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In my last post, I posed the question, “How evolved is your supply chain?” I’m hoping you took some time to think about it. Maybe you were you able to come up with an answer. If you did, I’d love to hear where you think your organization falls on the evolution continuum. If not, you can use the questions below as a way to gain perspective on your organization’s evolutionary progress. In my next post, I’ll share how to interpret your answers and understand where your organization currently stands. For a printable version, click on the questionnaire.
Below is the second half of my interview with our CEOs, George Coffey and Jim Ostrosky. In this section they discuss who we are as a company and how we make a real difference for our clients. Read Part 1 of our interview.
How do you feel USCCG is different from other firms? How are we unique in the market?
George: Many of our clients who have had extensive experience with other firms tell us that we develop a greater depth of understanding of their business and the issues they face which enables us to better design pragmatic solutions to improve performance. Many also feel that we have a more effective approach to engineering change in their organization that fosters ownership by their people. Prospective clients will ask us what we are good at and what makes us different. What we are good at is achieving results. We are able to generate substantial results in a relatively short time while enabling our clients to sustain and accelerate improvements .We strengthen their internal continuous improvement capability with enabling tools, skills, infrastructure, and culture. Generating near term results, while strengthening on-going organizational effectiveness, makes us different from many other approaches.
Jim: I believe a key differentiator between USCCG and our competitors is the depth of experience that our consultants possess in the various industries and domains we service. In this age of specialization, it has become more and more challenging to maintain a cadre of capable resources, but we have been able to do exceptionally well at that over the past 4 ½ decades. We continuously train our people utilizing internal methods as well as memberships in various professional organizations that offer certifications and continuing education credits. Perhaps, more importantly, we have been able to retain our people, which is also a key success factor. In addition, our deployment methodologies have proven to be very effective. We look at the processes by which a client operates, the technology they deploy, and the skills of their people. Real changes are realized when you link all three things together: their People, Processes, and Technology. We feel we do that better than most and that is what makes us different. Another key difference is that we involve ourselves in the implementation. Many consulting firms will analyze a company, and compare current performance to industry norms and benchmarks, create a road map, and leave behind an answer, but it often times that solution will never get implemented. When practical, we prefer to be involved in the implementation of our recommendations, so our clients can realize the value and we can change the processes, the systems and behaviors, so the results last. When we are engaged to work at the process level of a company, we believe that enables us to cause even more fundamental, lasting change. Much of what we are doing in regulated industries, such as Oil & Gas, Energy, and Healthcare, are at the process level. As the government regulatory agencies issue changes and directives, our clients need to verify they are in compliance and understand where they’re lacking. They must put auditable processes in place to keep them in compliance as well as doing so in a cost-effective manner. We have been doing a great deal of work in this area recently.
What makes a successful project, both from our end and the clients’ end?
George:The most critical aspect of a successful project and a successful client relationship is communication. We find when we’re talking to our clients routinely and objectively about how the project is going in a very open and forthright manner, we are able to understand and mitigate issues as they arise over the course of a project. We believe that we are putting the success of the project at risk if too much time passes without meaningful communication with all levels of our client’s organization to get a shared understanding of exactly where we are, what we can do to improve the process, and take corrective action. We typically organize a steering committee protocol to enable efficient communication and decision-making. The steering committee is kept absolutely abreast of where we are with respect to our projected improvement and also to the specific tasks associated with that.
Jim: Communication is a critical component, but to communicate effectively, we need to always do our job at the front end of a project to create a crystal clear shared vision. As we engage with a client, it is imperative that we fully understand what must change and create a clear vision of the end result that is co-owned by USCCG and our clients. It then becomes our job to create a change model to continually reinforce the vision adjusting as we go to make sure that we’re of one mind with all levels of the organization. We believe it to be very important that everybody feels like they’re doing what’s in the best interest of their company as most employees have pride in their company and they want to succeed. Our change model is one where we involve everyone in the organization from the process owner on up to the highest level that we can access on a regular basis. The difference between a good project and a great project: in my experience, it has been the amount of involvement we can gain from our clients especially at the Steering Team Level. We built our change model around a shared vision of employee involvement, combined with the appropriate changes to the processes, the technology, and the skill sets of the process owners and their managers all which serve to make our model very effective.
In what ways have you noticed technology’s impact on our project process and how has that changed what we offer to our clients?
