With fourth-quarter and year-end financials for online retail juggernaut Amazon.com set to be released Feb. 2, industry watchers were abuzz with a statistic from digital commerce watcher Slice Intelligence: More than half of all 2016 growth in e-commerce came from Amazon alone.
This dominance is the latest sign that Amazon is growing as an industry disruptor, shaking brick and mortar retail to its core and reframing what it means to be competitive – and to win. Amazon’s most headline-grabbing move of late – Prime Now one-hour delivery – demonstrates that what’s propelling the company along is a relentless push to satisfy customer demand with lightning speed and unprecedented convenience.
Indeed, a shift toward instant-gratification customer demand is transforming the supply chain as we know it – and for a variety of industries. In the space of several years, Uber has turned the personal transportation trade on its ear and become a model of disruption, leading the Wall Street Journal in 2015 to state “There’s an Uber for Everything Now.” In the traditional world of goods production and fulfillment, consumer product giants such as Procter & Gamble Co. are undertaking vast strategic overhauls of their distribution models.
These changes roiling in the operations, logistics and supply chain management worlds pose huge challenges to companies just as they present opportunities. The Center for Operational Excellence has teamed up with the Fisher College of Business Operations and Logistics Management Association for a look at this trend through a half-day Supply Chain Symposium event called “On Demand,” set for Friday, Feb. 24, from noon to 3:30 p.m. At this event, attendees will have the opportunity to hear from leaders at companies including Nestle USA, DHL and Amazon about how they’re working to keep pace with demand and stay competitive.
The first speaker at the event is Adrian Kumar (pictured, right), VP of Solutions Design, North America for DHL. Kumar leads a team of 50 engineers and supply chain professionals to drive growth and continuous improvement across the US and Canada. He’ll be discussing how changing consumer trends are changing the traditional fulfillment model along with the economics behind the model, crowd-sourced delivery. Kumar also will highlight the shift to regional and local fulfillment centers and the challenges in addressing short supply chain lead times.
The keynote speaker at the event is Michael Coburn (pictured, right), head of customer-facing supply chain for Nestle USA. Coburn, a nearly 30-year Nestle veteran, will introduce the concept of short-shelf-life products and their impact on products and customers. By presenting Nestle case studies, he’ll also illustrate their challenges and complexities along with the evolution of the short-lead-time supply chain space.
The event, open to COE members and Fisher graduate students, will wrap up with a discussion panel where Kumar of DHL will join Rob Precord, project manager, supplier-facing supply chain at Nestle and Matthew Fein, an operations manager at Amazon in Columbus.
Planning to attend the Center for Operational Excellence’s Leading Through Excellence summit in April? Less than two weeks remain to get the best available pricing on the three-day event.
Any registrations before Jan. 1, 2017, automatically will receive 10% off the total price. Group registrations of five or more receive an additional 5% off, a discount in effect the duration of the summit sign-up period. The automatic early bird discount for individuals and groups of up to four drops to 5% at the beginning of the new year.
Leading Through Excellence, COE’s signature event, will take place April 11-13 and feature a wide variety of workshops, tours, breakout sessions and keynotes designed to help attendees sharpen their problem-solving and leadership skills. This year, we’re taking attendees to the Cleveland Clinic, exploring the power of business storytelling, and hosting sessions from leaders at companies including IBM, Bose, FedEx and more. Keynote speakers include communication expert Debra Jasper, CEO of Columbus-based Mindset Digital, and Chris Yeh, co-author of the bestseller The Alliance: Managing Talent in the Networked Age.
Emotional Intelligence: Becoming a Leader Who Cares, hosted by American Woodmark CEO Cary Dunston. In this session, Dunston will explores why leaders with the best intentions often make choices that limit their ability to be effective. The root cause, he proposes, is a lack of “emotional intelligence,” which can steer leaders to become emboldened by purpose and aligned with their core values.
The Power of Lean Habits, hosted by Eric Olsen, a professor at California Polytechnic State University. Drawing from Charles Duhigg’s bestseller The Power of Habit, Olsen in this session explores how companies can leverage the key components of the habit loop – cue, routine, reward, craving – to identify the lean and non-lean habits at work in their organizations.
