What Is Operational Excellence

What is operational excellence and the 4 steps to achieve it. Operational Excellence is simply excellently producing goods and services.
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✏️ Transcript of the Video
▶ What is operational excellence ?
to understand what operational excellence is, let's start with an example of what operational excellence is not.
- Air travel overbooked.
- Delivery of an incorrect or defective product.
- A car recall for safety concerns.
Starting from these statements you can understand what operational excellence is. In practice, it is excellently producing goods and services.
To achieve excellence, production processes must be constantly improved.
▶ Words of Shingo
Shigeo Shingo said: “There are four purposes for improvement: easier, better, faster, cheaper. These four goals appear in order of priority. "
Therefore, to achieve operational excellence, one must follow the path traced by Shingo.
Let's go into detail.
- Easier
A simpler process is adopted by all involved naturally. Nature naturally tends towards simpler paths, and since man is part of nature a simpler process is destined to be carried out without any particular control.
- Better
A better quality product is bound to be more successful in the long term.
A product or process that has better security will be perceived as of greater value.
- Faster
If a product is delivered quickly or a process is carried out in a shorter time, we are in the presence of operational excellence.
- Cheaper
A product or service that is carried out with effective and efficient use of resources is certainly less expensive. If this savings is reflected in the price, the customer will certainly be satisfied.
Therefore, to achieve operational excellence, a company needs to design and execute processes that must be constantly improved following the priorities mentioned by Shingo.
▶ People, Tools, Mindset, and Leadership
Furthermore, all people must be clear about what is important, what to do, when to take action, and what to do.
To achieve operational excellence you need to work to have the right tools and the right mindset.
In particular,
the company must know about Lean, Six Sigma, Design Thinking Theory of Constraints, etc.
On the other hand, to develop the right mindset, the leadership must encourage the right behaviors by observing the metrics, encouraging results, and rewarding.
Finally, it is essential to achieve operational excellence that all metrics from all departments involved are aligned consistently with the company's strategy.
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#operationalexcellence

[@vivekpavithran5933]

Great insight , Simple , powerful & spot on. Couldn't we also consider / add " Safer " into the excellence cycle. Easier, Better, Faster, Cheaper & Safer.

[@procesosindustrialesleanco2515]

I like the exposure. Thanks a lot. I take one of the things you mentioned. Reducing the time is one of the pathways to excellence. To me, leadtime is a real indicator of the degree of excellence

[@dave.F0X]

@ 0:34 My company seems to think the purposes for improvement are "cost, margin, profit and revenue". ;)

[@camgere]

The struggle between optimizing for customer value or business value. Cheapening a part up, so it isn't quite as good doesn't improve customer value, but it does improve business value. There is the old joke about "you can have it fast, cheap or good, pick any two" which roughly maps to the more businesslike Quality, Cost and Delivery.

[@arno-31]

Excellently producing goods and service? Doesn't matter what the value is of this product to the customer?

[@LeanVlog]

Thank you for your comment; indeed, I took customer value for granted. This video introduces some basic concepts of operational excellence, assuming that you already have a product that sells. It doesn't discuss product innovation to create greater value.