Digital transformation is a topic that affects every company. 4aBetterBusiness believes that addressing the process and cultural issues in a company is an essential pre-requisite to success with Digital Transformation. This is the story of how 4aBetterBusiness used those beliefs and our proven implementation approach to help a company to achieve both business and digital transformation, with take-aways you can use in your business.
4aBetterBusiness was engaged by the company when integration of two operations, as part of an acquisition, had reduced on-time delivery performance to 50%. It was clear from a brief initial assessment that resolving the poor delivery performance would involve every area of the company.
We believe that employees are the world’s experts at knowing what they actually do every day – their local systems – and we started by building immediate, enthusiastic buy-in to change with management and employees.
We also believe that 90% of the issues in a company are embedded in how those local systems work and work together. We combined the buy-in to change with developing an in-depth understanding and documentation of the end-to-end processes and interconnections among every area of the entire company. As this development proceeded, we enlisted input and ideas from all the employees as part of developing solutions. This not only increased the buy-in to change, but also developed enthusiastic participation and contribution to change, and employee ownership of the results. The process-based actions took hold and process-based thinking developed as a result at every level of the company.
The process and cultural changes that were developed, including in-depth end-to-end process knowledge, buy-in to change and process-based thinking, created the ability to achieve rapid and sustainable change. On-time delivery performance improved, even though all the operational data for production and inventory was still paper-based.
The opportunity for digital transformation presented itself when the CFO determined that a full physical inventory was required – to be done within 3 weeks. I called one of our technology partners and presented the challenge: design, develop and implement a complete digital system for production and warehousing – within 3 weeks. The technology partner immediately accepted the challenge. We combined the end-to-end process knowledge 4aBetterBusiness had with technology partner’s technical expertise, and designed the system over a weekend. Our partner bought all the equipment and built the database and communication system.
Based on the processes we had already determined, 4aBetterBusiness worked hands-on with the employees to establish an effective warehouse layout and to mark all the locations. 4aBetterbusiness also coordinated with outside vendors to ensure wireless capability suitable for mobile operations (and different than wi-fi for an office) was in place and to produce and install all the overhead signage. 4aBetterBusiness also worked with employees to design the actual physical inventory process, and carried out hands-on training of all the employees to transition from use of a paper-based system to use of scanning and electronic records.
Over a weekend, three weeks from the inception of the project, the full physical inventory was completed, and all of the production and inventory operations were converted from paper-based to electronic records, with a system in place that ensured accurate updates.
In the second phase, relying again on the deep process knowledge and buy-in to change already established, all the electronic data was fully integrated with the company’s MRP system. Process changes developed with the employees and another technical partner ensured clean capture of all the data into the database. Despite the complexity of this operational and technical change, the changes were completed and the company was fully operational on the new system within 4 hours of cutover to the new system.
Neither of these digital initiatives would have been possible to complete without first addressing the process and cultural issues in the company.
Outcomes with the company included achieving and sustaining 99%+ on-time delivery performance, while reducing inventory by 22% and eliminating the need for annual physical inventory.
What are the take-aways from this experience you can use for your business?
- Recognize that employees are the world’s experts at knowing what they do every day
- Engage employees immediately to develop buy-in to change
- Develop process-based thinking and action from top to bottom in your company
- Develop deep knowledge of end-to-end processes, including customer journeys
Use these elements as part of an integrated approach to develop the capability for rapid, sustainable change. Address the process and cultural issues first, and you can use digital transformation success to ensure you outpace and outperform your competition.