Operational Excellence E-Book

John S. Mitchell

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 545

Veröffentlichungsjahr: 2015

Beschreibung

Provides the foundation and tools that are essential for an enterprise to bring Operational Excellence into their organizational culture; gain maximum results, benefits and value * Strategies for and implementing details for enterprises at all levels of maturity from those with programs in place to those looking to improve safety, health, environment performance as well as the efficiency and effectiveness of their operations * Includes topics from concept to sustainability satisfying knowledge requirements of all levels in the organization * Defines program objectives; develops improvement strategies; identifies and prioritizes improvement opportunities; implements improvement plans; monitors, continuously improves and sustains results * Applicable to a broad variety of operating enterprises, academic institutions and third party implementing organizations

Leseprobe

Table of Contents

Cover

Title Page

Copyright

BIOGRAPHY OF JOHN S. MITCHELL

PREFACE JOURNEY TO OPERATIONAL EXCELLENCE

EVOLUTION OF OPERATIONAL EXCELLENCE

GROWING AWARENESS OF OPERATIONAL EXCELLENCE

ACKNOWLEDGMENTS

INTRODUCTION

CHAPTER 1: OPERATIONAL EXCELLENCE—THE IMPERATIVE

DEFINITION OF OPERATIONAL EXCELLENCE

OPERATIONAL EXCELLENCE EMBRACES EVERYONE IN AN ENTERPRISE

OPERATIONAL EXCELLENCE IMPROVES EFFICIENCY

EFFICIENCY AND EFFECTIVENESS

A FAMILIAR PROGRAM

DESCRIPTION

THE JOURNEY

RELIABILITY

RISK

CHANGES IN THE BUSINESS/MISSION ENVIRONMENT

CONVENTIONAL OPERATIONS MANAGEMENT

MAINTENANCE WITHIN AN OPERATING ENTERPRISE

MANAGING IMPROVEMENT INITIATIVES

THE SOLUTION

EFFECTIVENESS AND VALUE THROUGHOUT THE ENTERPRISE

THE OPERATIONAL EXCELLENCE INITIATIVE

SUCCESS—GREATER THAN THE SUM OF THE PARTS

APPLICATION

WHAT YOU SHOULD TAKE AWAY

CHAPTER 2: APPLICATION OF OPERATIONAL EXCELLENCE

PROCESS CHARACTERISTICS

OPERATING/MARKET ENVIRONMENT

ENTERPRISE STRATEGY

CHANGES IN THE OPERATING ENVIRONMENT

VALUE

JOURNEY INTO THE FUTURE

WHAT YOU SHOULD TAKE AWAY

CHAPTER 3: FOUNDATION PRINCIPLES

OPERATIONAL EXCELLENCE—A PROGRAM EQUIVALENT TO SAFETY

SCOPE OF OPERATIONAL EXCELLENCE

FINANCIAL CONSIDERATIONS

DRIVEN BY BUSINESS/MISSION RESULTS

FOUNDATION PRINCIPLES

EIGHT ELEMENTS OF THE OPERATIONAL EXCELLENCE PROGRAM

IMPLEMENTING THE OPERATIONAL EXCELLENCE PROGRAM

BENEFITS OF OPERATIONAL EXCELLENCE

WHAT YOU SHOULD TAKE AWAY

CHAPTER 4: THE OPERATIONAL EXCELLENCE PROGRAM—OVERVIEW

INITIATION

THE VALUE PRINCIPLE

USE OF PROVEN PRACTICES, PROCESSES, AND TECHNOLOGY

OPERATIONAL EXCELLENCE PROGRAM

IMPROVEMENT PROCESSES

THE OPERATIONAL EXCELLENCE DIPICI PROCESS

PROGRAM ELEMENTS

ESSENTIALS FOR SUCCESS

IMPLEMENTATION

WHERE AND HOW TO BEGIN?

