What is Operational Excellence?
Operational Excellence and Lean can appear synonymous with one term being interchanged with the other in meetings or discussions. In GENEO’s terms, however, Operational Excellence takes on a broader context for the organisation in order to support Lean.
For Lean to flourish as a thinking way, all the functions in the business need to align to the goal of eliminating waste, becoming functionally excellent at what they do.
Operational Excellence looks for:
- A supply chain management strategy that works in partnership with its suppliers to lift the supply chain.
- A purchasing strategy that enables suppliers to stretch their performance and share in the gains.
- A human resource management strategy to develop its people and drive a learning organisation.
- A finance department that can see past traditional accounting methods and support value stream thinking.
- A sales and marketing strategy that puts the customer first and is capable of working with operations to deliver the best possible outcome.
- A Projects team that strives to deliver the best, most cost effective new product or process for operations to run with.
- An information systems and technology strategy that enables improvement and agility in operations and customer service.
- A health, safety and environment strategy that drives improvements in the workplace and minimises the organisations’ environmental footprint.
- A maintenance strategy that aligns with production to minimise downtime, optimise assets and limit overproduction.
- And finally, a Leadership team that recognises that its behaviours will ultimately determine whether the Lean Operating Model, with its principles, systems and tools, will survive the test of time.
Only when these disciplines of the organisation are working in full alignment, supporting the right decisions being made at an enterprise level, can we say that we have achieved Operational Excellence.
Common practice is to declare all of the above as part of Lean. However, best practice in these disciplines (functional excellence) has developed in many different industries and been adopted by others that now comes under the catch-all of Lean.
GENEO believes that Lean, the pursuit of excellence through waste elimination, can only truly thrive as an operating model in an environment where every function of the enterprise is aligned and working to the common goal of operational excellence.
Read more about the Lean Management Operating Model in our free training guides.
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This page was written by Mark Radley in February 2018.
Due for review in 2019.