Members of the OST community have worked with local and overseas corporations, SMEs and all levels of government. Some of our projects have involved large scale business unit transformations in the telecommunications, banking, manufacturing and digital technology sectors. Here are two case studies.
Redesigning a telecommunications managed network service
A large telecommunications managed network service (MNS) was struggling to adapt to new digital communications technology being introduced to the department. The MNS levels of service were so poor that one very important customer, a high-profile international airline, threatened to impose heavy fines for any aircraft delayed by avoidable communication incidents.
After a great deal of planning and preparation, several Participative Design Workshops were conductedinvolving key personnel from the relevant bureaucratic silos. Once the MNS was redesigned and operated as a team-based structure, the workplace changed from a culture of turf warfare to high levels of cooperation.
And despite the complex nature of the work, there was an immediate improvement in performance. The new MNS self-managing teams achieved 100% service availability for all Capital Cities – that is, airports and reservation centres in their 1st operating month and continued to improve performance month after month. In fact, the MNS teams changed the way it engaged its customers and made it easier to do business.
The performance improvement was so dramatic that within 18 months MNS was awarded the airlines preferred supplier ward. When the announcement was made, the Manager of Product & Service Integrationsent the following email to the Telco’s senior management team: –
“Today we have won our airline customer’s Preferred Supplier Award. Two years ago, we interviewed several of their senior managers and were told that we would never be considered as a preferred supplier.
The award makes special mention of the ‘high value service delivery, technical performance and process re-design’. All these things relate directly to us using the OST processes of Search Conference and Participative Design Workshop.”
Strategically repositioning an Australian footwear manufacturer
A medium sized Australian footwear manufacturer which had been designing, manufacturing, and distributing footwear in Australia for over 100 years, was losing market share from tariff reductions and global competition. 500+ jobs were at stake from pending closure.
Lean manufacturing tools and techniques were introduced and soon reduced shoe manufacturing lead times from 8 to 3 weeks, but then plateaued. While this improvement was significant, it was still not good enough to compete with low-cost imports from Asia.
An OST community member was engaged by the executive to run and manage a Search Conference to help them develop an active adaptive business plan. After participating in this large group planning event, the executive was able to develop a most desirable and adaptive future for the business within the context of an external environment that was characterized by high levels of competition, very low-cost shoes, and growing online purchases.
The centre piece of their planning work involved repositioning the business to focus exclusively on manufacturing high fashion women’s shoes. This meant that in the world of fast changing, high fashion shoes, the business had to transform its operations from separate departments that made a certain part of a shoe, producing high levels of work in progress, to a highly cooperative and responsive enterprise comprised of multiple self-managing teams that made an entire shoe.
Conducting a series of Participative Design Workshops, which changed their organisational design principles, or organisational DNA, the business transformed from a bureaucratic structure to a democratic team-based enterprise where the basic unit of work is a self-managing team.
Within a few months this business was delivering outstanding results in a highly competitive market. After a couple of years lead times had reduced from 3 weeks to less than 12 hours and its market share from grew from 12% to greater than 60%.
Redesigning the organisational structure to one based on self-managing teams had a profound effect on the way this footwear manufacturer did business. It literally changed from a mass production factory to a mass customisation business where a single customer could place an online order of one pair of shoes within a daily production run of 5,000 pairs of shoes and receive their order within 48 hours.
An overview of these unprecedented results can be found in the following interview summary by the Managing Director of this ground-breaking footwear manufacturer.
He stated, “Under the old way of working I’d spend most of my time trying to make the plant more efficient. Now the teams are helping to do this, which frees up my time to generate new business.
For example, when new European styles were released under our old way of working, our marketers would discuss with the engineers and designers how to make this new style of shoe. Eventually, they would develop a new production process and instruct the operators on what to do. Now the self-managing teams, which collectively now hold engineering and design skills, are given the new shoe style and they come back to management with what they require to make a quality shoe in the shortest time possible.
Before teams we applied many continuous improvement techniques including TQM, JIT, and VAM. They produced some good results, but we still could not make a shoe and get it onto the customer’s shelf in less than 3 weeks. Now the teams can make a shoe in less than 12 hours, which means we can now take a customer order size of one!
This expertise has opened new markets for us including selling shoes at home shows. And because of our leather making expertise we are now selling other leather products. We are even selling the polyurethane moulding expertise that the teams have acquired!
In the last few years our share of Australian production has gone from 12% to over 60%, while many other Australian footwear manufacturers have closed their doors and sent their manufacturing offshore.”
Unfortunately, this very successful project has a sad ending. The footwear manufacturer was so successful, it failed. Key players in the manufacturer’s ecosystem were not adapting quickly enough to changes taking place across the whole supply chain and within the footwear manufacturing business. As these players closed their doors, it resulted in the collapse of this footwear manufacturer’s ecosystem. It’s a salutary lesson for those operating in rapidly changing and highly uncertain environments.