Organization Engineering

Executive summary

Organization Engineering

Organizations, whether private or public, private sector or public sector, for-profit or not-for-profit, are formed, operated and maintained to perform specific function(s) and produce desired output(s). Such organizations must be process-centric and focused to effectively and efficiently produce their desired output. However, most organizations develop and evolve through inconsistent directions and demands resulting from inconsistent and changing forces, both internal and external. As a result, processes may be altered, enhancements inserted, controls instituted or shortcuts devised in efforts to meet the changes. Organization processes develop eddies and turbulences inhibiting the smooth flow of information, work and output production with the organization operating below potential.

Organization Engineering applies engineering disciplines to align the leadership, management and production levels to form new, refined, effective and efficient organizational processes. The engineered processes deliver smoother, more laminar process flows reducing the organization effort in delivering the desired output. A more optimized organization results with reduced waste, increased efficiency, greater capacity and more effective product output.

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Service Methodology

The organization is addressed at the three common process strata: Leadership, Management and Production. In Organization Engineering the relevant processes at each strata are broken down and the critical components necessary to move the processes forward retained. The critical components are optimized for purpose and reassembled into more effective and efficient strata processes. Leadership process engineering ensures the desired organization output(s) are defined, relevant and in clear focus while establishing visible champion support for the organization effort. Management process engineering ensures clear organization objectives, competencies and accountabilities support the desired output(s). Production Engineering ensures people, equipment, materials and environment are aligned for capability and effectiveness. Excessive interactions among the strata that cause eddies and turbulences in the processes are reduced or eliminated resulting in smoother, more laminar flows. The engineered processes, together and aligned, form new, refined organizational processes with increased efficiency, greater capacity and producing more effective outputs.

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Service Options

Companies can elect whether they just require Appleton Greene for advice and support with the Bronze Client Service, for research and performance analysis with the Silver Client Service, for facilitating departmental workshops with the Gold Client Service, or for complete process planning, development, implementation, management and review, with the Platinum Client Service. Ultimately, there is a service to suit every situation and every budget and clients can elect to either upgrade or downgrade from one service to another as and when required, providing complete flexibility in order to ensure that the right level of support is available over a sustainable period of time, enabling the organization to compensate for any prescriptive or emergent changes relating to: Customer Service; E-business; Finance; Globalization; Human Resources; Information Technology; Legal; Management; Marketing; or Production.

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Service Mission

Our service mission is to assist members of an organization apply engineering disciplines in aligning the leadership, management and production strata to form new, refined, effective and efficient organization processes. The engineered processes are designed to deliver smoother, more laminar process flows reducing organization stressors in producing the desired output. A more optimized organization results in reduced waste, increased efficiency, greater capacity and more effective product output. The approach has been applied throughout numerous industries under radically different circumstances. Some notable results include: Formed management organization for crisis response in the largest offshore oil spill in U.S. history delivering unprecedented performance while reducing costs by over 20%; constructed the integration of 10 U.S. logistics operations into a network increasing capacity over 25% without workforce addition; designed performance programs in physician practice management to reduce patient, worker, and operational losses by $5M annually over three years; applied multi-level management approaches throughout an integrated energy corporation reducing employee, equipment, and operational losses over 30% with improved regulatory compliance.

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Service objectives

The following list represents the Key Service Objectives (KSO) for the Appleton Greene Organization Engineering service.

