Over the last few decades, high-performing organizations have employed corporate production systems to drive efficiency, effectiveness and bottom-line results. And with good reason: by placing a strong emphasis on continuous improvement and standard work, industry leaders have been able to consistently deliver superior performance and maintain a competitive edge.
The challenge now for these organizations is leveraging technology to increase speed, flexibility and agility. As corporate production systems evolve into next-generation production systems (or digital operating systems), organizations will need to maintain a foundation of continuous improvement to drive their digital transformation ambitions.
In fact, for organizations to triumph in the quest for digital dominance, they will need to take an integrated approach to continuous improvement. ‘Integrative improvement’, as it is termed, is the next level of continuous improvement ‒ it integrates all functions and processes across the value chain to embed operational excellence in the very fibre of the business.
This unique approach to continuous improvement ensures that improvements are integrated across systems, processes and people. In this way, the change is transformational and enduring, and the organization itself becomes the true source of sustainable competitive advantage.
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The following eight principles underpin the integrative improvement philosophy and, when carefully applied, will assist you in executing and expediting your digital transformation.
| 1. Benchmarking | For improvement to take place, there must be a current state from which to launch, and a goal end state towards which to strive. This end state – the state in which an organization adopts integrative improvement to become world class – is the benchmark. Therefore, one of the first phases in any integrative improvement initiative is to establish the benchmark, as this becomes the comparison and goal in integrative improvement. On the digital transformation journey, benchmarking is vital for identifying priorities and areas for improvement. | |
| 2. Self-assessment | An integrative improvement initiative cannot be successful in promising improvement and transformation if there is no self-assessment after a benchmark has been identified. The very goal of benchmarking is that the organization has a standard for measurement. This standard for measurement should form the basis of the continual self-assessment, which takes place consistently throughout the ongoing improvement initiative. In the case of digital transformation, an organization will need to assess its level of digital maturity in order to develop an actionable road map to drive the transformation journey. | |
| 3. Maturity-based | Integrative improvement is built around the premise that for organization-wide performance improvement to be sustainable, the initiative must be culture-based. Culture change is incremental as the skills, digital systems, leadership style, measures and standard procedures are developed. Managing this change requires that the integrative improvement system drive improvement across multiple stages of maturity. This stage-based approach is a critical element of a successful digital transformation journey as it enables organizations to execute improvements in sequence and transform faster. | |
| 4. Process-based | Integrative improvement is rooted in an organization wanting to improve the capability of the end-to-end value chain and overall manufacturing processes rather than functions, and ensure all stakeholders understand how these processes relate to and affect each other. The transition to digital will impact and elevate several manufacturing processes such as access to data and standard work. Real-time data ‒ in conjunction with predictive analytics ‒ will speed up decision-making and increase agility. In the case of standard work, manufacturers will be able to make use of dashboards and digital whiteboards to report performance metrics in real time and to chart workflow process actions. | |
| 5. Functional integration | CI leaders should use various improvement methodologies simultaneously to build the capability of the overall process and end-to-end value chain. For example, integrative improvement would address the improvement of functions such as quality, maintenance, planning, and HR in relation to their role in improving supply chain performance as an integrated whole, and not independently as separated parts. On the journey to digital excellence, silos must be broken down and end-to-end access to data must be enabled. Complete visibility across the value chain is the key to significant cost savings, higher operational efficiency, better quality and improved productivity. | |
| 6. Sustainability | These two factors are key for sustainability: an organization needs to ensure basic elements required of world-class functions and processes are in place before advanced technologies are used. Also, front-line tools need to be supported by systems and leadership management principles that drive these tools’ use.Operators using Statistical Process Control (SPC) tools, for example, require a system to ensure the SPC charts are used at appropriate points in the process. Further requirements are a plan to develop operators’ skills to use SPC charts, and management principles that support operators taking responsibility for Quality Control (QC) checks. Sustainability requires that the overall organizational design caters for the evolution of skills as the company moves from a functional to a process-based digital enterprise. | |
| 7. Knowledge-sharing | For an organization to improve, relevant knowledge and capabilities need to be gained and transferred between processes and among appropriate individuals in an organization. Knowledge management needs to happen at an implantation as well as a tacit knowledge level. This improvement of the collective knowledge should empower all players and the organization. Organizations that are embracing the shift to digital have begun to implement virtual best practice networks ‒ geographically dispersed teams with a common purpose that collaborate and co-create solutions in a disciplined way, for maximum business impact. | |
| 8. Organisation-wide adoption | For an organization’s operations excellence plan to be fully integrative, it needs to be adopted by the organization. Also, all the organization’s members need to recognise integrative improvement as a linked process that cannot function in silos. Organization-wide adoption is a critical component of a successful digital transformation; this can be facilitated by a change management program that emphasizes the importance of transparency and collaboration. |
An integrated approach to continuous improvement will yield many tangible benefits from reduced cost and waste to increased revenue and improved productivity. Perhaps, most importantly, this solid foundation of best practice and work process improvement will ensure that your organization builds a thriving culture of digital excellence that drives competitive advantage.
Download The Definitive Guide to Integrative Improvement to find out how integrative improvement is helping leading global organizations unlock superior performance and deliver maximum ROI.