Introduction to ops rules transformation expertise
- 1. Introduction to OPS Rules Transformation Expertise December 2012 © OPS Rules Partners, LLC 2012
- 2. We work closely with MIT Professor Simchi-Levi and use his latest IP to identify Supply Chain Opportunities for Clients In Operations Rules, Professor David Simchi- Levi identifies the crucial element in a company's success: the link between the value it provides its customers and its operations strategies. And he offers a set of scientifically and empirically-based rules that management can follow to achieve a quantum leap in operations performance. 2 © OPS Rules Partners, LLC 2012
- 3. Why Operations Strategy is so Important We live in the Internet Age when it is difficult to create and maintain a competitive advantage IP and innovations are difficult to keep proprietary Companies need to innovate and transform continuously Many companies have used 6-sigma techniques as an operations strategy They “leaned out” their supply chains making them fragile rather than resilient Regional supply chain strategies have also underperformed Transformations that matter only occur when business model innovations enable more efficient use of physical assets, working capital and people OPS Rules provides radical performance improvements that shift the balance of power in industries We help your teams analyze your business environment and develop the strategic insights you need to innovate your business model We help you use superior strategy to super-charge your continuous improvement efforts 3 © OPS Rules Partners, LLC 2012
- 4. OPS Rules helps Companies make Significant Business Improvements by Optimizing their Operations Strategies Potential Supply Chain Complexity Supply Chain Flexibility End-to-End Operating Strategy Risk Management Segmentation Management Optimization Improvements Management Identifies hidden Quantifies risk Optimizes Supply Chain Why it is costs of Long-Tail Aligns supply chain design exposure across Optimizes the level of costs and inventory levels Important Products with Customer Preferences the Supply Chain Supply Chain Flexibility and location Quantify the Define supply chain degree of supply Understand the costs of Use Supply Chain Network Classification of segments based on chain risk at each supply chain flexibility and Modeling Software to What is Involved product portfolio to price/service preferences major node in the determine optimal level of simulate and optimize reveal hidden costs and design well-aligned, supply chain in flexibility across global supply chain performance supply chain segments terms of profit or supply chain revenue exposure 1. Re-evaluate customer 1. Map the Supply 1. Investigate existing 1. Create all-inclusive trade-offs with respect to Chain strategy with respect to 1. Benchmark current cost model to capture price/costs and service 2. Quantify flexibility supply chain performance & report actual costs flexibility financial risks 2. Evaluate relative 2. Identify opportunities for of Long-tail products 2. Redesign supply chains to across the Supply effectiveness and efficiency improved performance 2. Investigate root share scale advantages and Chain of current strategy tradeoffs causes How best achieved 3. Develop tactical allow supply chain 3. Develop quantitatively 3. Simulate current differentiation where helpful strategies and 3. Update flexibility operations and strategic 3. Optimize differentiated remedies to reduce strategy in light of current 4. Simulate potential recommendations to supply chain segments overall supply risk business and GTM improvements reduce Long-tail costs 4. Engage sales and R&D to 4. Implement strategies and demand 5. Iterate until optimal in the short and long ensure functional strategies improvements and variability solution is apparent term align monitor results 4. Phase-in improvements Representative Reduce freight and manufacturing costs by 30%; Business Impacts Increase Revenue, Profits and Market Share significantly 4 © OPS Rules Partners, LLC 2012
- 5. OPS Rules Created a Repeatable Process to help Companies Benefit from Professor Simchi-Levi’s Intellectual Property Efficiency Supply chain performance trade-offs are different in each situation High Operating problems and their root causes Cost Current understood/resolved Strategy Customer preferences analyzed A Unique customer segments identified Micro-optimization strategies considered B Clear operations strategy defined Competitive differentiation strategy and plan of actions agreed C Low Cost Responsiveness Short Long Response Response 5 © OPS Rules Partners, LLC 2012
