Today, I would like to discuss Operational Excellence.
Definition: Operational Excellence is a philosophy of leadership, teamwork and problem solving resulting in continuous improvement throughout the organization by focusing on the needs of the customer, empowering employees, and optimizing existing activities in the process.(wikipedia).
Operational excellence was started out in a factory setting. When applied in a service setting it is referred to as Service Excellence. Operational excellence is also synonymous as business improvement.
The objective of operational excellence is to improve the quality of the product for the customer. Therefore all operational excellence initiatives are made to improve product quality, reduce cycle and reduce product costs.
There are several operational excellence methodologies, the main ones being:
Lean to simplify, identify value & remove waste from the organization
Six Sigma to reduce and control variation in the organization
Theory of Constraints to identify and remove system bottlenecks within organization
Most organizations choose a combination of operational excellence methodologies when adopting their own operational excellence program. Once the organization develops an operational excellence program. It must then deployed it in the organization.
Deployment is done with the assistance of a consultant with strong expertise in operational excellence. The consultant conducts company wide training of staff at various levels of competence namely: entry level for all frontline staff; tactical level for subject matter experts in departments and strategic level for cross functional processes.
Six sigma and Lean Six Sigma (combination of lean and six sigma) use karate type belts for each competence level. Yellow belt being the entry level, green belt being the department level and black belt being the cross functional level. The lean six sigma black belt is the most senior operational excellence expert and performs projects with wide organization foot print, these projects are strategic in nature.
For operational excellence deployment to succeed, the senior management must have total buy in into the program. This is for the reason that operational excellence moves the organization to a methodical approach to problem solving. In some cases it requires investment before results are realized especially for the strategic black belt projects. This calls for senior management buy in. In many cases, operational excellence deployment fails simply because the senior management is not patient to realize the fruits of the deployment.