When workers are problem-solvers, companies can profit

RIGHT FOCUS: Kevin Duggan says management's time should be focused on delivering solutions to client needs. / COURTESY DUGGAN ASSOCIATES
RIGHT FOCUS: Kevin Duggan says management's time should be focused on delivering solutions to client needs. / COURTESY DUGGAN ASSOCIATES

Kevin Duggan has advised businesses on several management philosophies, including lean enterprise and his own leadership method, operational excellence. He’s president of Duggan Associates and the Institute for Operational Excellence, both located in North Kingstown.
«constant ****SDLq»Operational excellence teaches us that value streams should run autonomously,” he said, explaining the focus of what he teaches. “Problems should not require management intervention.”
Duggan has been advising companies around the globe since the mid-1990s. His firm recently hosted a seminar at their headquarters that was attended by representatives from Luvata; Parker Hannafin; National Oilwell Varco and the inflight Internet company GoGo.

PBN: What exactly is “operational excellence”? How is it different from Japanese-inspired management methods, like lean management or Six Sigma?
DUGGAN: Think of these things as levels, all equally important. Six Sigma is about the process level, where people are actually doing the work. It looks at how things get done – it’s repeatable, dependable, predictable and reliable. Lean came along later. It looks at where work goes next. The term «constant ****SSLq»value streams’ comes from lean. Productivity flows through certain activities both in the office and on the factory floor. Lean pulls them together.
Operational excellence is the third stage. Once you have all the flows in place, what happens when there’s a problem? Operational excellence teaches us that value streams should run autonomously. Problems should not require management intervention. Workers should be able to see when things break down, and see how to fix them. Each and every employee should be able to see the flow of value to the customer, and fix that flow. In the office, everybody should understand how information flows to provide service to customers. When things begin to go wrong, when flow gets behind, they should know what to do without being told by management.

PBN: If workers are doing things without input from the boss, does that mean they should be paid more?
DUGGAN: Oh no. If you don’t have a boss coming over every 10 minutes telling you what to do, the frustration level goes away. Everyone knows what to do next. If others in the office see that you need help, they should come over without being told by management. There should be visual signs up in the office telling people how things are done. The office should be set up so that a visitor who’s never been there before can walk through and tell if you’re on track. If the visitor can do that, who else can? The employees.

PBN: So what happens to management? What do they do?
DUGGAN: Management’s role is to understand the customer and what customers want. The company is not just someplace that sells you parts – they’re solution providers. Operational excellence is not about efficiency. It’s about business growth and being competitive. It’s a very strategic way of thinking about how to grow companies in the U.S.

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PBN: Have some companies become successful using this method?
DUGGAN: I’ll give you an example right here in New England – Hypertherm in Hanover, N.H. They build plasma cutting torches. Some units are big, some are hand-held. They’re used in making things like PC boards, the stuff companies buy outside the U.S. But this company is selling in Asia, in all the low-cost countries. Another 35 percent of their product goes to Europe. That’s how competitive they are. They employ over 1,300 and they’ve never had a layoff. When they found they needed more employees, they built their own school so local people could get machinist certification. They believe companies should run without management. They have no production- control department because they don’t need one.

PBN: Any more examples?
DUGGAN: IDEX Corp. [in Illinois]. They have about 80 factories, and every single one went through this process. The factories run themselves, and management spends their time coming up with solutions for customers.

PBN: So when people talk about bringing back American manufacturing, this is what they should be looking at?
DUGGAN: Yes. Companies need to stop thinking they need to compete with Asia on price and delivery. They need to deliver solutions, not just product. They need to be designing customer solutions. Let the factories run themselves. Think of it like Lego blocks. The supplier should be giving the customer something he can build with, as if giving them Lego blocks.

PBN: Where did operation excellence come from?
DUGGAN: Operational excellence is something I designed and developed. I used to teach lean, but then a company asked – this was back in 2006 – if we do all this lean stuff right, where do we go from there? We could eliminate waste the rest of our lives, but we need an end goal. Instead of telling companies how to get from point A to point B, we also tell them what point B is. We give you the destination, and then help you develop the roadmap to get there. We’re saying, no more looking for problems – we’re going to design factories to deliver solutions to customers.INTERVIEW
Kevin Duggan
POSITION: President of Duggan Associates and founder of the Institute for Operational Excellence in North Kingstown
BACKGROUND: The Rhode Island native began his career in 1985 as an advanced manufacturing engineer at Hasbro Inc. He rose to the position of director of operations engineering, then left the company in 1997 to launch Duggan Associates, a consulting agency with expertise in the operational excellence method of business management.
EDUCATION: Bachelor’s degree in engineering, Roger Williams University, 1985
FIRST JOB: Working as an engineer at Victor Wire & Cable in West Warwick from 1982 to 1985
RESIDENCE: Westerly
AGE: 55

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