“It is not enough to know, one must apply; it is not enough to want, one must act as well.”
Johann Wolfgang von Goethe
Business Excellence means top performance. The meaning of it is the best performance that a company has the power to achieve. Excellence drives towards the effective realization of the business potential that is “hidden” in the company.
Top performance is rare, but rewarding
To achieve Business Excellence is challenging, but very profitable. Every percent of sustainable profit growth increases the company value exponentially by a 15 to 20 multiple.
Pursuing this goal and driven by intensified competition many manager start out on the path to excellence. Few keep up the way and reach the desired summit.
The highly successful companies apply for prestigious awards that confirm their top achievements. To name only the most important prizes, these are:
EFQM – European Foundation for Quality Management – Excellence Model
But awards by themselves don’t guarantee sustainable success. Firms like Motorola, Armstrong World Industries, Cadillac (GM), Dana Corporation, Wallace Company and AT&T were Baldrige Award winners and ended up in bankruptcy or as take-over targets.
For further information on the path to Business Excellence contact the author Andreas Sattlberger, Executive Advisor for Business Excellence at the firm procon in Vienna, Austria. You can reach him at firstname.lastname@example.org
„For a man with a hammer everything seems to be a nail.“ This saying also applies frequently for the use of lean tools. With great enthusiasm plenty of lean tools are getting trained in order to achieve higher efficiency and profitability. However, in truth all this tool training is a huge waste.
Typical lean tools that are trained with little benefit:
_ Just in Time
_ Kaizen Workshops
_ Standardized Work
_ Value stream
_ A3 Problem Solving
_ TPM, etc.
This type of training of lean tools is peddled to organizations with the promise of improvement. Unfortunately, the situation does not improve, but mostly it is deteriorating. Why? Because used in this way the tools are searching for the right problems.
In addition there is a psychological phenomenon. As we learned from nobel prize winner Daniel Kahneman, we tend to replace a difficult, complex problem, whose solution is hard for us, with a known problem, where we have smooth, easy solution. This may sound ignorant, but is probably practiced by all of us at times. Really dumb, however, seems to be the fact that we don´t like to admit our self-deception.
With lean management this means that we do have many difficult problems in our operations, where a lasting solution would greatly pay off. However, instead of trying to understand the problem thoroughly on site (gemba) and starting the hard path of step-wise improvement, we prefer instead to just “implement” the lean tools. Voilá, the problem seems solved! (Or not, as it is revealed shortly thereafter.)
Therefore the difficult problem (e.g. profit decline) is replaced with a simple problem (e.g. lacking lean skills), where the solution is an elementary training that can be provided quickly and simply.
Complex Problems Require Profound Solutions
The mistake with this kind of “solutions approach” consists of the fact that at our workplace we face problems with a complexity too high, than that they could be resolved with simple tools.
The true task requires us to eliminate all causes and obstacles that prevent us from fulfilling a customer order in one flow from receiving to delivery of the product, using the minimum of time, cost and effort. As Taiichi Ohno said:
„All we are doing is looking at the time line, from the moment the customer gives us an order to the point when we collect the cash. And we are reducing the time line by reducing the non-value adding wastes.”
Aim and Function of Lean Tools
The purpose and benefit of lean tools is to support employees and managers to clearly identify value and to immediately and urgently highlight waste. This waste then can be eliminated quickly and for good.
That means for example, not the introduction of just-in-time transforms the operation to become lean. Just-in-time only helps to see the problems that prevent us from a highly value added operation.
The reason is that only when the worker really depends on every supplied part, then it becomes paramount to develop and practice quality and reliability for the actual work and for the long term. Everything else is just pretty words.
Ultimately, lean cannot be established by implementing lean tools. Lean tools can only support people to solve their problems and overcome their challenges in order to deliver higher value.
Managers still need to step up to their responsibility, take an impartial look at their true problems and implement effective counter-measures on the basis of sound factual analysis. And yes, lean tools can be pretty helpful at this!
We all love to travel. And we all want to feel safe when flying to our destination. The fundamental principle of aerospace is to care for safety.
Over the history of air travel, we have learned what works and what poses risks. The result is an astounding record in terms of safety, compared to car travel or even the railway. Per 100 million miles travelled there are 1.33 deaths by car, 0.13 fatalities per train and only 0.0077 casualties by air travel (air is safe).
Therefore it is essential that the aerospace industry complies to these hard learned lessons on safety. While we all agree on this principle, it poses a strict discipline on the production of aerospace equipment.
The challenge is not only to stay in full compliance to the rules, regulations and lessons from history, however. Suppliers also need to deliver economic performance at the same time.
That is the task: high performance and high compliance – together. While neither is easy to deliver by itself, all together are a real challenge.
For a recent example, see how VW managed to grow profits and violate environmental standards, breaking emission rules.
How to deliver performance and compliance together?
While performance usually focuses on the top and the bottom line, compliance traditionally was delegated to a representative for quality, security, health, environment, risk, etc. It seemed an afterthought.
In any case, often the compliance officer was a secondary or less important function to the performance stars. This thinking was changed quite a while ago in quality by Dr. Juran, who first taught quality control and by Dr. Deming with his quality management.
At that time professional managers learned that quality is not an afterthought, after the product was produced, but an integral element to high performance.
Compliance is performance in disguise
Despite the fact that compliance today still is approached in a normative fashion with ISO norms, laws, audits and finger wagging, modern managers are integrating the various compliance requirements in their Integrated Management System (IMS).
The emphasis is on big capital Management, implementing the performance circle of
monitoring the implementation
handing out consequences – positive and negative.
As a result, compliance work contributes to organizational and business results the same as performance work does.
The secret to modern compliance lies in applying the management principles to requirements, being these customer driven, financial driven or compliance driven.
For questions, comment below or send an email to Andreas Sattlberger:
The aerospace supplier industry is changing profoundly and rapidly. Gone are the days of comfortable, long-term contracts with ample time for delays, quality-related rework and double trouble. Today, the requirements for suppliers have increased due to following trends:
High demand: surging market demand for product puts strain on capacity and require fast scaling of excellence
Shorter product life-time: acceleration in product life cycle because of faster technology innovation progress
Cost pressure: airlines under pressure for profitability hand down the increasing efficiency requirements to the supplier hierarchy
Lean methods: adoption of manufacturing process methodology along the lines of lean management and six sigma
Management change: transfer of managers from the automotive industry migrating into aerospace positions
Supplier managers face these challenges and more through need for automation, digitization / Internet of things, changing demographics, market shift to developing countries and more.
Excellence in areospace has been with us from the start of the industry. From humble beginnings to the impressive record of the aerospace industry today, pushing the envelope to higher and higher performance is part of the DNA of all aerospace philosophy and practice.
Now the time has come for the aerospace industry to fully adopt and embrace the philosophy of Operational Excellence in manufacturing as well. Therefore, we have started this blog to put out some ideas, questions and statements about what it takes us in the aerospace industries to improve ever more. We want to start with the motto from Lean Management:
A little better every day.
Wish you all much fun and success in discussing new and exciting ideas and practices and hope for your active participation in the Aerospace Excellence blog.