What is Operational Excellence?

see the flow of value


Rather abstract terminology, isn't it? How does flow break down if fluid flow analogy is used? How does an employee fix the flow? Does value really flow to customer? I think of customers as paying for products and services and assessing the value based on what they perceived or received and what they will or have paid. Sorry, but I can't grasp this definition of "operational excellence"! Value can be real or imaginary (perception).

It is not meant to be abstract

The idea is that maintenance is fix it and renew it

Reliability is to ensure function over time

Operational excellence is aligning to value delivery - based on what top management defines value too be.

Do you align your work in terms of ensuring value delivery that aligned with what your organization defines as value?

That may seem abstract but it is not meant to be.

Does operational excellence include meeting or exceeding the design capacity, to just meet customer demands and to ensure supply not to exceed demand excessively to keep in check the product market price?

Does operational excellence include mass production of products to lower product prices in order more people can afford to buy them and thus a wider market?
Here is a short description of operational excellence from Wikipedia if anyone is interested:

Operational Excellence is an element of organizational leadership that stresses the application of a variety of principles, systems, and tools toward the sustainable improvement of key performance metrics.

Much of this management philosophy is based on earlier continuous improvement methodologies, such as Lean Manufacturing, Six Sigma, and Scientific Management. The focus of Operational Excellence goes beyond the traditional event-based model of improvement toward a long-term change in organizational culture.

Core principles

The Shingo Prize, an organization that recognizes success in the discipline, has identified ten key principles its award winners display:[1]

1. Respect every individual
2. Lead with humility
3. Seek perfection
4. Assure quality at the source
5. Flow and pull value
6. Embrace scientific thinking
7. Focus on process
8. Think systematically
9. Create constancy of purpose
10. Create value for the customer


Operational Excellence in my way of thinking is the antithesis of the "flavor of the month" improvement culture that has infected many corners of industry. It recognizes that "You Can't get to World Class on Half-A$$" (tm) and have to commit to real, sustainable improvements to really impact the triple bottom line effectively. It eschews "projects" and "programs" in favor of cultural change such that everyone in the organization has direct line of sight to the customer and is empowered to deliver maximum value in their own role. 


Michael Meehan, CMRP, CRL

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