Operations Innovation & Transformation – Flexible Teams

The 4 quadrants described in the article “Operations Innovation & Transformation – the 4 Types” positions the lower right quadrant as a strategy for using a team of human assets in a new way.

In this quadrant, teams of specialists (with the same or different areas of specialization) are grouped to provide value improvement to a group of physical assets, and the group of physical assets can be used as a “fleet” or as a “chain”.  This is much more than a passive “help desk”.  One example is where specialists use real-time benchmarking and other tools, working with new business processes with the physical assets and the dedicated workers, to unlock value of themselves and the physical assets.

In the following diagrams, a team is located in different sites at the moment.  This example has 4 physical assets, A through D, and specialist 1 is mobile (working from a hotel, home or in an office within the enterprise), and specialist 3 is in an operations center.  In the left-hand diagram, specialist 1 is supporting or improving the performance of physical assets A and B, and specialist 3 handles the physical assets C and D.  In the right-hand diagram, a change in performance in asset B triggers a workflow and specialist 2, who is on call or is assigned by the team supervisor, handles asset B.  Specialist 1 does not receive workflows for asset B unless the team supervisor changes the assignments.  Overlapping assignments are also used, especially when multiple disciplines or specializations are involved.  Both use the same integrated and federated information, and these specialists become champions to help all like operations and equipment improve performance.

In the following diagram, a workflow “brings the work to the worker”, using the same integrated and federated information, on-line performance applications, and human workflow.  The supervisor(s) can easily change assignments, and the workflow can include escalation, which can be guided by the performance applications’ output compared to thresholds (simple calculations of time to reach a threshold).

The strength of these workflow is to help specialists intervene early enough, using standardized and trustworthy data, focused on trends.  This processing of information is automated as much as possible.

The specialists spend most of their time working on improvements instead of processing data and analyzing previous performance problems, and their decisions.  As a result, major overhauls are safely and reliably delayed, equipment performance is improved, and operators trust the equipment more to help increase performance at each physical asset.

Can we achieve the last mile of operational Excellence without IOT?

This question was posed to me last week, and it is a good one. The critical items is to understand what is operational excellence is trying to achieve to realized that it is journey and moving goal of effectiveness pushed by the market and technology. Like when you are riding a wave, you staying in front, and leveraging the wave to excel, otherwise it swallows you up.

Operational excellence is about:

• Agility to deliver products/ services to Customer/ market at the correct price, time and location
• The ability to rapidly introduce new innovation value to lead the market and open new markets
• The ability to enable sustainable innovation and value through effectively leveraging people, and technology.

The diagram below illustrates this, and I am sure some people will have different angles, but it is about leading the competitive edge.

But can you achieve this with the traditional approaches? I believe you can get to 60/ 70 % of the way with traditional approaches and current technologies, but that last mile needs a paradigm shift in “actionable decisions”. Agility requires timely decisions across a team, and consistency and timely actions associated with the decision across teams, roles etc.

A core concept of Internet of Things (IoT) is teams of things (devices, and people) interacting in an orchestrated manner to achieve an operational timely result. With devices being more “self-aware”, empowered to take actions, interacting with workers or other devices to move “work “to the next step.

This foundation of IoT and the orchestration of devices /people, timely knowledge, provides that much needed paradigm shift to enable that last mile on the above operational excellence journey. The constant discovery of new capabilities, and knowledge through big data techniques, the ever increasing lake of embedded knowledge lends it as the basis for companies to go on this Operational excellence journey, but with this is the required cultural evolution to continuous improvement and knowledge/ wisdom.

                                       Source ARC

The above IOT maturity model matches to Operational Excellence journey, especially on the stages of “smart, and autonomous” linking to the Operational Excellence stages of “Driving Business and Driving the Market”). Foundational to Operational Excellence is timely knowledge and procedures being delivered so actionable decisions can be taken in a consistent manner across plants, assets and people. The IoT principles provides the opportunity to deliver this knowledge, while abstracting the variability in plant, assets and experience levels of people.

To me the desire and programs being enabled at companies to take them down the operational excellence journey provides the cultural evolution needed combined with IoT to succeed and make IoT effective not just from technology but most of all business side

Operations Innovation & Transformation – the 4 Types a Series

Over the last couple of years Stan   DeVries and I have looked a 100s of projects by leading companies across many industries, analyzing industry trends. Much of what I discussed in this blog over the last year has come from these investigations. But Stan and I thought it was time to talk through these "Operational Innovations" and Stan has put a series of 5 blogs on the topics that I will post over the next 2 weeks. Building on the ideas and concepts.

