What is Operational Excellence?

14 December 2021
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What exactly is Operational Excellence? Although born in the industrial arena, the idea of Operational Excellence can be applied to many facets of business. The goal? To provide business leaders and strategists with key principles that could potentially improve efficiency and effectiveness of company operations. Phew, that got wordy!

A deeper understanding of what goes into smoothly running a business will ultimately waste less money and time, helping to ensure a better future for the company. The guiding principles within the concept of Operational Excellence show you exactly what to consider to achieve that better understanding.

Who came up with the Operational Excellence concept?

Dr. Shingo, an industrial-management specialist and productivity expert, had extensive knowledge of process improvement. He built a long and impressive resume, consulting with many companies over the years and helping them improve their production methods and business processes. One of the biggest companies he worked with was Toyota- you may have heard of them! Dr. Shingo helped Toyota develop the Toyota Production System (TDS), aka the birth of lean manufacturing. 

Dr. Shingo narrowed in on keeping low levels of inventory to save money. He also created Poka-Yoke, a method of detecting manufacturing process errors and subsequently (and quickly)  making necessary changes. Poka-yoke is not only a way to refine and enhance processes, it is a safeguard against human error. Dr. Shingo centered many of his key concepts around human error and the fact that it is inevitable. 

It’s really no surprise that Dr. Shingo made the idea of Operational Excellence the business pillar it is today. 

What makes up Operational Excellence?

Operational Excellence consists of 10 guiding principles, all of which are further divided under “dimensions”. 

Dimension #1: Cultural Enablers

✓ Respect Every Individual- Provide a respectful work environment for employees. Make sure they feel like they are a part of the business processes. Emphasize a team effort and the importance of inclusivity. 

✓ Lead with Humility- Take input and feedback graciously. Leaders should be approachable and create a collaborative environment. They should be willing to face criticism and accept that their way is not always the right way. 

Dimension #2: Continuous Improvement

✓ Focus on the Process- Don’t blame individual people for problems that should be blamed on a process. Work on creating the best process possible. 

✓ Seek Perfection- Yes, human error exists and will always exist. Seeking perfection, however, opens the door to continuous improvement. Think big and think about long term solutions, instead of focusing on small steps and temporary fixes. Think more radically and less rationally. Don’t simply focus on what’s attainable: go beyond it!

✓ Assure Quality at the Source- Don’t try to hide potential errors in your process: create transparency and identify/fix errors immediately. Quality depends on the beginning stages- not correcting what went wrong way down the road. 

✓ Improve Flow and Pull- The flow of a company’s process should not be convoluted by excess materials/products. The best way to ensure optimal flow is to answer directly to demand, and not keep extra inventory around. 

✓ Embrace Scientific Thinking- This one is pretty straightforward: use trial and error to your company’s benefit. Seek data-driven solutions and research-based approaches. Encourage employees to have a scientific mindset. 

Dimension #3: Enterprise Alignment

✓ Think Systematically- Try to understand the big operational picture. How do processes interconnect? What will one process change look like for another part of the organization? Systems rely on several different pieces to properly function. 

✓Create Consistency of Purpose- Ensure that everyone within the organization has a clear understanding of goals. Make employees confident in the vision of your organization and changes or improvements that may be required.

✓Create Value for the Customers- To put simply: the customer is always right. There is no business without the customer wanting what you offer. Operational Excellence isn’t possible without a heavy focus on customer needs. 

Let’s Sum it Up

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There are all kinds of classes, books, and vlogs out there discussing the meaning and application of Operational Excellence. Others may disagree, but when we think about the concept of Operational Excellence, we see four key things emphasized:

  • Collaborative and supportive work environment.
  • Continuously improving process. 
  • Clear vision
  • A focus on the big picture. 

Based on what you’ve read so far, how could you achieve Operational Excellence within your business? Have you identified any pain points you hadn’t really thought of before? 

Let’s face it: there’s alway room for improvement. Sometimes these improvements are glaringly obvious, sometimes it takes a fresh perspective to see them. Let Woggle help you examine your process and what you can do better. We are here to help you discover and implement new tactics and approaches. 

What will incorporating Woggle and all our resources leave you with? More time to focus on other aspects of your business! Just know we are always here to help in your journey towards achieving Operational Excellence!

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