Top

Lean Operations

Many companies suffer from layers of complexity that have built up over the years.
To stay competitive it is essential to continually find ways to simplify cost structures, customer propositions, processes and flows in the business.
Our proven business simplification approach ‘connects the dots’ while reducing complexity.

 

THE CHALLENGE

Companies have become more globalized, outsourced and technology-driven, resulting in the growing complexity of global operations. The need for simplifications has become greater.

It is a challenge for many companies to connect a sustainable product philosophy with the reality of its value chains. New product introductions have to be synchronized with the requirements of a globally distributed value creation. Planning, procurement, production and distribution do not just take place in a few sites close to the company’s headquarters, but throughout to a global distribution network. To make global value chains flexible, it is therefore essential to create an “end-to-end” perspective from customers to the supplier and back – thus integrating the entire system and making it transparent. Until now sustainability has played merely a minor role in the development of these tools.

Corporate sustainability mainly has to do with maintaining internal requirements regarding safety and environmental protection, which were recommended by jurisdiction or industry associations. Also, issues like saving energy costs and water usage, preventing the creation of waste and reducing CO2 are linked to corporate sustainability. Externalities, which are factors of production, that are available to the company free of charge but have not been included in financial records, are not yet taken into account.

As layers of processes, decision-making and IT systems swell to create an overload of complexity, business simplification and avoiding process waste is increasingly a strategic focus. The main symptoms of an overly complicated organization are:

  • Low effectiveness and efficiency
  • Lack of transparency
  • Lack of responsiveness and agility
  • Duplication of processes
  • Extra process layers
  • Process gaps
  • Process variations where it is not clear if the value is higher than the cost
  • Unclear roles and responsibilities
  • A mix and match of different key performance indicators
  • Guidelines and rules that slow the organisation down
  • Low ability to capture digitalization opportunities, as processes are not ready for automation
  • Reduced ability to integrate strategic acquisitions

OUR APPROACH

Our Lean Operations (LEANOPS) methodology is a business simplification and roadmap approach that allows companies to scope, structure and deliver more straightforward and leaner process integration across the company and with value chain partners:

  • Conduct a scoping workshop with leadership and process transformation teams
  • Ensure the business simplification efforts are connected to value (strategic objectives) and processes, people and systems (capabilities)
  • Prioritise the key processes and their value contribution
  • Define guiding principles for process simplification
  • Analyse priority processes: Current state using operational data, process maps (as per preferred or framework format, KPIs, Gaps)
  • Assess the effectiveness, efficiency and triple value-add of processes
  • Determine the vision for ‘to-be’ processes and performance
  • Develop a business simplification roadmap to achieve short, mid and long-term results
  • Pilot business simplification in one of the fundamental processes
  • Conduct a retrospect on the pilot and adjust where required
  • Scale from pilot to the business

Our methodology LEANOPS uses a mix of own experience based approaches with industry leading frameworks and methods:

  • Business Process Modeling using the APICS Supply Chain Operations Reference (SCOR) Model
  • Roles, Responsibilities, Competencies: APICS SCOR Model
  • Key Performance Indicators: APICS SCOR Model
  • Identification and removal of waste: LEAN, Theory of Constraints and the Supply Chain Operations Reference Model SCOR

THE BENEFITS

  • Improved transparency
  • Reduced redundancy
  • Improved speed through reduced cycle times
  • Improved quality
  • Elimination of time and resource waste
  • Reduction, eliminations and avoidance of bottlenecks and mistakes
  • Improved customer satisfaction (and higher net promoter scores)
  • Clean processes as a prerequisite for digitalization
  • 60% productivity increase
  • 20%+ cost reduction of the addressable cost base

KEY SUCCESS FACTORS

  • Define ambition and scope properly
  • Connect back to the dimensions of value
  • Use a best practice framework to get started
  • Manage change carefully, as not everyone in the organization understands process over functional thinking
  • Don’t go too steep, don’t get lost
  • Reduce barriers to change and reward efforts to simplify
mkdf-team-image
Michael D’heur
Expert for Strategy, Product Development, Supply Chain, Sustainability, Digitalisation

Munich
info@sharedvaluechain.com