The Core Principles of Operational Excellence

Operational excellence in manufacturing means adopting best practices, being dedicated to continuous improvement, engaging the process owners and utilizing the latest technology. This mindset in the workplace leads to accelerations in growth, improved productivity, and increased profitability.

In order for your organization to start practicing operational excellence, it’s important for your leadership team, and all employees, to first understand the core fundamentals.

Duggan Associates is credited with first pioneering the concept of operational excellence. The following eight principles will help guide your organization in the right direction.

Principle 1: Design Lean Value Streams

An end-to-end value stream flow needs to be created, which starts from the time an order is received and ends at the time it’s delivered to the customer. Information should be given to only one process in the value stream. The information then flows through each process from this one specific point. Since each process is connected, all materials will move only when necessary.

Principle 2: Make Lean Value Streams Flow

During this step, design goes from paper to performance. All employees should receive training on the new value stream, including its current state, the eight guidelines for flow, and how to apply and implement these guidelines. It’s important that the ultimate goal is teaching all employees the value of operational excellence for business growth.

Principle 3: Make Flow Visual

Once the flow process has been put into place, a visual representation should be put together as a reference tool for all employees to see. This way, it is clear how each process is connected to one another and the customer.

Principle 4: Create Standard Work for Flow

The next is applying the concept of standard work to the newly established flow. Standard work should be established between the processes themselves, targeting the connections that are made between them. This ultimately reduces variation and creates normalcy across the entire flow. This will allow for the product(s) to flow through the facility with velocity.

Principle 5: Make Abnormal Flow Visual

While every employee should know what normal flow looks like, it’s just as important to demonstrate abnormal flow. This way, everyone should be able to see abnormal flow just before it happens, and thus have a plan in place on how to correct it.

Principle 6: Create Standard Work for Abnormal Flow

Despite teaching employees how to adjust the flow and maintain it, eventually the flow will break down and will need to be put back on track. Be sure to establish exactly when management should step in. Furthermore, record the top responses from management so that when an issue arises, the employees in the flow can take action without seeking approval.

Principle 7: Have Employees in the Flow Improve the Flow

Once the flow is in place and being practiced, the level of performance should be maintained and continuously improved. Empower the operations side of the business to obtain a level of performance that contributes to business growth and strives for the correction application of improvement tools.

Principle 8: Perform Offense Activities

At the end of the day, operational excellence frees more time for management to put into growing the business vs. running operations. This is accomplished by reducing the amount of activities operations management does in relation to delivering products to customers. Now, these individuals can become part of the process that will turn your organization from a supplier to a solutions provider.

Catalyst Connection is proud to drive operational excellence within our own organization. We would be happy to guide your business towards achieving the same. If you’re interested in learning more about operational excellence best practices, reach out to our team.