7 companies that forever changed the face of process excellence
We take a look at how Ford, Toyota, Motorola and Amazon have impacted how we practice and view process excellence today
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Process management has been around for centuries. In 1776 economist Adam Smith first observed the effects of the division of labor on overall productivity in his Wealth of Nations. The concept of thinking through how work gets done (i.e. the process) and how this can boost productivity and wealth was born.
However, it was not until the twentieth century and the birth of mass manufacturing that "process thinking" really started to catch on. Methods have continued to evolve since then. Here are seven companies that have made a significant impact on how we practice and view process excellence today.
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1. Ford
Henry Ford gave the world so much more than just black cars. His was the first company to bring together an entire production line process, spawning modern-day mass manufacturing by putting together a moving conveyor belt assembly line, which was a dramatic break from the manufacturing processes of the day.
While his manufacturing processes had limitations by today’s standards – they allowed for limited customization, for example – he paved the way for modern manufacturing and a new kind of thinking about process.
2. Bell Laboratories
Bell Laboratories has been credited with bringing the world many ground breaking technologies such as the transistor, the radio, various IT programming languages and even demonstrating the first facsimile machine (although the technology was developed elsewhere).
Read more: What is Lean?
While the company’s engineers were looking for a way to improve the reliability of its telephony transmission systems - and they already knew about the importance of reducing process variation - Walter A. Shewhart wrote an internal memo that framed the problem in terms of common-cause and special-causes of variation. He emphasized the importance of bringing a process into a state of statistical control, laying the foundation for Statistical Process Control and later Six Sigma (he also invented the Control Chart in the process).
3. Toyota
The Toyota Way, characterized by the Toyota Production System, is a deeply entrenched cultural and management philosophy that focuses on continuously improving the way work is carried out, looking for faults in the system/process (rather than the people), getting every worker to be involved in identifying and solving problems, and focusing on ensuring that every activity the organization does is delivering value to customers.
The method came to the attention of Americans in the 1980s and 1990s after it was brought to prominence through the works of Dr. W. Edwards Deming and authors James Womack, Daniel Roos and Daniel Jones (in "The Machine that Changed the World"). It was, and remains – at least for the vast majority of companies – a very different way of managing. Many of the concepts of the Toyota Production System such as "just in time" ware in wide use today.
4. Motorola
Engineers at Motorola laboratories invented Six Sigma, a statistical method for process control to improve the quality of their products. The methodology, which was based on earlier methods like Statistical Process Control, formalized the tools and training required for someone to call themselves "Six Sigma certified". Motorola created the Six Sigma brand and the system of "belts" that practitioners use to denote their level of training today.
5. GE
Under former CEO Jack Welch, GE popularized the use of Six Sigma in business operations and offered a model for deployment in the corporate environment that almost everyone wanted to emulate, at least for a while.
Welch mandated the use of Six Sigma at all levels of the organization and made training a prerequisite for any employee aspiring to leadership positions at higher levels of the organization. It also came up with its own twist on the Six Sigma toolkit, creating the "GE Workout", an intensely focused session (usually over several consecutive days) that analyzes business challenges and recommends solutions.
6. Dell
While this PC vendor has perhaps lost a bit of its luster today, in the 1990s and early 00s Dell was booming, with assembly lines and supply chains that were seen as among the fastest and most hyper-efficient on earth.
The technology company brought innovation to its sales and marketing channels in 1996 by selling PCs directly to consumers via its website. It became known for applying Lean manufacturing to the world of personal computing; by 2004, the company supposedly carried about two hours of inventory in its factories and a maximum of just 72 hours' worth of inventory across its entire operation.
Read more: What is operational excellence?
While the high-tech industry has moved on dramatically since Dell’s heyday, the company demonstrated how Lean manufacturing and harnessing the power of technology could enable new business models and competitive advantage.
7. Amazon
This online retail giant illustrates the modern-day collision of excellent processes with powerful and well designed software. Blending online worlds with the real world, Amazon’s customers are able to move seamlessly between a virtual world where they shop and order and the reality where complex and uber-efficient logistics see the customer receiving their goods in as little as 24 hours.
Algorithms drive many of the processes behind the scenes at this online shopper’s paradise while Amazon’s recommendation engine can provide shoppers with a personalized experience that no retailer can match. The corporation is part of a new breed of operationally excellent company that illustrates how process excellence can support entirely new ways of doing business.
Who do you think tomorrow’s leaders will be in terms of changing the face of process excellence?
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