Operational excellence

Operational excellence

Operational Excellence 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.

Operational Excellence stresses the need to continually improve by promoting a stronger teamwork atmosphere. Safety and quality improvements for employees and customers lead towards becoming a better enterprise.

The continuous improvement is not only about improving HR quality, but also it is about the processes and standards improvement. You can not improve if you do not measure. Metrics and KPI definition for any process is of pivotal importance. Once a metric value can be calculated, from the data coming directly from the process crucial measurement points, it should be logged. Then continuous improvement means continuously improving on existing metrics and KPIs values.

Organization should also be improved. OE'S main objective is to reduce operation cost and wastes, without affecting quality, time delivery and cost of products and services one has to offer.

"Toyota has turned operational excellence into a strategic weapon. This operational excellence is based in part on tools and quality improvement methods made famous by Toyota in the manufacturing world, such as just-in-time, kaizen, one-piece flow, jidoka, and heijunka." [1]


In 2010 the Opexgroep (a Dutch company) introduced Operational Excellence as the highest possible standard for reliable products and services. In an era of widespread corporate fraud, deceit and crisis, they state that a company’s management of quality and performance needs to be brought back to serving the interests of the client. Their “Operational Excellence Framework” shows how the widely accepted interpretation of operational excellence as a way of “letting the interests of stakeholders prevail” is based on last century’s paradigms. In the modern organization this is replaced by models, methods and instruments that re-acknowledge the need for reliable, honest products and services which provide genuine customer value. They call this Reliability Centered Management (RCM). [2]


Since 2009 Horváth & Partners Management Consultants conduct an annual survey asking international financial service providers about their implementation and trends regarding topics of Operational Excellence. Therefore they developed the Operational Excellence Framework in cooperation with the Strascheg Institute for Innovation and Entrepreneurship at the European Business School in Oestrich-Winkel. [3]


Notes

  1. ^ Liker, J. 2004. The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer.
  2. ^ The Operational Excellence Framework 2010 http://www.opexgroep.nl/en/operational_excellence/operational_excellence/
  3. ^ Operational Excellence Framework by Horváth & Partners Management Consultants http://www2.horvath-partners.com/Operational-Excellence-in-Financial-Indu.1012.0.html

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