Driving Operational Excellence
After several successful pilots, Wärtsilä’s new way of working – a system of continuous improvement – is being introduced across the company.
Wärtsilä recently undertook the first steps in a transition that will affect how the company performs across every business area and function. Working under the banner of ‘Operational Excellence’, Fredrik Nordström and his small team have been piloting the new way of working with selected units. A gradual rollout is now firmly underway.
“This initiative started from the top,” Nordström emphasises. “Our management perceived that we have some very good practices in certain locations, but we have not been able to systematically share them across the different units. In other words, we have pockets of excellence to exploit – if we can learn from each other and utilise the knowledge we have in other locations, we will raise Wärtsilä’s entire performance.”
"If we can learn from each other and utilise the knowledge we have in other locations, we will raise Wärtsilä’s entire performance."
Operational Excellence is not focused solely on manufacturing, but takes account of the end-to-end processes at work within the company. Nordström compares effective collaboration within and between different functions – the ultimate aim of the initiative – to the workings of an orchestra. “With everyone working together in a synchronised and effective manner, we can gradually transform both our own expectations and those of our customers.”
Work began with two of Wärtsilä’s biggest units, based in Trieste and Vaasa, and the success stories quickly began to accumulate. By initially focusing on systematic improvement in a limited area of activity, the new way of working put continual goal-setting and realistic achievements at the heart of the agenda. With achievements such as reducing assembly time under their belt, units then moved towards more ambitious targets involving cross-functional collaboration.
"The secret of effecting transformation of this nature is the ambassadorial approach."
The secret of effecting transformation of this nature is the ambassadorial approach. Nordström and his team play a supporting role, but the improvements are facilitated by “change agents” within the units themselves. The focus areas for improvement are pinpointed and reported on during team meetings, giving Operational Excellence consistent topicality.
“In January 2016, we launched what we call the Wärtsilä Operational Excellence Academy,” says Nordström. “Here, through various workshops, we strengthen the understanding, capabilities, and motivation for Wärtsilä leaders on all levels to engage and support their teams to systematically and continuously develop the way things are done and set new standards of performance. The entire Board of Management participated in the first round of workshops in early 2016, leading strongly by example.”
This large investment in time and effort is now clearly starting to pay off. As of early 2017, fifteen sets of focused initiatives in different units have been finalised, resulting, for example, in reductions in inventories, increased productivity and improved delivery performance, which in several cases has enabled the winning of more orders.
There are now Operational Excellence initiatives ongoing in all divisions, covering areas all the way from the sales phase to the commissioning of Wärtsilä products and systems. “This is not a quick fix,” Nordström points out, “but with strong alignment and collaboration from all, we can achieve substantial and sustainable improvements with positive customer and business impacts.”