What is operational excellence? And how is it achieved?

01/04/2023

It is about making sure that every process in the supply chain is as efficient and effective as possible and making sure that everything is working as it should, every time. That is, making sure that all the processes in place are working as well as possible and that they are designed in such a way that they can be improved over time.

Operational excellence is based on creating a way of working consistent with the purpose (understood as the organization’s ultimate goal or purpose) and goals of an organization. It is not just about achieving specific metrics, but rather a set of behaviors, mindsets and daily practices that drive continuous improvement toward the organization’s reason for being.

Once an organization has established a solid foundation of operational excellence, it can leverage it to promote sustainable growth and higher levels of performance.

Operational excellence is the foundation for any organization that wants to achieve “great company” status, not so much because of its size but because of the level of recognition it has achieved in the context in which it operates. It is not something that can be generated overnight, but rather a journey with many small milestones along the way.

Operational excellence is about doing things right the first time and creating a culture of continuous improvement. It is about working together to achieve goals, reduce errors, improve efficiency, and increase productivity. Operational excellence is the discipline of creating an organization that can reliably and consistently deliver on its promises.

It requires leadership that sets a clear strategic direction, which then must be executed by every person on the team who deals with customers or touches internal processes. It consists of a company’s ability to execute its strategy and achieve its goals. However, it is not only about having the right strategy, but also about making sure that the decisions made bring the desired results.

Take the case of small and medium-sized enterprises (SMEs) that struggle to find a balance between people and technology. What were once simple machine-handling activities are now an intricate web of interdependent processes involving human and technological elements. At the center of this puzzle is operational excellence: the ability to manage processes with a high degree of efficiency and consistency.

Operational excellence comes from defining operational objectives and creating a plan to achieve them. The next step is the implementation of the plan, with resource allocation, prioritization, and measurement of results. Finally, it is necessary to modify the approach as needed and repeat the process until the desired result is achieved.

To achieve operational excellence, it is necessary to have a clear vision of how the company operates. Leaders must then be able to communicate this vision to all members of the organization and hold them accountable for achieving it.

Operational excellence is being able to consistently deliver value to customers while reducing costs.

It is about making sure that every process in the supply chain is as efficient and effective as possible and making sure that everything is working as it should, every time. That is, making sure that all the processes in place are working as well as possible and that they are designed in such a way that they can be improved over time.

But operational excellence is not just about reducing costs or improving quality. It is, fundamentally, about creating a performance-oriented culture focused on continuous improvement and innovation and committed to high standards of customer service.