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Home > Definition

Defining Operational Excellence

Operational Excellence – Defined
Kevin J. Duggan
Founder, Institute for Operational Excellence

Operational Excellence has not been an easy thing to define. The definition is vague at best. ‘Doing things right the first time’, ‘using the latest tools for problem solving’, ‘providing perfect quality at the right time and the right price.’ These all sound good, but absent from these definitions seems to be the practical side of what to do to accomplish this Nirvana.

Let’s start our definition by asking some tough questions, starting with continuous improvement. Companies have done continuous improvement efforts for years. Kazien events, accelerated work teams, six sigma projects, and many more CI programs have been around for quite a while. The tough question is: How do continuous improvement people know what to work on next?

The books Learning to See published by the Lean Enterprise Institute (www.lean.org) and Creating Mixed Model Value Streams published by Productivity Press (www.productivitypress.com), changed the way we thought about continuous improvement. Why? Because they answered the question, how do continuous improvement people know what to work on next by introducing the tool known as value stream mapping.

Here’s the next tough question. We have learned that lean is a never ending journey. It is about creating a culture that continuously seeks out and eliminates waste. The question is: Where will your lean journey take you?

The answer to this question will accelerate your lean journey tremendously. Organizations that know where they are going will simply get there faster.

The lean journey will take you to Operational Excellence. It’s that simple. That’s where you are going; that’s the direction in which you are heading if you are implementing lean. That’s the destination. The key is knowing what Operational Excellence is so you can see the sign posts along the way. Operational Excellence needs to be defined in a way that applies to the top executives as well as the operators producing the product. The definition should be simple and understandable so everyone knows what it means and what they can do in their position to contribute to building it. Here is the definition:

“Operational Excellence is when each and every employee can see the flow of value to the customer, and fix that flow before it breaks down”.

It’s that simple. Clear, concise, and applicable at all levels of the organization. The real key in Operational Excellence is to create self-healing value streams. Value streams that do not need a doctor (a.k.a. management) to stitch them up when they break down. The simply fix themselves and the flow resumes. The result of this is employees who create and maintain a lean flow, while management focuses on offense, or growing the business.

For more information on defining Operational Excellence or to read about companies who have applied these principles, go to the ’ARTICLES’ section of this website. The Institute for Operational Excellence offers a series of detailed classes on how to create Operational Excellence in your organization. We offer one day executive sessions to a full curriculum as well as hosting conferences for companies and their supply chains. For more information please contact us directly at info@instituteopex.org.