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Key Points on Operational Excellence Sub-Optimization

The Applied Solutions’ Industry Advisory Board and Lean Track coordinated three joint panel discussions at the IIE Annual Conference 2012 to identify causes for Operational Excellence sub-optimization and the role of Industrial Engineers (IE) for overall optimization. Vital information for the American industry resulted from the discussion between panelists and audience from several companies including, DuPont, John Deere, Boeing, Purdue University, Bradley University, MD Anderson, FedEx, National Centers for System of Systems Engineering, Memphis Light Gas & Water, Edwards Lifesciences, Ventura Foods, and others.

Key causes for operational excellence sub-optimization:

  1. System or holistic view is key to avoiding sub-optimization of operations
  2. Lean knowledge can be learned faster than the technical knowledge required to make right decisions for overall business improvement
  3. Standard Work measurement is superficial without IE leadership, coaching or active participation
  4. Closing of IE departments has caused losing our strength in Standard Work, which is the basis for continuous improvement – without SW kaizen outcomes are sub-optimal, not feasible or not sustainable
  5. Root Cause Analysis tends to be weak when teams do not have IEs, Engineers or Process Experts
  6. IE led initiatives demonstrate five to ten times the savings – Lean & Six Sigma programs with IE leaders, coaches or active participants show significantly better and more sustainable results
  7. Tool based implementation of operational excellence blinds companies with sub-optimal results
  8. More IE’s will be required to reverse the trend of declining US manufacturing
  9. Companies like John Deere had reduced IE count and are now starting to reverse the trend
  10. Demand for IE’s is on the rise and universities like Purdue are not able to meet the demand

Next steps to reverse the trend and save the American industry:

  1. IE departments in industry and academia need to better communicate the significant value of IEs
  2. Realize that IE’s are trained to see the big picture and systems view to strategically optimize operations
  3. Recognize that lean and six sigma have their roots in IE and it is just a sub-set of the IE curriculum
  4. Industry needs to position IE’s as coaches of operational excellence for rest of the operations
  5. Industry should use IE’s as operations and transformation leaders, or at least active participants
  6. IE’s should keep systems and solutions simple and transparent of complicated calculations
  7. IE’s need to improve soft people skills to enhance visibility and acceptability at all levels
  8. IE’s graduating in Philippines, Turkey, S. Africa, China, India are increasing, we need to do the same
  9. Universities need to market the IE programs at bachelor level as they do for graduate level
  10. Universities are drifting from classical IE and need a well rounded and practical program that includes classical IE, communication skills, industrial psychology, change management and leadership skills

Martin Nazareth, Applied Solutions Lean Track Chair & President of OpEx Solutions

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