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People at the Heart of Operational Excellence

Go to a management meeting: “Operational Excellence.” Attend a conference: “Operational Excellence.” Read a trade journal: “Operational Excellence.” Talk to a consultant: “Operational Excellence.” Despite all this attention, rare are the times it is achieved. Why?

Operational Excellence began in manufacturing industries. Its systems focus on efficiency, effectiveness and standardization. Common examples include Lean, Six-Sigma, and the Toyota Production System. Despite their ubiquity, most organizations fall far short of achieving true “Operational Excellence.” Most companies rely too much upon these operational methodologies forgetting to take their people along for the ride.

Lasting change requires more than programs, projects, names, logos and champions. Real sustained change only happens when executives drive a deep understanding of core principles into their organizations and engage their people to participate along the change journey. This is not a quick-fix process – it requires a clear plan and the sustained commitment of senior attention.

As technology displaces operators and changes responsibilities, the impact of the remaining workforce expands. These people face new challenges, many of which can lead to increased process variance and diminished control. In this world where there is a shortage of raw material given supply chain constraints there is constant pressure to achieve first-time pass rates. Quality must be designed-in to each process step.

In theory, this is where Operational Excellence “excels.” Done right, it becomes more than a methodology. It is a mind-set: the continuing quest to improve performance and profitability in all areas. Operational Excellence addresses all parts of the company, including innovation, growth, digitalization and people.

Operational Excellence success stories exhibit:

  • Significant cross-training and constant people development to build skills, foster systemic thinking and create a sense of urgency.
  • Tight coordination between sales, marketing, R&D, and production to build alignment where possible and resolve trade-offs quickly.
  • Formalized R&D-to-launch management to drive on-time and on-budget performance. This includes engaging multiple support groups early to avoid last-minute disruption.
  • Collaboration with customers and suppliers to reduce uncertainties, shorten time-to-market and manage costs.
  • Integration across the supply chain to minimize wasted activity and costs.
  • A sense of discipline and urgency that provides predictability and drives progress. Critical tools include dashboards and KPIs.
  • Clear roles and responsibilities especially at the interfaces between processes, departments and
  • An ownership of decision making at the front-line level by having the right information at the right time to minimize variances in performance and quality.

These factors take Operational Excellence beyond a mere methodology and make it a state of mind: The way we do business. It drives the relentless pursuit of improved performance and profitability across the organization. It is the key to competitiveness in today’s globalized world.

To make operational excellence the “way things are done” within your organization, you must first engage your people as the central players in operational transformation. You should seek to align every part of your business to a common set of principles that help you achieve and sustain tangible business value, transforming your organization into a powerful, dynamic, and resourceful competitor. In an era where everyone believes that digitalization is the core of Operational Excellence, you ought to take a step back and ensure any transformational journey you embark on has a purpose tied to your business goals, short- and long-term, places your people at the heart of change, then looks at the processes to make sure they are optimal for your business and finally implements digital solutions to accelerate your performance.

With Proudfoot’s 75 years of experience implementing successful Operational Excellence programs around the world, for a multitude of industries, we have learned and live by the knowledge that your people are the source of energy, ideas, and execution to propel your business forward.

What if you could achieve Operational Excellence across your entire organization?
With Proudfoot, you can.

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Posted on October 2, 2021

By Andreas Paetz

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