Building the Fit Organization, hosted by Dan Markovitz, Shingo Prize-winning author. Markovitz wrote his book of the same name after realizing too many companies in their pursuit of operational excellence were trying to mimic “the Toyota way” without translating the core concepts of lean into a language that resonates with their employees and in their unique corporate culture. This session offers the keys of the Toyota Production System in jargon-free terms.
Getting to the market before a competitor can mean the difference between smashing success and crushing defeat. This has prompted many companies to look critically at their product development processes in hopes of finding new ways to slash time.
So is faster better? New research this year from Fisher College of Business Associate Dean Elliot Bendoly shows it’s not that simple.
Bendoly’s research, co-authored by Rao Chao of the University of Virginia and published this year in Production and Operations Management, took the novel step of scrutinizing the product development process at eight distinct stages – spanning the “fuzzy front end” to market entry – to find out what happens when each one is sped up.
They found evidence that shortening two of the eight stages – beta/market testing and technical implementation – was linked to market value gains, though only to a certain point. How aggressively companies innovated and how much time they cut were key factors of influence. The research, which you can read about in full on the Management Sciences department website, might break new ground in how we view the product development process.
Fisher’s Management Sciences department, where COE’s associate directors reside, is a powerhouse in generating the latest research insights the managers’ most critical challenges. Check out these other research highlights, published in recent months:
As a researcher, Prof. Aravind Chandrasekaran doesn’t hang his hat in one particular industry.
In the 12 years he’s been contributing to our knowledge on issues such as innovation, knowledge creation and health-care delivery, he’s walked the floor in manufacturing plants, chased high-tech electronics as they move through the R&D pipeline, and scrutinized discharge instructions for kidney transplant recipients.
At the heart of his research is the question of handoffs: How can we move information more efficiently? How can we bring products to market more rapidly? How can we discharge patients and ensure they won’t be readmitted days later?
Prof. Chandrasekaran is bringing key insights from his research across this variety of industries to the Center for Operational Excellence’s Dec. 2 seminar, where managers can learn how they can collaborate across departments – even across their supply chains – and avoid common roadblocks such as employee burnout, intellectual property leaks, and scope creep. His 10:30 a.m. presentation is followed by a 1 p.m. keynote from Pete Buca, a top executive at manufacturer Parker Hannifin who’s giving an inside look at the company’s remarkable collaboration with Cleveland Clinic.
COE spoke to Prof. Chandrasekaran about his research and what attendees can expect at his Dec. 2 keynote.
COE: This summer, you led a three-part “Innovation Summer” series for COE. How does your upcoming keynote build on that?
AC: We focused this summer specifically on product and process innovation by looking at companies such as 3M and Johnson & Johnson. This keynote is meant for the R&D folks that attended this summer but a much broader audience, as well. I’ll be sharing keys to the “perfect handoff” by looking at examples in manufacturing, health care and IT services, not just R&D. There’s not a single COE member that wouldn’t benefit from it.
COE: Let’s talk about health care, specifically what non-health care companies can learn from your extensive research in that field.
AC: A lot of discussion in recent years has centered on what health care can learn from other industries, particularly manufacturing. I think the reverse is true, too: In health care, you have specialists – physicians, nurses – who are extremely skilled at what they do. At the same time, you have a complex ecosystem with tons of variation across patients, even caregivers. Those two components are present in just about any industry. As a result, many of the tools and processes I’ve worked with caregivers to apply in health care can be easily transferred to other settings.
COE: Speaking of handoffs, what are some of the biggest mistakes companies make when collaborating across departments or the supply chain?
AC: I think a really common one is that departments or companies take for granted that the other party has a clear understanding of the process. This is at the root of so many problems I’ve seen in R&D and health care. There’s also a misconception that the rules and requirements established at the beginning of a process don’t change. They can, sometimes in a way that can take us by surprise. I’ll be sharing insights in my keynote that can help managers address both of these common missteps.
COE: What’s causing more of these surprises?
AC: The increasingly global nature of business plays a not insignificant role here. More than ever, companies are dealing with language and cultural barriers, regulations and political risks – and the stakes for success have never been higher.
