Dr. Hrshi Kapoor | Jan 15, 2015
In the current economic climate there is increasing pressure for SMEs to be more efficient and improve their product/service offerings to survive.
Fostering a Continuous Improvement Culture in SMEs Using Lean Six Sigma
Mr T. Wilson (President, Airinmar), Mr J. Moreland (Director of Operations, Airinmar), Dr H. Kapoor (Business Operations Project Manager, Airinmar)
Today Small to Medium Enterprises (SMEs) are faced with a number of challenges. In the current economic climate there is increasing pressure for SMEs to be more efficient and improve their product/service offerings to survive. SMEs have to be agile enough to cater to customer demands this requires constant improvement to its operations. Some of them have ambitious growth plans but to meet this growth they have to do more with the existing resources they have. It is arguable to say that the need to constantly improve and innovate is greater for SMEs than larger organisations; however, the irony is that SMEs generally have less time available to manage their improvement efforts compared to larger corporations. Typically SMEs employ a greater portion of people doing rather than improving to keep their businesses running and here lies the SME’s challenge. This article intends to give readers an insight into how SMEs can adopt Lean Six Sigma through Airinmar’s CI journey.
Airinmar is an aviation component repair management specialist based in a leafy suburb near London Heathrow and employs approximately 120 staff members. Airinmar provides its services across airlines, maintenance repair and overhaul organisations, business jet manufacturers and military aircraft operators.
Although Airinmar was acquired by US firm AAR Corp in 2011 it operates as a single independent entity and retains its own IP. It provides its service to its parent company just as it does to any of its other customers and still retains a ‘small company’ entrepreneurial culture. Employing the services of Airinmar delivers two main value propositions; (i), Reducing the overall cost of component repairs and (ii), Managing the repair supply chain efficiently to reduce customers’ component Work In Progress (WIP) and repair turnaround time such that less inventory is required to manage a fleet of aircraft.
Three major challenges exist for Airinmar:
i. In the rapidly changing aviation industry, airlines are always seeking to reduce their operating costs. This in turn has a knock-on effect further down the supply chain. To remain a viable alternative to its potential customer’s supply chain arrangements, Airinmar, like many other businesses, is always looking to increase its value propositions whilst reducing the cost of delivering them. This would be evident in growing the business and revenue, whilst avoiding a proportional increase in costs. The majority of the pressure is in what Airinmar calls ‘volume sensitive functions’. Repairs are managed on repair orders and typically, a level of effort is required to manage a repair order through the system by Airinmar’s Customer Service, Supplier Management and Engineering functions. When Airinmar takes on a new customer, or an existing customer has need for greater support, the repair order volumes increase, thus having a requirement for increased resources.
ii. As previously mentioned, Airinmar’s customers are from different sectors of the industry and therefore they have unique requirements around the core services offered. These expectations generate additional modifications to the product and service offerings. Delivering service enhancement modifications is paramount to sustain the existing level of business.
iii. Due to delivering bespoke modifications, Airinmar’s evolution of its IP has led to the development of very sophisticated internal and customer facing IT systems. Over time, improvements were made incrementally over legacy processes. As a result of this, multiple systems and processes were being utilised differently for different customers. These systems and processes were at risk of failing in the future if nothing was done, not considering the cost of duplication of effort and inability to automate manual procedures due to the lack of consolidation.
A commonality exists between these three challenges. They will only be addressed through effectively identifying, managing and delivering a collection of change initiatives. But a series of questions arise as a result, these questions include: (a), Who can address these challenges with the little/no resource available? And (b), How can these change initiatives be managed and controlled?
Forming a CI Program
In short, an answer to the questions posed above is to formalise the change activities into a CI program that is deployed company wide and owned by “front line” staff members. Using Airinmar as an example, the next section explores five major elements of a CI program that helps promote a collection of individuals to handle change in a consistent manner i.e. a CI Culture.
1. Buy-In From the Top Down
It is crucial that a CI program has endorsement from an organisation’s most senior officials, their approval and support during the early stages of a program is critical in overcoming the possible resistance faced by staff in the organisation. They are also likely to have a vested interest in the resulting benefits that the program could bring.
At Airinmar, buy in from senior officials was achieved through regular meetings with departmental leaders to inform them of the CI program details and the positive return on investment they would witness with their support. Senior leadership were given honorary titles in the CI team as Facilitators who would advocate and support the change activities in their department. Having led Aerospace organisations for over 30 years, Airinmar’s President, Tom Wilson has been involved in unsuccessful and successful CI deployments. When commenting on CI Programs, Tom Wilson believes that,
‘The success of a CI program to achieve sustainable results and make it a part of the fabric of the organisation hinges on the amount of support from the top.’
