How is operational excellence achieved

Operational Excellence in times of constant change

The different types of change

Something can be improved in every company. But how does a fundamental change in the operational processes of a company succeed? After all, even minor changes in an organization often have unpredictable consequences. Many changes take place gradually over a longer period of time and often go unnoticed. At some point, managers and employees are surprised to see that certain things have gradually changed. Operational excellence is also such a case: Sustainable company growth requires that you gradually improve everyday work processes and constantly develop your organization.

Operational Excellence in Practice

Operational Excellence (OpEx) is about the harmonious interaction of the people, processes and IT systems involved in an organization. This balancing act also has a positive impact on the customer experience, but requires sustainable business change. But how do you get a successful OpEx initiative off the ground? Various methodologies that revolve around improving day-to-day business offer initial orientation. In this article, we introduce some popular approaches. We find out what they have in common and why they are particularly effective in combination with process management.

Methodology # 1: Lean Manufacturing

The name already suggests: Lean Manufacturing aims to reduce waste in different production systems in order to increase the number of value-adding activities for customers. Waste is understood here as an abstract concept that manifests itself in eight different forms. These eight types of waste can be observed in every process within a production system. They are intended to be eliminated or reduced through the lean manufacturing method in order to work towards operational excellence. These different forms of waste are:

  • error: Additional costs are incurred due to defective products and services are lost
  • Overproduction: Products are created that were originally needed for business change, but which become a source of waste
  • Waiting times: Time is lost by waiting for the next process step
  • Untapped potential: The talents, skills and knowledge of the employees are not being used sufficiently
  • transport: Products or materials are transported without any additional customer benefit
  • Stocks: Products or materials are not processed further and are a sign of waste as a production buffer or overproduction
  • Long ways: Fluid production processes are disrupted by long distances
  • Elaborate processes: Unnecessary process steps lead to delays, waiting times and possible errors

Methodology # 2: Six Sigma

Six Sigma is a set of different tools and techniques that serve to improve business processes in product development. The goal of Six Sigma is to identify and improve variations of one and the same process in order to positively change the customer experience. Six Sigma is based on the DMAIC method of process improvement (define, measure, analyze, improve, control): It provides that processes that do not meet certain requirements are gradually optimized.

Methodology # 3: Kaizen

Kaizen is Japanese and means "continuous improvement". In the business world, the concept stands for continuous positive changes in the work environment. The core ideas of Kaizen are:

  • A good process also leads to positive results
  • Teamwork is an important prerequisite for success
  • Any process can be improved

Kaizen is not only a philosophy, but also a practical instruction. An example: Your philosophy is to establish a corporate culture that actively involves all team members in improving the company. Different actions can be derived from this: For example, you could organize events in which you improve different areas of the company according to your philosophy.

Methodology # 4: Agility

For a company, agility means: It is able to act in the best possible way in a competitive environment, even if customer requirements change constantly. The agile methodology revolves around planning, delivery and continuous improvement and is considered the answer to constant change. Being agile therefore also means being able to react quickly to changing market requirements. For agile teams, good cooperation is crucial in order to achieve the goal step by step. This enables an iterative approach: the teams regularly present their work results and obtain feedback, which they implement as quickly as possible. The team then conducts retrospective meetings to evaluate what went well, how a project could be improved and what the next steps are. The agile methodology is often accompanied by approaches such as Scrum or Kanban:

Scrum: According to this method, the given time of a project is divided into a few regular work cycles: These so-called sprints last an average of one to four weeks and are mainly used in the area of ​​software development. The goal is better teamwork to achieve product improvements in the long run.

Kanban: This method revolves around prioritizing work items. The upcoming tasks are arranged according to priority and not according to urgency.

What do these methods have in common?

All four methods allow companies to systematize their OpEx initiatives from a certain point of view. For all the differences, they revolve around the right changes at the right time. But how do you know which method is best for your scenario? The answer is easier than you think: take a look at information you already have.

A process mining tool is recommended here, for example: With a view of the process data in the various IT systems in your organization, you can understand exactly how your operational processes run in day-to-day business. In this way, you can see where wastage occurs: You counteract expensive inefficiencies and are really process-oriented. If you consider operational excellence as one of the most important goals of your organization, you should also document your processes properly and compare their day-to-day execution with your corporate goals. The five steps from the DMAIC model of the Six Sigma method help here: define, measure, analyze, improve and control.

All the methods presented here have something in common: They revolve around collaboration within the company. Kaizen, for example, stipulates that team members from all hierarchical levels of an organization work together in order to achieve gradual improvements together. This shows that operational excellence is above all a team task.

How can operational excellence be developed with a process-oriented approach in a team?

Operational Excellence is not a state that an organization can achieve, but a process in itself. At the same time, it is also a mindset: the employees can ensure sustainable improvements in an organization by applying certain principles and using tools. In other words: Operational Excellence means that every team member focuses on the value gained for the customers in their day-to-day business. This requires a process-based and collaborative approach across the company.

The next steps towards operational excellence

To get a thorough insight into this topic, we recommend our guideline Operational Excellence in 7 steps. You will learn step by step how operational excellence can be developed in an organization, regardless of which method you are already working with. The guideline revolves around key issues such as transparency and collaboration - these are important prerequisites for corporate success.

Posted on: February 19, 2019 - Last modified on: November 12th, 2020