KEY TAKEAWAY:
--Continuous Improvement in the production of digital goods and services is coming fast. What’s really going on in that sea of cubicles? What’s really working in work from home? As there is one best way to mount a transmission or pick a pallet, there is one best way to underwrite an insurance policy and adjust a claim. Continuous Improvement is about empowering people with the right tools to find that way.
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I recently visited Walmart’s distribution facility in Brooksville, Florida, which features end-to-end automation. Driverless forklifts are a weird sight.
The facility was built in ’97, so people have lived through the cultural transformation from manual to automated. Ask hourly workers what they think, and many like monitoring screens and robots from a stationary position, while others loathe the new setup for the lack of physical activity and 20 pounds they’ve gained. Management values reduced process variability and lower error rates. And Walmart executives and shareholders love 2x to 3x the throughput on the same square footage and employee base.
A fourth constituency absent the day of my visit--customers--are driving all this. Customers unrelentingly demand more selection, faster delivery and lower prices, and 2x to 3x productivity gains contribute to all three. The demand is: “Deliver productivity, or else.” There’s always Amazon.
Walmart’s focus isn’t on automation, per se, but Continuous Improvement, incorporating a blend of best practices from Lean, Six Sigma and Total Quality Management (TQM) that were pioneered in manufacturing. As you can monitor, for example, a car being built along an assembly line, you can monitor boxes and packages moving through a logistics operation without the need to ask a worker what they’re doing or thinking.
Continuous Improvement in the production of digital goods and services is coming, and coming fast. What’s really going on in that sea of cubicles? What’s really working in work from home? Process intelligence tools, such as ours at Skan, let operations leaders “see” digital products being built. This new visibility enables statistical process control techniques to eliminate waste, improve products and drive defect rates toward zero.
As there is one best way to mount a transmission or pick a pallet, there is one best way to underwrite an insurance policy and adjust a claim. Continuous Improvement is about empowering people with the right tools to find that way. Automation can eventually execute the path without fail—but process optimization and standardization come first.
What’s going on here in insurance, with serious financial, social and medical inflation, feels like more than just another cycle. Insurance leaders find themselves in a new world where linear cost management techniques, such as budget cuts, fail to meet matrixed operational challenges and, worse, sap employee morale.
Budget cuts tend to imply people are part of the problem. A culture of Continuous Improvement believes people, working in concert, are the source of all solutions.
We’re all drawn to quick fixes, magic pills (and shots) and fad diets. Continuous Improvement represents a lifestyle change with guaranteed positive results—even if they take time. As the saying goes, “A culture of Continuous Improvement is the best long-term solution to all short-term problems.”
