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What Is Operational Excellence?

Editor's Note: Take a look at our featured best practice, Lean - Value Stream Mapping (VSM) (157-slide PowerPoint presentation). Value Stream Mapping (VSM) is a lean management technique used to analyze the flow of materials and information currently required to bring a product or service to a Customer. The goal of value stream mapping is to reduce the end-to-end lead time of a process by highlighting and eliminating [read more]

Also, if you are interested in becoming an expert on Process Improvement, take a look at Flevy's Process Improvement Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

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operational_excellencePerfection is not attainable, but if we chase perfection we can catch excellence. – Vince Lombardi

In “The Discipline of Market Leaders – Choose your Customers, Narrow your Focus, Dominate your Market,” Michael Treacy and Fred Wiersema describe three distinct value propositions or disciplines an organization can choose to compete in their market or industry–Operational Excellence, Product Leadership, and Customer Intimacy.

Market leaders choose to excel in delivering extraordinary levels of one of these three value propositions, while maintaining competitive standards in the other disciplines.

Based on Treacy’s and Wiersema’s findings, market leaders will not pursue a diffused business strategy across two or even all three disciplines, but will continually focus on their organizational design, processes, technology, and competencies to improve the one particular value discipline that they want to provide to their Customers better than anyone else.

Organizations pursuing an Operational Excellence differentiation strategy are able to deliver a combination of quality, price, and ease of purchase and service that no other organization in their market or industry can match.

Achieving Operational Excellence requires the successful implementation of a Business Execution System that effectively and seamlessly integrates the following four building blocks: Strategy Deployment, Performance Management, Process Excellence, and High Performance Work Teams.

First, Operational Excellence organizations follow a well defined Strategy and Operational Planning & Deployment Process that ensures collaboration and alignment among the different parts of the organization and effectively links strategic and operational objectives, initiatives and execution. Strategy Mapping and Hoshin Planning provide this systematic and collaborative planning, execution, and review process.

Second, Operational Excellence organizations are able to translate strategic or operational objectives and initiatives into measurable success indicators and ensure alignment among the different levels and parts of the organization.

The Balanced Scorecard Methodology provides a Performance Management framework to ensure alignment of an organization towards common objectives and goals.

Third, Operational Excellence organizations are process-centered organizations that have well designed, efficient, and effective management, value chain, and support processes to deliver best-in-class products and services consistently.

Process Excellence concepts, methods and tools, including Six Sigma Methodology, Lean Management Methodology, 8D Problem Solving Process, and Business Process Improvement, are core competences and utilized at all levels of the organization.

You can learn more about Operational Excellence from the author’s training guides available on Flevy, including a free-of-charge presentation, An Introduction to Operational Excellence.

Fourth, Operational Excellence can only be achieved and sustained with the right attitude, the right mindset, and the right competencies. Operational Excellence organizations continuously strive to increase the engagement and empowerment of their employees through strong values, guiding principles, leadership development, coaching, and continuous competence development.

190-slide PowerPoint presentation
The office, by any name, is a paperwork factory. To become a Lean enterprise, office activities must fully support shop-floor manufacturing operations to eliminate waste. The adoption of 5S throughout all office functions is the first step to increase efficiency. 5S principles are dedicated to [read more]

Want to Achieve Excellence in Process Improvement?

Gain the knowledge and develop the expertise to become an expert in Process Improvement. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

Process Improvement involves analyzing and improving existing business processes in the pursuit of optimized performance. The goals are typically to continuously reduce costs, minimize errors, eliminate waste, improve productivity, and streamline activities.

As we continue to deal with COVID-19 and its economic aftermath, most organizations will prioritize Business Process Improvement initiatives. This is true for a few reasons. First, Process Improvement is one of the most common and effective ways of reducing costs. As the global economy slows down, Cost Management will jump to the forefront of most corporate agendas.

Secondly, a downturn typically unveils ineffective and broken business processes. Organizations that once seemed agile and focused during periods of growth may become sluggish and inefficient when demand drops off.

Lastly, COVID-19 has expedited Digital Transformation for most organizations. One of the quickest and most impactful forms of Digital Transformation is Robotic Process Automation (RPA). Thus, we have included numerous RPA frameworks within this Stream.

Learn about our Process Improvement Best Practice Frameworks here.

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The 8D Problem Solving Process has become a standard in many industries as problem solving or improvement process, as internal Corrective Action Request (CAR) Process or as Supplier Corrective Action Request (SCAR) Process. The 8D Problem Solving Process Training Module [read more]


 
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About Frank Adler

Frank Adler co-founded Operational Excellence Consulting (OEC) in 2009 to follow his passion for Operational Excellence and to be able to work with individuals and organizations that share this passion. He has over 20 years of international executive leadership experience in General Management, multi-site Operations & Supply Chain Management, Quality & Customer Support Management, and Operational Excellence & Lean Six Sigma. View more of OEC's materials on Flevy here, including training guides and free downloads.

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Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
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The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

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