WHAT YOU SHOULD TAKE AWAY

CHAPTER 5: BUSINESS AND FINANCIAL ELEMENTS

CONNECTION TO BUSINESS RESULTS

THE OPPORTUNITY

PROFIT CENTER MENTALITY

VALUE IMPERATIVE FOR OPERATIONAL EXCELLENCE

THE FINANCIAL STATEMENT

SELECTING FINANCIAL MEASURES OF PERFORMANCE

ACCURATE LIFETIME COST TRACKING

THE BUSINESS VALUE MODEL

OPERATING EFFECTIVENESS

LEVERAGING MISSION/CONVERSION EFFECTIVENESS

WHAT YOU SHOULD TAKE AWAY

CHAPTER 6: THE ESSENTIAL EVOLUTION TO REAL-TIME BUSINESS OPERATIONAL EXCELLENCE

BACKGROUND

NECESSITY FOR REAL-TIME OPERATIONAL EXCELLENCE

INTEGRATED BUSINESS AND OPERATIONS SYSTEM

DEVELOPING REAL-TIME BUSINESS-DRIVEN OPERATIONAL EXCELLENCE

WHAT YOU SHOULD TAKE AWAY

CHAPTER 7: LEADERSHIP, VISION, STRATEGY

EXECUTIVE CHAMPION

STEERING TEAM

LEADERSHIP SUCCESSION

PROGRAM LEADER/CHAMPION

PROGRAM LEADERSHIP TEAM

WHAT YOU SHOULD TAKE AWAY

CHAPTER 8: SAFETY AND HUMAN PERFORMANCE EXCELLENCE

SAFETY PERFORMANCE EXCELLENCE

HUMAN PERFORMANCE EXCELLENCE

WHAT YOU SHOULD TAKE AWAY

CHAPTER 9:

