The Six “M’s” of Optimization: The Lack of a System, Part 5

SOURCE: Kay Sever | January 5, 2020

OPTIMIZATION… When we think about that word, phrases like “achieving the best results”, “eliminating bottlenecks” and “making the most money” come to mind. You are told by vendors and experts that you must buy new equipment and systems (often millions of dollars) to achieve optimization. If the executive team decides to move forward with optimization, three words commonly summarize management’s focus: Machines, Money and Maximization.

What if I told you that there are three more areas of focus that will make or break your efforts to maximize results? What if you knew that ROI would be less than you promised the board of directors AND less than was possible to achieve if these areas of focus were ignored? What if you learned that little or no investment is required to include these areas of focus in your optimization plan?

It’s time to pull the veil back on three additional aspects of optimization that are overlooked, underrated and misunderstood. These aspects are important to know about because they are sources of organizational weaknesses that reduce reported ROI. It’s time to explore the “organizational side of optimization”: Mindset, Measures and Management, the aspects linked to an Optimization System.   

Part 5 of this article will focus on Optimization System highlights.

AN OPTIMIZATION SYSTEM – Things to Consider

The buying decision linked to optimization goals is a “one-time investment” that often requires millions of dollars of new capital. Once the request for capital is approved by the Board of Directors, orders are placed, and equipment arrives and is put into production. Then it’s a waiting game to see how the equipment will perform (compared to budgeted goals).

To say this another way… you invest to achieve your best possible performance but you don’t have any numbers that tell you what best possible performance is! As a result of this HUGE DISCONNECT,

1) You use budget as a guideline when your goal is optimization. Your management team is expected to make operating decisions to achieve best possible performance, but they have no data that reveals how close they are to that goal. How can you achieve optimization without a dataset that gives you a window into missing operating potential that you are chasing?

2) People assume that optimization will be achieved with equipment and that people have little impact on optimization success. There is no awareness of the working relationships required to achieve “full” optimization across a value stream… AND there are no numbers linked to the value added by those relationships. As a result, the management/culture side of optimization is overlooked/missed and losses linked to relationships required to achieve optimization will occur/continue for decades.     

An Optimization System acts as an overarching umbrella that links optimization data to the people that need to change how they manage assets and people to achieve “full” optimization. Selected optimization data can also be shared with employees doing the work so they know if they are achieving their best performance, an empowering goal that transcends and mends old corporate culture divides within the management team and workforce.

Without an Optimization System as part of your optimization strategy, your organization will be left out of the optimization process. You will be measuring your success with budget data and will not know if you are achieving your optimization goals. You will also not be able to measure or reduce losses linked to people, working relationships and corporate culture, so “full” optimization will remain out of reach.

Thought for the month: “Full Optimization” of a site or company requires an Optimization System that links equipment and people to optimization goals over the long term.

        

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Kay Sever is a leading expert in reducing financial losses caused by corporate cultures, optimization and change barriers. She has developed a management training system called MiningOpportunity which is based on her 20 years of experience working with mines and plants to reduce the losses they never measure… losses linked to corporate culture, hidden excess capacity and change barriers. MiningOpportunity modules teach executives and management teams how to find and quantify their losses and apply strategies and tactics that stop them. Unique insights from Kay’s 3-year study of management’s barriers to change and optimization are included in the content. See MiningOpportunity.com for her contact information and several training options for your team, including the NEW “Spend a Day with Kay” option.

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Kay Sever
Kay Sever Author
P.O. Box 337 Gilbert, AZ USA 85299-0337

Kay has worked side by side with corporate and production sites in a management/leadership/consulting role for 35+ years. She helps management teams improve performance, profit, culture and change, but does it in a way that connects people and the corporate culture to their hidden potential. Kay helps companies move “beyond improvement” to a state of “sustained optimization”. With her guidance and the MiningOpportunity system, management teams can measure the losses caused by weaknesses in their current culture, shift to a Loss Reduction Culture to reduce the losses, and “manage” the gains from the new culture as a second income stream.