“Operational excellence remains a greater imperative than most companies and most executives acknowledge.” - Gene Tyndall in Supercharging Supply Chains (1998)
Wikipedia defines operational excellence as “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.” In today’s competitive market, operational excellence is critical for any enterprise or organization to grow profitably.
A keen focus on operations excellence helps companies to achieve sustainable business performance, which in turn brings forth a sustainable competitive advantage. However, operational excellence is not to be confused with business strategy, as it is not a strategy but a means to implement business strategies successfully.
An enterprise or organization can be considered to be on the path of achieving operational excellence if it shows:
a) Continuous progress and development over time
b) Sustained advancement in all areas of importance
c) Improved performance that is on par or better than the most prominent organizations
In the past, operational excellence was confined to the areas of cost, quality and delivery. As time passed though, new players came onto the scene, regulations became more stringent, the climate became more competitive, and, due to the ever-changing nature of the industry, the areas of importance also underwent changes. Apart from cost, delivery and quality, the other important areas that attained great importance include risk mitigation, productivity, adaptability and rapidity.
How to Achieve Operational Excellence
Any enterprise or organization can achieve operational excellence if and only if they are clear not only about their objectives but also about the methods or tactics employed to realize those objectives. Let us look at the approach that needs to be employed to achieve operational excellence.
a) Visualize and Strategize- At first the enterprise or organization needs to visualize the kind of business entity that it wants to be in the future and then strategize a course of action to make that vision a reality. However, this plan of action needs to be constantly reviewed and evaluated for any scope of improvement.
b) Assess and Evaluate- Secondly, the enterprise needs to assess its present state, which includes its work processes, capabilities of its workforce, management systems and so on. Such an evaluation helps in enhancing the plan of action to achieve operational excellence.
c) Improve Work Efficiency- Thirdly improve work efficiency through coordination and cooperation. The entire enterprise and organization should function as a team and work towards making the transition smooth and successful. For that to happen, enterprises and organizations need to eliminate the concept of creating or functioning as multiple entities.
However, with the emergence of operational excellence consulting firms today, it has become easy for organizations and enterprises to achieve operations excellence. As these firms provide all kinds of services and solutions to enhance operational efficiency, enterprises need not think hard about the methods to be employed to align their business goals and technology innovation.