OPEX: Worldwide Operational Excellence Initiative
The ROI OPEX model: activating excellence forces
You learn from mistakes – this applies to people as well as companies. The important thing is that this leads to continuous improvement. In industry, this falls under the heading ‘operational excellence’, or OPEX for short. Instead of resorting to off-the-shelf solutions, companies should develop their own strategies here. Just like the group from the steel industry that, in this case, successfully implemented the ROI OPEX model at its plants.
OPEX results must be quickly scalable to the highest management levels. Digitisation opens up new OPEX potentials, but small (lean) tweaks are just as important. Routines create clarity and contribute significantly to the targeted improvement of employee skills.MORE
Volatile raw material prices, currency fluctuations, price wars due to cheap imports, tough competition: the steel industry is under enormous pressure. Entrepreneurial success becomes a balancing act between over-capacities, price shocks and supply bottlenecks. Rapid reaction replaces targeted action. There is only a small part of the often rudimentary value-added chain that companies are still able influence in order to optimise processes, reduce costs and react flexibly to increased customer requirements. In this situation, one group from the steel industry joined ROI at the start of the project. Energy for change should not simply be unleashed, but used in a focused and result-oriented manner – to make operative processes not just simply better but excellent.
OPEX: focus on efficiency and effectiveness
The ideal approach to this is known as OPEX, which in this case does not stand for ‘operational expenditure’ but for ‘operational excellence’. Focused entirely on efficiency and effectiveness, OPEX reduces losses and waste across the entire value chain. In ROI projects, control loops are created for the continuous improvement of operational structures and processes.
OPEX scan determines maturity level
At first, however, vague ideas about what could be done better were developed into tangible OPEX approaches. To this end, ROI used the ROI OPEX scan to analyse the maturity of operational excellence in 30 plants – for example, in areas such as lean warehousing, supply chain integration and shop floor management. Using the scan result in combination with gap and potential analyses, the management now had a clear picture of the status quo, the weak points and the most important starting points that they could build on to lead the plants to new successes.
Tangible instead of abstract: overview for the management team
There is, of course, no OPEX template, every company thinks differently. At the beginning of the project, the steel group, too, worked together with ROI to determine what operational excellence meant for them and what goals it was intended to achieve: Which principles determine the goal? Are there any procedural peculiarities that need to be taken into account? At the same time, the group learnt from ROI how and with which results OPEX processes work at ‘best-in-class’ companies worldwide. This resulted in a catalogue of action areas which were to be further developed later with the help of ROI’s own OPEX model (see diagram).
Strategy for continuous improvement
ROI pursues a unique strategy, not only in the case of the steel group, but in all OPEX projects, for identifying and activating the potential for continuous excellence improvements in companies. With its dedicated OPEX model, ROI does not create standard solutions but enables the organisation to solve its own problems. The joint OPEX projects create the necessary transparency and define the starting points. The holistic consideration of four core elements plays a central role here: organisation, employees, cycle & goals and standards.
Organisation & employees: qualification as a trigger
In the case of the steel group, the basic facts already illustrate the level of complexity in which an OPEX project can play a role. Slightly less than half of the company’s 400 or so locations were considered in the project – in other words, almost 200 different organisations. The project team therefore determined how many OPEX managers were required at which locations and what roles and responsibilities they had to take on. After the company had filled these positions, ROI prepared the OPEX managers for their tasks in accordance with the ‘train-the-trainer’ principle. After all, ROI was not able to train all the employees at all the plants themselves in such a short time. With the support of the employees, this principle can give rise to an incredible dynamic: in another project, for example, ROI first qualified 45 employees for OPEX, who then passed on their knowledge to a total of more than 24,000 employees in 64 factories.
Quickly adapting best practices
Large differences were found in the case of the approximately 200 plants examined, for example in the area of ‘skill levels’. There were beginners, fast movers and true champions, depending on the demands made by customers on the respective plant and their own OPEX maturity level. ROI networked all locations via a platform that allowed them to exchange information and learn from each other. In addition, some 200 best practices from 30 plants were identified and made available to all. The acceptance of the best practices and measures resulting from the ROI scan was very high from the outset – and since all the processes stored were standardised, the plants were able to adapt them quickly and implement them themselves. Initially, ROI teams accompanied pilot projects during the implementation of OPEX measures. Soon afterwards, plant managers, supervisors and OPEX managers visited each other in order to learn from one another. The production line employees were also very committed, as the improvement of their workplaces quickly brought benefits.
Transparency for TOP management
Standards for unambiguous documentation and clear KPIs ensure that the results of OPEX are quickly scalable to the highest management level. The ROI’s OPEX model also compiles, measures and reports key figures to prioritise the goals of the OPEX strategy. Success is monitored at management level in an annual cycle. Here, the financial performance is evaluated in the context of operational performance and fine-tuned or optimised accordingly. At shop floor level, there is a daily cycle. The plant foreman discusses what went well and what went badly with the employees. These routines not only provide clarity, but also make a significant contribution to the targeted improvement of employees’ skills.
A culture of continuous improvement
However, there is no ‘perfect’ OPEX master plan that can be implemented at time X. The working world is changing far too fast for this. For example, anyone who introduces fingerprint-based time logging across all plants might save a lot of time and paper today. But perhaps by the year 2020, employees will no longer clock in and out of work themselves because their smartphones will do it for them as they walk in. And that is just one of many OPEX options that open up new technologies all the time. At the same time, a great deal can still be done with small, simple (lean) tweaks, for example arranging tools using a shadow board, using safety scorecards or introducing handling systems for new machines.
Concentration on the essential
Opportunities for continuous improvement of all elements involved in the value chain will therefore always exist en masse. The key success factor is focusing on the most important issues. To achieve this, decision-makers need a clear strategy for their process and operational structures that functions in good and bad times. Operational excellence (OPEX) provides the decisive points of reference for such a strategy: It ensures that the employees’ skills are fostered and used optimally and focuses the entire company on reducing waste – which, in turn, improves customer orientation, quality and efficiency.