What is Operational Excellence?

January 08th, 2016

Tags: Operations Improvement, operational excellence

There are many opinions for the definition and even more related on how to acheive operations excellence. Let's start with Webster's Dictionary and take it from there.

  • Operation: A process of a practical or mechanical nature.
  • Operational: Ready to execute
  • Excellence: The state of excelling; superiority. An excellent quality or feature.

To summarize the meaning of Operational Excellence, the following should suffice.

  • Practical processes that execute with superior quality.

With that defintion how do you tell if your organization is striving for or has achieved operational excellence? The answer lies in measurements. Performance measures will determine if the process is executing with superior quality. Practicality is determined by the process meeting a functional requirement for the creation of a product or delivery of a service. Quality is perceived by the customer and is related to form, fit, and function. This is all beginning to sound a bit like circular logic.

Practical ties directly to doing the minimum that meets all form, fit, and function required by the customer, or no wasted efforts. This can be measured. Quality can be measured, but requires Operational Definitions with regard to the meanings of form, fit, and function.

What about quantity and frequency of delivery? That can be measured, but who sets the drumbeat? Well, it is driven by customer demand for the product or the service. Once again everything gets back to measurements, performance measurements or metrics. Just where do those come from? The metrics surely aren't all financial, but to meet business goals and objectives they better have linkages to the financials.

Before an organization goes off on a campaign of Lean, Six Sigma, or Lean Six Sigma there better be a good idea about what to measure. The baseline performance that is measured identifies where these programs should start their attack to achieve the dramatic improvements that potentially can be had. The place to start is with Performance Measurement and Management.

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