1. Leadership Strategies
   Organization initiatives to capitalize on evolving business dynamics. Dynamic technical and strategic plans balancing organization capabilities with demands of the markets in which they compete. Develop plans and objectives for the organization to achieve performance. Clearly define the organization vision and supporting strategic goals to compete successfully…a “focused” strategy. Identify opportunities for improved performance within the “focus” area to increase speed of action and leverage valuable resources. Develop performance improvement alternatives. Prioritize potential returns, risk exposures and risk mitigations into a set of organization tactics. Organize selected performance solutions for planned implementation based potential investment return and associated organization risks. Monitor the plan for deployed improvement solutions and evaluate against expected organization performance…needs redefine goals.
2. Management Integration
   Quality, Productivity and Safety/Environment balanced in mainstream business practices. Alignment and integration of product quality/acceptability, environmental protection/worker safety and process productivity/ROI to contribute to and expand achievement of organization goals. The desired balance of environmental/safety with quality/customer acceptability and productivity/ROI must be identified to create the “complete” vision and competitive goals. From the “vision” a business strategy integrated with product acceptability environmental protection/worker safety and process productivity/ROI is developed and a SMART plan (Specific, Measurable, Action-Based, Relevant, Time-Bounded) created. The SMART plan is a roadmap for development of management controls: expectations/standards, employee training/tools and monitoring of performance. Implementation of the management controls result in desired work and output performance with on-spec product and environmental/employee protection built in.
3. Change Management
   Integrate business changes by assessing skills and resource requirements then developing sensible organizational changes and employee-enabling programs. Change structuring is formed around appropriate life cycle steps. Design a S.M.A.R.T Plan (Specific, Measurable, Action-Based, Relevant, Time-Bounded) a “road map” for managing the needed change to both maximize value and minimize waste. Establish succinct standards that pinpoint roles, responsibilities and key performance indicators. Ensure clarification of performer and technology requirements. Update processes, training and/or technology to be competent within the desired changes. Identify and delineate resources. Measure and evaluate key performance indicators. Communicate results with clear performance feedback. High performance dictates continuous improvement – Solicit input from customers and other stakeholders.
4. Process Engineering
   Create or measurably increase performance by reengineering organization value chain and incorporating best practices. Innovative value creation. Inventory all related organization processes. Assess current situation through interviews and observations. Search for interdependencies. Eliminate processes not adding organization value. Identify processes most critical to success. Use Paredo’s Principle – 80/20 Rule. Break the process into steps – must move the process definably forward. Prioritize process strengths and weaknesses. Identify “ripple” effects. Identify gaps between the desired performance and actual performance. Analyze the steps for underlying performance causes. Eliminate process steps not adding organization value. Assess for simplicity. Check step requirements for any match problems with performers. Design the “to be” concept and evaluate with best practices. Engineer the detailed “to be” lean steps and total process. Pilot test the “to be” process. Improve procedures and practices to reflect the “to be” processes. Capitalize on new or improved technologies. Train performers for any newly required skills/knowledge. Sequentially deploy the “to be” processes. Pilot test for redesigned process performance and any “ripple effects”. Realize “value-added” organization improvements.
5. Project Leadership
   Value realization through project successes. Seamless performance improvement project leadership and management control from conceptualization through delivery. Analyze organization information to clarify key project success criteria, needs and value drivers. Establish business, organizational and technical requirements. Establish project scope, cost estimates, time schedules and resource requirements. Agree on measurements, critical success factors and valuation. A “game plan” – Tasks, schedules, resources and management controls are required to ensure successes and value realization. Execute the “game plan”. Responsibly communicate status and deliverables. Excel in delivering accomplishments and training to drive-home successes and value. Value realized. Solutions delivered – practical and real-world. Mission accomplished.

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Achievements

British Petroleum Plc

My consulting practice was contacted to help establish and build a management organization and unprecedented organization processes to oversee the numerous contractors and subcontractors responding to the Deepwater Horizon Drilling Platform explosion, fire and oil spill in the Gulf of Mexico. The incident was rapidly on its way to becoming the largest offshore oil spill in U.S. history. We formed and staffed in four weeks a 70-person organization to provide direction, oversight, monitoring and fiscal control over 13 prime contractors and 80 subcontractors in a 400-mile area encompassing Mississippi, Alabama and Florida with over 15,000 onshore response workers, thousands of pieces of equipment and 500 on-water vessels. The cost for this response contractor work exceeded $1 billion. BP was the Responsible Party (RP), strategic work direction came through the Unified Command (UC) organization and work was coordinated through each state in which the work was performed. Daily collaborations were maintained with representatives of the EPA, OSHA, NOAA and political representatives from each Governor and each county/parish. We able to achieve unprecedented response performance while reducing costs by 20% and delivering organization returns exceeding 300%. Through comprehensive fiscal controls performance integrity was ensured while client costs were reduced an additional 5%.

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Panasonic Logistics Company of America

For a major international consumer and industrial electronics conglomerate, I led the team-based redesign of business processes and asset streamlining in a unionized labor environment. This 18-month effort involved teams of executives working with representatives from each of the 10 logistics centers to focus on each of the 15 key performance processes. The representatives, trained in team-based projects, addressed as a team each key process, through the assessment, performance-improving redesign and implementation of the resulting new processes. Free discussion, brainstorming and conflict resolution led to new solutions and commitment by the team members to the changes. With each team member committed to their respective new process, they were more effectively able to carry the change back to their locations and achieve buy-in by their co-workers. Through redesigned business processes and asset streamlining, capacity was increased an estimated 25% and policies and procedures were reduced, standardized and simplified in a unionized labor environment. The 18-month project achieved all deliverables on schedule and on budget.