George:One of the more important aspects and benefits of being able to deploy and utilize more technology is the sustainability of our efforts. Good management practice depends on accurate data and timely information. Earlier on, we had to depend on the manual collection of data and the manual preparation of reports. As a result of that, it was very difficult to sustain some of the procedures we would put into place because they were very demanding from a time standpoint. Now, that information comes with a lot less pain, very often automatically. It makes all of our efforts, processes, and procedures easier to sustain. Since we are getting the information more quickly, good management requires timely corrective action when issues are identified. We are able to do more effective problem solving with a greater sense of urgency as a result of having that information more quickly. The whole business intelligence aspect of performance improvement is absolutely critical today.
Jim: With current technology, data has become readily available in various forms and in some cases, in excess. Some of our clients feel as if they have too much data and not nearly enough information. Often our job isn’t to provide clients with more technology, our job is to help them leverage the technology investments they already have made by sorting out the data they currently have and making it actionable. To do this we filter it, slice it and dice it, create meaningful metrics and Key Performance Indicators out of that plethora of information. In many cases, there have been tremendous investments in technology, but sometimes these systems leave out a key part of the organization: the people at the execution level of the process. Management and accounting have better information than ever, but the people who actually execute the process often times don’t receive timely accurate feedback of actionable information. Our job is to make sure we link the data and information from the board room to the process owner, and every step in-between. By sorting out the data, making it relevant, and holding the people accountable at the points of execution we leverage technology to help provide the underpinnings to meaningful lasting change.
What hurdles or objections do we encounter most often with respect to beginning an initiative with a new client or even a new project with an existing client?
George:Sometimes clients feel that they have so many other issues and programs underway, that it’s difficult to add yet another project to everyone’s to-do list, even if it clear that something should be done. There’s never a good time to start these initiatives and there’s never a bad time to start making the kind of dramatic near term and strategic improvement that we can make in business performance. To start, we really have to talk through how many resources we have to bring to bear and get a good solid understanding early on about what the time requirement are going to be for our client’s people. These requirements should be properly assessed, understood, and planned for. There aren’t any businesses or organizations out there that don’t have many different distractions, different initiatives, and different problems. We are very effective at being able to come in and integrate into our client’s organization and be a net increase in their resource capability, not a distraction or a dilution to the already existing initiatives underway.
Jim: One of the questions that comes up often in the early phases of a relationship with a client is, Do you think I have the right organization in place? Or, I don’t feel that I have the right organization in place, therefore now is not the time to begin a project. It can be difficult to see the organization through the client’s eyes, but if the client could see their organization through our eyes, they would understand that it likely is an appropriate time to start. We can optimize their processes, upgrade their skills, implement systems, and technology to help enable their people to become better at what they do. A manager who may not be quite as effective today as a client would like them to be, after having gone through a USCCG deployment will have tools, improved supervisory skills, and will be much more effective than they would have been prior to starting the project. From our perspective, there’s rarely a bad time to start a project as in today’s competitive world improved performance is an imperative to survival. Perceived organizational deficiencies aren’t always a reason not to get started; often they are THE reason to get started.
The APICS Dictionary, 14th edition, defines Supply Chain Management (SCM) as “the design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand, and measuring performance globally.” Where globally can mean “either worldwide or applying to the chain as a whole rather than to a particular entity within the chain.”
Other important aspects of SCM according to APICS Fundamentals of Supply Chain Management, Module 1, include three things that point to the importance of collaboration with suppliers and customers alike:
- SCM is about creating net value – not all about squeezing out costs from one activity or another.
- Value-creating activities in the supply chain should transcend the activities of particular entities in the chain – the supply chain has to produce value for more than one stakeholder (i.e. all partners need to realize value) in addition to generating value for the consumers or investors.
- Managing supply chains requires a balancing act among competing interests – just like balancing competing priorities of finance, marketing, and operations internally.
Like many things, an organization’s supply chain(s) and SCM practices evolve over time as they work toward customer focus and creation of net value. Regardless of where an organization begins its evolution or its current position on the continuum, the goal is to move as close to a highly evolved operation as possible.
Through the years, I have worked with organizations at varying points of evolution. Some even demonstrate variation within their own organization, having highly evolved supply chains for their core product offerings while operating at a much lower level on the continuum for extension offerings that follow a different supply chain. While all are looking to move to the right on the continuum, they have been successful regardless of their current level of evolution.
Based on this, I am curious:
- How evolved is your supply chain?
- Are your different supply chains operating at the same or different levels of evolution?
If you are not sure how to answer these questions, look for a short self-assessment in my next post.
With projects across the globe, the variety of clients our company works with has given me the chance to learn about specific processes utilized in certain industries that I would never have otherwise known about. Recently, USCCG completed a pipeline integrity project for an Oil and Gas company in North America. I reached out to Ben Harper, Project Manager with USCCG, to get the inside scoop on his team’s strategy, process implementation, and end results.