- 6. After current Execution Problems are Addressed, we Focus on Creating a Strategic Operations Competitive Advantage OPS Rules Operations Strategy Platform Development-related Development Fulfillment-related Vectors of Differentiation Supply Chain Vectors of Differentiation Product/Platform Architecture Plan/De Push/Pull Optimized Planning Design for Supply Chain sign Complexity Reduction Customer Value Proposition Flexibility Make/Buy Strategy Supply Chain Segmentation Strategic Partnerships Macro/Micro/Supply Strategic Sourcing & Supplier OPO Chain/Production Optimization Development Source Supply Chain Risk Management Supplier Contracting Managing Long Tail Products Operations Performance Management Fulfillment Supply Supply Produce Distribute Sell Chain 6 © OPS Rules Partners, LLC 2012
- 7. We use Data to Ensure Root Causes and Alternative Cures are Fully Understood before Implementation Begins Analyze Innovate Transform ----- ----- ----- Understand opportunities Reduce complexity & risk Pilot, prove, inspire & root causes of problems and optimize strategy & lead the change effort Data Collection Scenario Planning Transformation Planning Comprehensive Scope Micro Supply Chain Create a Vision Performance Benchmarks Optimization Evaluate Challenges & Risks Customer-centered Approach Potential Vectors of Agree Transformation Roadmap Differentiation Evaluation Scenario Analysis Planned Adoption Quantitative & Qualitative Focus on new Behaviors Benchmarking Scenario Analysis Lead & Inspire the Team Key Customer Interviews Current State Simulation Over-communicate the Way Customer Value Proposition Scenario Evaluation Forward Improvements Optimal Scenario Identified Implementation Conclusions Scenario Validation Create/Deploy new Definitive Root Cause Analysis Quick Wins Piloting Capabilities Preliminary Strategic Customer/Supplier Test Drives Monitor Progress to Close Gaps Alternatives Final Solution Specification Use Simulation to Prioritize Requirements for Simulation & and Evaluate Continuous new Metrics Improvement Projects 7 © OPS Rules Partners, LLC 2012
- 8. OPS Rules Transformation Expertise © OPS Rules Partners, LLC 2012
- 9. OPS Team Brings a High-Value Blend of Operations and Consulting for at a Lower than Market Rate/Hour Team selection of senior experienced people is key at the project start Able to handle broad range of uncertainties Positioned to manage a significant increase in resources as project unfolds We recommend a junior consultant on the project for certain types of work Our transformation capabilities will enable success in both limited-scale performance and in a broader-scale rollout We led a supply performance assurance effort at a global manufacturer – Siemens Our unique IP and insights from David Simchi-Levi can be leveraged 9 © OPS Rules Partners, LLC 2012
- 10. OPS Ensures that Every Aspect of Organizational Change is Addressed in Order to Achieve Transformation Success Stakeholder Engagement Create a sense of urgency Stakeholder Reality Check Pull together the guiding team Transformation Readiness Evaluation Develop the change vision and strategy Culture Analysis Communicate for understanding and Begin Cultural Change buy in Transformation Process Buy-in Empower others to act First pass transformation Produce short-term wins workload analysis Organizational Don’t let up Initial Transformation Create a new culture Strategy Change Management Sustainability Collaborative Strategic Planning and Management Time-based goals and objectives Complete set of metrics Transparency across functions and between levels Continuous Improvement/Adaptation 10 © OPS Rules Partners, LLC 2012
- 11. We Integrate Carefully with the People, Culture and Realities while Driving Results There is no one-size-fits all. Plans are structured around current realities and culture. Don’t waste peoples’ time. This is a busy environment with ongoing initiatives and priorities. Our techniques get early engagement. People will test whether this is a “program du jour”. Our prioritization techniques are sensitive to over-driving the resources We do whatever is needed to make the people and program successful 11 © OPS Rules Partners, LLC 2012
