How to improve performance across multiple facilities: Q&A with Ed Koch, CCi Business Partner
The operational excellence methodology and tools to improve performance at a single facility are well understood. The challenge of improving performance at multiple manufacturing and distribution facilities spread around the world is a completely different one. How does one go about setting this up? What are the challenges to engage people at all levels to do this? Why is this more important than ever during the Coronavirus pandemic?
During his 25-year career, Ed Koch, Managing Director at ValuPoint Limited and CCi Business Partner, has been instrumental in crafting strategies for multi-site improvement. He has led a highly successful global lean operational excellence program for eight years that delivered significant P&L benefits for a FTSE-10 company. The techniques for multi-site improvement have been honed through use over multiple years and across several clients.
Ed shared the following insights with us in a recent interview.
Why is it important for supply chain organizations to improve performance across multiple sites?
It has been my experience that organizations are filled with clever and passionate people who are committed to making a difference. ‘Engagement’ is a much-used word, but the truth is people love being part of a winning team where they can provide a meaningful contribution. So, part of our role as leaders is to create the environment for our teams to flourish. This includes creating a clear ‘why’ or purpose for our objectives and establishing a process that enables people to contribute. Virtual best practice networks are one such mechanism where people at all levels can make a meaningful contribution to the business.
The second reason why multi-site improvement is so important for organizations is speed. In order to remain competitive, to innovate sustainably, and to continually accelerate shareholder and stakeholder value we need an integrated way to improve performance. We cannot do this sequentially – one site or region or business unit at a time. Improvement must happen simultaneously across multiple regions and facilities, and at all levels. Virtual best practice networks provide an effective way to ‘get every brain in the game’!
What is a virtual best practice network?
A virtual best practice network is perhaps a fancy title for what is essentially a geographically dispersed team. It is a team with a common purpose that collaborates and co-creates solutions in a disciplined way, organizing and sharing what it knows, so that it has business impact.
These networks or communities can collectively be centered on a broad range of topics. These may include areas in sustainable development such as water consumption, energy usage, waste management and recycling; or in areas of innovation such as new product development, and raw and packaging material optimization. Further examples include collaborating on planning processes, warehouse management practices, and distribution best practice. The list of opportunities is endless.
What distinguishes a best practice network from a group of colleagues spread across the world who simply work in the same function is the deliberate nature of ensuring the network has business impact.
How can virtual best practice networks work most effectively?
Best practice networks are not particularly difficult to establish, but there are a few factors that make them successful.
- There must be a clear scope and business challenge, a purpose or ‘why’. As Simon Sinek urges … ‘always start with why’. This must be clearly articulated as a set of SMART goals and typically agreed with the senior leadership of the supply organization to ensure sponsorship and alignment.
- Membership of the network must be clear and, just like any team, there should be a leader and sponsor. Network membership is a role, not a job. It is important that the people selected to join a particular network are real subject matter experts in their area. The expert is not necessarily the most senior person at head office but may be someone in a facility at a far corner of the organization. All participants invest part of their time in the network and pursue its deliverables while performing their day-to-day roles. This implies that leaders must enable their teams to work on both local priorities and global network priorities. If this is not clearly agreed, a network’s progress can be hampered by members who are not fully engaged with its priorities.
- A network must have a strong set of practices to ensure it stays on course and meets its goals. Obviously, this includes meeting regularly and managing actions associated with delivering the objectives. However, the most important issue is to create a mechanism to document and share the best practice that is created. Effective change leadership is needed to ensure the best practice is adopted and replicated throughout the business. Ultimately, this is how the rapid improvement will happen through the organization.
How is the COVID-19 pandemic influencing the need to set up multi-site improvement teams?
Coronavirus has clearly had a major impact on the way in which work gets done around the world. ‘Working from home’ has become the norm for people who were previously located in offices or operational facilities. Also, international business travel has been brought to a standstill.
Previously, the business model may have been to have experts in various fields travel to facilities around the world and build internal capability in an area such as operational excellence, supply chain planning, warehouse and transport management, etc. This business model no longer exists and is unlikely to be restored in the short term, if ever.
Virtual best practice networks offer an alternative way of building capability within an organization that ensures expert knowledge is developed and replicated for maximum business impact.