Understanding Pipeline Integrity
Pipeline Integrity encompasses two areas: In-line Inspection and Digging. In-line inspection is the process of investigating the integrity of pipelines through internal inspection via a highly specialized and intelligent pipe diagnostic tool which is pushed through the pipeline being investigated from point A to point B. The data received from this process is analyzed and then utilized in preparing a prioritized maintenance schedule. It’s sometimes called Pigging by employees, as earlier generations of the tools used were said to sound like a screaming pig as they were sent through the pipes. Due to the level of technology and proprietary knowledge of the technology in the tools they are owned by outside vendors. These vendors are selected based on the pipes design and their tools’ specs, dimensions, and capabilities. The Digging involves unearthing the pipes and either replacing or cutting-out pieces based on the results of the inspection.
Our Client’s Situation
The client team was made up of engineers, who were very particular about documenting and following the processes and procedures outlined in their department’s manuals. Since integrity projects are typically uncomplicated and relatively inexpensive, these projects have become the training ground for new and inexperienced project engineers. Unfortunately, they relied heavily on antiquated, and in some cases non-existent/non-applicable, processes and procedures. Thus, a major issue was that new employees were too often learning from their mistakes and depending too much on the support of more experienced employees. Furthermore, each individual was developing tools and reports to plan and execute, and of course, report their version of the process, creating a vast litany of unique reports capturing data relevant only to the user.
Our Team’s Objective
Our engagement was to review and improve our client’s handling of Pipeline Integrity projects (focus on In-line Inspections), Storage and Transmission buildings (STO), and Turn-key projects, while enhancing and developing a standard tool kit for new engineers to rely on. Upon our analysis of the gaps in their processes and procedures, it was clear that most of the issues were related to Integrity. While the Integrity projects represented a smaller portion of their budget, it represented a significant percentage by units of work. As the larger STO and Turn-key projects were generally handled following a larger divisions process and procedures, we encouraged an approach which would comprehensively encompass Integrity projects, all the while applying lessons learned in the Integrity processes to the larger projects.
Developing the Process
We conducted several “brown paper” meetings which included representatives from all of the support departments under the Engineering Construction umbrella – such as pipeline design, pipeline engineering, planning, etc. From these meetings we developed the ideal state process flow models which outlined all the steps and responsibilities in the project.
During our analysis phase, we also identified some tools and information gaps that our team worked on throughout the ideal state development. From all of the data that was captured during and after past integrity projects, they never attempted to capture the operational information that would simplify and improve future projects, as the pipelines are basically the same when they return two years later.
Creating the Tools
From all of the available information, we created a high-level estimating tool that would enable any employee, new or experienced, to generate a high-level estimate of the project. This was important as they relied heavily on the knowledge of one experienced individual to create the integrity budget each year. This tool enables the managers to build their own high-level estimates if changes to the project scope occur.
We also built another simple, but helpful tool: a standard estimating template in excel. It begin as a quick excel report and over 10 weeks our team developed the “Project Workbook” which included the budget template, along with project tracking aligned with their SAP, burn-rate/project outlook, and a summary tab with two documents that were auto-filled to submit to accounting. This eliminated the need for employees to estimate information that was not available or leave out relevant information, as they had done in the past because previous budgets were all unique or ad-hoc remodels of old projects.
Throughout the development of the processes and procedures for In-line Inspections, Digging, and Turn-key, we also addressed and closed 14 gaps such as the examples above. We standardized frequently used documents and assisted in the alignment of their documents to other departments and necessary requirements. This project is considered a cost avoidance project, as it is extremely hard to put a financial value to the installation of these benefits. At the end, we were able to provide our client with tangible benefits to the completed work, outlined below.
Pennies Make Dimes and Dimes Make Dollars
This project emphasizes the value of having a strong and well-developed process model for smaller high volume projects that are executed on a routine basis. The small dollar value associated with Integrity processes accumulates over the number of times it is executed on a yearly basis by in-experienced engineers. While this enhancement may appear small, it is these small improvements in a large company that provide competitive advantages.
Last month, USCCG celebrated its 46th anniversary. With a rich history of successful projects and satisfied clients, we know that we must be doing something right. As we begin another year in this business, I felt this was good time to get our CEOs, George Coffey and Jim Ostrosky, to share their thoughts on the company’s evolution and their vision for the future. Below is the first part of our interview:
When did you start with USCCG?
George: I started in 1978, as a project consultant in our operating group and progressed through management positions. Ultimately, I moved out to LA to run our projects on the west coast, and then I moved into business development. I became a Business Development Executive, a Regional Manager, Analyst, and ultimately headed up all of Business Development.
