Working for Group COO of a FTSE 250 service provided to government customer worldwide, designed an Operational Excellence programme to be deployed to ~75,000 employees.
The approach based upon the Shingo model for Operational Excellence. It included plans to Align all employees through startegy deployment tools and techniques; to Enable business through education and training; and to Improve through simple Lean tools application.
The company had no real control on changes to the products and services offered to its clients. Many of these changes were requested by the client after the contract had been signed, and the company would bend over backwards to delivery what the customer wanted. This should have given a great customer experience! However, those changes took time and resources, and delayed new software releases or impacted other processes. In addition, there was no budget to do the work, so contract profitability was badly comprimised. The net effect was that customers' perception was that the business never delivered what it promised.
There were a number of steps to get the correct governance in place, implemented by the a new Programme Management Office (PMO):
- Project Plans - all projects were professionally managed, with realistic delivery plans and allocated resources. This is the baseline for managing change.
- Change Request Ticketing - a formal system of tracking change requests (internal and client)
- Impact Assessment - using the project plans, cost and time implications of changes were assessed.
- Quotes - formally documenting the impacts and costs for the customer to approve.
- Executive Change Control Board (ECCB) - weekly review of all quotes before release to customers, including checks on margin and adequecy of contingency included in the estimates. Attended by CEO, full functional representation.
- Discipline - no work was carried out until Quote for change was formally accepted by the customer.
- Customer Management - PMO acted as single interface to the clients for change, ensuring that dependencies managed.
Process design to institutionalisation took around 12 months.
Existing projects gradually came under control as promises began to match the real plans. As a result, the customers had a lot more visibility of the impact of changes, and could make rational decision on whether to implement immediately or wait until later releases.
People inside the business quickly adopted the system as they could get clear answers to proposed changes, and through the improved control had fewer changes injected unexpectedly into the programme.
Most importantly, the business started to make real profit out of the changes, with a significant impact on overall programme results.
The company was expanding its offering, moving from a product to a service based business. In the process, it was also carrying out a lot more bids. However, experience in the business was that the contracts won were not always profitable, and there was no control on the sales units to ensure that the projects were actually deliverable. As a result, contractual SLAs were often hard to meet within the budget, leading to a poor reputation with customers.
A new governance structure was set up to ensure that bids were actively reviewed by all relevant stakeholders at each key stage. The ten step programme lifecycle was defined, with the following key decision points:
- Opportunity Review - basic qualification of the opportunity to gain resources to prepare bid.
- Bid / No Bid Review - check to see that the value proposition was achievable, and that bid resources were affordable.
- Bid Approval - to control release of solution designs and bid package to the client.
- Contract Approval - after negotiation, approval of final contract, SLAs, etc.
- Service Readiness Review - all operations ready to go live.
- Contract Review - to manage, protect and grow the account.
The new processes were well communicated and all stakeholders were represented at reviews. This avoided conflicts between the sales and operational teams, as there was no longer anyone to blame if key issues were missed.
Process design through to institutionalisation took around 6 months.
It is obviously hard to put a value to this type of project, as you are reducing risk in the delivery phase. However, the following benefits were recognised by the CEO and leadership team:
- Increased visibility of bids and quotations.
- Early disqualification of "unwinnable" or low margin bids, saving bid resources for more healthy prospects.
- Increased involvement of service delivery teams in tender processes, leading to quicker implementation and less misunderstanding of client needs.
- Increased management confidence that bids were realistic.
The business had not carried out a formal review of pricing for several years. Annual increases were applied across the board, with no review of the competitors offering or consideration of the market opportunity. In some cases, margins were worse for premium products than for standard, low cost units. This lead to conflicting pressures on the sales team, as they couldn't translate top line growth into bottom line improvement.
Improved EBITDA by over 2 percentage points year on year, from a starting point already in double figures, through a combination of pricing, productivity and overhead management, with operational lean implementation. Despite this, managed to increase the investment in product development. Budgets beaten every year.
The company won a major service contract covering half of the UK to install broadband, cable TV and telephone into residential properties. This involved TUPE or recruitment of over 1000 people, new IT systems and developing a whole new business process - in just 7 months! With no reduction in customer service. The contract also saw a major upscaling of network cabling and civil engineering services. My role was to drive the business in its start up phase, ensuring that the four Operations Directors and support functions delivered the sales revenues, margins and customer experience expected by the Board. Key to this was implementing process improvements to gain the necessary synergies to make the contract pay.
Lead a team of 12 manufacturing engineers working on Advanced Quality Planning for new Unit Injector factory in support of £1bn+ contract with Volkswagen. A world class process FMEA was created, which identified all the possible issues before equipment was purchsed. Managed interface with customer during audits, etc., ensuring good working relationships.
The company was the original equipment manufacturer of a major safety critical component used in a high volume vehicle. It also supplied aftermarket remanufactured items to the main dealer network, via the vehicle manufacturer. A number of faulty remanufactured units were released into the OEM and independant aftermarket, which lead to a small number of thankfully minor accidents.
The project involved recovering the suspect batch of about 400 units. The German authority, the KVA, was threatening to write to over 10 million owners across Europe, with charges of several Euros per letter, if we could not track down the vast majority of the units. This was obviously on top of the direct impact of any product liability claims, and reputational damage.