Professor Dr.-Ing. Ralf Hörstmeier explains how wastage in trade businesses and SMEs belongs in the past
Equivalent to the English expression “you can’t make an omelet without breaking eggs”, there’s a German saying that literally translates as “wherever you plane wood, you get shavings”. It was these proverbial shavings that led Professor Dr.-Ing. Ralf Hörstmeier to develop the VFMEA® method. For more than ten years, he has been helping trade businesses and SMEs to save time and money by implementing the method in their day-to-day operations. The German acronym “VFMEA” stands for “wastage, failure mode and effects analysis”. The method highlights the failures in businesses, big and small alike. TRANSFER interviewed the retired Steinbeis Entrepreneur, whose motto is “helping people to help themselves”.
List of failures and wastage based on business structure
Professor Hörstmeier, when you developed the VFMEA® method back in 2013, you were a professor at Bielefeld University of Applied Sciences and Arts. How did you come into contact with trades and industry at this time, and what led you to the conclusion that a method for preventing wastage was needed?
I’m fortunate enough to work in the economically strong region of East Westphalia-Lippe. As part of the university’s practical engineering program, I had contact with several different companies through my projects and students. Over the years, I saw how much effort bigger companies were putting into tackling failures and wastage – sometimes at their customers’ request – and the significant costs and human resources involved.
But since trade businesses and SMEs are also a key part of the East Westphalia-Lippe economy, I had the idea of developing the VFMEA® method as a practical tool for optimizing business processes. My aim was to create a low-cost solution with transparent structures and a short project duration that included everyone working in the business and provided clear and practical documentation. A range of project partners helped me translate my idea into a successful tool in practice.
After carrying out the first pilot projects in different industries, our initial focus was on failures and wastage, but we would subsequently add issues like sustainability and company culture. Especially given the current difficulty in recruiting young people, company culture – in other words, how included employees feel in the company – is becoming increasingly important. The
methodology was well received when we publicly unveiled it for the first time at the Steinbeis Day in Stuttgart in September 2013, and this led us to press ahead with its market launch. The references on our website (www.vfmea.de) serve to illustrate how the VFMEA® method has developed.
You now have extensive experience of working with trade businesses and SMEs to roll out VFMEA® in their business. Is there a recurring wastage issue that keeps cropping up in most businesses?
One of the reasons for the VFMEA® method’s success is that it looks at the overall picture. The details obviously vary depending on the industry and size of the business. But when we talk about “seven out of thirteen in one go”, it’s a claim rooted in concrete experience. We identified 13 areas where failures and wastage occur. When the method is implemented, seven of these areas invariably crop up in almost every company, albeit not always the same seven. To return to your question, you’re quite right, there is one recurring issue – communication. This includes internal communication between management and employees and among the employees themselves, but also communication with customers.
When we first speak to our clients, a lot of them say “everything’s fine in the business”. But after they’ve introduced VFMEA®, just as many come back and say “we had no idea that was going on”. The company error culture is something that is often neglected. Inadequate analysis or a lack of honesty can create a breeding ground for repeat errors, which are one of the most serious types of failure. After about five meetings, the VFMEA® model has an effect that’s akin to opening a treasure chest – it’s full of surprises.
We often can’t see the wood for the trees in our everyday lives, and the same applies to a company’s everyday operations. What would your top tip be to help companies identify signs of wastage and failures in their business?
You need the impetus for a new approach to these issues, and that has to come from management. The next step is to create a basis for discussion by systematically describing the business structure. The proverbial trees start to thin out when you draw up your first list of failures and wastage. Suddenly, you can see the thing you were always looking for. Each point on the list is given a rating that is permanently documented, even if the problem goes on to be fully or partially solved. This ensures that the business has transparent documentation that allows the history of each point to be easily checked so that new employees can get up to speed quickly. It also provides additional support for preventing repeat errors. The involvement of employees is one aspect of the VFMEA® method that has proven its worth. It allows them to constructively feed in their often astonishingly in-depth knowledge. This automatically creates widespread buy-in for efforts to jointly eliminate existing failures and wastage and prevent future problems. It’s not always about the big things – sometimes it can be really small things that bug people and poison the atmosphere in the business. Respect and mutual support are the basis of efficient performance.
The list’s transparent structure and a common ranking system provide a clear view of the wood, in other words the business. This overview also makes it easier to implement the principle of “helping people to help themselves”. Some businesses are able to build on the VFMEA® findings on their own and maintain this approach going forward. Others opt to continue receiving support from the VFMEA® team at prearranged intervals in the form of an update or refresh. In our experience, this can be a great help in the event of personnel changes or business succession.
My top tip has to be that businesses must make use of the discussions – in other words, communication. The primary focus is always on the future of the business. In my experience, at least, even the initial discussions with companies result in proposals for the first individual measures.
Digital technology has continued to develop rapidly over the last decade. How do you see its role in businesses? Does it help to increase efficiency and prevent failures, or can the use of technology sometimes actually impede processes from being analyzed?
Both impacts of digital technology that you mention in your question can be found in the vast majority of trade businesses and SMEs.
Because the VFMEA® method looks at the overall picture, it delivers insights that can then be addressed by specialist advice from consulting firms or Chambers of Crafts. The businesses in our target group are very diverse, but the VFMEA® method can be adapted to their specific circumstances. When implemented, it often identifies weaknesses that can then be addressed through the targeted deployment of digital tools. We’re also encountering more and more businesses that are actively expanding their use of digital technology so that a whole range of processes run more efficiently and transparently.
All the businesses that have taken part in the VFMEA® project to date have benefited from it, regardless of how extensively they use digital technology. But it’s crucial to always keep the human factor in mind. The VFMEA® method often provides a transparent view of what’s causing an issue. As well as being classified and ranked in terms of its impact on processes and costs, each point on the failures and wastage list is analyzed by the team using cause-effect methods. This ensures that the processes are scrutinized and remain the focus of any optimization measures.
In summary, it’s fair to say that the first ten years of the VFMEA® method have been a success story. In the future, businesses can also look forward to an app and additional aids such as flowcharts.
PARTNERS IN THE DEVELOPMENT OF THE VFMEA METHOD
Various project partners provided support during the VFMEA’s concept phase in 2013, helping to translate the idea into a successful tool in practice:
- The Steinbeis organization in Stuttgart
- Various Chambers of Crafts and craft industry organizations
- The Chamber of Industry and Commerce of East Westphalia in Bielefeld
- Bielefeld University of Applied Sciences and Arts
- The Association of German Engineers (VDI)
- The VdS association of self-employed persons in the district of Herford
- Economic development agencies and pilot project partners from different industries
Contact
Prof. Dr.-Ing. Ralf Hörstmeier (interviewee)
Originator of the VFMEA® method