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OPERATIONAL EXCELLENCE
Operational Excellence is a management philosophy of Leadership, Teamwork, and Problem Solving, resulting in Continuous Improvement throughout the organization by focusing on the needs of the customer, empowering employees, and optimizing existing activities in the process.

WHAT IS OPERATIONAL EXCELLENCE?


In "The Discipline of Market Leaders," Michael Treacy and Fred Wiersema describe three distinct value propositions an organization can choose to compete in their market or industry:

  1. Operational Excellence,
  2. Product Leadership, and
  3. Customer Intimacy.

The core of the book is based on five years of research by the Treacy and Wiersema into companies, including Wal-Mart, Dell, Southwest Airlines, Home Depot, Intel, and Sony. Market leaders choose to excel in delivering extraordinary levels of one of these three value propositions, while maintaining reasonable standards in the other disciplines. So, what exactly is Operational Excellence?

Operational Excellence is a well established management philosophy. It is a philosophy of leadership, teamwork, and problem solving, resulting in continuous improvement throughout the organization by focusing on the needs of the customer, empowering employees, and optimizing existing activities in the process.

There are many approaches, frameworks, and models that have been presented under the term Operational Excellence. It is also closely related to other continuous improvement methodologies, such as Lean Manufacturing and Six Sigma.

Achieving Operational Excellence

To achieve Operational Excellence requires the successful implementation of an integrated Business Execution System that effectively and seamlessly integrates the following four building blocks:

FREE DOWNLOAD
INTRODUCTION TO OPERATIONAL EXCELLENCE


 

Learn about the 4 building blocks to Operational Excellence: Strategy Deployment, Performance Management, Process Excellence, and High Performance Work Teams. Download a FREE PowerPoint on Operational Excellence.

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Let's delve briefly into each of these components.

Strategy Deployment

Strategy or Policy Deployment is the process that aligns and links business strategy and execution. The (Hoshin) Strategy Deployment Process follows a 6 phase approach:

There are many tools and frameworks assist in the Strategy Deployment process, such as Strategy Maps, Strategic Grids, and Hoshin X-Matrix.

Performance Management

Performance Management is the process that translates strategic initiatives into measurable objectives and goals. A powerful tool for Performance Management used in Operational Excellence is the Balanced Scorecard (BSC) framework, developed by Dr. Robert Kaplan and Dr. David Norton. BSC is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

There are numerous benefits to developing and deploying Balanced Scorecards in an organization. These benefits include:

Process Excellence

Well designed, efficient, and effective Management, Value Chain, and Support Processes are necessary to deliver world-class results. On a high level, to attain Process Excellence, follow this 5-phase approach:

There are numerous frameworks and tools for achieving Process Excellence, including full a suite of Lean Six Sigma methodology tools. Examples include BPI (Business Process Improvement) 7, 8D (8 Disciplines) Problem Solving, DMAIC (Define-Measure-Analyze-Improve-Control), and so forth.

High Performance Work Teams

Operational Excellence can be achieved and sustained with the right attitude, the right mindset, and the right competencies. In the "Empowerment Continuum," the high performance team has the highest level of empowerment. This requires the team to have sufficiency across the areas of authority, resources, information, accountability.

While an organization transitions from a more traditional top-down organization to an organization build around high performance work teams, the role of a supervisor or manager changes to the role of a leader and coach, with six distinctive capabilities: living example, coach, barrier buster, result catalyst, facilitator, and business analyzer.

This article provides a very rudimentary introduction to Operational Excellence. To develop a more in depth understanding, we suggest downloading a free copy of the 48-slide Introduction to Operational Excellence presentation and consulting the business training guides below.

Source: An Introduction to Operational Excellence, An Integrated Business Execution System, Operational Excellence Consulting LLC [source material]

OPERATIONAL EXCELLENCE SUBJECT MATTER EXPERTS


Flevy's document contributors are Subject Matter Experts in their respective industries. Below, we have showcased our authors that specialize in Operational Excellence and Lean Six Sigma. Each of these authors and their respective consulting firms have developed training guides on Operational Excellence.


Allan Ung, founder of Singapore-based Operational Excellence Consulting, has over 30+ years of experience playing global and regional roles leading Lean, Six Sigma, and TQM initiatives in global organizations such as IBM, Microsoft, Underwriters Laboratories, and Infineon Technologies.

His firm provides corporate learning programs and management advisory services to assist clients to achieve breakthrough in business performance and effectiveness. Operational Excellence Consulting works with government bodies, multinational corporations, and small and medium-sized enterprises of a wide spectrum of industries. Some of their valued clients include Analog Devices, Borouge, Micron Technologies, B|Braun Medical Instruments, Panasonic, NEC, NileDutch, CLS Communication, Elsevier, Wow Education, Ministry of Social & Family Development, Temasek Polytechnic, Defence Science & Technology Agency, Immigration & Checkpoints Authority, etc.

» View Allan's Operational Excellence training guides here

Frank Adler, co-founder of US-based Operational Excellence Consulting, has over 25+ years of international executive leadership experience in General Management, multi-site Operations & Supply Chain Management, Quality & Customer Support Management, and Operational Excellence, Lean Management & Six Sigma.

Frank is a certified and experienced Lean Six Sigma Master Black Belt, with a proven track record of implementing these methods, concepts and tools in various organizations and industries. He holds a in Mathematics and Physics from the Freie University of Berlin (Germany) and a in Applied Mathematics and Industrial Economics from the Helsinki University of Technology (Finland).

