Chapter 20

Ten Mistakes That New Operations Managers Make

In This Chapter

Starting a project without planning it

Failing to simplify and standardize your process

Forgetting to focus on the customer

Everyone makes mistakes, especially when just starting out in a new job or activity. In this chapter we highlight the top ten mistakes that rookie operations managers tend to make. Don’t feel too bad if you’ve made all of them; even experienced operations managers sometimes make them, too. But if you haven’t yet slipped up on these missteps, just knowing about them increases your chances of avoiding them.

Beginning an Improvement Journey without a Map

Perhaps the most frequent mistake that even experienced operations managers make is not documenting their existing processes. In any process-improvement project, knowing where you start from is essential. How do you know whether you made any improvement if you don’t know where you started? Although this initial documentation is often considered a waste of time because you end up changing it anyway, documenting the current process uncovers where in the process trouble spots exist — believe us when we say that what’s wrong isn’t always obvious — and is well-worth the time and effort.

If you have existing process documentation, by all means use it. However, your task in this case becomes to check that the actual work and workers follow the documented process. It’s not unusual to find that workers aren’t following a documented process. These discrepancies can also point you to process trouble spots.

Running without Metrics

Make sure that you measure the performance of the operations in the process. These metrics must be quantitative, relevant, and fairly easy to obtain. You want to take several different measurements, including these basics:

How long each operation takes to complete its task

Time needed for one product to get through the process from start to finish

How much work each operation can complete in any given time period

Quantity of inventory in the process

An operation’s level of consistency

How well a product conforms to standards

Avoid measuring too many things, though, because you can get lost in data, which means you may get distracted from the most vital metrics. For more on performance metrics, take a look at Chapter 2.

Creating Overly Complex Processes

Simple is always better when it comes to designing processes, so avoid the temptation to develop overly complex processes. A common thing that happens in established processes is that steps and activities are added, often as a work-around for a broken operation, and those steps become a permanent part of the process, adding to the complexity.

When documenting and analyzing a process, be on the lookout for the statement, “Well, we’ve just always done it this way.” Chances are good that you can greatly simplify a process that’s related to such a statement. Also watch for processes that no one can fully describe. These processes are often too complex for the task they’re supposed to accomplish. For tips on how to simplify processes, see Chapters 3, 4, and 5.

Missing the Real Bottleneck

If you don’t properly analyze a process, you’ll probably misidentify the bottleneck. The bottleneck is that resource that limits the process’s production and is the resource with the smallest capacity. If you misidentify the bottleneck (or, worse, don’t identify it at all), you’ll waste time and money adding capacity to something that isn’t actually limiting your production in the first place.

People often assume that the bottleneck is the most expensive or biggest piece of equipment in the system and mistakenly add capacity to it. Make sure you carefully analyze the process so you don’t succumb to this faulty assumption. Find details about bottlenecks in Chapters 2 and 3.

Managing Based on Utilization

Many managers mistakenly think that their resources must be continuously working. Nothing is further from the truth, and this mentality only adds to the quantity of work-in-process inventory. The only resource that needs to be working 100 percent of the time is the bottleneck, and that’s only if demand for it exists.

A big problem is that, unfortunately, operations managers are often evaluated on the utilization of resources. In this situation, keep in mind that the utilization metric is probably the worst one to use if you’re concerned with the financial health of the company. Focusing on the utilization of the bottleneck is important, but for other steps in a process, you want to focus on eliminating waste and improving quality to improve operations overall. For more on utilization, flip to Chapters 2 and 3.

Not Standardizing

Standardizing processes — or designing processes that follow the same standards — is important to reduce complexity, and simple is always better. Standardization is especially important when more than one facility is producing the same product. Can you imagine what the impact on quality might be if every McDonald’s franchise used a different process to assemble a cheeseburger and prepare French fries? Standardization allows a company to produce consistent quality in both products, and services.

Automating Bad Processes

If a process isn’t performing as desired, you may assume that automating it can lead to improvement. But an automated bad process is still a bad process, no matter how much automation you implement.

W. Edwards Deming, an American quality guru who revolutionized Japanese manufacturing after World War II, once stated, “Workers are responsible for only 15 percent of the problems; the process, for the other 85 percent.”

Many companies use enterprise management systems (covered in Chapter 9) to integrate and manage their processes. But these systems are expensive and time-consuming to implement and maintain, and they’re only as good as the underlying processes. Until a company can fix its faulty processes, these expensive systems can’t provide much help.

Misdefining Quality

No matter what you may think about a process or what you may be measuring, quality is what the customer says it is! When operation managers and company leaders forget this fact, they waste time and money on improving aspects of the product or service that may not be important in terms of profitability or customer satisfaction.

In other words, just because an output meets corporate target quality measurements doesn’t mean that customers perceive it as a quality product. Creating quality products requires a company to know exactly what customers define as quality. Knowing what the customer wants makes it possible to develop a process to deliver it.

Another mistake to avoid is assuming that the definition of quality stays the same over time. Customer desires and tastes change constantly, and companies must adjust to meet these shifting requirements.

Don’t compromise quality to meet schedule or cost pressures because this may lead to dissatisfied customers and product defects that in turn can lead to recalls, litigation, and a damaged reputation. Quality failures can put companies out of business. See Chapter 12 to find more on quality.

Not Doing Enough Project Planning Upfront

Here are some major rookie mistakes related to project management:

Inadequate upfront planning

Using one estimate for timing and cost rather than range estimates that recognize variability

Not properly identifying the critical path

The critical path, much like a bottleneck (see Chapter 3), is that path of activities that determines the project’s timing (details on finding the critical path are in Chapter 15). Failing to identify the critical path leads project managers to focus on the wrong activities at the wrong points in time. Proper upfront planning can help eliminate this mistake.

Find details on how to plan projects in Chapter 14.

Not Focusing on the Customer

Never forget that the customer is always right. Operations managers often forget the end customer — the person who ultimately buys the product or service. Instead, some OMs focus on internal performance metrics that have no consequence to the customer. Staying focused on what the customer actually wants requires a close link between operations and other departments, such as product development and marketing.