The term operational excellence was thrust into the global manufacturing landscape during the ‘quality crisis’ post-second world war. Having formed the bedrock of the ultra-quality products of Japanese organizations in the 1980s, it was swiftly adopted by the United States and their European allies seeking to wrestle back some market share. But what is operational excellence? In this article, we consider the term, its importance, and the outsized role Connected Worker platforms are playing in helping factories achieve operational excellence that lasts.
What is Operational Excellence?
There are several lenses through which operational excellence can be observed: culturally, in terms of material balance, and of course, the competition.
The culture of an operationally excellent organization is one deep-rooted in problem-solving, inclusive leadership, and collaboration. These cultural themes are normalized by consistently upskilling the workforce and empowering them with tools and technologies to quickly communicate and act proactively in resolving issues. In OpEx organizations, not only can workers see the flow of value to the customer, they are equipped to detect a break in flow and effectively solve the ‘breakage’ without calling out for managerial interventions.
Every stakeholder recognizes their role as a process leader and, having been empowered, can fulfil this role to the latter. The organization is forever interloped in a cycle of growth and development. And, continuous improvement is the norm.
Another prism through which operational excellence can be viewed is that of the input-output balance. Organizations that function excellently always seek to ‘lean’ their input – reducing it to as low as practically necessary and at the same time, maximize their output. It’s that efficiency – the ‘doing more with less’ philosophy – that has pioneered great manufacturing successes over the years. OPEX organizations have successfully mingled this efficiency with effectiveness and made the ensuing state natural to their companies.
Operational excellence can also be examined with reference to the competition. Here, operational excellence is construed as having ‘lower operational risks, lower operating costs, and increased revenue than the competition’. For a factory, this is evident in internal procedures, tools, and culture that outstrip everyone else in the industry. Soon enough, this internal excellence will translate to heightened perceptions externally (on the part of customers, competitors, and regulators), that quickly positions the manufacturer as an authority in their space.
The Operational Excellence Society defines operational excellence as:
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.
– OpEx Society
Case Study: Toyota
Through its Toyota production system, the company introduced revolutionary concepts such as lean (eliminating production wastes), ‘just in time’ (controlling process variability by creating items to meet demand), and early jidoka (in-built quality control) into the manufacturing space.
What they do
- They eschew fault-finding and instead focus their attention on improving the process
- Every worker can identify and solve problems
- They continually shed away redundant processes and employ lean principles for faster and more agile manufacturing.
- They monitor the internal production sequence to ensure that every activity delivers measurable value
Maximl’s 4 steps to achieve Operational Excellence
Cultivate a cultural change
Getting an organization to operational excellence is a structural approach that requires a top-down change in the work culture. To begin with, roles and responsibilities should be stated and the chain of command from problem-detection up until resolution should be clearly defined.
In manufacturing, workers who inhabit shop floors on the field, and understand the nitty-gritty of the production process, have a major role to play in delivering operational excellence.
Yes, the CEO is the leader (and as the leader, should lead by example!) but the employees should be no less involved or engaged. As an enterprise-wide venture, operational excellence requires inclusive leadership – actively encouraged and championed by the top management.
Empower your workers with digital solutions
Involving frontline workers in the journey to operational excellence sounds good in theory, but in practice, how will these workers actually play their role? And when they deduce that a process is ineffective or misaligned from the factory’s strategies, what can they do?
Problem-solving, along with inclusive leadership and collaboration, is one of the cultural themes of operational excellence. But remote field workers cannot solve problems if they do not have the tools to do so. They cannot act proactively if they have not been trained to do so, and they cannot collaborate with office-based managers if they do not have the platform to do so.
Many shop floors are coming to terms with this and have already begun empowering their workers with Connected Worker platforms – modern technology that allows workers to take an active role in delivering operational excellence to their factories.
Connected Worker platforms, with the real-time communication and collaboration capabilities it holds, eliminate the communication gap between on-field workers and stakeholders in remote locations. Also, they provide data feeds that allow workers to proactively detect problems, an information ‘storehouse’ from which they can (if necessary) search for solutions and collaboration mediums to guide them through resolution.
The platforms help organize visually appealing, engaging, (and utterly effective!) training that quickly conveys operational excellence to new employees, and fosters skill transfer – in so doing, reducing the seismic impact of losing legacy manufacturing workers.
For managers, it increases their visibility into field operations and enables them to eliminate manual instructions and procedures that dampen productivity.
See more: How a Connected Worker platform can help bridge silos in your organization
Measure, review, and repeat
Factories are advised to start out on the route to operational excellence with small-scale pilot programs. This way, progress can be monitored and the factory can actually measure the stage-by-stage effectiveness of the OpEx program. The results can then be reviewed allowing team leaders to make the necessary adjustments and implement these, even as the process is repeated.
The process is repeated?!
Yes, the very term operational excellence suggests that it’s never-ending. OpEx is a consistent, continuous, and relentless approach to improvement and does not stop. This is because already established standards, if unimproved, can quickly decline and slip into mediocre levels.
See more: A guide to implementing a Track and Trace system for your factory
Why operational excellence?
46% of manufacturers have established or plan to establish a strategic operational excellence group in 2014
Operational excellence saves cost by fostering an attitude of targeted investments and better decision-making. That is, assets, upon data-based considerations, are only utilized in processes that yield results and areas that are consistent with their strengths. The better asset utilization, in turn, will increase the quality of manufactured products and bolster profits up north.
In manufacturing, some areas that can be subjected to operational excellence include:
- Health and safety audit: Connected Worker platforms enable the rapid digitization of safety sheets, and SWPs – and facilitate a wider distribution of these materials. Moreover, for highly complex procedures, workers can benefit from AR/VR-assisted guidance or sit-in while specialized robots put in the hard yards.
See also: How digitalization helps stay compliant with OSHA’s 5 most cited standards
- Quality audits and traceability controls: Internal and external traceability systems, powered by IoT and data, can self-detect product defects during the production sequence. Where AI is unavailable, managers can monitor the internal data sets (to flag discrepancies) or install a track and trace system, so that if a defect is detected outside the plant, recalls can be targeted to only include the affected batches or lots.
See also: A definitive guide to implementing a track and trace system in your factory
- Equipment inspections: Using data provided by attached machine sensors, the equipment can be subjected to data-based predictive maintenance. Here, conditions are monitored in real-time to pre-empt maintenance and prevent asset breakdown.