The 6 Components of Achieving Operational Excellence


Rock Creek Informatics (RCI) was founded by Dr. Guy Deloach as an Operational Excellence firm nearly 15 years ago to serve the business and industry needs in the Southeast Region of Tennessee and beyond. Over the years, RCI has grown and added other competencies and offerings, but at its core, our company is centered on helping organizations achieve operational excellence.


The Gemba Academy defines Operational Excellence (OPEX) as "a business strategy to develop the capabilities to excel in areas of flexibility, on-time delivery, quality and reliability while maintaining lower operational costs, thus increasing customer satisfaction and competitiveness."


In this post we will discuss 6 components needed to achieve OPEX:

  • Common Processes

  • Education

  • Performance Management & Benchmarking

  • Knowledge Management

  • LeanSigma

  • Leadership Commitment

Leadership Commitment

It is important for us to begin with the last component first, as it is the number one reason why most organizations fail in their OPEX efforts. The leadership of an organization must make the decision to lead their organization through the OPEX journey, and the first step in the process is to develop a OPEX vision statement. This statement serves as the goal to which the OPEX journey is moving towards. Without the leadership's commitment all OPEX endeavors will fall short and be unsustainable.


Common Practices

Once the leadership has developed and communicated his or her OPEX vision statement, the journey begins. However, this usually takes place years after the inception of the organization. Therefore, there are already processes in place (whether intentional or coincidental) and work being done every day. One of the key components of OPEX is to conduct a deep dive evaluation of each of these processes in order to develop and implement common key business processes. Where it would add value, the organization should seek to standardize work. In order for these efforts to be successful, individuals from the shop floor to the c-suite need to be involved in the development and implementation process. The development of benchmarking and the use of common language are vital to the sustainability of these common practices


"Common language means: consistent process and easy communication for the sharing of good ideas and practices."

Eduction

The next important component to achieving OPEX is that of education. People need to know what is expected from them on this journey and they must be trained in key OPEX competencies in order to meet the leadership's expectations. How each organization approaches their training programs will be varied, but it is important that each organization develops an intentional approach to how it educates employees. Many organizations have Learning Management Systems (LMS) in place that deliver a range of programs and activities across a variety of learning platforms, such as:

  • Instructor led classroom training

  • Instructor led virtual classroom and online coaching

  • Instructor led shop-floor training

  • Self-paced WEB-based training

  • Videos, Books, etc.

Leadership should have a working knowledge of lean principles, so it may be advantageous to begin the OPEX journey with LeanSigma Yellow or Green Belt Training. A basic understanding of lean principles will better equip leaders to provide quality coaching for their employees throughout the OPEX journey.


Performance Management & Benchmarking

The leadership's OPEX Vision Statement will inform how performance will be managed and how progress will be tracked through benchmarking. In essence, performance management and benchmarking is asking the question: How will we know that we are making progress towards our goal for OPEX? Therefore, the leadership team will develop a model that clearly illustrates and provides reference against practices and performance criteria consistent with leading edge companies. In turn, the leadership will use this model to conduct a self-assessment of his or her's organization. The results of this self-assessment will provide a Performance Gap Analysis which will serve as their future improvement plan - the "how are we going to get there" roadmap. This roadmap will involve drivers, key processes, and support processes that need to be improved in order to reach OPEX.


Knowledge Management

Throughout the OPEX process it is very important to decide on how you will capture, visualize, store, and communicate the information generated throughout. The organization will need to have an efficient process for capturing ideas, experiences, good practices, and learnings in order to rapidly share them across the organization. This information will then need to be turned into action items to enable the organization to achieve world class performance. In order to develop a sustainable culture of OPEX within an organization knowledge sharing and learning must be embedded into all business processes and ways of working.


LeanSigma

Finally, we get to the component that everyone thinks of when they hear about OPEX: LeanSigma. However, without the other four components in place, there will not exist a sustainable culture for improvement. This is the mistake many organizations make: send a number of employees to get Lean Training without the support of the other four components. LeanSigma tools and techniques (i.e., 5S, Value Stream Mapping, Problem Solving, etc.) are meant to be learned and applied within an organization that places the highest value on OPEX and that cultivates a culture for a continuous improvement mindset from the CEO down to the operator on the shop-floor.


"Leaders who send their workforce to LeanSigma training but do not cultivate an OPEX culture across their business, should not expect a return on investment."

OPEX is not achieved over night, and most certainly will not be achieved by only sending employees to training classes. Training is one component of a much larger system needed to achieve operational excellence. Leaders need to commit to the entire process if they expect to see a healthy return on investment. When implemented and sustained, OPEX will serve to satisfy both your workforce and your customers.


If you are a leader of an organization and see the value of this journey but do not have the internal resources or personal know-how to get started, please feel free to reach out to us for a free consultation at info@thinkrci.com. We are helping organizations across the country find success in their journey towards achieving operational excellence, and would consider it an honor to serve your organization as well.

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