His firm provides assessments, training solutions, kaizen event facilitation, and implementation support to organizations that are committed to achieve superior performance through Operational Excellence.

» View Frank's Operational Excellence training guides here

Vishnu Rayapeddi, founder of Productivity Solutions, is a management executive with over 30+ years of experience in End-to-end Supply Chain Management, Manufacturing Operations Management, Strategic Planning, Business/Operational Excellence, and Process Re-engineering/Improvement.

Vishnu is a pioneer in Lean Management, combining the power of Lean Thinking, TOC, Six Sigma, TQM, TWI, Balanced Scorecard, cGMP, and other best-class methodologies like DMAIC, Value Stream Mapping, Root Cause Analysis, 5S, Quick Changeovers, Quality and Reliability, TPM, Visual Management, Standard Work, Pull, JIT, and Kanban.

Vishnu has worked in Pharma Manufacturing and FMCG Supply Chain environments for over 21 years with some of the most reputed organisations in New Zealand and India, including Unichem Laboratories, Aristo Pharmaceuticals, Intas Pharmaceuticals, Standard Medical & Pharmaceuticals Ltd, Fonterra, George Weston Foods (part of AB Foods) and others. In the past 6 years, Vishnu has been providing consulting, training, coaching and mentoring services in the Operational Excellence arena.

» View Vishnu's Operational Excellence training guides here

Michael Carter, founder of 6ixSigma, is a Six Sigma Master Black Belt with experience in Statistical Analysis, Predictive Modeling, Root Cause Analysis, Design of Experiments, Sampling, Regression, Data and Text mining.

His firm has assisted with Lean Six Sigma training and implementation in Australia, Singapore, Germany, China, Malaysia, Taiwan, Mexico, India, Hong Kong, United States, Canada, and counting.

Michael is also a Director in KPMG's Advisory Services practice, where leads the internal process improvement deployment and also leads the data analytics initiative, leveraging analytics to identify and improve operational results and assist clients with their operational needs.

» View Michael's Operational Excellence training guides here

OPERATIONAL EXCELLENCE BUSINESS TRAINING GUIDES


Flevy is the leading online provider of business frameworks, methodologies, and training guides. These documents are of the same caliber produced by top tier consulting firms, like McKinsey, Bain, and Deloitte. Most documents were developed by seasoned executives and consultants with 20+ years of experience. The training guides selected below have all been developed by management consulting firms specializing in Operational Excellence. The select training guides below have all been developed by the subject matter experts showcased above.



** Define Your Strategic Priorities for the Post-pandemic Business Environment! ** Hoshin Kanri process is a powerful strategy deployment methodology for defining long-range [read more]

Our Strategic Planning Process, based on Hoshin Policy Deployment, provides an organization with proven and effective methods to develop, communicate and align its strategic [read more]

Kaizen strategy is the single most important concept in Japanese management - the key to successful Japanese companies such as Toyota. Kaizen, which simply means continuous [read more]

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 [read more]

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 [read more]

In business, 'Gemba' refers to the place where value is created and improved. The 'Gemba Walk' is an activity that takes management to the front lines to look for waste [read more]

As a company-wide initiative, Total Productive Maintenance (TPM) maximizes the effectiveness and longevity of equipment. The TPM program significantly increases labor and [read more]

Every organization depends on customer service. Due to rising customer expectations, delivering excellent service is no longer a choice but a necessity. When you equip your [read more]

Lean is a management philosophy based on the Toyota Production System (TPS). With Lean Manufacturing, you will be able to enhance value for your customers by improving and [read more]

Lean Office is a management philosophy based on the Toyota Production System (TPS). With Lean Office, you will be able to enhance value for your customers by improving and [read more]

5S good housekeeping and workplace organization is a set of basic management principles that are widely adopted in industries today. The cornerstone of 5S is that untidy, [read more]

Leveraging the 012_Introduction to Mapping, this module takes a detailed look at process maps, swim lane diagrams and brown paper maps. Process maps are easy to construct and [read more]

This presentation has 114 slides and and comprises of the following: * What is Kaizen? * The 10 Commandments of Continuous Improvement * Value versus Waste concept * The 7 [read more]

The Lean - Standard Work Training Module includes: 1. MS PowerPoint Presentation including 113 slides covering - History of Lean Manufacturing, - The Five Lean [read more]

Being able to measure a processes performance is a hallmark of Lean Six Sigma and selecting the appropriate metric is critical. LSS metrics fall into one of three categories: [read more]

This workshop introduces various concepts of best-class practices, such as TQM (Total Quality Management) WCM (World Class Manufacturing), Agile and Flexible [read more]

This 2 day Lean White Belt presentation is suited for the executive management and consists of 193 slides in all and comprises of the following: This is meant for the senior/top [read more]

Gathering the Voice of the Customer is one of the easiest and one of the most difficult tasks a process improvement professional faces. It is easy because when you have a clearly [read more]

This module looks at process variation and the methodology widely used to reduce or eliminate it - DMAIC. Variation is first defined, followed by process basics (inputs, [read more]

This presentation has a total of 82 slides and is split in to 2 parts: Part 1 comprises of: Why Equipment Fails Measuring Equipment Performance Getting it under [read more]




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