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MedPartners LLC

As a consultant, I led a 17-person team deploying leading-edge clinical process improvement programs for the western operations of the nation’s largest physician-practice management organization with over 3,000 employees and in excess of 100 clinical locations. The adaptation of management and process improvement techniques integrated with the corporate business model was designed to reduce patient, worker, and operational losses by $5M annually over three years. This improved process efficiency by integrating sophisticated loss prevention management principles used in high hazard industries with requirements of the Joint Commission for Accreditation of Healthcare Operations, the principal U.S. healthcare accreditation body. The performance improvement program for the healthcare organization included greatly-improved security monitoring, tracking and control of medical supplies (drugs, syringes, sharps, etc.) as well increased diligence in the controlled use of patient and other confidential information.

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Unocal Corporation

I led a global effort to implement integrated process improvement techniques to capitalize on production management successes including quality, security, human resources, accounting/finance management and safety/environmental management worldwide for a global petroleum exploration, production, transportation and retail marketing, chemicals manufacture and geothermal energy production conglomerate with 17,000 employees, 100 offshore platforms, 6 refineries, 5 tankers, 8,000 miles of pipelines and over 2,000 retail locations. Identified critical needs through extensive team-based operational audits as the foundation for management-centric performance improvement programs. Applied critical process analyses and in-depth industry knowledge to maximize impact, improve consistency and minimize operational disruption reducing employee, equipment, and operational losses an estimated 30% while improving regulatory compliance.

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More detailed achievements, references and testimonials are confidentially available to clients upon request.

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Industries

This service is primarily available to the following industry sectors:

Energy

Prices have relatively stabilized in the US oil and gas industry. Since the high point in 2014 upstream oil and gas companies faced a 50 percent drop in revenues. Looking ahead to 2016, we see positive developments that could help the industry evolve to a better place. Demand, decline, production, and a leaner, stronger industry will all have an impact. So far, the exploration and production sector of the industry have employed traditional responses to severe price declines: Reduce capital expenditures and defer major capital projects; cut operating expenses and headcount and; re-negotiate with suppliers for better pricing. Going forward, low crude prices are forcing a powerful innovation in the way oil is being developed and produced. We are in the early stages of what can be achieved in terms of reducing unit costs and achieving higher return on capital. Operating and process improvements will require new thinking, new approaches and new creativity. There are some developments that may be positive from a pricing perspective. US demand is responding to lower oil prices customarily with increased car sales, especially larger cars, SUV’s and trucks. As auto sales go up, expect to see increased US demand. Asian demand is showing strong growth. China, despite the stock market uncertainties, remains a huge source of global demand and continued growth. Natural reservoir production decline, which has historically been four to five percent globally, means that even without demand growth, the oil and gas industry must produce another four million barrels per day every year just to keep up with current demand. This naturally puts upward pressure on pricing. Total US production finally started to decline and that trend is expected to continue in the near future. Billions of dollars of investments have been deferred due to the low price environment, which translates to millions of barrels that will not be produced in the years to come. This sets the stage for a price rally.

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Chemicals

The U.S. chemical industry has been facing a number of economic headwinds. A strong dollar hampered exports. Trade partners Brazil, Japan, and Russia flirted with recession while growth in China slowed. Yet output increased by almost 4% last year, thanks in large part to consumers. Output should continue to expand, though the growth pace should slow somewhat. Such continued recovery from the global recession should continue to boost demand for autos, construction materials, and business equipment. Sales in the US of cars, SUV’s and trucks are expected to edge up with increased hiring and better availability of credit. Basic chemicals, synthetic rubber, and specialties will top the list of growth segments. Chemical companies will likely see prices continue to slide in some product areas, but even with the fall in oil prices, US industries still have favorable competitive positions chemical feedstock costs as natural gas prices have remained low as well. Low prices for agricultural commodities as well as oil and gas have dampened demand for chemicals used in those industries. European chemical firms should continue to see low oil prices, a ke