To register for Prof. Chandrasekaran’s keynote and the entire Dec. 2 seminar, click here.
Being a top hospital in the country, Cleveland Clinic is home to countless great ideas poised to transform into life-altering, even life-saving, medical advancements.
Getting those ideas out of the heads of its top-ranked physicians and onto the market has been the focus of a remarkable collaboration between the hospital and one of its neighbors in the Cleveland economic scene: Manufacturer Parker Hannifin Corp.
This partnership, which began quietly nearly a decade ago and was formally announced in 2014, is the focus of the afternoon keynote at the Center for Operational Excellence’s Dec. 2 seminar. At the event, Parker Hannifin VP Pete Buca will share details on the Cleveland Clinic collaboration, which has become a bustling pipeline of medical device ideas the company is working to bring to life using its own product development process, dubbed “Winovation.”
Recently ranked the No. 2 hospital in the country, Cleveland Clinic sees more than 5 million patient visits a year and employs more than 3,000 caregivers. That same U.S. News & World Report ranking called it the No. 1 hospital in the country for cardiology and heart surgery and one of the top five for diabetes and endocrinology, gastroenterology, orthopedics and pulmonology, among others.
Parker Hannifin, meanwhile, is an $11 billion-a-year maker of motion and control technologies that spent about $360 million on research and development in its latest fiscal year. It’s a supplier to more than 400,000 customers that span just about every significant manufacturing, transportation and processing industry in the economy: Food and beverage, life sciences, renewable energy, agriculture and aerospace, just to name a few.
Parker and Cleveland Clinic began collaborating several years ago in an effort to connect the engineering and product development prowess of the former with the critical insights into health-care challenges at the latter. To translate these two capabilities into action, Parker employees sat in on surgeries and communicated with surgeons, leaders told Crain’s Cleveland Business. Interactions like these spawned the 100-plus ideas that initially populated the partnership’s pipeline.
One product seeking to eventually make its way to the market is what’s called the Cleveland Multiport Catheter (CMC), a bold attempt to advance the treatment of brain cancers. Gliomas – a type of tumor in the glue-like supportive tissue of the brain – are resistant to radiation and other common therapies, largely because of the natural barrier in the body that keeps circulating blood out of the brain.
Surgical catheters that pump cancer drugs directly into the brain have been used on a trial basis for the past few decades, according to an October 2015 article by a CMC inventor, but have key limitations. Two in particular, according to the article, must be used in a special operating room, and left in only for several hours. The CMC, which began development in 2009, can be implanted in any neurological OR then be left in place for several days, ultimately delivering more cancer drugs, wrote inventor Dr. Michael Vogelbaum.
Cleveland Clinic partnered with Parker Hannifin to manufacture the CMC and treated its first patient with the device about two years ago. A March update revealed seven patients have undergone treatment with the CMC, which now has an Investigational New Drug application formally on file with the U.S. Food and Drug Administration. Dr. Vogelbaum said in a CMC update video that the device ultimately could help treat other neurological conditions such as Alzheimer’s Disease, Parkinson’s Disease and epilepsy.
At COE’s Dec. 2 seminar, Buca will share other exciting developments with Cleveland Clinic and detail how other organizations can learn from their collaborative innovation efforts. The featured keynote at the seminar’s morning session is Fisher College of Business Prof. Aravind Chandrasekaran, an award-winning researcher who will be sharing keys to collaboration.
The next time you think your organization’s process problems are so singular they couldn’t be happening anywhere else, ask Joe Langlitz and his colleagues how they spent the first month of their summer this year.
Langlitz and fellow Fisher College of Business MBA students James Goetter and Wenzhao Bi closed out their first year in the program with an 8,000-mile trip below the equator to Gaborone, Botswana. They were one of eight groups of students sent overseas through Fisher’s Global Applied Projects (GAP) program to work up-close with a corporation to solve a business challenge. Sponsoring the students’ gap team was the Botswana arm of British banking giant Barclays, where Fisher alumnus Jeff Davis serves as Chief Risk Officer.
