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Achieving Operational Excellence

Achieving Operational Excellence. Gregg Schoppman August 2019. 8. Why are we here?. 1. Case Study | Mechanical Contractor, Midwest, USA. 2. Consider the Starbucks Cup of Coffee. Legacy organization – Established in 1912 Operates within a perceived “commodity marketplace”

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Achieving Operational Excellence

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  1. Achieving Operational Excellence Gregg Schoppman August 2019 8

  2. Why are we here? 1

  3. Case Study | Mechanical Contractor, Midwest, USA 2

  4. Consider the Starbucks Cup of Coffee • Legacy organization – Established in 1912 • Operates within a perceived “commodity marketplace” • Number of employees – 190,000 worldwide • Annual approximate revenue - $17 billion • Menu – Infinite potential menu combinations • With all this variability, how can Starbucks create the “same” cup of coffee in Tampa, FL as it does in Seattle, WA? • Why is it a construction organization with ten managers and $50 million in sales has 11 ways of operating? 3

  5. “You might be reactive if…” (1 of 2) • Comments heard in reactive companies: • “We don’t have time to plan” • “Things change too much to plan” • “We’ll figure it out in the field” • “We’ll order 80 percent of the materials and the foreman can handle the rest” • “Our jobs are different” • “We have always done it this way” • “Our software won’t let us do that” • “My customer won’t let me plan” 4

  6. “You might be reactive if…” (2 of 2) • Move field managers and crews constantly • Constant phone and radio noise • Too many emergencies or last-minute needs from your shop or vendors • Large number of small purchases made in the field • Lack of structure • High percentage of new associates from various backgrounds (free agency) 5

  7. Critical Elements of Operational Excellence • Defined processes and tools for your firm – The Brand X Way • Key performance indicators the drive performance and behavior • True operational leadership to drive accountability and consistency • Training and development to drive the “Brand X Way” • Strategic focus on operations, similar approach to safety • Defined culture of innovation and continuous improvement 6

  8. FOCUS on the Things You Can Control and Influence • YOUR FIRM controls the planning at all levels • YOUR FIRM influences the place of work • YOUR FIRM controls the workforce • YOUR FIRM has the “bandwidth” to control the tools, processes and accountability 7

  9. Interconnectivity of the Drivers of Productivity 8

  10. Critical tools for your toolbox 9

  11. Other Important Processes to Consider • Schedule Development and Management • Change Order Management • Customer Management • Document Control • Cost Control/Cost to Complete • Financial Management and Collections • Quality Control and Assurance • Risk Management 10

  12. Why MUST We Measure? • Accountability • To change behavior, you must have accountability • Quality Control • What is the “Brand X Way?” • Training and Development • Provides positive reinforcement • Lean Metrics • Upstream data to drive performance and benchmarking 11

  13. What is a “Business Leader/Business Manager?” • Keen balance of project and business management • Understanding of the building technical insight as well as the financial component • Strong emotional intelligence • Relationship orientation, internally and externally • Paradoxical blend of visionary and detail orientation 12

  14. Turning Project Managers Into Business Managers/ Leaders… 13

  15. Do You Have Project Leaders or Project Witnesses? • Know where the job stands today • Know where the job will stand at completion 14

  16. What Happens Between the Boxes 15

  17. Methodologies for Improvement DMAIC (Define, Measure, Analyze, Improve, Control) 16

  18. “Wrenching on the Car While You’re Going 180 MPH…” 17

  19. What is process? If you want consistent results, you better have consistent management processes and you better be using them consistently! A management process is a collection of related, structured activities or tasks that produce a specific service or product (serve a particular goal) for a particular customer or customers. It can often be visualized with a flowchart as a sequence of activities 18

  20. What is process? • Should be teachable or trainable • Method or system that achieves consistent, desirable results • Documented • Uniform • Repeatable • A firm’s “best practice” • Assigns ownership and creates accountability • Brandable (e.g., “The Brand X Way”) • Proactive 19

  21. What process is NOT • It is not a binder • Top-down directive • A replacement for leadership • Exclusive to an individual • Undocumented • Verbal and poorly communicated • Stagnant • Any way you want to do something as long as it produces good results 20

  22. Most processes will require productivity tools A productivity tool is a standardized template that facilitates the completion of one or more of the steps in a process. A productivity tool directly or indirectly impacts productivity and ensures consistency • Standard meeting agendas • Planning templates or formats • Checklists • Forms • Spreadsheets • Graphs and charts • Reports • Prefab catalog • Logs • Change order proposals 21

  23. Common Mistakes to Consider Watch out for these pitfalls • Don’t confuse your software for process – Yes, it helps but think about how they use that TOOL rather than the TOOL itself • Don’t confuse high performance for business consistency – Many firms look at a great manager and think it is the process when that manager is simply doing it differently than the pack • Don’t think SOP Manual – Often, SOP’s can be evaluated by the coating of dust on them… • Don’t forget to measure – You must measure to manage! • Don’t think this is a “set it and forget it” moment – Operations evolve (Think Operations 2.0) 22

  24. A Leader’s Role in Achieving Operational Excellence • Operational excellence and productivity improvement start at the top • To realize a significant return, you must be willing to make significant investments in examining and building the RIGHT infrastructure • You cannot fast track sustainable cultural changes • Set the bar high for both corporate and individual performance • Your job is to beat the drum at every opportunity (and celebrate the wins) 23

  25. A Leader’s Role in Achieving Operational Excellence • Measure and share the right things on a regular schedule (did we forget to say MEASURE!) • Be visible and involved on a regular basis • Recognize and reward the right things • Always be looking for, studying and embracing industry trends, technologies and delivery methods – Avoid the danger of the “Status Quo” • The leaders are responsible for selling and implementing the necessary changes 24

  26. Integrated platform FMI has the ability to bring all its resources to bear in order to deliver customized solutions and exceptional results to its clients

  27. Gregg Schoppman Principal FMI Corporation 308 South Boulevard Tampa, FL 33606 Tel: 813.636.1259 Email: gschoppman@fminet.com www.fminet.com

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