Major efficiencies, economies of scale and cost-savings can be delivered for global manufacturers that introduce standardised processes across multiple markets and locations, but the stumbling block comes when you need to adapt processes for different product lines, regulations or other regional nuances.
The sheer degree of business complexity of operating both globally and locally represents a huge challenge when it comes to successfully managing and standardising manufacturing business processes. Why? Because in reality the demands of localisation and customisation mean there will always be exceptions to the rule, resulting in the need for process variations. The dichotomy that this presents was nicely summed up by sociologist Roland Robertson when defining ‘glocalisation’ as “the simultaneity – the co-presence – of both universalising and particularising tendencies”.
With the growing impact of Industry 4.0 coupled with the adoption of servitisation, robotics and IoT, there is likely to be even greater onus on manufacturers to introduce process variants to universal standards so they can add value for their customers and stay competitive. However, if not properly managed, introducing process variations can lead to increased costs, process inconsistencies and bottlenecks every time a new variation is introduced. This can be particularly frustrating when only slight tweaks to standard processes are necessary to meet the requirements of a specific location, product or customer.
So what steps can be taken to reap the benefits of slicker processes both on a broader and at a specific level. According to Steve Stanton, an analyst with FCB Partners and a pioneer of business model innovation, “ninety percent of the organisations I know have failed at standardisation.” However there are ways of achieving the nirvana of process standardisation with the ability to control process variations as appropriate. Here are seven ways you can make this happen.
1. Standardise core processes
Manufacturers who operate across multiple countries with multiple sites, products and varying customer requirements must first agree on a set of core or standard processes. These should then be assigned to ‘global process owners’ who are responsible for their ultimate governance and control. This master platform will act as a blueprint against which all local variations are then considered.
2. All process variations must be authorised
Local process variants should then only be established from this standard process base. Any changes applied by ‘variant experts’ should be highlighted and be visible against the core processes. There should be no modifications to process variations, unless authorised by the global process owners, enabling them to retain omniscience and control.
3. Track changes
Manufacturers must have the facility to oversee, compare and report on all the process variations that exist, for each standard process, so an organisation can see and track exactly what activities have been added, removed or changed, and how they diverge from the original process.
This enables global process owners to be completely aware of what is happening at a macro-level, yet still empower local teams with the flexibility to act according to regional or customer-specific demands.
4. Intuitive access to new process variants
Once a process variant has been introduced, naturally it must be simple for teams to find and access those process variations applicable to them. Ideally, they should be able to select the process variant they seek electronically from a list, or even better, be routed automatically to the exact variant relevant to them, dependent on a default location, product team or department. This will not only save huge amounts of time in sifting through documentation or manuals but will also help to support process adherence.
5. On-going changes through collaboration
If the global process owners wish to make an alteration to the standard process they should alert local variant owners for their approval to merge this into each of the established variant processes, or for feedback and/or amendment by teams or individuals. By introducing this layer of consultation and dialogue, variation owners have the opportunity to apply their on-the-ground expertise to ensure the particular needs of the process variation are still met.
6. Shared global Intelligence
There should be a global reporting function so that process champions can always view the entire inventory of process variations, and see how these compare against the standard core process.
7. Accounting for costs and time
Process variant costing and timeframe tracking is required to compare the costs and time between variations and the standard process. This is crucial as it allows manufacturers to decide whether it is worth retaining or removing specific process variations. Overall, it also highlights cost savings opportunities and the impact of process changes.
Tracking and measuring the impact of process variations is critical for manufacturers to have a clear understanding of not only the volume and effects of process variations but also their benefits or drawbacks. Armed with this information global process owners together with local teams can if necessary challenge them and improve transparency, compliance and control. In turn employees have the power to be more agile, because they have sufficient ownership to customise (or eliminate) activities as they see fit.
Introducing a more simplified process management and improvement culture that encourages participation at both a global and local level allows manufacturing organisations to achieve all the benefits of scale from standardisation yet simultaneously gives them the freedom to customise processes and remain competitive.
By Ivan Seselj, CEO at Promapp Solutions