World-Class, Lean Performance in the SMEs - Small and Medium Enterprises - by Carlo Scodanibbio, Industrial & Business Consultant - Lean Management Consultant
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Carlo Scodanibbio
Industrial & Business Consultant
Lean Management Consultant
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main ingredients of the world-class, lean performance formula

World-Class Industrial Culture (Lean Culture)     (more »)
World-Class approach to Market and Clients     (more »)
World-Class Products and Services     (more »)
World-Class Operations (Lean Operations)
Lean Value Chain     (more »)
Lean Human Resources Management     (more »)

world-class operations (lean operations)

manufacturing operations   manufacturing operations   manufacturing operations   project operations   project operations   project operations   service operations   service operations

Eventually, lunch time comes and the monster must be fed.

Manufacturers must give products (and service) to their monster clients.

Project-driven enterprises must give the object of the project (be it a dwelling, a ship, a bridge or the soft furnishing of a conference centre....) - again with adequate service - to their monster client.

Service Establishments must feed services (a travel booking, or an insurance policy or providing an internet connection....) to their monsters.

Products, objects of projects and services have to be processed operationally until they are output.

The principles, the core concepts and the philosophy governing "operations" of any nature are absolutely identical in the three main industrial sectors (Manufacturing - Project - Service): monsters want their food with the right quality, at the right time at the right price (the 3 main operational parameters), and with a smile on top (as cherry on the cake....). And something else.
Like to say, once again, they want value. But...



The output value of a processing operation cannot exceed (it seems obvious) the value inherent in that operation and generated by that operation.


As a consequence, processing operations come under close scrutiny: since the target is to maximise output value, considerable care has to be taken to ensure that value is actually generated during processing.

Processing may generate value (the famous added-value) but, unfortunately, may also generate something else (non-value), or too little value in relation to the available time or to the associated cost.
This phenomenon influences directly product's/service's worth (as perceived by the monster) and product's/service's cost (to the supplier) and, consequently, price to the monster client.


Monsters are extremely intelligent.
After the world changed, they have become very skilled in creating immediate relationships between product/service worth and its associated price.
If there is a match, there is satisfaction.
If there is a mismatch, there isn't enough. The monster then becomes a monstrous monster... (more »)



....after the world changed, monsters decided to stop giving any subsidy to their food (products, services) providers.....


The net conclusion is that world-class enterprises must be extremely careful to all items of non-value or to insufficient value output in their processing operations.

The Lean Thinking and Value Adding Management philosophies come to the rescue again, and give brilliant, shining light to Enterprises willing to jump to higher levels of operational performance: processing operations must produce only pure, adequate value. All the rest is non-value, or, called with its true name, waste.

The practical criterion is extremely simple: whatever adds to cost without adding to output value is to be looked at very suspiciously - most probably it's just pure waste.



Systematic Elimination of Waste (SEW) of any nature and entity is the primary target of SMEs aiming at world-class, lean operations.
All Lean, Operations-related Disciplines rotate around this very principle.


The World-Class, Lean Operations formula is theoretically identical for the 3 main industrial sectors.
We should focus onto:

