Operational excellence what is

Operational excellence frameworks are designed to help you transform your organization, continuously improve, and guide you through your OpEx journey. The three OpEx frameworks discussed in this section will help you:. It is a data-driven OpEx framework of Six Sigma to identify the root cause of problems and develop ways to continuously improve existing processes.

Developing a project charter: This is a document referred to during the project. It is adjusted as team members learn more as the project progresses. It documents:. It takes out all human bias and allows only data to do the talking. This framework is designed to help you identify the causes of recurring problems in your organization and develop a plan to solve them. In every process, the root cause is the core issue. It is the highest-level cause that triggers the cause-and-effect reaction that ultimately leads to the problem.

This approach uses data gathered methodically to establish a timeline for the activities leading up to the accident or problem. It is mostly used for major, single-event problems like refinery explosions. This approach focuses on analyzing the changes made in people, equipment, technology, etc. This approach focuses on analyzing the controls that are already in place to detect a problem or prevent one from occurring.

This approach makes use of a tree diagram to figure out what occurred and understand why it happened. A tree diagram is a new management planning tool that depicts the hierarchy of tasks and subtasks needed to complete an objective.

It starts with one item that branches into two or more, with each branch developing two or more branches of its own, and so on. This framework is a strategic planning process designed to help you implement new goals and policies in your organization. The Hoshin Kanri framework will help you achieve two things:. What would you like to achieve with operational excellence? What process problems would you like to solve?

Before anything else, you should first outline everything you want to achieve with operational excellence, from broad goals to specific KPIs. After defining your goals, choose a methodology that helps you achieve them as efficiently as possible. It helps to get the support of senior management as early as possible to get the resources you need for your OpEx plan.

It helps to include them in the conversation as soon as possible to give you real-time insight into the problems they face, and share ideas on how they think it can be made better. Communication is the key to achieving operational excellence.

Communication starts when you share your OpEx goals, objectives, and KPIs with the leaders and employees, and continues as you go on. Consistently providing feedback on the progress made will help everyone in your organization stay motivated and aware of their roles throughout the process. To encourage employees to stay motivated, it helps to regularly recognize and reward staff who show exceptional support.

For it to be sustained, it requires continuous improvement, communication, and workforce engagement. SweetProcess is a tool that helps you attain operational excellence by allowing you to document processes, procedures, and tasks in one place, so you can stay focused on growing your business. Operational excellence starts from company culture, and changing culture can be difficult. To successfully build a culture of innovation and continuous improvement in any organization, everybody from the executive level to the lowest-level employee must understand the vision and commit to doing their best to make it happen.

In their journey to operational excellence, most organizations jump right into finding ways to improve their processes. But after some time, people get carried away and move on to other things. Continuous improvement is not sustained, and the previous improvements become the new normal. As a result, employees do not develop a culture of problem-solving and being responsible for their contribution to the flow of value. From concerns about migrating data from one platform to another, to employees not being willing to give up their old way of doing things for better ones, changes in techniques and technology can pose a huge problem when implementing operational excellence.

Operational excellence requires resources and serious commitment. Most companies begin their operational excellence journey by creating a small team of people whose main focus is to innovate and find new ways to improve processes. Hence, less time and resources are required. The results of this approach are often short-lived.

Because only a few employees are allowed to participate in transformative change, the values and culture of other employees remain the same. A more holistic end-to-end approach is required to ensure that the new culture is spread across different departments. This will require more time and resources to train employees, but the result is a more sustainable and operationally excellent culture. Twenty-six percent of respondents succeeded in implementing company-wide transformations and sustained improvements.

After asking the successful companies about the actions that contributed most to their success, McKinsey found that the following four actions correlate much more with success than others. Communicating progress and success to the different employees and departments while implementing company-wide change was seen to have a direct correlation with success. McKinsey found that respondents who communicated openly with their teams were eight times as likely to report a successful transformation as those who said this communication did not happen.

It also helped when senior managers communicated a change story to keep employees aligned around the same goals. Transformations are 5. When implementing operational excellence, it is beneficial for managers to spend less time planning to implement change and more time with employees. Keep people who are resistant to change out of leadership and influencer roles. When undergoing company-wide transformation, senior managers should allocate accountability roles to high performers and active supporters of the changes and innovations being made.

McKinsey found that teams are 2. To keep your employees from backsliding into their old ways, ensure that they continue to participate in activities that help them connect strategy to daily work. Keep challenging them to deliver value more efficiently to customers, contribute their best ability, and discover better ways to perform tasks. McKinsey reported that organizations that plan for continuous improvement after a transformation were more likely to succeed. To successfully implement operational excellence in your organization, it helps to have a few team members with significant experience in at least one operational excellence methodology.

The goal is to make operational excellence principles a part of the company culture. In most organizations, executives prefer to hire an operational excellence facilitator also called an operational excellence manager or director to lead the change. The first step to improvement is the admission that improvement is possible and necessary. This requires a sense of humility. Leaders must be willing to seek input, listen, and learn.