Jim: I started in 1979, and entered our operating group at the entry-level; Project Consultant. I spent the majority of my career in Operations, working at every level from a Project Consultant on up to VP-Senior Operations Manager. When the company decided it was time to put a technology practice together, I moved over from directly working in operations to help organize our CTS group. I co-ran Operations and lead the CTS efforts that we now know as LINCS, as well as some of the other client offerings we have.
How do you feel business has changed, back when you started to today?
George: One of the most significant changes is that we had shorter business acquisition cycles back then. Typically, we would meet with a prospective client, determine whether or not there was a compelling value thesis, develop scope, move into feasibility study to more fully develop the business case for moving forward, and get a very quick decision. Today, for a number of reasons, prospective clients are more cautious, the process has slowed, and there is an opportunity cost for these delays in decision-making. More importantly, when I first started, more of our focus was on manufacturing and labor productivity. Today our approach is to address overall EBITDA performance improvement by driving operational excellence across all aspects of our clients’ business, across the entire supply chain including SG&A, Spend Management, Asset Performance Management, Rationalization/Consolidation, Acquisition Integration, Quality, Service, as well as cost reduction. So today, we are much more focused on overall financial performance.
Jim: One thing that is similar is that it’s still a people business. In the 1980’s we would talk about the fact that 80% of our efforts were focused on helping people understand the change process, find out what they are dissatisfied about in their current operation, and help them make that transition; 20% of it was on the technical aspects of what actually had to be changed in order to realize the results. One might argue the ratio 80-20 or 60-40, but ours remains a people business. Other than the people aspect, everything else has changed, the whole world has changed, and we were forced to change our approach as well. Technology entered into the picture and our clients’ expectations certainly changed. Clients are looking for a group to come in make an impact, make it quickly, and drive the value, then move on. Another major difference today is who owns businesses. In the past we dealt with many entrepreneurs, while today, Private Equity has entered the market and has a lot to say about what goes on and that brings different pressures that we have had to adapt to as well. It’s still a people business, but the expectations have certainly changed from the timing of results, the depth of results, and clients who are less patient than ever and expecting more.
How would you describe the way we do business?
George: A cornerstone of our business has always been long-term relationships. In any given year, typically two-thirds of our business, or more, is the result of existing relationships and that’s underwritten by the fact that we’ve done what we’ve said we would do. We make time-bound, realistic projections of what can be accomplished, and then we meet or exceed those projections. Our business is performance improvement. We are not about products, we are about outcomes. We have an extensive array of tools including technology, methodology, and processes that we apply within the context of an intended result. Most importantly we bring to bear a powerful organization of talented subject matter experts (domain, industry methodology) that are highly experienced in designing and implementing performance improvement programs. We can drive improvement in many creative ways and we architect our client relationships based on circumstances and timing.
Jim: I would say, the two R’s: relevance and relationships. We’ve stayed relevant and found a way to deliver value in an ever-changing world. It’s definitely a relationship business in a networked world. We are proud to have worked almost continuously for a couple of clients over the past couple of decades. We recently did a project for a client that we worked for in 1970. The third generation is now running the company, but there was enough staying power to what we implemented and the credibility that we established that when they had a need we were called in to again help with their current challenges. Our goal is always delivering value, and at the end of the day, our clients love us as long as we do what we say. And we definitely do what we say. We feel we’ve always been market driven and client centric, and have had to adapt over the years to survive. Whatever the market or our clients demand, that is what we learn to do. The clients who were the most demanding over time caused us to change and adapt the most, and we are very grateful for those demanding clients. They caused us to really push the envelope for us and for them, but their confidence in us and our ability to do what we say, created great partnerships. By working with them we are able to establish many of the new offerings that we have.
Where do you see USCCG going forward into the future?
George: We’ve always gone to market and organized as a hybrid model, meaning that we have horizontal domain offerings with subject matter experts in areas such as Asset Performance Management, Business Intelligence, Spend Management, and others. We can drive that horizontal domain expertise across different industries. We also have a vertical approach in certain industries because they have significant issues that are specific to those industries such as Mining and Healthcare. We will continue to expand both approaches as we move forward with more offerings, more adjacencies, as well as further develop more industry focus as it relates to our vertical approach.
