The Shingo model for operational excellence. 1 May 2012. 3,048. 1.
1. Bob Miller is the executive director of The Shingo Prize for Operational Excellence at Utah State University. In this article, he explains how companies can use the Shingo model to benchmark themselves against best practice and aspire to real organisation-wide change. The search for improvement is instinctive. To be successful in the long term, businesses and indeed any organisation must be engaged in a relentless quest to make things better.
Failure to make this an organisational priority will inevitably result in organisational decline. Excellence must be the pursuit of all great leaders. In fact, the passionate pursuit of perfection, even knowing it is fundamentally impossible to achieve, brings out the very best in every human being.
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Improvement is hard work. It requires great leaders, smart managers and empowered people. Improvement cannot be delegated down, organised into a programme or trained into the people. Improvement requires more than the application of a new tool set or the power of a charismatic personality.
Improvement requires the transformation of a culture to one where every single person is engaged every day in most often small but, from time to time, large change. In reality, every organisation is naturally in some state of transformation. The critical question is, to what end is the organisation being transformed and who are the architects of the transformation? The Shingo model of operational excellence asserts that successful organisational transformation occurs when leaders understand and take personal responsibility for architecting a deep and abiding culture of continuous improvement. This is not something that can be delegated to others.
As the CEO of a very successful organisation recently said, “Leaders lead culture.” A CULTURE BUILT ON CORRECT PRINCIPLES Dr. Stephen Covey describes principles as fundamental truths. He defines a principle as a natural law that is universally understood, timeless in its meaning and fundamentally inarguable because it is self-evident. Covey teaches that values govern our actions and principles govern the consequence of our actions. Values are cultural, personal, interpretable and variable. Our personal values influence how we see the world and ultimately our choices for how to behave.
Principles govern the outcomes of our choices. In other words, the values of an unprincipled person will very likely lead to behaviors that have negative consequences.
Principles govern everything that happens in the natural world. Scientists the world over continually search to understand more of the principles that govern the universe. They do not invent them; they only discover their existence and seek to do good by taking purposeful action based on knowledge of the guiding principle.
Principles govern the laws of science; they determine the consequences of human relationships and, ultimately, principles influence the successful outcome of every business endeavor. Similarly, the values of a corporation, not grounded in enduring principles, are largely ineffectual in influencing the creation of a consistent organisational culture.
WHY OPERATIONAL EXCELLENCE? For decades we have watched, and all too often experienced, the disappointing efforts of programmatic improvement initiatives, leaving in their wake a trail of unintended negative consequences; rarely resulting in lasting improvement. Quality circles, just-in-time, total quality management, business process re-engineering, six sigma, and most recently lean are a few illustrations of well intentioned initiatives that have far underdelivered on there promised benefits. Our study of these programmes over the last 25 years has led us to believe that the problem has nothing to do with the concepts and everything to do with the programmatic, tool oriented deployment of them. The Shingo model for operational excellence is based on a systematic study of each of these improvement initiatives. Our approach bypasses the tools that each programme has engendered and focuses rather on the underlying/guiding principles and supporting key concepts behind them.
We recognise the necessity of good improvement tools but focus on them only within the context of enabling a system to better drive ideal, principle based behaviors. The Shingo “House” (Figure 1) provides a summary and categorisation of this collection of guiding principles and supporting concepts. When taken in their totality, these timeless principles become the basis for building a lasting culture of excellence in the execution of one’s mission statement. We call this relationship between business results and principle based behavior operational excellence. Operational excellence cannot be a programme, another new set of tools or a new management fad. It is the consequence of an enterprise-wide practice of ideal behaviors, based on correct principles. As long as improvement is seen as something outside the core work of the business, as long as it is viewed as “something else to do”, operational excellence will remain elusive.