DEFINE

THE PROGRAM AND PROGRAM OBJECTIVES

EXECUTIVE LEADERSHIP

OPERATING ORGANIZATION

PROGRAM PLAN

FORMULATE PROGRAM OPERATING PLAN

APPOINT WORKING-LEVEL LEADERS—CHAMPIONS

ADD/OPTIMIZE SUPPORTING PROCESSES

ROLL OUT OPERATIONAL EXCELLENCE PROGRAM

MAINTAIN MOTIVATION AND ENTHUSIASM

WHAT YOU SHOULD TAKE AWAY

CHAPTER 10: OPTIMIZE THE ORGANIZATION

ORGANIZATIONAL REQUIREMENTS FOR SUCCESSFUL OPERATIONAL EXCELLENCE

INITIATING ORGANIZATIONAL IMPROVEMENT

SKILLS MANAGEMENT AND TRAINING

PERSONNEL REDUCTIONS

NECESSITY FOR EFFECTIVE COMMUNICATIONS

WHAT YOU SHOULD TAKE AWAY

CHAPTER 11: CONDUCT INITIAL TRAINING WORKSHOPS

ESTABLISH TEAM TRAINING, FACILITATION, AND REVIEW PROCESS

TECHNICAL TRAINING

WORKSHOP DESCRIPTION

REVIEW AND REFINE PROGRAM BASIS

WHAT YOU SHOULD TAKE AWAY

CHAPTER 12: IDENTIFY AND VALUE PRIORITIZE OPPORTUNITIES FOR IMPROVEMENT

VALIDATE SCOPE OF IMPROVEMENTS

OPPORTUNITY IDENTIFICATION PROCESS

IMPROVEMENT METHODS

IDENTIFYING SPECIFIC POTENTIAL IMPROVEMENTS

QUANTIFY AND PRIORITIZE OPPORTUNITIES—IN BUSINESS TERMS

CATEGORIES OF PERFORMANCE

METHODS FOR IDENTIFYING OPPORTUNITIES

RISK

FINANCIAL NORMALIZATION

ANALYZE TO DETERMINE HIGHEST POTENTIAL VALUE OPPORTUNITIES

FINAL STAGE

EXPAND LEADERSHIP TEAM

WHAT YOU SHOULD TAKE AWAY

CHAPTER 13: PROCESS RELIABILITY TECHNIQUES HELP MAKE MORE MONEY

INTRODUCTION

PARETO DISTRIBUTION

CAUSE OF DEFICIENCIES

TRADITIONAL WEIBULL PLOTS

PROCESS WEIBULL PLOT

PRODUCTION WEIBULL ANALYSIS

WHAT YOU SHOULD TAKE AWAY

References

CHAPTER 14: PLAN OPPORTUNITIES FOR IMPROVEMENT

APPOINT IMPROVEMENT ACTION TEAMS

REFINE PRELIMINARY IMPROVEMENT PLANS

SELECT SET OF IMPROVEMENT OPPORTUNITIES FOR DETAILED PLAN DEVELOPMENT

DEVELOP DETAILED IMPROVEMENT ACTION PLANS FOR HIGHEST VALUE IMPROVEMENTS

CONSIDER PILOT IMPLEMENTATION

FINALIZE AND SUBMIT IMPROVEMENT ACTION PLANS FOR APPROVAL

FOLLOWING APPROVAL

WHAT YOU SHOULD TAKE AWAY

CHAPTER 15: MEASURES OF PERFORMANCE—METRICS AND KPI

TYPES OF METRICS

ESTABLISHING OBJECTIVES

USE OF METRICS

HIERARCHY OF OPERATIONAL EXCELLENCE METRICS

SELECTION OF METRICS

KEY PERFORMANCE INDICATORS

GRAPHICAL DISPLAYS

BENEFITS OF METRICS

WHAT YOU SHOULD TAKE AWAY

CHAPTER 16: IMPLEMENT—IMPROVEMENT ACTION PLANS

REFINE THE ORGANIZATION

DEPLOY RESOURCES

DEPLOY PRACTICES AND TECHNOLOGY

IMPLEMENT IMPROVEMENT ACTION PLANS

ESTABLISH INTERNAL OVERSIGHT AND MONITORING

DRIVE THE IMPROVEMENT PROCESS

OVERCOME BARRIERS

COMMUNICATE RESULTS AND SUCCESSES

WHAT YOU SHOULD TAKE AWAY

CHAPTER 17: PERFORMANCE ASSESSMENTS

OVERALL DESCRIPTION

ASSESSMENT METHODS

ASSESSMENT PROCESS

ASSESSMENT PREPARATION

PERFORM THE ASSESSMENT

ASSESSMENT TEMPLATE

CONCLUSION, SUMMARY, RECOMMENDATIONS, AND SITE WRAP UP

PREPARE FORMAL ASSESSMENT REPORT

REPORT SUBMISSION

ACTIONS REQUIRED FROM ASSESSED OPERATING UNIT

FORMAL AND INFORMAL EMPLOYEE SATISFACTION SURVEYS

WHAT YOU SHOULD TAKE AWAY

CHAPTER 18:

CHECK

—MEASURE AND MANAGE RESULTS

BEGIN WITH METRICS

CONDUCT ASSESSMENTS AND SURVEYS

CONFIRM RESULTS AND CONTRIBUTION TO ENTERPRISE VALUE AND STRATEGY

CONTINUE CHECKING UNTIL CONFIDENT THAT IMPROVEMENT IS FULLY SUSTAINED

WHAT YOU SHOULD TAKE AWAY

CHAPTER 19:

IMPROVE

—INSTITUTIONALIZE AND SUSTAIN GAINS

IMPROVE AND SUSTAIN

CONTINUOUS IMPROVEMENT

ACHIEVING SUSTAINABILITY

SOME LESSONS LEARNED

FINAL COMMENT

WHAT YOU SHOULD TAKE AWAY

CHAPTER 20: CONCLUSION—NOW IT IS UP TO YOU!

INDEX

End User License Agreement

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Guide

Cover

Table of Contents

Preface

Begin Reading

List of Illustrations

Figure 1.1

Figure 1.2

Figure 1.3

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OPERATIONAL EXCELLENCE

Journey to Creating Sustainable Value

JOHN S. MITCHELL

Copyright © 2015 by John Wiley & Sons, Inc. All rights reserved

Published by John Wiley & Sons, Inc., Hoboken, New Jersey

Published simultaneously in Canada

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, [phone], fax [phone], or on the web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, [phone], fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at [phone], outside the United States at [phone] or fax [phone].

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Library of Congress Cataloging-in-Publication Data:

Mitchell, John S., 1937-

Operational excellence : journey to creating sustainable value / by John S. Mitchell.

pages cm

Includes index.

Summary: “Provides Operational Excellence strategies and implementation details for enterprises at all levels of maturity, from those with programs in place to those looking to improve performance”–Provided by publisher.

ISBN 978-1-118-61801-1 (hardback)

1. Production management. 2. Industrial management. 3. Quality control. 4. Total quality management. I. Title.

TS155.M6165 2015

658.5--dc23

2014025096

BIOGRAPHY OF JOHN S. MITCHELL

During a professional career of over 40 years, John Mitchell has held a wide range of executive, managerial, and technical positions in industry. He has been a strong and visible advocate for the development and implementation of business, technical, and operating strategies for Operational Excellence, Physical Asset Management, and Reliability and Maintenance (R&M) excellence. During his career, he has delivered numerous presentations and workshops throughout the world, stressing the necessity and financial and business benefits of optimizing work processes and technology in his areas of expertise. In semiretirement, he provides mentoring and coaching for organizations committed to improving operational productivity and effectiveness.

