Manufacturing Breakthrough Blog
Friday March 25, 2016
In my last post we presented three more of the ten Prerequisite Beliefs (PB) that I believe are absolutely necessary for creating a true, positive and lasting environment for change. These three PBs were as follows:
- PB 5: Believing that abandoning outdated performance metrics like efficiency and utilization, reward or incentive programs, and variances is essential to moving forward.
- PB 6: Believing that excessive waste is in your process and that it must be removed.
- PB 7: Believing that excessive variation is in your process and that it must be reduced.
In today’s post we will complete our discussion on the ten prerequisite beliefs that I believe must be embraced if true, positive, and lasting change is to be achieved.
Prerequisite Beliefs (PB)
PB 8: Believing that problems and conflicts must be addressed and solved
The eighth prerequisite belief that your organization must embrace is that problems must be addressed head-on instead of being pushed aside or swept under the carpet. You can no longer accept temporary fixes to your problems, and believe me, many problems will be uncovered as you progress through the UIC. If you are like many companies, there are problems that have been hidden for years with excessive amounts of inventory used to guard against their negative effects. This way of thinking can no longer be accepted. Your organization must be committed to determining the root cause of problems and implementing effective and sustainable solutions or the UIC will not work for you.
PB 9: Believing that constraints can be internal, external, physical, or policy, or any combination of the four.
The ninth prerequisite belief that your organization must accept if you are to be successful and create the environment for change involves the type and location of the constraint. Constraints can be either internal or external to your organization, and they can be either physical or policy related. If they are external, this typically means that you have more capacity than you do orders. If this is the case, you must use your improved process to leverage this constraint. That is, your improved process will result in significantly less lead time, which your sales team can use to leverage more sales. If you have excess capacity, your sales team can even quote a lower sales cost to leverage additional sales. Think about it, as long as your expenses or truly variable costs are less than the sales price, you are adding more money directly to your bottom line. Yes, the margins could be lower than normal, but it all flows directly to your company’s bottom line.
If your constraint is found to be a policy constraint, you know it involves a conflict that must be resolved. You now have the tools to resolve conflicts, so you must be ready to use them. All of what is involved in the Ultimate Improvement Cycle requires new and out-of-the-box thinking for your organization.
PB 10: Believing that the organization is a chain of dependent functions and that systems thinking must replace individual thinking
The tenth and final prerequisite belief is the understanding that the organization is a chain of dependent functions that requires systems thinking rather than individual thinking. It makes no sense at all to optimize a part of the process that isn’t directly linked to throughput and revenue improvements. There are interdependencies that exist within the organization, with all functions playing a role in the final outcome. Unless and until individual functions cease from protecting their own “turf” and begin collaborating as a team, real and sustainable progress will not be achieved.
Before completing this series on Creating the Environment for Change, let’s review the ten prerequisite beliefs that your organization must be prepared to not only accept, but passionately embrace, if you are to successfully implement and navigate through the Ultimate Improvement Cycle:
- Believing that leveraging the constraint and focusing your resources on the constraint is the key to improved profitability.
- Believing that it is imperative to subordinate all non-constraints to the constraint.
- Believing that improving your process is a never-ending cycle.
- Believing that involving your total workforce is critical to success.
- Believing that abandoning outdated performance metrics like efficiency and utilization, reward or incentive programs, and variances is essential to moving forward
- Believing that excessive waste is in your process and that it must be removed.
- Believing that excessive variation is in your process and that it must be reduced.
- Believing that problems and conflicts must be addressed and solved.
- Believing that constraints can be internal, external, physical, or policy, or any combination of the four.
- Believing that the organization is a chain of dependent functions and that systems thinking must replace individual thinking
If your organization has truly accepted these ten prerequisite beliefs and all that goes with them, you are now ready to begin this exciting journey that has no final destination. But simply saying you believe something can be hollow and empty. It is your day-to-day actions that matter most. Review these ten prerequisite beliefs as a group on a regular basis and hold people and yourself accountable to them. Post them for everyone to see. Utilizing the Ultimate Improvement Cycle and true acceptance of and employment of these ten prerequisite beliefs will set the stage for levels of success you never believed were possible.
In my next post we will begin a new series on continuous improvement. As always, if you have any questions or comments about any of my posts, leave me a message and I will respond.
Until next time.