Operational Excellence (OpEx): 7 Checks
Operational Excellence (OpEx), what does that mean, exactly? Originally, OpEx used to be seen as a way to supply standard […]
Operational Excellence (OpEx), what does that mean, exactly? Originally, OpEx used to be seen as a way to supply standard products and services at the lowest cost (or at the highest efficiency)(see Treacy & Wiersema, 1995), but this concept is considerably broader nowadays. (There is a general consensus that) Operation Excellence revolves around reliably and timely developing, realizing, and supplying the proper products and services, which achieves the most proper customer value, at the lowest integral costs possible.
Right now, some of you are probably thinking: this doesn’t apply to us, does it? Our sales results are high and our margins are even better, so why would we be concerned?
As long as the trend looks set to continue, many organizations won’t put the improvement and preservation of efficiency on top of the agenda, because everything seems to go well…
A wind in the sails is easy for everybody, but, unfortunately, SCEX has experienced multiple times that every company’s turn will come to sail against that strong wind one day. If you want your company to keep on getting those astonishing high EBITDA grades, then don’t wait for the wind to change and start now to make OpEx a strategic choice within your organization. This will make you “faster, cheaper, and more agile”, and thus enables you to serve clients better.
Whenever you search for Operational Excellence on Amazone.com, you’ll receive over 214 different books, but we believe that the following seven OpEx Checks will enable you to get on track as fast as possible.
Good luck! If you’d like to receive more information or assistance, we (www.scex.nl) are always happy to come speak at your company.
Do we still offer added value to our customers and in which way? Costumer value is highly dynamic, therefore it is wise to regularly ask for their feedback to design their desired products and services as well as possible. Every non-value-adding activity could be terminated. A great example of this are fast-paced shipments; one customer may find more value in this than others. Therefore, Focus On Customer Value will always be at number one.
What’s the exact goal? Every employer within a company should know their vision and mission, and everyone should obviously be engaging with the same goal. It is important to measure this continuously in order to know if you work towards or away from this goal. This is not a one time thing, it should become a process that lives within your company. This will bring several changes which many may not like at first because getting out of your comfort zone can be difficult. Therefore, SMARTER KPI’S are important to monitor whether everyone works as agreed. (Specific-Measurable-Achievable-Time phased-Explainable-Relative-Key Performance Indicators)
Everything revolves around motivated and skilled people who believe in their company’s ambitions and together aim to achieve a mutual goal. Development of their skills and talent are very important and the manager plays a supportive role in this. At all times, the manager is seen as a role model who always leads his people the way. As manager, you’d like to surround yourself with people who are better or could be better than you. These people will challenge you as a manager to achieve that mutual goal. This “First time Right” is in these people’s veins.
Teaming up requires commitment from every team member. Everyone needs to make effort in order to create team spirit. Team players are able to make a difference. A successful team is capable of performing their tasks quickly and effectively, even under a great pressure. Therefore, the right mentality is everything when it comes to making teams. Teaming up boosts friendship and brings positive energy into the group. No more living within your own bubble or constantly blaming everyone else. Cooperation, focus, inspiration, respect, and encouragement of creativity are important success-factors.
It is important for a company to be carefully and consistently organized. Transparent agreements about roles, tools, and the method of working should be arranged in order to realize uniformity and trustworthiness. Pay attention though, we are not talking about thick procedure folders, but about to help people in finding a structured view on work and improvement from there. Thus, standards are the basis for further improvement. A convenient tool for this could be “5S” which is a method focused on improving an organization with the workplace as starting point.
Kaizen simply means ‘continuous improvement’ and is seen as an organized usage of common sense to cut costs, increase quality, reduce delivery times, and boost customer satisfaction. Kaizen is not a step-by-step plan or model, it’s a whole culture. This could be pretty difficult when you’d like to combine standardizing and mutualizing goals, while simultaneously having the courage to adapt when necessary.
Focusing on individual principles is totally fine, as long as you bear ‘The Big Picture’ in mind. An organization can only become successful when all of these checks are used. In this way, we are able to create an excellent organization which can successfully sail against every strong wind on sea.