Operational Excellence by Shingo Model
Mr. Nital Zaveri, CEO & Director, Concept Business Excellence Pvt. Ltd.
Dr. Shigeo Shingo was born in Saga City, Japan, was a Japanese industrial engineer who is considered as the world’s leading expert on manufacturing practices and the Toyota Production System. Over the course of his life, Dr. Shingo wrote and published 18 books, eight of which were translated from Japanese into English. He wrote about quality at source, flowing value through customers, working with zero inventories and rapidly setting machines through system called “single minute exchange of dies (SMED). In 1988, Shingo received his honorary Doctorate of Management from Utah State University and, later that year, his ambitions were realized when The Shingo Prize for Excellence in Manufacturing was organized and incorporated as part of the university. The Shingo Prize is given to companies around the globe that "achieve world-class operational excellence status." It was established in 1988 and is named in honour of Shigeo Shingo. Dubbed the “Nobel Prize of Manufacturing” by Business Week, the Shingo Prize is recognized as the premier award for operational excellence.
The award has three levels
- Shingo Prize
- Shingo Silver Medallion
- Shingo Bronze Medallion
One of Dr. Shingo’s little known, but perhaps most important contributions, was his understanding of the relationship between concepts (principles), systems and tools. Unfortunately, over the years, most of us have gravitated to and exalted the tools associated with effective operations and have paid too little attention to the power of the principles. Based on this understanding entire Shingo model of operational excellence is divided into Principles, Systems and Tools. Shingo Institute did lot of research and found that sustaining operational excellence requires five fundamental paradigm shift:
- Operational excellence requires a focus both on results and behaviors.
- Ideal behaviours in an organization are those that flow from the principles that govern the desired outcomes.
- Principles construct the only foundation upon which a culture can be built if it is to be sustained over the long-term.
- Creating ideal, principle-based behaviours requires alignment of the management systems that have the greatest impact on how people behave.
- The tools of lean, TQM, JIT, Six Sigma, etc. are enablers and should be strategically and cautiously inserted into appropriate systems to better drive ideal behavior and excellent results.
- The Shingo Model is comprised of two elements: the house, and the diamond. The house describes the correct principles of operational excellence and the power of balancing effort across all dimensions the diamond represents the transformation process for imbedding the principles of operational excellence into the organization.
The Shingo Model
For organizations to be successful over the long term, leaders must deeply and personally understand the principles that govern their success. Furthermore, they must ensure the behaviours of every person who contributes to the business are in harmony with these principles. In short, the organizational culture they build must be grounded in correct principles.
Principles of Operational Excellence
The principles are categorized into four dimensions:
- D-1: Cultural enablers,
- D-2: Continuous process improvement,
- D-3: Enterprise alignment and
- D-4: Results – the ultimate end of all business initiatives.
- These four dimensions overlay five core business systems: product/service development, customer relations, operations, supply and a variety of management or administrative support systems.
- Guiding Principles
- The Shingo Prize for Operational Excellence has 10 guiding principles of operational excellence.
|1||Lead with Humanity||A leader’s willingness to seek input, listen carefully and continuously learn creates an environment where associates feel respected and energized and give freely of their creative abilities.|
|2||Respect for Individual||Respect is a principle that enables the development of people and creates an environment for empowered associates to improve the processes that they “own.” This principle is stated in the context of “every individual” rather than “for people” as a group.|
|3||Focus on Process||Good processes will produce the intended output, as long as proper inputs are provided. Process focus also helps focus problem-solving efforts on process rather than people. A complete shift to process focus eliminates the tendency to find the culprit (person) who made the mistake but rather leads to a pursuit of the real culprit (process) that allowed the mistake to be made.|
|4||Embrace Scientific Thinking||All associates can be trained to use scientific thinking to improve the processes with which they work, creating a culture that provides common understanding, approach and language regarding improvement. There are a variety of models for scientific thinking, such as PDCA (plan, do, check and adjust), the QC Story, A3 thinking and DMAIC (define, measure, analyze, improve and control).|
|5||Flow and Pull Value||Flow is the best driver to make processes faster, easier, cheaper and better. Pull is the concept of matching the rate of production to the level of demand, the goal in any environment. Flow and pull create enormous positive benefits in all aspects in any business.|
|6||Assure Quality at the Source||0.00034%Assuring quality at the source is the combination of three important concepts: (1) do not pass defects forward, (2) stop and fix problems and (3) respect the individual in the process. Organizations must commit to stopping and fixing processes that are creating defects, rather than keeping products or services moving while planning to fix the issue later.|
|7||Seek Perfection||This explains Dr. Shingo’s philosophy that one should always look for problems where there doesn’t appear to be any. This is contrary to the traditional belief: “If it isn’t broken, don’t fix it.” The pursuit of perfection reveals that there are always opportunities for improvement.|
|8||Create Constancy of Purpose||Almost every aspect of any organization is always in a constant state of change. Even knowing this, the first of W. Edwards Deming’s “14 Points” is to create constancy of purpose. How is this possible? Purpose, at the highest level answers the question: “Why does this organization exist?” It is incumbent upon leaders to find agreement on philosophical and strategic direction that provides a unifying vision. This sense of direction helps people keep their eyes on the horizon so that when tactical decisions require a temporary detour, they understand why and can contribute to getting back on track.|
|9||Think Systemically||Leaders realize that the impact of synergy — how things work together — is far greater than the sum of the parts. As managers design and align systems with correct principles, they must shift from thinking purely analytically to thinking systemically.|
|10||Create Value for the Customer||Every aspect of an organization should be focused on creating value for the customer. It is helpful to consider this true-north concept that should guide decision making and continuous improvement. An organization should drive all aspects of value, including quality, cost, delivery, safety and morale.|
Shingo Diamond illustrating that Systems, Tool and results must be supported by principles.
Operational excellence is the vision that many organizations have established to drive improvement. Programs, names, tools, projects and personalities are insufficient to create lasting change. Real change is only possible when timeless principles of operational excellence are understood and deeply embedded into culture. The focus of leaders must change to become more oriented toward driving principles and culture while the manager’s focus becomes more on designing and aligning systems to drive ideal principle-based behaviour. The Shingo model may be used as a benchmark for what excellence at the highest level should look like. It may be used to align all elements of an organization around a common set of guiding principles and a proven methodology for transformation. Some use the Shingo model as the basis for organizational assessment and improvement planning. A few use the Shingo model as a way to recognize their associates for excellent work, and others use it to demonstrate to current and prospective customers that they can compete with anyone in the world. Some use the Shingo model for all of the above. Principles of operational excellence are the only foundation on which organizational culture can be built with confidence that it will stand the test of time.