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Operational Excellence: Industry Tips and Course of Action

November 23, 2022
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A company' success can be determined through multiple factors, both internal and external. This can lead to a healthy rivalry between business operating in the same industry, as it encourages continuous innovation and strategic planning. In order to come out on top, one of the ways to do so is through achieving operational excellence.

Definition of Operational Excellence

Operational excellence is a company’s effort to keep improving over time while keeping costs as low as possible. It can be achieved if every member of a company is involved and aim for the same goal. This is applicable to multiple industries.

Operational Excellence Framework

Operational excellence has several layers:

  • strategy development which is about a company’s vision or mission for the future,
  • performance management, which means controlling every necessary thing to increase value,
  • leadership and culture, having the right people and environment in a company,
  • process excellence which focuses on a company’s efficiency,
  • and team performance, with members that needs to have the skills necessary to achieve operational excellence.

10 Core Operational Excellence Principles

Here are the 10 Guiding Principles of the Shingo Model, which serves as the base of operational excellence.

Respect Every Individual

Everyone has to be respected, especially in a working environment. Asking employees to get involved positively in a company’s future is a way for operational excellence.

Lead with Humility

A leader who is willing to take suggestions from anyone is a humble leader that every company needs.

Seek Perfection

Perfection is almost impossible to be achieved, but there are still some small opportunities that can be done to get a positive mindset in fighting a problem.

Embrace Scientific Thinking

Learning and trying any experiments, whether they are successful or failed, can lead to some innovations for the development of a company.

Focus on the Process

Success and failure depend on the process. Looking at the process and correcting it can result in success when something is wrong initially.

Assure Quality at the Source

The process has to be correct to get the best quality, so if there is something incorrect during the process, some rectification has to be done before continuing.

Flow and Pull Value

Workflow in a company has to be in-line with customers’ demands to maintain the company’s value and efficiency.

Think Systematically

Every part of the process and its relationship with each other in the company’s system has to be understood before deciding on any changes.

Create Constancy of Purpose

To be certain about a company, its visions and missions have to be known by employees consistently from the beginning.

Create Value for the Customer

What customers want and need is the heart and soul of the value of a company, so a company must understand and follow that desire.

Operational Excellence Methodologies

To achieve operational excellence, some methodologies can be used for the approach.

Lean Manufacturing

Constant productivity needs to be well-executed by every company, but waste must be minimized. Instead, focus on the value for customers with the right process.

Kaizen

Japanese for “change for the better”, means that an entire team must work together to have consistent improvement.

5-S System

Another method with Japanese words, the 5-S, stands for seiri, seiton, seiso, seiketsu, and shitsuke. These words are combined and mean improvement in safety, productivity, uptime, and morale in a company.

Kanban

It is better for a company to produce only what customers want to avoid overproduction waste and reduce inventory as “kanban” itself means “visual signal.”

Six Sigma

This last method can be used by focusing on customers, detecting problems, avoiding waste, doing the process, and being flexible.

Challenges of Operational Excellence

Challenges in achieving operational excellence can come from any part of a company's systems and procedures. If there is someone who does not understand the role, or if process are not properly executed, it can disturb the flow of getting the goal.

Furthermore, some employees might not feel motivated to work on slow progress toward achieving operational excellence or even not willing to adapt to changes in the first place. The necessary data is also too complex, which pushes the unwillingness even deeper.

Operational Excellence and Continuous Improvement in Digital Era

In this digital era, companies must improve continuously and achieve operational excellence. Otherwise, they would be seen as old-fashioned, which leads to failure. To help your business improve, Nimbly provides a solution to help you get things done properly and efficiently, creating improvements in your operational processes. Learn how features such as our analytics dashboard, and issue tracker, provide your team with real-time visibility into operations and help lead you to timely decision making processes. Request for a free consultation to find out how.

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