When leaders anchor the corporate mission, vision and values to principles of operational excellence and help associates to connect and anchor their own values to the same principles, they enable a shift in the way people think and behave. Changing the collective behaviour of the group changes the culture. This is a leadership responsibility that cannot be delegated. In his book Key Strategies for Plant Improvement, Shigeo Shingo said, “Think in terms of categorical principles.” The Shingo House is a categorisation of the guiding principles of operational excellence. Associated with each category are also listed many important supporting concepts. The principles are categorised into four dimensions: cultural enablers, continuous process improvement, enterprise alignment, and 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 did not create the ten guiding principles of operational excellence, but rather they have always existed. In truth, there is ample evidence that these principles have been well understood, more or less, at different times for thousands of years. As the world has gone through cycles of advancement and decline, it seems these principles are routinely lost and forgotten and must be re-discovered. Emerging from the dark ages into a period of enlightenment and industrialisation, the impact of these principles are only now beginning to be understood again.
Certainly and even surprisingly, business schools do not emphasise these principles even though they are the drivers for business execution excellence. The cause for this may be that these fundamental business principles have been disguised in management fads and tool boxes that become programmes or “flavors of the month”. The Shingo Prize has made a diligent search of thought leaders over the last 100 years. Their work has been carefully analysed and dissected and the unique concepts or principles from each have been extracted. Compiling, distilling and prioritising the list led to the 10 guiding principles on the left side and the supporting concepts for each dimension on the right side of the house.
Supporting concepts are critical to pay attention to but may not stand up to the rigor of being universal, timeless and selfevident as are the principles. The dimensions are the result of ‘thinking categorically about the principles.’ It is clear that all four dimensions of the model require focus in order to achieve excellence.
In the same way that we need to comprehend objects in three dimensions to truly appreciate all of their characteristics, operational excellence must be viewed in these four dimensions in order to fully appreciate the power of the principles to affect business outcomes. TRANSFORMING A CULTURE – SHINGO TRANSFORMATION PROCESS Many organisations and their leaders are coming to understand that sustainability requires focusing on the culture; that’s the easy part. The difficult part is knowing how to really affect a change. The Shingo transformation process is a methodology for accelerating a personal and enterprise-wide transformation to a culture of operational excellence. The process is based on the teaching of Dr.
Shigeo Shingo who recognised that business improvement came through understanding the relationship between principles, systems and tools. Shingo understood that operational excellence is not achieved by superficial imitation or the isolated and random use of tools & techniques (‘know how’). Instead, achieving operational excellence requires people to ‘know why’ — for example, an understanding of underlying principles. In the 1940s, the work of French social scientist Piaget led us to understand that learning occurs when people come to deeply understand the meaning behind the methodology. People naturally search first for meaning, the principle, and then attempt to organise them somehow into a system, or some kind of order. Finally, they create tools to better enable the systems to accomplish the purpose for which they were created.
LEARNING AND TEACHING THE PRINCIPLES The first step a leader must take in leading cultural transformation is a personal journey to understand what each of these guiding principles mean conceptually and then what they mean personally. It is impossible for a leader to lead the development of a principlebased culture until he or she has gone through the deep reflection required to begin a personal transformation. This is no trivial task.
For many and perhaps most, fully embracing these principles requires a fundamental re-thinking of the rules of engagement used to get to where they are. At a minimum, leaders must be curious enough to experiment with the principle.
John Shook at the Lean Enterprise Institute taught us that it is often impossible to “think our way into a new way of acting”. Rather, guided by correct principles, what we should do is to do, observe, learn and then do something else, until we “act our way into a new way of thinking”. By carefully analysing the cause and effect relationship between principles and results, a leader will begin to shift their own beliefs about what drives optimal business performance. After gaining this new insight it becomes the effective leader’s primary responsibility to see that others in his/her organisation have experiences where they can gain the same insight.
Leaders who choose to disregard the principles that govern business outcomes do so at great risk. Whether we acknowledge them or not, the principles of operational excellence always govern the consequence of our leadership and management behaviours. An example may help.
If we encourage, enable or simply allow a culture to emerge where employees are thought of merely as an unfortunate cost burden, or that the smartest people are those that rise to the top, the consequence will be a workforce that is not fully engaged, ideas for improvement are never articulated and acted on, people feel unfulfilled in their work and turnover is very high. Labor costs become excessively high, business systems stagnate, and innovation is not fast enough to compete in a rapidly changing business climate. When people understand principles for themselves, the “why”, they become empowered to take personal initiative. Leaders who teach associates the principles behind the tactics or the tools can be confident that innovation from each individual will be pointed in the right direction. It is not necessary for a leader to define ideal behaviours for others. If the principle is truly a principle, diverse people with different values even, will readily be able to define ideal behavior for themselves and be very consistent with others.
