In recent weeks, I have been involved with two customers regarding Operational Excellence at two different stages of their deployment. I was thrilled to see the ambition and vision these organizations demonstrated in order to pursue a plan to achieve.Now comes reality. Go to a management meeting: “Operational Excellence.” Attend a conference: “Operational Excellence.” Read a trade journal: “Operational Excellence.” Talk to a consultant: “Operational Excellence.” Despite all this attention, rare are the times it is achieved sustainably. Why?
Operational Excellence began in manufacturing industries. Its systems focus on efficiency, effectiveness, and standardization. Common examples include Lean, Six-Sigma, and the Toyota Production System. Despite their ubiquity, most organizations fall far short of achieving true “operational excellence.” Most companies rely too much on these methodologies forgetting to take their people along for the ride.
Lasting change requires more than programs, projects, names, logos, and champions. Real sustained change only happens when executives drive a deep understanding of core principles into their organizations. This is not a quick-fix process, it requires a clear plan and the commitment of senior leadership.
As technology displaces people and changes responsibilities, the impact of the remaining individuals expands. These people face new challenges, many of which threaten increased process variance and diminished control. In this world, right-first-time performance is vital. Quality must be designed-in to each process step.
In theory, this is where Operational Excellence “excels.” Done right, it becomes more than a methodology. It becomes a mindset: the continuing quest to improve performance and profitability in all areas. Operational Excellence addresses all parts of the company, including innovation, growth, and digitalization.
Operational Excellence success stories exhibit:
- Significant cross-training and constant people development to build skills, foster systemic thinking and create a sense of urgency.
- Tight coordination between sales, marketing, R&D, and production to build alignment where possible and resolve trade-offs quickly.
- Formalized R&D-to-launch management to drive on-time and on-budget performance. This includes engaging multiple support groups early to avoid last-minute disruption.
- Collaboration with customers and suppliers to reduce uncertainties, shorten time-to-market and manage costs.
- Integration across the supply chain to minimize wasted activity and costs.
- A sense of discipline and urgency that provides predictability and drives progress. Critical tools include dashboards and KPIs.
- Clear roles and responsibilities especially at the interfaces between processes, departments, and areas.
These factors take Operational Excellence beyond a mere methodology, instantiating it as a state of mind: The way we do business. It drives the relentless pursuit of improved performance and profitability across the organization. It is the key to competitiveness in today’s globalized world.
With over 70 years of operational improvement experience, Proudfoot offers proven techniques to help you make Operational Excellence the “way things are done” at your company. We engage with your people as central players in operational transformation.
Our best-in-class reference models are benchmarks for all operating aspects of your business. These can engage and align people to a common set of guiding principles. Our proven transformation methodology can help you achieve and sustain high-performance business results. They can transform your organization into a powerful, dynamic, and resourceful competitor. They will keep you engaged with your workforce as a source of energy and ideas.
This relentless pursuit of Operational Excellence helped one of our clients and us to be chosen as a finalist at the MCA 2018 Awards for the Best International Project.
What if you could achieve Operational Excellence across your entire ogranization?
With Proudfoot, you can.
Article by Andres Paetz, VP, Analytics