When an organization is led with humility, there is consistent, foreseeable engagement where the work happens. While perfection is an unattainable goal, pursuing it creates the environment for a culture of operational excellence.

Our notions of what is possible can be changed with altered points of view, meaning that the opportunity to improve is unlimited. Scientists insist that ideas are tested rigorously with experimentation, observation, and analysis. Operationally excellent organizations follow a structure for solving problems and testing ideas without the fear of failure. While it is common to blame people when something goes awry, the problem is usually related to a failed process design, not the person doing the work.

When leaders focus on the process, they get to the root cause of the error and improve it. They also make sure that all resources, including information, materials, parts, and equipment, meet the standards before they are used in a process. Excellence can only be attained when every element of work is performed correctly the first time.

If there is a problem, it must be uncovered and fixed where and when it was created. Quality happens when the work environment is organized so that potential problems become visible immediately. The process must be stopped and corrected before the error moves further down the pipeline when something goes wrong.

Maximizing value for customers means creating it in response to demand and maintaining an uninterrupted flow. When the flow is disrupted or excess inventory occurs, waste is produced. In addition, backlogs in work-in-progress create opportunities for error. Operationally excellent organizations understand that processes are intertwined and that the most significant problems often occur when work is moved from one process to another. Therefore, they recognize that it is essential to understand these relationships within the system to implement positive change.

Furthermore, waste is any activity or expenditure of resources that does not add value from the customer's point of view.

In Lean manufacturing, there are seven types of waste identified:. Six Sigma. Six Sigma is a set of tools and techniques for the improvement of business processes. The goal is to create customer experience improvement by means of variation's identification and elimination. DMAIC is the abbreviation for:. Kaizen is Japanese and stands for " Continuous Improvement ".

It refers to activities aiming for the implementation of positive, ongoing changes at the work station. In other words, it is a strategy that involves all employees from every company level to work together and proactively with the goal of achieving regular, incremental improvements to the manufacturing process.

Kaizen puts emphasis on the significance of continuous improvement. It is not enough to undertake changes once. Organizations have to make an effort in continuing improvements repeatedly. Numerous companies have applied Kaizen's concept and strategy in order to increase employee productivity, reduce costs, and improve the overall customer experience. Read more articles about Continuous Improvement:.

Sustaining a Continuous Improvement Culture. Continuous Improvement: Never be Complacent, how to stay ahead. On this page, we have compiled a number of helpful resources to build your understanding of Operational Excellence, Continuous Improvement and Lean Six Sigma. Get the report now. Think of it as answering the question: Where will our journey of continuous improvement take us? A good answer is that our journey will take us to Operational Excellence, or the point at which —.

Videos: Introductions to Operational Excellence. The Top 10 Operational Excellence Books. The Top 10 Operational Excellence Blogs. Submit an Article. Insights from the most progressive thought leaders delivered to your inbox.

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Focusing on the process also means assuring quality at the source. Quality is assured when potential problems and deviations in flow are visualized, employees have the ability to stop the process to fix errors before continuing, and process results are analyzed for variation. Operational excellence also dictates, not only should your employees clearly understand the purpose of the company, but they understand their individual role and how it leads to the success of the company.

To do this, regularly communicate the purpose and direction of the company, avoid aligning goals in a cascading manner top down , and involve individuals when creating performance objectives. DMAIC — define, measure, analyze, improve and control — is used when organizations want to improve existing processes. DMADV — define, measure, analyze, design and verify — is used when an organization is creating a new process. Six Sigma is a great tool to help achieve operational excellence as it focuses on process improvement and flow.

Operational excellence seems fairly straightforward on paper, however, the road to achieving it presents itself with some common road blocks every organization needs to get around before success is achieved. Front-line employees should feel empowered to contribute to the fixing interruptions to flow, as they are the ones who deal with it on a daily basis.

They have first-hand experience with the process and the issues that come from that process. Often, operational excellence comes down to how your organization accepts change. Process improvement projects might take people away from their normal schedule for a bit while they learn and adopt new processes. This does require a new mindset, but there are other ways to soften the abruptness of continuous improvement.

For example, sometimes running a pilot program before implementing a company-wide change or a change to an entire department might help work out issues before other employees need to take the time to train. Revise, adjust and recommunicate is key. We encourage you to read our updated Privacy Policy Hide. Toggle navigation Toggle search. Subscribe Today Reliable Plant Newsletters. What is Operational Excellence? What Drives Occupational Excellence?

Design lean value streams. Value stream maps are a great way to visualize this flow. Make those lean value streams flow. Make sure your designed value stream flows freely by communicating it through some form of formal training.

This ensures everyone understands the objectives and is clear about the desired outcomes. Training also helps them learn any new tools you might want to implement to achieve this flow. Make flow visual. There are two ways to make flow visual for operational excellence: using static or dynamic visuals.

Dynamic visuals animations or videos let employees know the current status of flow and dynamic visuals still images indicate how flow should work based on the design. Standardize work for flow.