Looking back at the work Langlitz and his team completed, Davis says they’ve helped lay the groundwork for some major improvements in Barclays’ business loan approval process. Getting there, however, entailed a frenzied three-week mission to hunt down process waste that put to work what each team member brought from the classroom and enlisted the help of a few Center for Operational Excellence members, too.
‘I wanted a revolution’
Davis cut his teeth in the birthplace of lean manufacturing, working with automakers and suppliers as they applied lean/Six Sigma principles. Today he’s a top officer at Barclays Botswana, which employs 1,200 at its corporate office and 42 branches and ranks as the second-largest bank in the market.
“When I got into financial services later in life, I would see our processes through the lens of the learnings I had in the automotive industry and would get frustrated at our inability to do true lessons and root-cause analysis in our pursuit of simple, repeatable processes.”
A particular target of Davis’ frustration was the corporate loan approval process at Barclays Botswana, which could – and often did – take as few as two days but also could stretch past six months in some instances, putting average turnaround just shy of four months.
“I wanted a revolution,” Davis said. “I wanted 500 percent better.”
Davis took his first steps toward a solution by connecting with the GAP program at his alma mater, eventually bringing the trio from Fisher to Gaborone and pairing them with two MBA students from the University of Botswana. The project team had zero formal corporate banking experience – and that’s exactly what Davis wanted.
“We wanted an injection of new ideas,” he said.
Langlitz admits to a dose of culture shock upon arrival. Gaborone is the governmental and economic capital of a country with a fast-growing economy, but one that also still relies heavily upon mining and the cattle trade. It’s the latter – particularly their penchant for wandering onto busy roads in Gaborone – that struck the team in their early days.
“The first week we were there, it really sunk in: ‘We’re on the opposite side of the equator,’” he said.
The more time the team spent in country, however, the more familiar it became – and the more Langlitz and others saw how universal challenges such as those at Barclays are.
“They’re just like any institution,” he said. “They’re trying to figure out better ways to serve the customer.”
The GAP team and their University of Botswana colleagues took on what Barclays dubbed “Project Firefly,” an extensive effort to visualize the loan approval process flow in the form of a value stream map and, importantly, flag non-value-added elements therein. The long-term goal is to slash average loan-processing time a staggering 90 percent to only 10 days.
Mapping the process required interviewing numerous stakeholders across different offices and navigating at-times fraught situations.
“With the overall process so fragmented, teams tend to be myopic when dissecting which processes are adding to uncompetitive turnaround times,” Davis said. “We asked the team to hold a mirror up and tell our people what’s going on without placing blame, and they did a nice job of lowering defenses.”
In addition to receiving regular coaching from COE Executive Director Peg Pennington, the Project Firefly team also sought insights on the challenge at hand from two member companies: Huntington National Bank and KeyCorp.
“A lot of the pain points they had,” Langlitz said, “were pain points Barclays has been dealing with.”
Jeremy Winstel, a senior manager of enterprise lean/Six Sigma for Key, said reducing customer hassle has been a regular focus for the bank in its process improvement efforts. His insights served as a key early benchmarking opportunity for the project team before and during their stint in Gaborone.
“Providing this knowledge transfer assistance has been a great way to get plugged in to Fisher and try to help out,” Winstel said. “That’s what the COE’s about, holistically.”
Kevin Plaugher, senior vice president and business banking credit manager at Huntington, also spent time walking the team through the credit approval process and imparting a key bit of wisdom:
“It’s like physics,” Plaugher said. “If you want to extend credit to the customer, there are certain things you have to do, and you can’t pretend steps in the process can be skipped or eliminated. Still, even with the most manual processes, there are tools to make it faster, simpler, and clearer.”
Langlitz said benchmarking with Huntington and Key “sent us down the right path” to ultimately making this key discovery: More than half of the time Barclays Botswana spent processing loans was non-value-added. This opened the door to substantial improvements.
Just the beginning
The Project Firefly team capped their nearly three-week stint with Barclays Botswana by reporting out their findings and recommendations to the bank’s executive leadership team and its Managing Director, the region’s top-ranking official. Langlitz said the team took particular pride in the fact that none of its recommendations came strictly from qualitative information.
“All our recommendations were data-driven,” Langlitz said. “These weren’t just because we heard someone say it was a good idea.”