- 12. OPS Rules Capabilities, Techniques and Tools will ensure a Successful Transformation Personnel and Resources Vision the End State Performance we Consultants with C-level experience who are Entitled to have have led operations and transformations Strategic planning – appropriate Lean and Six Sigma experience Vision of Entitlement-achievement planning On-demand training of OPS methods for Enterprise maturity models/to-be client personnel workflows and metrics vision Project Preparation & Planning Governance: Organization and Project Transformation readiness assessment Cross functional team process Transformation workshop series to Concept of operations document scope, charter, plan, measure progress Client operating procedures Project roadmaps and detailed plans Pilot program design and execution Driving Performance End-to-end metrics design & definitions Stakeholder Engagement and Metrics gap analytics & target setting Communications Barrier identification and ranking Outbound planning and execution tools Barrier removal/escalation techniques Engagement outreach with 2-way discussion Drumbeat gap closure process Key stakeholder analysis and mentoring Correlation of operations / financial metrics Early adopter recruitment 12 © OPS Rules Partners, LLC 2012
- 13. Enterprise Transformation Workshops (ETW) Generate High Levels of Leadership and Employee Engagement Scoping Project Planning Planning/Progress Completion Preparation Session ETW #1 ETW’s #2-X ETW Learn ETW process Define tight scope of Diagnose potential Diagnose progress Summarize Results Practice specific tools work for team implementation barriers Develop risk mitigation compared to plan planned for ETW #1 Learn Enterprise Complete Team Charter strategies Capture lessons related Learn specific ETW Transformation model Define team roles and scope Identify stakeholders to transformation roles and language Clarify “burning platform” Develop detailed Install continuous Meet ETW lead Introduce sponsor to Define specific vision and stakeholder management improvement methods facilitator and set ETW process success metrics plan Create process for mutual expectations Clarify roles for ETWs Detail project milestones Create communications measuring future Detail implementation plan messages and detailed progress Develop plan to ensure communication plans Create action plans for leadership commitment Work toward team based future transformation milestones work Leaders and project team members fully align on the project requirements, plans, risks, milestones and progress Project team uses ETW output to fine tune project plans and assure alignment across all stakeholders We develop an aggregate project progress reporting structure We help plan and then facilitate these events 13 © OPS Rules Partners, LLC 2012
- 14. Our Approach is Optimized to Engage Key Stakeholders Early and Help them Shape and Own the Transformation Vision What happens after implementation? Is this transformation really here for keeps? How will the change Stakeholder Perspective affect my job? How do we continue improving? How can this transformation help us grow the business? What will I be trained on? How ready are we? How ready is the business? Degree of Support for Change What do changes look like? Commitment What is my role? How committed is the leadership? Acceptance How will this affect me? How will this affect the business? What is the transition Align reward system to new scope, full impact and environment rationale for the Empower stakeholder groups to Understanding Begin to generate buy-in fully own business processes transformation? Highlight the need for and Implement training focused on long- benefits of transformation term use and continuous Develop action plan to remove improvement barriers that impede pace of transformation Define transition vision Provide sufficient training and Awareness and business benefits support Develop shared vision for change Accept and respond to input from stakeholders Define scope of transformation Identify sponsors and key Action Steps stakeholders Plan project work steps and milestones Time 14 © OPS Rules Partners, LLC 2012
- 15. Our Transformation Readiness Assessment Tool Identifies the High-priority Issues to Address in Implementation Gathers readiness insights from Tool Excerpt Illustration personnel at many Do you have what’s needed to levels and locations execute program? What are the transformation issues you will encounter? Case for Organizati Transformation Leadership Organizational Capable Transformat onal Management Alignment Alignment Organization ion Systems Gives us a baseline 1. There is a 5. The scope of Business 9. Organization 13. Key 17. Organization of stakeholder solid project is System: leadership geographic, has sufficient business narrow and Assets, strongly functional, and data & case to fairly simple to processes, supports the labor operational perceptions justify the project manage skills and technology objectives of the Transformation stakeholder groups are expertise to support the initiative which committed to transformation generate the added transformation Informs early value and provide communications value and messaging Project team addresses each issue in the project plan 15 © OPS Rules Partners, LLC 2012