 High Level Review of the 4 Types Operational Innovation:

There has been much marketing on the innovations in supply chain and customer relationship management during the last 7+ years.  During this time, manufacturing and industrial operations has begun a less publicized transformation on their own.  This transformation goes beyond lean and total quality management principles.  In the 1980’s, we saw the impact of Japanese quality strategies; in the 1990’s, the consumer globalization fundamentally changed where facilities are built, how frequently new products are introduced, and in the 21^stcentury, industrial operations focus on how they create value for their customers, often focused on reliability.  These strategies might seem to be dreams without understanding the innovations that make these sustainable and the new risks can be practically managed.

These innovations are focused on unlocking the value of groups of physical and human assets:

1.       Physical Assets: the move to unifying the industrial enterprise over multiple sites (in groups or as a whole), with a more holistic view in terms of operating strategy and performance management.

2.       Human Assets: the shift to operational teams that spread across the multiple sites (in groups or as a whole), central, and Subject Matter Experts (SME’s) to make a rapid and dynamic decision support system in a dynamic operational world.

The following table published by ARC describes a spectrum of coordination or collaboration across assets, both physical and human:

The innovations are essential and prominent in the Integrated and Optimized portions of the above table.  So physical or human assets become 2 parts of one of the dimensions:

So far, no innovation is immediately apparent.  The other attribute of creating value of these groups is improving consistency or efficiency, either by seeking and maintaining a constant “sweet spot” or by enabling profitable agility.

One way that value can be unlocked from a group of people or physical assets is by improving the consistency of the group’s output.  This is very different from the hope of “the best worker on their best day, every day” or the physical asset’s equivalent.  Instead, the innovation achieves a “new normal” which understands and manages to a repeatable performance or “the new average worker on their average day, every day”.  This focuses on reducing the range of performance in output, whether measured as sales value of production, yield, efficiency, throughput etc.

Another way that value can be unlocked from a group of people or physical assets is by improving the effectiveness of the group’s output – the “synergy”.  This focus might seem to be a cliche, but it has produced significant and sustainable improvements.

So consistency and effectiveness become 2 parts of the second dimension, and now we have 4 quadrants:

Now we have some hints of innovation – how is it possible and practical to achieve significant and sustainable improvement from a group of physical and human assets instead of the “sweat the assets” focus which has been in place for 100 years?  The changes come from using physical and human assets differently when they are required to perform to a group objective.  The 4 quadrants are summarized as follows:

In the lower left quadrant, a group of similar industrial operations (2 or more) adapt their performance objectives, business processes and accompanying hiring and information strategies to optimize the “fleet”.  This innovation can be limited by the distribution flexibility among the locations, but several corporations have achieved success with this.  One example is keeping most of the locations operating at a constant or “base” portion of the combined market demand, and using the more agile locations to deliver the “swing” or variable portion of the demand.  Other examples and methods are described in a following article which focuses on this quadrant.

In the upper left quadrant, a group of complementary industrial operations (2 or more) adapt their performance objectives, business processes and accompanying hiring and information strategies to optimize the “chain”.  This innovation can be limited by the dynamic and range flexibility of some of the operations, but several corporations have also achieved success with this.  One example is seasonal competitiveness, where the “chain” collaborates to achieve maximum throughput during the high demand season and maximum efficiency during the low demand season (efficiency and throughput interact differently across different groups of industries).  Other examples and methods are described in a following article which focuses on this quadrant.

In the lower right quadrant, teams of specialists are grouped to provide value improvement to a group of physical assets, and the group of physical assets can be used as a “fleet” or as a “chain”.  This is much more than a passive “help desk”.  One example is where specialists use real-time bench-marking and other tools, working with new business processes with the physical assets and the dedicated workers, to unlock value of themselves and the physical assets.  Other examples and methods are described in a following article which focuses on this quadrant.

In the upper right hand quadrant, managers and supervisors use consistent measures and business processes to adjust targets for specialists and other workers, using the industrial automation concept of a “control loop”.  One example is where managers negotiate the next day’s production targets each day using the same business process for all specialists and industrial locations.  Other examples and methods are described in a following article which focuses on this quadrant.

The results have been spectacular, including double-digit improvements in efficiency, first-quarterly industry performance, and more.