Operations excellence might seem like a hefty term that is difficult to achieve for a successful workplace or profitable business, but it is quite easy to implement.
This article will give an overview of what operations excellence is and how to make sure your entire team is on board for success.
Definition of Operations Excellence
Operations excellence means that every person on the team or in the workplace understands what needs to be done to make customers satisfied and that they have the tools and understanding of the knowledge flow to fix a problem when there is a break in the system.
Another key point is that employees can empower themselves to effect some of these solutions, instead of having to go to the manager for each small issue.
This allows managers to focus on the overall concepts and issues regarding the business, instead of having to spend all their time micro-managing day-to-day activities and tasks.
Differences in Operations Excellence and Continuous Improvement
Many people confuse operations excellence with continuous improvement; however, they are two very different things.
Continuous improvement means the constant adjustment of simple and complex processes to run a program or company more efficiently.
This includes improving the quality of products, reducing waste of resources, and heightening the potential of workers.
When implementing continuous improvement, efficiency is the outcome. However, focusing all of a manager’s time and energy on this area means that said manager will not be able to devote resources to more overarching, profit-building activities.
Insert operations excellence. With this (in addition to continuous improvement), the laborers know their roles and responsibilities, how to adjust when things go wrong, and who to communicate with. This frees up management to focus on bigger ideas.
Recognizing and Fixing the Value Flow
For this to all work seamlessly, employees or team members must be able to clearly see and adjust the value flow when situations arise.
Having clearly labeled charts for the chain-of-command, communications systems, and operational processes helps employees—especially new workers, temps, or people taking over on a project—know exactly what needs to be done, how, and to whom to report when there is a problem. This is called standard work.
Standard work allows people to produce and complete jobs efficiently without having to think about each new situation as a first-time problem, and it allows the majority of laborers to get things done without having to go to the manager for every small thing.
Principles of Operations Excellence
There are three parts that guide this idea, encompassing ten individual ideas. These are called the Shingo Guiding principles, created in 1950 by Shiegeo Shingo and Taiichi Ohno in the development of the Toyota Production System, or TPS.
The TPS is still looked at as a model for companies that produce on a large scale and was the basis for the idea of “lean,” in which a business works to eliminate wasted resources (tangible or intangible).
The ten principles can be grouped into three parts. These three parts with their ideas are:
- Enabling of the culture (individual respect and humble leadership)
- Continuous improvement (ensuring source quality, improved flow and pull, striving for perfection, embracing scientific thinking, focusing on process)
- Alignment with the enterprise (creating value for the customer, creating constant purpose, systematic thinking)
These ten principles are detailed below.
When an individual feels respected, they are more likely to give their full potential to the job at hand. Creating a culture of respect means that everyone will feel valued and treat others with value in return.
This goes for customers as well as laborers. Customers who feel listened to and understood will be more likely to return to a company and give them loyal business.
Even the best leaders make mistakes. A leader who can own up to these mistakes and take responsibility will be trusted and respected form their team.
Striving for Perfection
You might have heard that perfection can never be attained, and in practice this may be true. However, theoretically striving for perfection can ensure that labor and procedures are performed to the best of people’s abilities.
Employees should work with the idea that a process or system can always be improved upon.
Embracing Scientific Thinking
The scientific process involves a hypothesis, information gathering, experimentation, and concluding whether the proposed hypothesis was true or false.
Although this may sound overwhelming, as humans we do this often without even realizing it.
Scientific thinking in the workplace involves realizing what could be improved, gathering ideas on how that might be accomplished, trying them out, and then embedding them into the culture if they are successful.
Focusing on Process
It is believed that many problems in company systems and procedures lie within the process and not the people performing the related procedures.
People will often follow the directions (or workflow) that they are given, even if it is not the best way to do something. If something is not working, it needs to be changed at the foundation instead of blaming the worker.
Ensuring Source Quality
When something goes wrong, go back to the beginning. When everything comes out of its originator perfectly, then problems are less likely to arise.
Improving Pull and Flow
This is another way of saying to pay attention to supply and demand. This should be something dynamic, or ever-changing. Paying close attention to pull and flow decreases wasted and maximizes resources.
Every part of a process is connected to multiple others. When you change or improve one part of a system, others are going to be affected.
This means that when a workplace is looking to improve, people have to think about the entirety of what is affected.
Creating Constancy of Purpose
Each team member should know what the overarching goals of a workplace are. What is the highest goal that is trying to be achieved?
People can set their sights on that apex so that they know their work is valued and important.
Creating Value for Customers
A customer will choose who they devote their business to when that business gives them a quality product that they want, when they want it. If a business does not achieve this, a customer will move on somewhere else. Creating and delivering value to customers is one of the most important parts of a successful business.
Benefits of Operations Excellence
There are many benefits to devoting energy to achieving operations excellence. The four main ideas are detailed below.
Strong Teamwork and Problem-Solving
People who are valued and empowered will work well as a part of a team. They understand that each member has an important position and show respect to one another, which breeds positivity and confidence.
People who come to work with these positive qualities themselves (and recognize them in their colleagues) will be able to problem-solve while thinking critically, constantly bringing about effective change to the workplace.
Early Detection of Problems
Using visual systems and placing high importance on workflow and communication allows people to see where problems arise at the very beginning.
Combined with responsibility and teamwork, early recognition of problems means that they will be solved quickly and more easily than if they were ignored and left to grow.
Lean, Predictable, and Scalable Operations
When all of the above-mentioned 10 principles are implemented, it is almost inevitable that workplace processes will maximize resources (lean), happen seamlessly and similarly each time they are performed (predictability), and that they can be applied to other situations (scalability).
All of the above ideas work together to create happy, satisfied customers who see value in the product they are receiving from a company, be it tangible or intangible.
The successful and efficient daily practices of the labor force in a company also free up management to be able to focus on developing larger ideas for company improvement and customer satisfaction so that the business can grow and develop with the times.
Keys to Operation Excellence Achievement
To accomplish this way of running a business, a company will need to do five key things.
- Honestly assess the state of the business
Do you know who you are as a business and who you are trying to serve? If not, make sure you find out.
- Set a clear vision, mission statement, and goals/objectives
This vision should be clearly defined and shared with the entire team.
- Create a solid, empowered team with buy-in
When everyone is on the same figurative team, things move along more seamlessly and positively.
- Commit to improvement at every step
Improvement as part of company culture ensures that all are reaching toward a goal of perfection.
- Correctly measure outcomes
To appropriately embed the improvements, success must be measured to decide what changes are worth implementing and what needs to be looked at again.
Breaking down operational excellence should give you an idea of what it looks like in the “real-life” workplace. Learning about the principles should trigger some thoughts about successful businesses that you support who use these ideas themselves.
Some of the biggest business names out there (Amazon, Disney, Target, Toyota, Apple, Tesla, GE, etc.) have solidified their use of operational excellence and it has made them household names which our society seems to not be able to live without.
This was not achieved by accident! Managers at the highest level of successful companies look at what other successful companies have done and apply it to their own business.
They are continuously improving, thinking about their employee workforce and customer base, and the everchanging market.