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Why Operational Excellence (OE) Matters

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Organizations must manage their operations with greater efficiency in order to continue to provide high level of service to their customers at reduced costs. The business environment is very competitive – if organizations and managers continue doing what they have done in the past, organizations may not survive! Companies have started preparing for a year that is unknown for the business community. Some companies are taking drastic changes as to reduce their overall costs & some are taking planned measures. However companies who will put operational excellence on their agenda now are the ones who will be successful in the longer run.

Improve or Perish is the harsh reality!

Operational Excellence for Business Excellence

Operational Excellence for Business Excellence is the alternative strategy which will help organizations to unlock high business performance in difficult times. The best way going ahead is to be operationally fit all the time.

What is Operational Excellence?

Operational Excellence…it is DOING your DO Well! Infact in the PDCA cycle, Operational Excellence covers DCA, while P is the typical strategy part. We have innumerable examples of great strategies failing due to poor execution (of course the reverse happens too!). Irrespective of the size of the business or the industry it belongs to, OE is mission critical.

Often times, it is a pity that Operations is given a step motherly treatment. Strategy is the leaders domain! It is seen as enriching, something that nourishes the visionary instincts inside the CEO or senior managers. As soon the strategy is set; operations is often left to the ‘boys’ below to tackle! In other words operations is seen as trivial, not so engaging or inspiring! But success lies in the details, it lies in ‘doing’ your plans well! I am of the firm opinion that even simple plans,  executed with minimum waste delivers excellence!

Operational Excellence is not rocket science. It is about identifying undesirable elements from across the processes…which manifest as Waste and Variation. Waste in the form on rework, over processing, waiting, unnecessary motion and such others, results in broken processes. Broken processes can’t deliver products or services on time or in full. On the other hand processes variations results in costly errors or at times in total failure!

OE is our challenge and opportunity! We often know what to do, we often have great policies and plans, but we fail when it is time to put plans into action.

How can an organization achieve Operational Excellence?

True organizational transformation happen when the very bones…the skeletal structure is challenged and changed. When old paradigms and structures are questioned and replaced when needed. One can’t fool one self or others by mere ‘dressing up’! Sadly, often time, this is the case within many organizations who adopt LEAN/ 6 Sigma or any other transformation approach. Especially this applies to manufacturing or transformation related to operations as in LEAN/ LEAN Sigma or similar implementation.

Often organizations get started with tools like 5s, SMED, AM, Cellular Layouts etc, these  are tools that are launched and implemented with encouraging results, but many a times the efforts start and end with these tools. These tools are a means to an end. The end being Sustainable Growth and Profits!

NEVER ever can these disjointed, tool focused approach cannot be considered as organizational transformation! We do get enthused by book like The Toyota Way, which does offer more than a peep into Toyota’s culture transformation under way since some many decades (they say it is still work in progress! Kaizen!). But not many of us are not able to appreciate the deeper organization cultural/ habits/ beliefs which drives everything else. Our chairman Sensei Imai san says – true Kaizen is…Everyday, Everyone, Everywhere Kaizen ….continual improvement. It is not few people, few days, few places ….driving Kaizen!

While tools drive improvements, it is how one builds the underlying cultural transformation that is the key. From the Kaizen Management System perspective, culture is an outcome that comes by staying focused on three key elements: (a) system & model for change within the organization (b) building skills / capability across the board to learn & drive change (c) coupled with setting clear goals, an audit mechanism linked to performance management. It is this judicious combination of these three elements that powers true transformation, which in turn, powers sustenance of a Kaizen culture within any organization.

As one perfects the tools of change, one should not loose sight on the cultural aspects as mentioned above. There is no meaning in fooling ourselves or other stake holders, by calling a ‘dressed up’ chimp as a homo sapiens! The message is clear….apply tools, but address the culture!

In Imai san’s words….LEAN or 6 Sigma is the outcome, whereas Kaizen is the process that drives these outcomes!

Why OE?

This will results in two benefits:

–          Business Benefit– Better Flow of production, thus Less Inventories, and On Time In Full Error Free Deliveries.

–          Impact on Culture – Improved Discipline and higher Engagement of People in Company   Wide Efficiency Improvements 

Author: Kaizen Institute - India!

Kaizen Institute – India is part of the Global Kaizen Institute operations. Kaizen Institute was established by Sensei Masaaki Imai, the GURU of Kaizen. He wrote the 1st book 28 yrs ago and that is when it all started . We operate in 30+ countries today and have over 400+ coaches helping more then 600 organizations Learn, Apply, Sustain – Kaizen/ Operational Excellence. In India we have two physical offices – Pune & Ahmedabad and 27 coaches in all.

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