In a globally connected and increasingly competitive world, as pressure mount, organizations need to operate at peak level of performance. In addition, organizations need reliable methods to achieve substantial, sustainable advances in performance.
In today’s highly competitive marketplace, achieving high performance by itself is not enough for companies to survive in their sectors. They need to make a sustainable progress by embracing competitive strategies. One of these strategies is achieving operational excellence. For companies to survive, excellence is no longer an option, it is essential to their success. Yes, companies should use operational excellence to survive in the competitive marketplace but what ‘’Operational Excellence’’ really is?
There are many definitions of Operational Excellence. Some companies define OPEX as a proper and consistent application of certain methodologies (Lean, Six Sigma, TPM, TQM, etc.) and tools (Kaizen, SMED, DMAIC, Kanban, Visual Management, etc.). For leaders operational excellence is having the right work practices and business processes and for other companies, operational excellence is creating the right work culture (Roger Price, 2015).
Although there are differences for each company, five key steps can be identified for the development and implementation of the operational excellence strategy. Here are five keys that an organization must have in place to pursue operational excellence (Megan Burns, 2017):
1. Clear Vision Statement:
Operational Excellence should start by constructing a simple and well defined vision statement of what you want to achieve that motivates and understood at all levels. Company values should also be defined. Company values should answer the following questions. What makes you different to everyone else? What attitudes and behaviour would you expect from employees? 2. Engaged People:
The second part is to gather commitment from those who have the authority to make decisions and involve people into the process whom realize the company vision. Even if you have the best strategy and vision, if your employees are not engaged with your company’s values, you may never achieve operational excellence. Show your staff that every idea counts, no matter how big or small. Teams will be given the freedom to implement ideas and adopt new working methods based on how much impact they will have on key business measures. 3. Planning:
Having the above two steps established, a businesses can move on to the 3rd step which is planing, using tools such as lean manufacturing, six sigma value chain management, total quality management. In the planning stage, all the steps must be defined in line with the policies set by the company. The management team and the leader must determine at least 5-6 key business goals based on the company desired future state. The management team and the leader also should conduct regular one-to-one meetings to follow up the progress. 4. Measure the effectiveness of the plan once it is implemented:
At this stage, we need to ask following questions to understand where we are at and how we can get better, “Did we achieve what we set out to do? If not, why not?”, and come up with solutions together to make it better. Once we are aware of the gaps between where we are now, where we plan to be, we can make decisions on where to focus our improvement efforts. Using Deming Type Plan-Do-Check-Act loops will ensure us maintain sustainable progress and we are constantly moving towards excellence.5. Continuous Improvement:
If we want to achieve operational excellence, we need a continuous improvement methodology. We should emphasize that OPEX is not necessarily a destination, it should be considered as an ongoing journey.
Achieving operational excellence is one of the most important contributors to a company’s sustainable growth. Companies that use the operational excellence strategy have numerous advantages and have a sustainable growth prospect despite challenging competitive environment.
Escarus believes that operational excellence is a very valuable strategy to achieve continues sustainable improvement. We aim to help our customers by providing the most appropriate solutions at each steps outlined above, making the products and services more efficient by integrating environmental and social impacts (such as zero accidents and minimal waste) into operational excellence strategy.