“Are we excellent yet?” How Euroports are making operational excellence business as usual
Pablo Garcia, Global Operations Excellence Director at Euroports shares lessons learnt
Europort, a European transport and logistics company, launched its operational excellence program in 2012. Historically, the organization was made up of acquisitions and assets around Europe and Asia that were merged into one unique company, with its headquarters based in Amsterdam. The Operational Excellence program was set up to improve efficiency and there are currently 8 people with different levels of responsibility working within the Operational Excellence (OE) program.
Here’s how Euroports is blending operational excellence into everyday culture.
Editor’s note: this interview was featured in our recent report “From PEX to OpEx: The Next Generation” on insights and trends on the state of Operational Excellence programs in Europe. Download the full report, along with case studies from Euroports, Coca-Cola, E.ON and Air France here.
PEX Network: Is Euroports planning to expand OE into other departments?
Pablo Garcia: When planning for the next year, we try to identify the areas where we can really improve on and then we discuss and prioritize based on different criteria, such as whether it is a quick win. We do the typical matrix of effort and benefit and then we try to prioritize. For example, for invoicing the priority is high, but invoicing is mainly in Spain and Belgium, whereas in Italy operations is more of a focus; so every country has their own priorities. One group objective that is mandatory for all the countries is resource planning, and this will be a primary focus for 2016.
PEX Network: How are you achieving executive buy-in?
Pablo Garcia: From the executive committee, meaning my boss, this is our daily discussion - how to gain priority for projects. Every country is different, even when you convince the MD; you still need to convince the Operational Manager and then you still need to convince the terminal managers so there are a lot of different levels of buying in. You need to try and identify quick wins, something that will make them think this is really positive and that it works.
Secondly, you also need to gain some buy-in from the bottom so that when you develop a workshop, when you do something with their team, they are happy and give positive feedback upstream.
PEX Network: Can you explain the structured metrics across your organization to monitor and measure performance?
Pablo Garcia: Aside from the financial information, we have three metrics; warehouse rotation, cost per ton and cost per hour. What we find more valuable is to visit the countries and then through discussions, identify the strategic areas or main concerns for each region, whether this is receiving complaints from customers or whether there are inefficiencies.
With the use of benchmarks we identify areas of concern and then we fix a metric for that area. For example in Finland they have issues with staffing containers, while staffing containers in Belgium is going well, we don’t ask Belgium to report monthly to the group on their staffing metric. But in Finland it is critical; they send an operational report on a monthly basis to the holding company. So it all depends on the countries’ local strategies that we identify for them.
PEX Network: Do you think you have succeeded in blending Operational Excellence into the everyday culture of the organization?
Pablo Garcia: To say everyone is trying, everyone is continuously improving; it’s difficult, so I have implemented some metrics, looking at how many people are trained and the number of teams we have per country making improvements, but we cannot say we have succeeded.
We succeeded in delivering a number of projects that needed to succeed. In the first two years we were slightly below budget, but this year 2015, we will be on budget, so that is the way we have to measure if we are succeeding or not, but again there isn’t a day when you will say, “I am excellent.”
PEX Network: What other challenges have you been faced with and how are you overcoming those?
Pablo Garcia: Trying to convince the different managers and the different layers to put ten or twelve people through a workshop for four days is really challenging. And again, how I convince them is by doing it in some countries and showing the results.
PEX Network: What are your main projections for operational programs in 2016?
Pablo Garcia: My main projection is to prove to the organization that Operational Excellence is working and how the people in the different regions, continue to reinforce this cultural change every day. This cannot be only Pablo or from the holding. They need to have more people deploying, or implementing this cultural change. HR has to be involved, customer, or commercial teams need to pursue and come back with customer comments. I am asking commercial to collect the voice of the customer in a structural way, in a way that they can communicate to operations.
Secondly, is to continue with these cultural changes, add new people to the program, but, the bigger challenge is to maintain the interest of those already delivering. So there are teams that are delivering, but it’s about finding a way to keep them on time. Identifying new areas of control and initiatives is easier than keeping people on a daily basis working and improving.
PEX Network: What are the main strategies that companies should have in order to drive a successful cultural change?
Pablo Garcia: The most important is trust in the people in the field, that’s very important. You need to trust in the experience of the people and invest in developing them. It’s very important, you need to identify the local leadership and do this group-wide. It’s also important for companies to understand that this is not a short term strategy, this is something that must be done, looking into the medium long term.
We are in a digital age and new technology is changing the rules of the game.
PEX Network: How has Euroports changed strategies as a result to stay ahead?
Pablo Garcia: The main areas are metrics and integration with customers. We are implementing a huge business transformation program and investing a lot of money in changing our systems. We are also standardizing and harmonizing processes across the group and integrating our customers in the change.
Hear more insights from Pablo Garcia when he presents on: ‘One Step Ahead: Discover how Euroports continuously improve the way they deliver value to their stakeholders,’ at OPEX & PROCESS TRANSFORMATION WEEK 2016.