Shingo understood this and taught that the primary role of a leader is to drive the principles of operational excellence into the culture. ALIGNING THE SYSTEMS WITH PRINCIPLES All work in organisations is the outcome of a system. Systems are either designed to produce a specific end goal or they evolve on their own. Systems drive the behavior of people; or rather they create the conditions that cause people to behave in a certain way. One of the outcomes of poorly designed systems is enormous variation in behaviour or even consistently bad behaviour. Variation in behaviour leads to variation in results. Operational excellence requires ideal behaviour that translates into consistent and ideal results.
The Shingo transformation process illustrates the critical need to align every business, management and work system of the organisation with the principles of operational excellence. When systems are properly aligned with principles, they strategically influence people’s behaviour toward the ideal.
Shingo also taught that the primary role of managers must shift from fire fighting to designing, aligning and improving systems. THE ENABLING ROLE OF IMPROVEMENT TOOLS A tool is nothing more than a point solution or a specific means to a specific end.
Shingo referred to tools as techniques for problem solving; necessary but not sufficient. He taught that tools should be selected to enable a system to perform its intended purpose.
In many ways, a system may be thought of as a collection of tools, working together to accomplish an intended outcome. A successful enterprise is usually made up of complex business systems that can be further divided into layers of sub-systems, each having embedded in them the necessary tools to enable a successful outcome.
Perhaps the largest mistake made by corporations over the last three or four decades has been the inappropriate focus on a specific tool set as the basis for their improvement efforts. Tools do not answer the question of “why”, only the question of “how”.
Knowing the “how” without fully understanding the “why” leaves people waiting for instructions and powerless to act on their own. Organisations can never sufficiently release the full potential of their people by creating a tool-oriented culture. EXPERIMENT WITH THE PRINCIPLE One of the principles of operational excellence is scientific thinking, which is intended to foster a culture of experimentation and deep learning. People must be able to put to the test each of the principles espoused by the principle-based leader. Only when people see for themselves the cause-and-effect relationship of results relative to the principle, will they come to deeply understand the value of the principle to them personally.
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Repetition through many cycles of learning in the experiment gives people a personal insight about the principle and empowers them to make personal judgments about its validity. SUMMARY Operational excellence is end game of all organisations focusing on continuous improvement.
Programmes, titles, tools, projects, events 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 towards driving principles and culture while managers’ focus becomes more on designing and aligning systems to drive ideal principlebased behaviour. The ultimate mission of The Shingo Prize is to assist organisations of all kinds in building operational excellence. 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 organisation around a common set of guiding principles and a proven methodology for transformation. Some use the Shingo model as the basis for organisational assessment and improvement planning.
A few use the Shingo model as a way to recognise 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. The real Shingo Prize, however, is represented by the business results that come from the relentless pursuit of a standard of excellence that is without question, the most rigorous in the world. Those who use the Shingo model will embark on a journey that will accelerate the transformation of their organisations into powerful, dynamic, nimble competitors. No obstacle – affordable healthcare, efficient transportation, emerging global environmental concerns – will be beyond the reach of those who embrace principles of operational excellence and make certain that every person in their extended value stream deeply understands the principles behind the tools.
Lean leaders around the world invest substantial time and money on change initiatives that achieve positive results. Most often, they find it is hard to sustain momentum. Each new Lean tool becomes another possible solution or 'best practice' only to create a temporary boost in results and a small taste of victory. It doesn’t take many such cycles for associates to feel jaded, frustrated and even burnt out. The Shingo Model™ is not an additional Lean program or change initiative to implement.
Rather, it introduces the 10 Shingo Guiding Principles on which to anchor your current initiatives. It fills the gaps in your efforts towards ideal results and enterprise excellence. Respect Every Individual Respect must become something that is deeply felt for and by every person in an organization. Respect for every individual naturally includes respect for customers, suppliers, the community and society in general. Individuals are energized when this type of respect is demonstrated.