2. Form the Program Charter - What are the CI Program Objectives?
The CI charter should form the foundation of the CI program. It will ultimately provide the CI team members with direction just as a compass would when trekkers are navigating unknown terrains. A good charter should encapsulate what the programs goals are as concisely as possible. Everybody in the organisation should understand the purpose of the CI program.
Airinmar’s charter consisted of 3 simple goals:
i. Mission to eliminate waste;
ii. Maximise Revenue through targeted operational Excellence; and
iii. Instil CI values throughout the organisations.
These objectives are of equal importance and are communicated through a number of different channels to make people aware of the CI programs purpose.
3. Have a Plan - Establish a Framework That Works for the Organisation
A plan is required once the CI program’s objectives are formalised through the charter. The plan should answer the following key questions (but not limited to):
i. Who will be responsible for co-ordinating the program?
ii. Who will be in the core team what will be their specific responsibilities?
iii. How will team members navigate their way through their challenges?
iv. What support is available to them to address the pressing issues?
Airinmar based its plan on using Six Sigma’s DMAIC (Define, Measure, Analyse, Improve and Control) structure to manage the change activities. Business Operations would co-ordinate and be accountable for the program, while suitable candidates at Airinmar were selected to act as Champions within their respective areas. Champions formed the core team and were expected to take pressing issues within their areas and solve them by moving through the DMAIC phases (refer to figure 1). When selecting Champions personal attributes such as problem solving, listening skills and a natural enthusiasm for making a difference were considered more valued in the team than experience and seniority. Champions’ responsibilities did not adversely affect their everyday operational duties and a network of support was available to them when working on their projects (refer to figure 2).
Figure 1 highlights the DMAIC structure and how it could be used to solve departmental issues.
Figure 2 outlines the 3 role types that co-exist within Airinmar’s CI team to encourage change.
4. Provide Training and Awareness to Stakeholders in the Program
Providing Champions with the necessary tools to equip them through the DMAIC structure as part of their induction is recommended, as it is likely that they have had little exposure to solving problems while utilising Lean Six Sigma principles. Increasing the wider organisation’s understanding of CI is vital; this can be achieved by highlighting its motivation and key benefits. Awareness training to an organisation’s employees dispels any negative myths and inspires people to participate with their designated champion in making positive changes.
Within Airinmar Champions were provided with a 20 hour induction program, delivered in bite size sessions over seven weeks. These sessions covered core Lean Six Sigma principles that they were likely to use as tools through DMAIC. After the induction program, coaching sessions were scheduled to develop the Champions’ self-confidence when applying the tools formally discussed. When discussing the Airinmar CI training program, Lucy Collingwood, Airinmar’s Component Availability Champion said,
‘The induction process provided all Champions with a firm starting ground in solving simple to complex operational challenges. The DMAIC structured approach strengthened our ability to identify areas for improvement. Our approach rewarded the department over a short period of time, with extensive time savings in major day to day activities.’
5. Have an Infrastructure to Manage Change Projects in the Organisation
It is just as important to track the positive changes that are occurring through a CI Culture as it equips stakeholders with the required tools to; (i), justifying the return on investment to the sponsors and organisation, and (ii), prioritising the portfolio of change initiatives based on the available amount of resource. If projects are not successfully tracked it is unlikely that the above can be fulfilled.
Key criteria to successfully track a change initiative should include:
i. The objective of the initiative;
ii. Summary of the benefits realised;
iii. Responsible POCs; and
iv. Status of the project.
At Airinmar, project forms were generated for each change initiative. These forms fed into a database and allowed Airinmar to run key metrics on the performance of the CI program. Figure 3 shows key metrics that are pulled out from Airinmar’s Operational Excellence database which highlights:
i. Project status across departments;
ii. Summed value of projects currently open; and
iii. Monthly Rolling count of projects closed.
Figure 3 displays key metrics that help measure the performance of the CI program.
Results of Airinmar’s CI Program
Airinmar are reaping both tangible and intangible benefits as a result of the CI program. Since its formal inception in February 2013 the CI team have improved Airinmar’s capacity by approximately 20% across volume sensitive departments. The CI team have also significantly contributed to enhancing the services that Airinmar provide its customers. But the profound and longer lasting benefits have been with staff engagement. It has provided Champions and front line staff with a means to solve their departments’ and colleagues’ challenges that could have previously been left unresolved.
Fostering a CI Culture at Airinmar has been established by formalising it through a structured program which broadly follows the five ingredients discussed in the previous section. Within two years Airinmar has successfully grown a CI Culture which will continue to run as long as it is supported. The problems that Airinmar face are common amongst similar sized organisations and broadly applying such steps would help in solving some SMEs’ pressing issues whilst growing a sustainable CI model.
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