Tale of Two Facilities , Part Two

Last week we discussed the comparison of two distribution centers of the same corporation who followed the same approach to process improvement and labor management, but with very different results. (Tale of Two Facilities, Part One) One facility has achieved 20% improvement for two consecutive years. The other has achieved little improvement.

What’s the difference? The facility that has chosen to succeed has instituted the keys to creating continuous improvement–teamwork, priority, communication, and continuity.

The process that the facility management team followed to institute the keys to creating continuous improvement is a case study for success.

1. Establish the leadership team – this group will establish priorities, review opportunities, and track progress. The group should include the most senior member of management assigned to the facility (general manager, director, vice president, whatever), each manager within the facility (include human resources and information technology), and periodically specific content experts (supervisors, hourly associates, consultants). Limit the group to less than ten people. (Teamwork)

2. Set goals and expectations – the first task of the leadership team is to establish goals and expectations. Goals should include focus areas, time frames/deadlines, and success metrics. Establish progress reporting practices and action plan formats. (Priority, Communication)

3. Assign responsibilities – each manager should have responsibility for multiple initiatives at any given time. Some opportunities may require input from multiple team members; even so, assign the primary responsibility to one member of the leadership team. A standard format for action plans should be used for assigning responsibilities and tracking progress. (Priority, Continuity)

4. Establish a recurring progress review time – Emphasize the importance of continuous improvement by establishing a scheduled recurring time for the team to report progress and solicit input. Weekly meetings are recommended in the beginning to create some momentum. (Teamwork, Priority, Communication, Continuity)

5. Encourage open dialog – the sponsor for an initiative should involve “experts” at every level of the organization. This includes staff support from HR, IT, QC, etc.; input and testing by workers actually performing the tasks; and direction from senior management regarding corporate initiatives and business conditions. Every member of the leadership team should be encouraged to question and refine every idea to achieve optimal results. (Communication, Teamwork)

6. Evaluate results – facts not opinions – before you overreact to the call for criticism in the previous step, all evaluation and critique of an improvement initiative must be based on facts. Team members will foster the environment of improvement and positive results only when questions and suggestions are based on facts accumulated during evaluation of the idea. If anyone begins a statement by saying “I think…”, “I assume…”, or “It seems…”; kindly request that all comments include factual data supporting the opinion. Calculate the return of investment, net present value, or internal rate of return whenever possible. (Teamwork, Continuity)

7. Adjust ideas to overcome obstacles to success – whether as a result of testing or discussion, obstacles to success will arise. Make small adjustments to the idea to overcome the obstacles. Test the idea again. Sometimes positive results can only be achieved after several tests. Focus on the objective not the obstacles. (Continuity)

8. Reevaluate improvement opportunities – Collect data for tests and present recommendations to the leadership team for approval. This approach ensures that no hidden obstacles exist. Input from every possible angle and area of responsibility will greatly improve the potential for success. Many ideas will not prove successful. Commend the group for diligent testing and preventing a failure – implementation of an unsuccessful idea. (Continuity)

9. Implement ideas which prove beneficial – Momentum for continuous improvement is created mostly by demonstrating success through implementing ideas and making them practices. Being part of success will spark additional ideas from many people within the facility. Recognize those who contribute to the successful testing and implementation of an improvement opportunity. Public recognition in a staff meeting or shift meeting is effective. Displaying the idea, expected results, and team member names in a prominent area is very effective. (Priority, Communication)

10. Pursue next opportunity – capitalize on the momentum by beginning a new initiative. Ideas should always be in great supply once the management team demonstrates the teamwork, priority, communication, and continuity needed to create an environment of continuous improvement. Begin discussing and testing a new opportunity immediately to maintain the momentum of success. (Continuity)

Sandy Stephens is principal of Smyrna, GA-based Johnson Stephens Consulting.