OPERATIONAL EXCELLENCE

 

In the broadest sense, operational excellence involves making continuous improvements to a Company in order to achieve a competitive advantage. In doing so, companies maximize value for the customer as well as their own financial benefits. With operational excellence, companies develop efficient systems in which employees focus on fixing problems as soon as they arise. All employees have the information and authorization to solve problems affecting the business channels in which they work.

Freeing Managers' Time.

By solving problems, themselves, employees allow managers to focus on increasing the business rather than fixing problems. Managers are then free to focus on marketing, developing new ventures, improving product quality or other areas of priority. Additionally, if managers do not need to worry about fixing unexpected problems, they can schedule their time more effectively because such unexpected problems are less likely to interrupt their scheduled tasks.

Catching Problems Quickly.

When employees watch for problems they can fix and solve problems at their root, they can solve the problems as quickly as possible. Employees should know what actions to perform or have the authority to make a decision without consulting with their supervisor. This does not mean they will never discuss problems with the supervisor, but they will be able to solve many challenges on their own. Furthermore, catching problems quickly keeps problems from growing. Within this system, employees have access to a wealth of data to empower them to make wise decisions. Their empowered role also keeps them motivated and helps them feel they are a vital part of the Company.

Streamlined Processes Allow for Expansion.

The streamlined processes in companies using operational excellence make monitoring the systems easier. Such companies thrive on well-defined processes, rules and measurements that aim to make operations more efficient. Companies can more easily create new business centres or franchises when clear rules and methods are in place. This allows a Company to expand far more easily. For example, chain restaurants like McDonald's aim to achieve operational excellence by using the same processes in many different locations. In addition, training numerous employees becomes easier when a Company already has well-defined expectations.

Eliminating Waste.

A key component of operational excellence is leanness, which means avoiding waste by keeping the system functioning as efficiently as possible. Employees must strive to ensure that the parts of the system they are responsible for are not wasting resources. This in turn benefits the flow of value to the Company's customers. In addition, the employee's ability to maintain that flow and to fix it when it breaks down helps free management to focus on increasing the business.

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