How to achieve operational excellence: 5-step guide
Are you looking to improve efficiencies and combat high costs?
Operational Excellence enables us to do that.
In this article, you’ll learn how to achieve Operational Excellence for your organization in 5 steps.
Let’s dive in.
What is Operational Excellence, and why is it a powerful strategy?
“There is nothing so useless as doing efficiently that which should not be done at all.”
First, let’s define Operational Excellence.
Operational Excellence is a business strategy and mindset that emphasizes continuous improvement, involving leaders and frontline staff to deliver the best customer value.
By improving your efficiency in operations, you will:
Reduces costs, defects, delays, waiting time, inventory, and staff movement.
Better business outcomes.
Cut redundancies.
Increase staffing capacity and productivity
What makes Operational Excellence so successful are the two foundational pillars.
Respect for the people.
Kaizen - continuous improvement culture.
The people doing the work are the experts. The success stems from their collaboration in anticipating and preventing problems. They are the first to identify problems and the first to come up with ideas to improve. Having them solve the problems is showing respect.
“Starting with the people starts the culture of continuous improvement. ”
Now that you understand why operational excellence is powerful for your organization.
Let's break down the 5-steps. These 5-steps are the five lean principles to guide you through your transformation.
Step 1: Specify Value
First, look at the process from your customers ' perspective. Ignore the existing technologies and eliminate anything that does not hold value.
Ask what would be valuable to them. Often, I see the value created by technical staff where the focus is more on what is beneficial for the process than on the value it provides to the customer.
Ask, what would they value most? Think of the outcomes.
Form a clear view from the consumer's perspective of what is needed.
Now that you have specified the value. In the next step, you can eliminate waste (Muda) and identify the value stream.
Step 2: Identify The Value Stream
Next, identify all the specific actions required for the service.
Map the process to identify the value, root causes of pain points, and inefficiencies. And then remove anything that is unnecessary waste. This will include both informational and physical tasks.
Examples of waste (muda):
Information forms – asking the same questions.
System incompatibility causes errors.
Manual rechecks.
Workarounds.
When mapping out the process, ask yourself these three questions:
What is the process step?
How long did that step take?
Who touches this process step?
This will help you optimize for the next step.
Step 3: Make The Process And Value Flow
In this step, we'll discuss how to flow the remaining value. That way, the information and the customer flow smoothly through the process.
With steps 1 and 2, you identified the value and mapped the process, and timed each step. You can now see the areas that are taking the longest and where backups are occurring.
The fastest way to see results is by avoiding the batch-and-queue model. Batching is what is causing bottlenecks. One area will always be faster than another, causing backups and long wait times. The pressure to catch up opens the door for shortcuts.
Rearrange the process to achieve a single-piece flow. This will cut your wait times in half, and the entire process flows smoothly for both customers and the teams involved.
Reduce unnecessary staff, supply, and equipment movement. This saves time, reduces the risk of injury, and enhances the quality of service.
And standardize the work to reduce variation.
Step 4: Create Pull
Now, let’s discuss how to let customers pull services versus pushing them onto customers.
The traditional push system has excess work in progress (WIP) waiting. However, the problem with this approach is that it produces more inventory than needed, leads to defects, and results in staff waiting around. This all adds unnecessary costs.
But when you let the customers pull the services. The necessary information, people, and supplies are pulled at the right time. You can better control inventories, free up staffing capacity, and lower costs.
Step 5: Pursue Perfection
The final step is to pursue perfection.
As you improve, you will see another area to improve. Your people will start to see Muda and find ways to take it out daily.
Empowering employees is crucial in creating a culture of continuous improvement. They are the experts in their work and are best suited to identify problems and devise solutions. Encourage them to share their ideas for improvement, which is the key to success.
As you apply these steps and focus on the foundational pillars. You will begin to achieve operational excellence for your organization.
Getting personalized help to achieve operational excellence
If you want help achieving these results for your organization, I offer Operational Excellence consulting services to meet you where you are.