Jim: Looking ahead to the future, in addition to all the industries we currently serve, we will continue to expand in the areas of healthcare and energy. These are two growth areas with tremendous needs and opportunities for us. In addition, demand for Procurement and Logistics will also continue to grow. The logistics of buying things from the other side of the world and having them delivered to your doorstep creates both challenges and opportunities. As our clients globalize their supply chains, they have those same challenges. How do they get their products procured, inventoried, and delivered in a timely and cost efficient manner? Getting it manufactured cheaply in Indonesia is one thing, but getting it to your customer in an efficient manner is another. Globalization is driving much of our current volume, and is a trend that will likely increase. As we have done for the past 46 years, we will continue to be market and client driven and we will remain focused on our clients’ needs as we develop the value added offerings and solutions they are seeking.
While I’ve spent a significant amount of time working with some of our mining clients, I have recently had the pleasure of working with a client in a much different industry, with a new set of challenges. Joining this project has afforded me the opportunity to get to know a new type of business and work with two individuals who have placed a large emphasis on building a long-lasting relationship with this client. Over the course of this project, they have both given me some valuable insight into the kinds of solutions we can provide for this type of client.
The true strength of this relationship became evident through early discussions with the client during the analysis phase; they clearly already had a great understanding of our process and the effectiveness of our methods. As we explained where we believed the opportunities could be found and what we felt the estimated return would be from capitalizing on these opportunities, they didn’t hesitate for a second. They knew our company, they knew the management, and most importantly, they knew what we were capable of.
A Little Background
Our client is a worldwide logistics organization that has worked with USCCG for several years on multiple projects. It’s been a very interesting portfolio, resulting in a true partnership that perfectly models our “client for life” mentality. They understand that true change is a leadership responsibility; but at the same time, they set high expectations for the organization to deliver for both internal partners and external customers. This client relationship is based on mutual respect, which sometimes means we have to discuss tough, uncomfortable subjects; but they know we hold all aspects of the business in high regard for cost, quality, service, and people.
Our Goal: Streamline Fragmented Logistics Processes
The term logistics is often applied to the planning of one or more complex tasks. Traditionally, it has been associated with moving material or people through a process. We like to consider a more broad-based holistic view-point. Logistics is the planning, scheduling, controlling, monitoring, and delivery of goods and/or services from order to cash.
Our process in this arena focuses in large part on the communication loops, either between people or systems, as this is often the greatest area of delay which results in increased costs, decreased service, deterioration of quality, and people’s frustration. The transmission and handling of information behind each customer order is astonishing, especially when you consider the end result of moving a product from A to B. The complexity of this process increases when you consider the multiple business units and multiple modes of transportation, along with the multiple systems being used to manage all of these transactions.
Consider a very practical example: When you look behind your TV at home and see a complete mess of wires running in every direction, you’re not exactly sure how everything functions properly, but it works so you leave it alone. A problem arises when you decide to purchase a new stereo and must remove some cables to plug-in others. You waste an enormous amount of time working through with this tangled mess, and when you’re finished, something isn’t working as it did before.
Our process here began with straightening out each cable one by one. This in itself was a very important exercise to truly understand the current state inner workings of the client before we began. It can at times be the most delicate balance to stay focused through the noise of working with such a large decentralized organization, while at the same time taking in the opinions of each and every employee you meet along the way. Every single opinion or suggestion, regardless of the source, could have an incredible impact on the success of the project. We absorb every piece of information, opinion, and suggestion, and then analyze it until we can draw a conclusion. I can confidently say that we truly leave no rock unturned. Once we have straightened all of the cables out, we began wrapping them up together to create uniform lines of communication.
We’re able to help improve logistical processes by fully understanding the reason for every transaction, reducing/eliminating duplication of effort, engaging enabling technology to improve communication and signals, and having robust business processes for both real-time and long-term decision-making capability. We looked into everything from booking services to dispatching line haul assets to deliver goods.
We didn’t come to the table with a pre-defined solution or software package. By engaging all of the employees in the development of the approach, from C-suite down to hourly, we could truly find a better method and teach the organization how to constantly move towards best. By truly understanding the current state, we could quickly go after gaps and disconnects in the existing processes to drive immediate change. Then, engage the organization in any requisite major changes to better deliver on cost, quality, service, and people issues.
Change is a Process, Not a Destination
Our methodology of discovery, prototyping, and implementation ensures that we have lasting impact and true organizational change. As we like to say, “Change does not take time, it takes energy.” While implementing changes, we always strive to make sure the USCCG project team executes on the deliverables we have committed to, without compromising our client’s values or mission statement.
Our client’s absolute trust in our team has given us the freedom to implement the best solutions possible for their unique situations. Their unfaltering zeal to embrace our recommendations and training has made the change process easier and faster, getting them to a better place in less time. This mutual commitment to support each other’s efforts has been vital to the success of this project and overall client relationship.