Mitchell has authored over 100 technical papers and articles, detailing the technology, financial, and business benefits of Operational Excellence, Physical Asset Optimization, Profit-Centered Maintenance, reliability improvement, condition monitoring, and assessment. Mitchell has authored the books “The Physical Asset Management Handbook,” currently in its fourth edition, and “An Introduction to Machinery Monitoring and Analysis.”

He is a graduate of the U.S. Naval Academy, Annapolis Maryland.

PREFACE JOURNEY TO OPERATIONAL EXCELLENCE

This book is addressed to three constituencies:

Executives and senior management

: the text provides a solid definition of the concept and principles of Operational Excellence, the business/mission benefits and the value it will produce, and the importance leading enterprises have placed on its successful implementation. This information is contained in the first five chapters along with principles, requirements, basics of implementation, and commitment necessary for success. Consider the five chapters as an overly long executive summary of the details that follow.

Leaders and third parties chartered to lead, manage, and facilitate an Operational Excellence initiative

: specific information detailing the establishment and effective implementation of the program. An Operational Excellence program produces results meeting all expectations and, of course, makes them look good in the process.

People within an enterprise participating in Operational Excellence

: this group will find definitive principles and a detailed implementing roadmap to assure all are on the same page, working effectively to common objectives. Expectations, requirements, and mutual responsibilities are fully identified and aligned to assure maximum success.

EVOLUTION OF OPERATIONAL EXCELLENCE

The concepts and details that follow have been developed and refined over more than a decade of workshops and interactions with enterprises and people directly involved in seeking maximum effectiveness and return from their efforts. This text will provide guidance and great value for executives, management, leaders, and implementers of Operational Excellence.

The path to this book began in the early 1990s. The author and a good friend, both with land-based production operations and marine experience, were attempting to discern why industrial plant maintenance, rather than the essential, profit-making part of the business that it could and must be, was typically considered a necessary evil and cost to be controlled. In many operating enterprises, maintenance was primarily directed to restoring failures reactively rather than proactive avoidance, elimination, and improvement. Furthermore, many advances in technology and practice proven to improve performance and value gained from physical production assets were not viewed in the same light as investments for improving energy and process efficiency. While the latter was presumed to generate a business return, the former was most often thought of as rather costly luxuries to be considered only when times were good. Equally important, why did performance-limiting friction exist at the working level between the operations and maintenance functions in most industrial operating enterprises?

In many operating enterprises, operations typically felt that production/mission compliance was first, foremost, and above all. Operations typically considered maintenance a service supplier: someone to call when bad things happened. This perspective and its corollary “keep the customer happy” were shared by many in maintenance. Although typical within many operating enterprises, the “keep the customer happy” premise is particularly unproductive when considering what obligations a customer, operations in this case, has to a supplier. What obligations do you have to the supplier of the tires on your automobile? Operations would say that maintenance was often unrealistic, requesting a premature halt to production to correct what operations considered minor problems or to conduct preventive tasks operations considered of secondary importance to production output. Maintenance typically replied that production too often operated equipment carelessly, didn't really care for or about equipment until something went wrong, and then applied extreme pressure to restore operation as quickly as possible.

In the marine industry, operators and maintainers are one and the same—these tensions didn't exist. Even if it did, open ocean swimming in creature-filled waters isn't an attractive alternate in the event of a major failure!

A concept called profit-centered maintenance was the initial outcome of the discussions. Profit-centered maintenance advocated adopting a value, investment, return, and continuous improvement mentality, rather than the less-effective cost control to budget where there are actually disincentives for improvement.

A leading operating company had adopted a team-based profit-centered mentality within a budgetary system. It appeared to work very well, with numerous operating and business benefits. Many who reviewed profit-centered maintenance thought the concept as a good idea; some felt it didn't go far enough. One person stated that maintenance in his company was considered, and always would be considered, a service and cost—the profit-centered philosophy would never be accepted at any level of the company, certainly not by executive and financial management.

By the late 1990s, the profit-centered idea had advanced into the initial concept of physical asset management. In addition to the essentials of profit-centered maintenance, physical asset management expanded to emphasize the cooperative organization, improvement-oriented work culture, human performance excellence, reliability, and risk imperatives. All are necessary within a larger, multifunction, operating process to gain optimum sustainable performance and greatest business results.

A book, written by the author and first published in early 2000, detailed the value-based principles of physical asset management. The book made the case that the key challenge facing operating enterprises wasn't technology or adoption of optimizing practices—all had been proven beyond doubt—but rather the business value that made them essential for success. This was the fundamental premise of physical asset management.