- 16. Strategic Stakeholder Analysis Identifies Issues Important to Key Players and how to Address them 16 © OPS Rules Partners, LLC 2012
- 17. Knowing the Stakeholder Audience, We Develop Messages, Themes and the Transformation Story Communication Themes Build Understanding / Gain Commitment / Build Awareness Reinforce New Behavior Objective Internalization Engagement {Theme #1} {Theme #2} {Theme #1} {Theme #2} {Theme #1} {Theme #2} {Theme #1} {Theme #2} Audience Message Vehicle Goal Available vehicles Description: Developing key messages, themes and the transformation story are interactive processes for gaining key stakeholder buy-in and delivering and demonstrating targeted communications Instructions: 1. Identify the key messages for the initiative and the themes to reinforce actions (walk the talk) 2. Determine how to frame each message to accomplish the different communication objectives 3. Develop the transformation story with key stakeholders 4. Review and revise messages, themes and story with leads and key stakeholders to ensure consistency of communication throughout the organization 17 © OPS Rules Partners, LLC 2012
- 18. Up-front Analysis Allows us to Establish a Well- coordinated Communication Action Plan Stakeholder/ Assess Objectives Channels Milestones Status Audience Effectiveness Roles Communication Purpose Media Timing Date Completed Audience Response/ Follow-Up Lead Newsletter Raise Email July 18th TBD Exec. Stakeholders Online survey Project Awareness, and Project Manager State Direction Leaders E-Newsletter Blogs Website Lunch & Learn Screen saver Description: Coordinating all elements into the Communication Action Plan, including team-level communications, drives overall execution for internal and external audiences and stakeholders Instructions: 1. Develop the Communication Action Plan for each project phase 2. Design the plan based on purpose and audience(s) 3. Use plan to monitor status of individual communications 4. Update plan throughout project 18 © OPS Rules Partners, LLC 2012
- 19. We Design Program Governance to Optimize Collaboration SWE Governance and Inhibit Sub-optimization (US Navy example) * EXCOMM SWE Board of Directors (BOD) *VADM Etnyre, CNSF * RADM Curtis, DCNSF/CNSL RDML Connor, N821 (FMB) * MGEN Benes, OPNAV N85 RADM Lyden, OPNAV N41 RDML Shatynski, CNSF N00R * RADM Guillory, OPNAV N86 RADM Reilly, MSC RDML Benedict, PEO IWS * RDML Frick, V-NAVSEA RADM Hugel, SEA 04 Jeff Klein, SPAWAR 04 * RDML Campbell, OPNAV N43B RDML Orzalli, RMC Commander Ms. Leggieri, NAVICP * RDML McManamon, SEA 21 RDML Horn, OPNAV N86F * RDML Hebner, PERS 4 RDML Goddard, PEO SHIPS Other Stakeholders (Participation as Required) NAVSEA SPAWAR NETC CNP NETWARCOM C2F/C3F CNIC PEOs INSURV N86B N85B RDML Frick, V-AVSEA Chief Operating Officer Communications Team AO: CDR Campbell, CNSF PAO RADM Guillory, OPNAV N86 Chief RADM Curtis, DCNSF Financial Officer Chief Readiness Officer Sustainment & NAVRIIPCFT Personnel Readiness Team- Strategic Financial Management Team Modernization Team FLAG Leads: RDML Hebner / FLAG Leads: RDML Horn RADM Starling FLAG Leads: RDML McManamon / RDML Shatynski AO: CNSF N41 CAPT Davis Ms. Leggieri AO: CNSF N1 CDR Deehr Co-AO: CNSF N8 CAPT Kaufmann AO: CNSF N43 CAPT Lewis Co-AO: PERS41 CAPT Sharpe CLASSRONs Co-AO:NAVICP85 CAPT Stafford Readiness, Requirements Planning Logistics Strategic Financial Planning (Parts / Food / Fuel / Ordnance) Over-arching Metrics Team Personnel Assignment AO: Mr. Warner, CNSF N8A Maintenance Individual Training Financial Reporting / Metrics Unit / Intermediate / Modernization Sustainment Training As of 14Sep07 19 © OPS Rules Partners, LLC 2012
- 20. Maturity Models Measure Transformation Progress at the Enterprise Level and Organization Level Enterprise Maturity Model Create a common vision of Level 1 2 3 4 5 what it takes to operate as Enterprise Management an enterprise Change Management Organization Governance Give an honest , evidence- Alignment based view of current Management Process maturity level Problem / Barrier Resolution Strategy & Planning Execution & Results Enable deliberate Process Driven planning for a desired Metrics - Drivers and Results Cost Management degree of advancement Improvement Process Tools & Methodology Results Evidenced 20 © OPS Rules Partners, LLC 2012
