PRESS RELEASE: XONITEK 3rd Annual EU Summit Highlights

3rd EU Operational Excellence Summit, Budapest & Milan

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Strategic Role of Leaders
The 3rd Annual EU Operational Excellence Summit organized by XONITEK Group of Companies took place at the beginning of June in Budapest and Milan. It was an international forum for practitioners, experts and academics where strategies and methods of achieving operational excellence in various industries and economic environments were discussed.

Continuous Improvement (CI) leaders and Lean & Quality Professionals responsible for Operational Excellence programs shared their experience and knowledge which makes their companies more competitive and better prepared for current changing market conditions. Managers from all over Europe came to listen and discuss the most inspiring case studies and review strategies and tools demanded of modern leaders.

The conference was opened by Joseph Paris, Chairman of the XONITEK Group of Companies with his keynote speech “A Frictionless World”. He delved into the various types of friction and their sources, whether the root causes be procurement, engineering, information technologies (IT) and the Enterprise Resource Planning (ERP) systems, sales and customer service, or perhaps even all the way to the C-Suite and the Board Room. Joseph Paris examined some practical examples of processes and identified the root cause of the friction. He also discussed using Costed Value Stream Mapping (C-VSM) to discreetly map a process and determine the classification, value-add and cost of a friction-point on the end deliverable. Finally, he reviewed what it takes to affect the changes necessary – and the “friction” associated with why things stay the same.

The Keynote speaker was followed by learned and seasoned experts in the field and concluded with a panel discussion. Here are some highlights from the presentations which resonated most with the audience. The formula for both conferences in Budapest and Milan was to give participants an opportunity to share best practices and take some inspiration from different industries operating on similar principles. That is why representatives of the manufacturing, finance, HR and other services were present in the room. Among them were speakers from GE Capital, Robert Bosch Ltd, Siemens, K&H Bank, Google Inc., The Corps Group, PCC and XONITEK.

K&H Bank is one of the largest private banks in Hungary. There are 100 process managers and 15 group program managers who have completed over 30 large process improvement projects to date. Operational Excellence consultants from K&H Bank, Zsofia Kovacs and Ferenc Varga showed how they’ve helped the bank save money, materials and space. The main focus of OpEx implementations at the bank is on training and coaching employees. One of the pilot projects presented at the conference was a paper reduction project which resulted in large savings in paper cost and office space (about 114 000 euro and 800 square meters of regained office space). In 2010 KBC group (the international owner of K&H Bank) initiated a new Lean program which aims at changing organizational culture through process improvement in 3 major departments: IT, leasing and back office. This initiative is currently being merged with existing operational excellence program at K&H Bank which is an interesting project in itself.

Gyorgy Seprenyi, Lean manager at Robert Bosch factory in Miscolc, Hungary showed the vision of Lean that was implemented in the factory and also extended over the entire supply chain. This factory produces over 600 ready parts on 35 production lines and employs over 3500 people in 3 factories spreading over an area of 12 000 square meters. Its suppliers are mostly in Europe as the percentage of Asian suppliers is decreasing. The company’s aim was to shorten its “lead time” below the current – already low – 8 days, and to eliminate duplicated processes. The main benefits from introducing Lean are: space savings allowing for new production, changing the way in which parts are delivered to end customers (splitting deliveries into smaller shipments in special small boxes,), implementation of the Bosch Production System along with the Supplier Enabling Program (SEP) for Bosch’s suppliers and distributors. As a result of these programs the company was able to: decrease their inventory levels, increase the level of service to their suppliers, introduce a uniform marking system for parts deliveries, develop distribution strategies to specific regions in Europe (““milk runs” of trucks across the country and Europe), more frequent deliveries to end clients and the establishment of KPIs for all processes.