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Most associates will say that to be respected is the most important thing they want from their employment. When people feel respected, they give far more than their hands—they give their minds and hearts as well. To better understand the principle of respect for every individual simply ask the question “why?” The answer is because we are all human beings with worth and potential.
Because this is true, every individual deserves my respect. Examples of Ideal Behaviors. Create a development plan for employees including appropriate goals. Involve employees in improving the work done in their areas. Continually provide coaching for problem solving. Lead With Humility One common trait among leading practitioners of enterprise excellence is a sense of humility. Humility is an enabling principle that precedes learning and improvement.
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. Improvement is only possible when people are willing to acknowledge their vulnerability and abandon bias and prejudice in their pursuit of a better way. Examples of Ideal Behaviors. When an error occurs, focus on improving the process that created the error. Ensure that all parts, materials, information and resources are correct and meet specifications before using them in a process. Focus on Process All outcomes are the consequence of a process.
It is nearly impossible for even good people to consistently produce ideal results with a poor process both inside and outside the organization. There is natural tendency to blame the people involved when something goes wrong or is less than ideal, when in reality the vast majority of the time the issue is rooted in an imperfect process, not the people. Examples of Ideal Behaviors. When an error occurs, focus on improving the process that created the error. Ensure that all parts, materials, information and resources are correct and meet specifications before using them in a process. Insight #1 Ideal Results Require Ideal Behaviors Results are the aim of every organization, but there are various methods by which they are attained. Ideal results are those that are sustainable over the long-term.
Simply learning or buying new tools or systems does not achieve ideal results. Great leaders understand the cause-and-effect relationship between results and behavior. To achieve ideal results, leaders must do the hard work of creating an environment where ideal behaviors are evident in every associate. Insight #2 Purpose and Systems Drive Behavior It has long been understood that our beliefs have a profound effect on our behavior. What is often overlooked, however, is the equally profound effect that systems have on behavior. Most of the systems that guide the way people work in our companies were designed to create a specific business result without regard for the behavior that the system consequentially drives. Many systems are de-facto systems that have evolved in response to a specific need for a particular result.
Managers have an enormous job to realign both management and work systems to drive the ideal behavior required to achieve ideal business results. Insight #3 Principles Inform Ideal Behaviors Principles are foundational rules and help us to see both the positive and negative consequence of our behaviors. This fact enables us to make more informed decisions, specifically, about how we choose to behave. The more deeply leaders, managers and associates understand the principles of operational excellence and the more perfectly systems are aligned to reinforce ideal behavior, the greater the probability of creating a sustainable culture of excellence where achieving ideal results is the norm rather than the aspiration. This is what the Shingo Model™ illustrates.
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. 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. 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. Sr Guiding Principle Meaning 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.
The Shingo Prize (a.k.a. The Shingo Model) is the world’s highest standard for operational excellence. The prize recognizes organizations’ efforts to build cultures of operational excellence and continuous improvement. The prize is named after Shigeo Shingo, a Japanese industrial engineer who is widely recognized for his work in developing many of the revolutionary manufacturing practices that originated at Toyota. The Shingo Prize is based on the principles, systems and tools that deliver world class levels of excellence across an enterprise.
The Shingo Model is useful for companies/organizations who have embarked on the lean journey. The model can be used to assess the level of lean maturity and identify strengths and opportunities for improvement. This training presentation can be used to brief employees to gain buy-in to the Shingo Model and prepare them for site visit assessments.
LEARNING OBJECTIVES 1. Understand The Shingo Prize as a Model for Operational Excellence 2. Explain the Shingo Assessment Criteria for Operational Excellence 3. Define the Shingo Model Assessment and Scoring Guidelines 4.
Gain an Overview of the Shingo Application Process CONTENTS 1. Overview of the The Shingo Prize 2. Assessment Criteria 3. Assessment & Scoring System 4. Application Process 5.
Shingo Award Winners To download the complete presentation, visit: http://www.oeconsulting.com.sg.