17.05.2017

A Conversation about Operational Excellence - What on Earth is it?

A Conversation about “Operational Excellence” (OpEx) - What on Earth is it?

“The point at which — Each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.” - Institute for Operational Excellence

“Operational Excellence is a state of readiness attained as the efforts throughout the enterprise reach a state of alignment for pursuing its strategies; where the corporate culture is committed to the continuous and deliberate improvement of company performance AND the circumstances of those who work there – and is a precursor to becoming a high-performance organization.”
– Joseph F Paris Jr

Great words. So, what does this mean for me, and why should I be bothered?

The fact is that there is no agreed definition, just as there was no agreed definition of “World Class” before it. This is primarily due to the diversity of businesses that the definition is attempting to cover. Frequently what is important to a small, locally operating, discrete manufacturer is significantly different to a multi-national, capital intensive, corporation with extended supply chains.

And there’s the rub, what OpEx means to your business has essentially to be defined by you and your colleagues, understanding your particular circumstances, the maturity of your business, your customers and competitors.

This is likely to take a lot of thought, a lot of discussion and it’s not inconceivable that there will be conflicting viewpoints reflecting the different facets of the organisation. However, if you’re going to be excellent at anything, it’s a good starting point to have the team aligned and seeing at least a similar “big picture”.

Of course, there are clues to what might be important and there are commonalities which are relevant across nearly all businesses – not many survive without high levels of customer satisfaction, (On Time - In Full performance, Customer Complaints), few realise their full potential without considering how to maximise their assets (OEE) and that performance with sustainability is difficult without people, their knowledge, their creativity and support. This is a far from exhaustive list of clues – licence to operate (SHE, Quality Standards) must be included amongst many others. Once again, the relevance will depend on the particular circumstances of a business, thankfully Nuclear Recycling operates within a different set of safety regulations to a French Haute Couture House.

And then there’s Culture, what’s the OpEx culture?

Take a step back, what’s culture? I’m old enough to remember Peters and Waterman’s (no not Stock Aitken Waterman) journey in search of excellence when in business, coat stands and office colours were considered “culture”! We may have moved a long way in our understanding since the 1980s, but do we have a common understanding among colleagues of what we mean by culture. Perhaps more importantly how culture and peoples’ behaviours affect the businesses ability to perform. There’s the rub again - what OpEx culture and values means to your business has essentially to be defined by you and your colleagues.

Sounds like a lot of work, so Why Bother?

I’ve been privileged to see and work within many different operations. The ones that I would class as being excellent or approaching excellence have defining features. They are pleasant places to work, people turn up to meetings on time and their stress is a good stress, it’s about how to improve, not how to excuse the last late delivery or the last customer complaint. And here’s the final rub, if you and your colleagues define OpEx for your business, your circumstances, you’ll pull the right levers and sustainably increase profitability, which in this turbulent environment is as close as it gets to increasing the probability of success.

If you’d like to continue or add to this conversation please contact
Mike Johnson.
0788 5524 208

I am a seasoned Consultant with 16 years' experience in delivering results through diagnosis, planning and execution across a range of industries. My career path has been though Engineering…

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