Productivity improvement: win as a team with effective cross-functional targets
Roy Koers
Published at
Recently we saw 18-year-old Max Verstappen take the win in the Formula One Spanish Grand Prix. He broke many records including being the first Dutchman and the youngest driver ever to win a Formula One race. What is the key of a team winning a race?
In the end all the teams have the same goal, be the first to cross the finish line. Therefore every team member has personal targets related to be the first car finishing. Max should drive as fast as he could, taking the most efficient line when taking turns and don’t make unnecessary pit stops. When doing a pit stop, there should be the right tyre available and the technician should exchange it in the shortest possible time. But how often do you see in companies all employees and departments have targets aligned with the primary business goal?
Productivity improvement
In daily business competing companies also want to win. They want customers to choose them as their partner of choice. Recently R&G performed a quick scan in a warehouse to look for productivity improvement possibilities. In this warehouse carts driven by employees getting next stop information by a voice picking system. Once stopping, they have to pick the right amount of products and go on. Generally every driver trusts such a system to provide them the shortest route and allow them to pick as much as possible. How to look at warehouse productivity improvement opportunities if computer programs are said to be optimized to the max?
Data based learning
Most managers always look high over to data and conclude performance on averages. However, the opportunities to learn are in the data closest to the operation, on transactional level. Variances in the data showed in this case that pickers stopped at locations where no products were on the shelf. This happened in once out of five routes. At the end of the picking route they drove back to the replenished location to get the last products needed. Could you imagine this happening in a Formula One race? A significant opportunity for warehouse productivity improvement was found in their own non-used data.
Root cause analysis
But why were there no products on the shelf when needed? After applying root cause analysis we discovered supply chain management has targets on low inventory levels within the warehouse and reducing replenishment. At the same time the operations department has focus on output per employee. These conflicting targets won’t help in increasing warehouse productivity
Effective cross-functional targets
The warehouse productivity improvement example showed how department targets do not always align with the primary goal of a company. Lack of effective cross-functional targets and also management bonus structures lower your efficiency in the end. Work as a team and set targets in such a way they contribute to the same goal like they do in Formula One. Only then you are able to achieve a collective win!
Roy Koers is Business Process Consultant at R&G Global Consultants in The Netherlands.