- 21. Our Cross-Functional Team (CFT) Handbook Clarifies the Methods Necessary for a Project Team to Succeed Aligns stakeholders with a The CFT Handbook common view of the work and The CFT and Business Improvement Team (BIT) The 16 Step CFT Process and Map 1 3 approach to improvement Part I: Processes and Players 5 Step 1 Identify the high leverage processes and functions 6 Step 2 Establish the CFT scope and charter 9 Step 3 Select CFT leader and members 11 Accelerates performance Part II: Scope and Mapping 13 Step 4 Validate scope and charter 14 improvement with frequent Step 5 Map the baseline process 15 drumbeat and rapid barrier Step 6 Establish baseline performance Step 7 Identify value-added and non-value-added steps 16 17 removal Step 8 Map the entitled process 18 Part III: Measurements 21 Step 9 Determine key measurements 22 Step 10 Design the measurement system22 Measurements are geared to Step 11 Establish initial entitled performance 22 Part IV: Barriers 31 advance global interests, not just Step 12 Identify barriers 32 local Step 13 Develop analysis to find root cause barriers Step 14 Rank-order root cause barriers 34 36 Step 15 Assign and schedule barrier removal actions 38 Step 16 Track progress through measurement system 39 Glossary 63 21 © OPS Rules Partners, LLC 2012
- 22. Our Barrier Identification and Removal Techniques Accelerate Gap Closure and Performance Improvement Barriers (subject matter, business process, Culture Barriers cultural) are complex and interrelated 2 1 Teams must remove barriers to improve Work- performance. Culture barriers are toughest Business Process 3 Arounds but provide the highest return Barriers 2 2 Subject Work-arounds grow due to barriers and can 1 Matter add permanent cost. They must be dismantled when barriers are removed. Barrier to Subject Matter Business Process Culture Desired Performance Barrier Cultural Barriers: Removal 1X 10 X 100 X hardest but greatest Impact returns © OPS Rules Partners, LLC 2012
- 23. We create Specific Examples of Barriers and ask Project Team Members to help Identify and Overcome them Categories and Examples of Transformation Barriers and Symptoms Business Process Culture Appropriate lot, work package or batch size Inadequate focus on reducing process cycle times Bottlenecks Views business as independent functions Lack of flexibility Lack of enterprise vision, strategy and planning Poor scheduling Inappropriate use of metrics, controls and incentives Allowing process inputs to exceed speed of line Lack of expertise in reducing process cycle times Allowing work-in-progress to grow Lack of attention to resource capacity utilization Poor resource allocation Lack of balanced sense of urgency Inappropriate process hold actions Cultural blindness-don't understand other functions Poor process design Resistance to changing paradigms Poor process implementation Inadequate emphasis on data integrity Long cycle-times Multiple collections of same information or data Low levels of first pass yields Lack of leadership/management forcing functions Low productivity Hidden drivers of suboptimizing behaviors Inadequate feedback Lack of root cause problem solving behavior/skills Wrong measurements Behaviors that demonstrate policies are optional Rework Behaviors that demonstrate practices are optional Knowledge or skill deficits Inadequate strategic planning to drive performance Inadequate or ineffective inspection Lack of error-proofing Ineffective communication Excessive non-business "chatter" 23 © OPS Rules Partners, LLC 2012
Editor's Notes
- #17: The results are mapped to identify and focus on stakeholders that need the most improvement to support the transformation.Strength of influence – Considerations: Rank, tenure, internal network, budget authority, client network, resource ownership, charisma, knowledge/expertise, track record, reputation, demeanor, political savviness, amount of political capital (ability to reciprocate favors)
- #20: Over 20 organizations with a core ExcommProcess Teams for major processesHere is where change management took rootOther admirals could not back out easilySubordinates saw the boss engaging and moving feet, not just lipsAll gained and end-to-end perspective Gumby is an actual guy