Carey Lohrenz, Vice President of The Corps Group, who, as a former military officer, fighter pilot and corporate executive, is accustomed to working in fast moving, dynamic environments, where inconsistent execution can generate catastrophic results. These same challenges are found in corporate environments everywhere; markets change, customer needs evolve, and the failure to adapt can quickly place a company’s success in jeopardy. In her presentation “High Performing Organizations and Lean Six Sigma: Achieving Dramatic and Sustainable Results” she talked about why so many aggressive process improvement programs falter. In order to  prevent this from happening in an organization it is necessary to unite the existing powerful disciplines of Lean Six Sigma and High Performing Organizations for sustained success.

Mrs. Lohrenz shared with the audience how to dramatically improve results by integrating a  High Performing Organization’s concentration on strategy, culture, accountability, and world-class execution with Lean’s Continuous Improvement principles and tools that focus on waste elimination and process speed.

“Organizations should concentrate on strategy development and its communication to employees, taking into account organizational culture, assigning individuals responsible for change implementation and perfect delivery throughout the whole process. It is very useful to set up a “red team” which helps to analyze and assess everything that happened in the process regardless of who was responsible and what’s his or her role in the organization – so called “debriefing” or post-implementation feedback process.”

Miklos Kiss, Quality Department Leader at Siemens, Hungary, pointed to the fact that demanding clients are often the reason for companies starting optimization of their processes and quality improvement initiatives.

Alessandro Laureani, Global Operations – Process & Systems Manager w/ Google Inc.is an expert in converting statistical insight into Lean Six Sigma improvement results.  As a senior manager in the high-demand worldwide Google operation, he focuses on improving the systems and deliverables of the Adwords platform, a key environment driving revenue for the organization. In his presentation “The Impact of Leadership Style on Continuous Improvement Success” he explored which styles of leadership are most conducive to success in Continuous Improvement and how an organization’s culture itself can impact the deployment of Continuous Improvement efforts.

Marco Tagliapietra, Operational Excellence Leader at GE Capital Italy is tasked with the overall management of the Operational Excellence function and operations integration within GE Capital Italy.  Marco Tagliapietra presented a case study, “Success in Operational Excellence within a Regulated Framework”, on GE Capital’s successful implementation of Operational Excellence methodologies within a regulated environment.  The session included discussions on the process of introducing Lean Six Sigma philosophies to the organization, the content and role requirements for success, and new challenges on the horizon in the rapidly evolving business climate of the 21st century.

An interesting aspect of the scientific justification for using psychology in Lean and CI implementation was presented by David Bovis, Partner and Founder of the Psychology for Cultural Change (PCC) in his lecture “Look before You Lean”.

How humans think and subsequently react is often a root cause of change initiative failure.  Whether focused on performance improvement, merger & acquisition, consolidation, or IT implementation, change involves people.  Fortunately, with today’s advances in Neuroscience and scanning processes, we are able to analyze such ‘people process’ root-cause issues with the same attention to detail historically reserved for the logical side of change. The pragmatic models developed by Mr. Bovis clearly convey the link between individual performance, systemic conditions, organizational performance, and profitability – at a psychological level.

Members of the academia, Mr. Dan Bumblauskas, Professor from the University of Missouri, and Mr. Paul Lacourbe, Associate Professor from CEU Business School,  gave us a new perspective on how universities contribute to CI in organizations and how joint initiatives of industry and schools result in better educated young people as well as fresh ideas being transferred to companies.

Our speakers and participants were experienced professionals responsible for global OpEx programs. They’ve expressed an interest in showing their production facilities and sharing their best practices with invited guests. Perhaps this is an opportunity to tighten the links among business process improvement professionals and make the learning even more focused, hence the idea of next year’s event which will be dedicated to specific industries or challenges. 
During the Summit, speakers and participants shared their lessons learned so the same mistakes would not have to be repeated and good practices could be replicated.  It was a great opportunity to meet the local champions of Continuous Improvement initiatives, as well as listen to provocative speakers and take part in moderated discussions.

“Operational Excellence is about the pursuit of perfection,” said Joseph Paris, summarizing the 3rd EU Operational Excellence Summit.  “It requires effective communication, leadership and following. It means successful problem solving and using the right tools and techniques in a thoughtful and well organized manner.”

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