By: James A. D’Agostino, CEO, MEP Center Director
As its name implies, continuous improvement is a never-ending process. Whether it is the need for greater sales, increased productivity, or anything in between, there is always something that can be improved upon. Continuous improvement can occur as a major event or transformation such as a Kaizen event, or it can occur through daily, gradual improvements with a Kata approach. When organizations realize successes with these continual improvement efforts, many will claim to have achieved some degree of operational excellence. But what is operational excellence, and what does a manufacturing organization look like once it achieves a level of operational excellence?
Operational excellence does not have a singular definition that is universally agreed upon, nor should it. Every company is different, so operational excellence may mean different things. Companies measure performance and success differently, and many also have different operational goals and objectives. Operational excellence is a mindset that embraces certain principles and tools to create sustainable improvements within organizations, and it is achieved when every member of an organization can see the flow of value to the customer. Employees should actively try to improve both the value and its delivery. However, from a high level, operational excellence can be broadly defined through the following core principles:
- Focus on the Process: When mistakes happen, the natural human reaction is to blame the operator. Deming, anyone? However, when we take a moment to analyze the issue, we should question why the process allowed the operator to perform in the manner that resulted in the mistake. We should strive to assess what part of the process the error occurred in, and then make the necessary process changes to try to achieve the desired outcome.
- Promote Scientific Thinking: As we discussed recently with the subject of Toyota Kata, innovation comes from rapid experimentation and learning. By systematically exploring new ideas, an organization will encourage employees to do the same without fear of failure.
- Emphasis on Value Streams and Systematic Thinking: Organizations must fully understand customer needs to create value (i.e., what customers are willing to pay for). Organizations that stop delivering customer value are not sustainable over time. In addition, systems contain many different interconnected parts that work together. It is critically important to understand relationships between each part to ultimately make better decisions that will positively impact customer value.
- Flow and Pull: The goal of every organization should be to provide the utmost value to its customers. Interruptions and work stoppages create inefficiencies (i.e., waste), so organizations should ensure that processes and workflows are continuous. Hand-offs from one operation to the next should be crisp and tight.
- Quality at the Source: Excellent quality can only be achieved when every part of the process is completed correctly. Workstations and processes should be structured and organized to allow potential problems to become visible immediately. When mistakes occur (and they will), work should be stopped immediately to correct the mistake before continuing, and time should be taken to understand what was learned by the mistake.
- Respect All Individuals and Lead with Humility: Respect is a two-way street. One of the best ways to demonstrate respect for your employees is by involving them in continuous improvement efforts, especially those that affect them. This will lead to empowerment and greater engagement. Leaders should always seek to exercise humility, which involves a willingness to listen. Good leaders should also always give credit where credit is due.
- Aim High: While perfection may feel unattainable, that does not mean that an organization should not strive for it anyway. By setting lofty goals and expectations, an organization creates a different mindset and culture.
- Clear and Consistent Goals and Communication: Employees should continually understand and be aware of the goals and objectives of the organization, along with their progress towards meeting them. This will keep the organization aligned in its purpose from top to bottom.
Overall, operational excellence is not just about reducing costs or increasing productivity in the workplace. It is about creating a vibrant company culture that will allow you to produce valuable products and services for your customers and achieve long-term sustainable growth. Operational excellence is a journey that involves applying the right tools to the right processes at the right time. When this happens successfully, the ideal work culture is created where employees are provided for in a way that enables them to stay empowered and motivated.
Does your organization look and perform like this already? If so, job well done – you can pat yourself on the back! If not, do not fret. TDO’s team is fully certified to help manufacturers define and achieve operational excellence at all levels. Reach out today to learn more and schedule a free consultation!