During the first decade of the twenty-first century, physical asset management, under several naming variants, gradually devolved into a more sophisticated name for maintenance. The profit center value concept, operations maintenance cooperation, empowered workforce, human performance excellence, and a number of other elements considered essential for optimum business/mission performance and effectiveness were subsumed by heavy concentration on administrative controls, maintenance management, and practice.

Late in the decade, the term Operational Excellence began to appear, primarily from leading operating enterprises as their guiding concept for attaining maximum effectiveness, overall operations, and business and mission success. Examining the principles of Operational Excellence as expressed by industry leaders, a number of essentials codified earlier concepts. Engaged visionary leaders, value focus, a working culture committed to excellence in all activities and continuous improvement, optimizing risk and reliability as business imperatives, cooperative, committed ownership throughout the organization, and empowered multifunction improvement action teams to name a few.

Viewing the principles, it became clear that Operational Excellence could be considered the latest stage in an evolution that began almost 20 years earlier with the concept of profit-centered maintenance. In addition to the profit and value focus, Operational Excellence includes production and business/mission optimization for greatest effectiveness and success. It is fully inclusive, compatible with, and supportive of asset management. In fact, the organizational, administrative, and control system specified in the ISO55000 series, Asset Management, are totally applicable to and should be incorporated within Operational Excellence. Think of Operational Excellence as a major river to business/mission success. Lean Six Sigma, energy and control performance excellence, asset management and asset performance excellence, profit-centered maintenance, and other broadly accepted functional improvement practices, production, and business system optimization are tributaries! All are included in, contributing to, and driving Operational Excellence to gain greatest value for the enterprise.

Physical asset management workshops, delivered throughout the world by the author beginning in the late 1990s and continuing during the first decade of the 2000s, gradually shifted emphasis to Operational Excellence. The book mentioned previously, likewise evolved through four editions, increasing emphasis on the value and human elements that are essential for a successful operating enterprise.

GROWING AWARENESS OF OPERATIONAL EXCELLENCE

As time progressed, several facts became apparent. There is growing awareness of Operational Excellence at executive levels of operating enterprises. Many operating enterprises are implementing or considering Operational Excellence. Most of these have a dedicated executive at the vice president or director level overseeing the effort. Some may call the concept by a different name—the powerful principles remain the same. With this stated, definitions are evolving, and there are few generally accepted implementing details to provide guidance for those assigned responsibility. In one major corporation, overall guidelines for Operational Excellence signed by the CEO were so general and with a number of inconsistencies that individual business units within the corporation developed differing implementations. Books and articles on Operational Excellence have been focused into areas such as the organization, process flow, and alignment of management systems; few address the totality. Furthermore, there is a major disagreement on overall strategy. Should the operating strategy of the enterprise be directed to business growth, improving value gain, continuous improvement, or some combination? All these issues will be addressed and answered.

Many participants at Operational Excellence workshops stated their company had initiated an Operational Excellence program or was considering a program without any details to define the beast beyond the compelling term! The great majority were present to learn and assure the program they were developing, or might be called on to develop, would meet expectations quickly and effectively, thereby providing executive management confidence in Operational Excellence and their personal value, not necessarily in that order! A few stated they had Operational Excellence initiatives in place and were looking for ideas that would make their efforts more effective and successful.

By now, many are wondering where safety is in this concept. In fact, safety and Operational Excellence are interlocking, identical programs. The same procedural basis, working culture, organizational and individual commitment, learning, and continuous improvement required for safety must exist within Operational Excellence. Much more about this will be revealed as the story unfolds. There are many supporting functions. Several have been named, and more will be revealed in the text. Human relations (HR) and personnel and change (improvement) management are highly important. It is the same for engineering, finance, and information technology (IT). For all, the text will focus on requirements and function within Operational Excellence. Several specific practices such as Lean Six Sigma will be identified and their application discussed; many details are left to subject-specific texts.

There you have it, a brief explanation of where we will be going and a bit about the origin. Hope the text will be informative and create value for you.

ACKNOWLEDGMENTS

Developing the concepts and ideas for a book of this type begins from experience, identifying and solving problems, discussions, comments, and suggestions with many, many people. To all I have come in contact with over the years, participants in projects, plant assessments, technical conferences, physical asset management, and operational excellence workshops—my great thanks for sharing your knowledge, your questions, comments, and insight toward building this body of knowledge.