The results and recommendations provided major clarity for Barclays going forward, even if Davis and his colleagues already knew process waste was a problem.
“We knew there was a lot of waste in the system, but we’d never been able to measure it,” he said. “They did a great job of taking a complicated set of data from a lot of locations and distilling it down to a very clear story to tell.”
Through the summer, Barclays Botswana began hiring additional associates and making its first strides in implementing some of the Project Firefly recommendations. Improvement efforts are set to ramp up through the fall, Davis said, for what is expected to be an ongoing process.
As for the students, Langlitz said he and his colleagues gained invaluable process improvement skills, through an unforgettable experience, no less.
“Being able to say I’ve been there, done business in a different culture, I’m a lot more comfortable now.”
An unconventional effort to reform Ohio’s K-12 education system is sending a new pack of leaders out with more than an MBA from Fisher College of Business and a certification to serve as a principal.
They can wield some foundational operational excellence tools, as well.
Fisher this summer graduated 30 students as part of the BRIGHT New Leaders for Ohio Schools program after they spent nearly a year working as administrators in high-poverty schools around the state and completed an accelerated MBA program at Fisher. The program, launched in 2015 with $3.5 million in state funding and help from Fisher and the Ohio Business Roundtable, takes business professionals from a variety of backgrounds – largely non-education – and deploys them throughout the state as principals. BRIGHT fellows, as they’re called, must serve as a school administrator for at least three years after graduation.
At a presentation prior to graduation, a number of BRIGHT fellows showed the results of their work tackling the A3 problem-solving methodology, one of a few tools Center for Operational Excellence Executive Director and BRIGHT educator Peg Pennington introduced to the curriculum.
“The BRIGHT program itself is an experiment, so I thought to myself, ‘Why not do an experiment of our own here?’” Pennington said. “These problem-solving skills – A3s, root-cause analysis – are powerful tools anywhere, and I think they can really help cut to the heart of some of issues that plague our education system.”
For the BRIGHT fellows, those issues included lagging math and reading scores, a lack of collaboration between upper- and lower-grade students and educators, truancy, and discipline referrals, among others. Pennington in her classes with the BRIGHT fellows showed how the A3 and root-cause analysis can properly define the problem and, medically speaking, move past managing symptoms to truly treat the underlying ailment.
David Maile, a longtime plant farm owner who transitioned out of the business two years ago, signed onto the BRIGHT program and found himself as an administrator at Highview 6th Grade Center in the Cincinnati suburb of Middletown, where the poverty rate has jumped from 9 percent to nearly 14 percent in about 15 years. Maile leveraged root-cause analysis and A3 problem-solving to improve math scores in the school, where he said much of the challenge was in bringing a level of consistency and precision to data collection.
Other process-improvement projects were of a more qualitative nature. Jeff Greenley, a lawyer by training, worked in the Switzerland of Ohio School District in Appalachian Ohio, the highest-poverty region in the Buckeye State. Greenley’s school housed a wide age range of students that rarely interacted, in large part because they didn’t see the value in it. Greenley did.
After defining the problem via an A3 and enacting countermeasures, Greenley finished the school year with more than four in five upper-grade students helping out and interacting with elementary-age students. The A3 process, he said, was eye-opening.
“There are not a lot of tools at our disposal in education to think about operational problems,” he said. “This is a hammer we can use to hit the nail.”
Regardless of the challenge, the BRIGHT fellows discovered very quickly that data was a crucial asset in their problem-solving journey – even if it wasn’t used as such in their schools. Astrid Arca, an economist for the state of Ohio, served in the same Appalachian school district as Greenley and took on the challenge of improving reading and math schools in a student population with a high percentage on so-called individual education plans. The data needed to cut to the heart of the problem, Arca found, existed – but weren’t being analyzed to inform instructional practices.
“There was almost a fear of the data,” she said, “and most of my job was removing those barriers.”
BRIGHT leaders are hoping that spirit has a transformative effect in the schools where its graduates are heading this fall and beyond, even if the difference in background for many fellows hasn’t gone unnoticed. Deborah Copeland, a BRIGHT principal coach with a nearly 30-year background as an elementary school principal, acknowledged a level of skepticism around “outside” people taking a leadership role in education. Often, she said, it just takes spending time alongside the fellows to see that they have the skills and capability to drive change.
