pieter lottering - global io - gaining executive support and financing for integrated operations...
TRANSCRIPT
Integrated Operations – Gaining Executive Support
Integrated Operations Specialists22 October 2015 March 2015
The IO value proposition
High Performing Businesses, like orchestras, have a few critical elements in common…
“The conductor of an orchestra doesn’t make a sound. He depends, for his power, on his ability to make other people powerful.”
Benjamin Zander – The Art of Possibility
A team of highly trained and skilled professionals, all wanting to do their very best both individually and as a team.
A well defined process where musicians or professionals only play when required, as it is definitely not about maximising the use of any single person or instrument. A change in song or customer requirements simply means different people are required to work differently and in different amounts, and the process for changing is simple and efficient.
1. People
2. Process
3. Technolog
y Specialised equipment, fit for the task at hand, to do exactly what is required, nothing more, nothing less
and performance are managed in real time. Integrated Operations is like the conductor of your supply chain.
4. Coordination
Here is where true value gets created.
And importantly, a very capable conductor to ensure the process work as a whole,
How empowered are your conductors?
Specialist Managers
Con
text
Impact of Decisions
Bureaucratic Silos
Functional Excellence
Turf Wars
Communities of Practice
Cross Functional Teams
True Integrated Operations
Centralised Control
Corporate Despotism
Lim
ited
Ric
h
Local Enterprise
The Global Integrated Operations framework
Leadership behaviours
Right people
Processes
Technology
Culture & behaviours • Collaboration • Transparency • Desire to improve • Define success as a
collective
Context and awareness
• Real-time enterprise awareness
• Trusted and available information
Dynamic Enterprise-wide
optimisation
• Optimised operations across the business
• Culture of rapid improvement • Dynamic business model
responsive to market needs
Inputs Integrated Operations Benefits
Culture and Context are both critical to maximising dynamic optimisation
Structural Benefits • Improved Safety Outcome • Better cost outcome • Rapid technology and process
remediation
Source: Co-developed with The Boston Consulting Group
IO Business Case
Functional Excellence
Collaboration Benefits
Dynamic Optimisation
Structural Benefits
Feasibility Phase Implementation Phase Post Implementation Phase
Valu
e
Return on investment comes in different forms
Strategy
Process Innovation
Process Optimisation
Cross Functional Decision Making
Interface Efficiency
Gains
Real time deviation
management
Recovery from major disruption
Safety
Relocation -Virtualisation
Continuous Improvement Future
Expansion Cost
Innovation Efficiency Transparency
Benchmarking
Examples from an actual deployment
35%
65% 97%
150%
10%
35%
15%
Upfront Cost Ongoing Cost
Relocation Benefit
Throughput Benefit
Additional Scope
Future Expansion
Other Benefits
Projected benefits as part of business case
Optimisation benefits as part after go-live
% NPV relative to cost
12%
25%
26%
25%
11%
Projected
Year 1
Year 2
Year 3
Year 4
Year 5
105%
Realised
Year 1 capacity improvement delivered
>60% Year 2 capacity improvement
Projected Values Actual Benefit
Value proposition Summary
Understand the current baseline and target areas where small changes can have big effects
Cleary describe a vision of how the different types of benefits provide upside over time.
Show how downside risk will be managed (perceived or real)
Get commitment that sufficient resources will be available, especially the 2 years after go-live
Ensure Executives are on the journey and are authors of the strategic parts of the vision
1
2
4
3
5
Transformation and Change
IOC are much more than a technology project…
“A recent survey at the Global Leadership Summit in London
found that 34% [of leaders] said more than half their company’s
full-time workforce would be working remotely by 2020” –
Fast Company 2014
“It's not uncommon to have an organisation seeing a centre somewhere and saying 'I want one of those' and it's about a centre.” – Andy Sherring Oct 2012
In the beginning, everyone thought the value lies in having a big control room
However, experience has now shown that the value really lies in the improvement culture that emerges out of these environments
Senior Leaders
Middle Management
Frontline Leaders
Operational Staff
Senior Leaders
Middle Management
Frontline Leaders
Operational Staff
These cultures can emerge anywhere where you provide people with the right context
E-Commerce, the industrial internet and the internet of things allow for these environments to be stood up at low cost, and potentially in a virtualised fashion
Change as Transformation key points Treat your IOC deployment as a business transformation initiative, not only as a large technology project
Accentuate that technology is only the enabler, people and the processes they use will add the most value
Use the opportunity to deliberately design in better interface management
Integrate the organisation by designing shared KPI’s on either side of important interfaces
Make sure the IO implantation is lead by operational leaders
Budget and plan for sufficient post implementation support, especially for newly introduced technology
Share cross-functional wins early, often and publicly
Be very transparent in your communications about the positives and the negatives
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2
4
3
5
7
6
8
Building a winning culture
Impact on organisational culture
Continuous Improvement Leadership Transparency
• Simple, effective CI process
• Fit for purpose tools and methodologies
• Process to identify high value opportunities fast
• Sufficient analyst and engineering support to execute high value ideas
IO Leadership • Lead with humility and
influence • Value chain performance
focused • Foster strong peer
relationships Site Leadership • Trust in the IOC’s capability • Have clear expectations – both
ways • Understand their role in the
value chain and the reasons for globally optimised decisions
• Fix poor data structures and remove duplicate data sources
• Transparency is vital for real time decision making
• Establish single source of truth for benchmarking
• Reinforce that the data is there to highlight areas that need help, not to highlight poor performance
“Blame is not for failure, it is for failing to help or ask for help” Jorgen Vig Kudstorp, CEO of Lego
Senior Leaders Middle Management Frontline Leaders Operational Staff
Value
Senior Leaders Enables the
construction of an IROC. No significant
competitive advantage
Middle Management
Interface optimisation by building a non-
siloed culture. Some competitive advantage Frontline Leaders
Expectation to provide operational expertise allows for rapid process improvement and
standardisation. Significant competitive advantage
IROC is embedded in all aspects of day to day operations.
Significantly outperform our
peers.
The role of the executive
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