A Look at Operational Excellence

Operational Excellence is a hot topic. Yet it's a challenge to define it, and an even bigger challenge to implement it. I thought it would be a good idea to have a closer, candid look at Operational Excellence.

Defining Operational Excellence

Operational Excellence is a philosophy devoted to making operations as efficient as possible, which implies reducing costs while maintaining or even improving quality of products/services.

Implementing Operational Excellence consists in defining and executing a systematic approach to drive an organization toward world-class execution by integrating Operational Excellence concepts, methods and tools into the organization's operating model.

Operational Excellence is deeply associated with concepts such as continuous improvement, doing things right the first time (“first time right”), producing high quality products/services at the right time and for the right price, and KPI’s.

Operational Excellence stresses the use of metrics and benchmarks in order to identify and assess improvements objectively.

Operational Excellence does not presume of any model, method or technique. Its implementation and the choice of models/methods/techniques greatly depend on the context.

By contrast, operational effectiveness focuses on “doing the right things” whereas Operational Excellence focuses on “doing things right”.

Standards

Several companies, mainly in consulting field, claim having a model for Operational Excellence. However, since Operational Excellence is essentially a philosophy, there is no consensus on its precise definition and no generally accepted model has emerged so far. The Shingo Model of the Shingo Prize for Operational Excellence would be the closest thing to a model.

Critics and pitfalls

• Operational Excellence is but a philosophy. Without a context (such as an actual organization facing specific challenges), it’s difficult to discuss. 
• Because Operational Excellence is so broad, it’s difficult to make it an objective as such. 

In the big picture

• Models aligned with operational excellence philosophy: CMMI, ISO 9000. 
• Methods and techniques that help achieve operational excellence (not exhaustive): Six Sigma, Lean, Value Stream Mapping.