  • The INDUSTRIAL, LEAN CULTURE AREA.
    Once again, Value Adding Management is the pilot light, well supported, operationally, by the SEW - Systematic Elimination of Waste discipline. (more »)
  • The PROCESS AREA.
    This is the heart of Operations of any nature.
    The focus is on Process' efficiency.
    The world-class, lean target is very simple: Total Productivity. Meaning: high efficiency of processes (maximising outputs while minimising all associated costs - drastic reduction of all lead-times - high flexibility and reactivity to clients' requirements.
    The lean, state-of-the-art disciplines available to SMEs to manage the Process Area are different for the 3 main industrial sectors (see below).
  • The PRODUCT/SERVICE AREA.
    The focus is on Process' effectiveness.
    The world-class target is very simple: Total Quality. Meaning: 100% effectiveness - 100% conformity - zero defects/zero errors.
    The lean, state-of-the-art discipline available to all SMEs to manage the Product/Service area is still TQM - Total Quality Management.
    However, this discipline must be developed/adapted to face the new millennium challenges. (more »)
  • The PLANT AREA.
    The focus is on Plant, Machinery, Equipment and, in general, Technology "overall performance".
    The world-class target is very simple: Total Plant/Machinery Performance.
    Meaning: maximisation of efficiency and effectiveness of all technology components associated with operational processing - optimisation of technology utilisation - elimination of all technology-related losses (waste).
    The leading state-of-the-art discipline available to all SMEs to manage the Plant/Technology area is still TPM - Total Productive Maintenance, developed/adapted to suit the new millennium challenges.
    Its latest development is Lean Maintenance & Lean Plant/Assets Management (more »)
  • The PEOPLE AREA.
    People make the difference between success or failure of any enterprise.
    The focus is on Personnel Performance.
    The world-class, lean target is again very simple: TEI - Total Employee Involvement and, where applicable/feasible, TEP - Total Employee Performance.
    Meaning: only when enterprise's people accept responsibly and actively the challenges of the new-world; and tackle with effort and hard, creative thinking their daily confrontation with reality; highly involved in processes they understand and own; contributing actively to improve those processes' output value; well satisfied in doing so...   only under these circumstances can an enterprise aim at high levels of operational performance.
    Obviously, in order to achieve gigh levels of Operational and Personnel Performance, people management style must change to cater for the Lean challenges.
    Today, we need Lean Human Resources Management (more »)

You may view my architectural interpretation of the World-Class Operations formula by clicking here.


In practice, the World-Class Operations formula is slightly different for the 3 main industrial sectors, because different disciplines are suited to govern their PROCESS Areas.
In detail:

  • MANUFACTURING INDUSTRY.

    Manufacturing The state-of-the-art, lean discipline available to Small and Medium Manufacturing Enterprises to govern their Process Area is Lean Manufacturing.

    Lean Manufacturing is the operational arm and the core discipline of the World Class Manufacturing philosophy and approach.

    Lean Manufacturing means: manufacturing without waste. (more »)


    Lean Manufacturing is based on/supported by a number of allied, lean disciplines, which include:

    - the SOCO (5S) approach as a starting point (more »)
    - Cell Manufacturing (more »)
    - Continuous Flow Manufacturing (more »)
    - Lean TQM, 6-Sigma & Poka-Yoke (more »)
    - Achieving Quick Change-Over (more »)
    - "intelligent" Kanban (more »), and
    - Total Productive Maintenance and Autonomous Mmaintenance (more »), and
    - Value Stream Mapping (more ») as a co-ordinating/organising tool for lean initiatives

    You may view my architectural interpretation of the World-Class Manufacturing Operations formula by clicking here.

  • PROJECT-DRIVEN INDUSTRY.

    Construction The state-of-the-art, lean disciplines available to Small and Medium Project-driven and Engineering/Construction Enterprises to govern their Process Area are Lean Project Management and Lean Construction Management.

    Both target at establishing flow in Project type of Operations (from Engineering, through Construction/Fabrication/Installation up to Commissioning and releasing the Scope of the Project to the Client).

    Meaning: producing project objects without waste, while maximising value to the client and all stake-holders. (more »)

    Lean Project Management and Lean Construction Management are based on/supported by a number of allied disciplines, including:

    - Lean Risk Management
    - Lean Planning & Last Planning
    - TOC (Theory of Constraints) approach in multi-project situations
    - Intelligent Monitoring of PPC - Percent Plan Complete and analysis of Failures through the 5Why technique
    - and others

    You may view my architectural interpretation of the World-Class Project Operations formula by clicking here.

  • SERVICE INDUSTRY.

    Service - Tourism
    The state-of-the-art, lean disciplines available to Small and Medium Service Enterprises to govern their Process Area are PIM - Process Improvement & Management and PR - Process Re-engineering.


    Both fall under the Lean Process Engineering umbrella, and both are addressed to govern the output of services with minimal/nil waste and max value to the client. (more »)


    Lean Process Engineering is based on/supported by a number of allied, lean disciplines, which include:

    - Lean Customer Care
    - Value Stream Mapping
    - Spaghetti Diagram
    - Communication Diagram
    - and others


    You may view my architectural interpretation of the World-Class Service Operations formula by clicking here.

 

 

 
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