“It’s been a joy watching these fellows coming in with a different perspective, full of hope and promise and not weighted down by the barriers that those of us who’ve been in the trenches often get blinded by,” Copeland said.
The BRIGHT fellows themselves are the source of a telling data point: About 90 percent had K-12 principal or assistant principal jobs locked in at the start of the school year.
A group of undergraduate operations students at the Fisher College Business bear the distinction of being the first in the world to earn a new professional certification seen as a stepping stone another key resume-booster.
A total of 15 Fisher students recently passed a version of a new exam through the American Production and Inventory Control Society (APICS) to earn the “Global Supply Chain Associate” (GSCA) designation. This brand-new designation is the culmination of a year’s work among faculty at several universities nationwide, including Andrea Prud’homme, a clinical faculty member at Fisher who also serves as an associate director for the Center for Operational Excellence. The Fisher students took part in a test launch of the program, which is set to roll out internationally this fall .
Prud’homme said a key motivation in creating the GSCA designation was the fact that undergraduates often don’t have the time or money to pursue the well-known Certified Production and Inventory Management (CPIM) designation.
“This gets them started should they wish to pursue CPIM certification,” Prud’homme said. “Additionally, many of the companies that hire our undergraduates provide incentives and support for new hires to become CPIM-certified.”
The Ohio Manufacturing Institute just released the latest edition of its semi-monthly Manufacturing Tomorrow podcast, which they recorded at the Center for Operational Excellence’s Leading Through Excellence summit just last month.
Podcast Executive Producer Kathryn Kelley in this edition interviews a trio of COE members – Agrana Fruit’s John Labrador, Crown Equipment’s Craig Wreede and WillowWood’s John Matera – on what operational excellence means for them. Listen here, and check out the podcast’s website here.
COE regularly partners with OMI to bring speakers to Manufacturing Tomorrow. Past COE collaborations have resulted in podcasts interviewing Goodyear’s Norbert Majerus, COE Executive Director Peg Pennington, Snap-On Inc. CEO Nick Pinchuk and more. They’re all on the podcast archive.
Special thanks to Kathryn Kelley and the OMI team for visiting the summit and featuring our members.
Spotlight on MassMutual at IT Leadership Network forum
After a visit from Menlo Innovations CEO and Joy Inc. author Rich Sheridan May 13, COE’s popular IT Leadership Network forum series returns June 3 with a presentation from Dalton Li, a vice president who leads the continuous improvement practice for $29 billion-a-year MassMutual Financial Group.
In this session, which kicks off with a networking breakfast, Li will provide an inside look at MassMutual’s approach to lean deployment, its coaching strategy, and its support system for sustaining gains. Li began his career as a nuclear submarine officer based in Annapolis and later served as an assistant professor for the U.S. Navy before working at consultancy McKinsey & Co. for six years. He joined MassMutual in his current role in 2012.
Formal invites for this session are set to go out early the week of May 2.
Innovation Summer series
Just a few weeks later, COE kicks off a three-part “Innovation Summer” series led by Associate Director Aravind Chandrasekaran. This series, set for June 16, July 14 and Aug. 18, tackles questions including: How can companies leverage lean/Six Sigma practices to build more agility for innovation teams inside their organization? How can they carry those across the supply chain? And how can these best practices cultivate an idea from its earliest stages?
Across this trio of sessions, you’ll hear from innovation icon 3M, Buckeye/NFL greats and business owners Bobby Carpenter and Anthony Schlegel (pictured, left), and more.
Registration for the first of the three sessions will open the week of May 9.
‘Build Your Brand’ workshop
COE’s semi-annual Women’s Leadership Forum series returns June 24 for a workshop with Krista Neher, CEO of Boot Camp Digital. This “Launch Yourself” session will help attendees define, design and deliver a powerful personal brand online.
Registration for this limited-capacity session will open the week of May 16.
Check out COE’s events page for save-the-dates on additional events into the fall and through 2017.