Operational Excellence (OE) is a general term used to define an organization’s commitment to reinvest in itself. There is no industry standard definition, and thus the programs that support OE vary considerably. Different methodologies promote different approaches to work, training, and governance. There are common themes, however, that apply to all OE programs (OEPs). These themes provide a consistent definition that is used throughout this site’s content. A well-formed OEP will have the following characteristics:
An OEP exists to improve and ensure organizational performance over time. As new services are created, new systems implemented, and costs are managed, an OEP exists to maximize the value from this work and minimize the chance of future breakdowns. An OEP’s scope can be limited, such as focusing on cost savings, but fully realized OEPs ensure value from all work that the organization undertakes.
An OEP ensures value by creating a consistent focus on how value is created. It promotes a focus on the customer, measuring results, and eliminating waste. To successfully do this, this perspective must be continually applied. It can’t be event driven, or the organization becomes subject to failures between events. To ensure a continual application of these concepts, they are embed in the organization’s culture.
An OEP creates expertise in an organization. Members learn and become expert on the tools and methods required to meet the OEP’s goals. Training methods and support will vary, but an OEP will have limited success without a formal capability development component.
An OEP requires operational accountability. Traditional management approaches create functional silos. Managers are responsible for the work of their people, but no one is responsible for the work across functions. An OEP creates an additional management layer focused on how work gets done.
An OEP specifically assigns resources to operational improvement. Resource allocation will include sponsoring improvement teams, improvement events, and securing a percentage of employee’s time. An OEP will also have a budget for dedicated resources and implementing small to medium size process changes.
An OEP promotes the concepts of continuous improvement and process redesign, and provides a mechanism for realizing these concepts in the organization. An OEP isn’t just a project, but is an on-going program that drives on-going results in the organization.
An OEP supports the continual learning and growth of the organization. This can’t happen if people can’t grow and learn from the work of others. Without knowledge management, documents quickly become stale and solved problems become reoccurring problems. The degree of sophistication of the solution may vary, but a usable knowledge repository and/or process must exist.
Operational Excellence will mean something different for each organization, so no two OEPs are exactly alike. Many OEPs are implementations of popular Process Improvement Methodologies, like Six Sigma and Lean. Others are related to ERP software implementations and their ongoing support. Organizations will use different labels to identify their program, including Process Excellence, Business Excellence, Best-in-Class, and World Class.
The common theme of OEPs is striving for the continual improvement of the organization. An OEP will emphasize the organization’s desired culture, and virtually all OEPs emphasize the importance of the customer and metric-based performance management. A well formulated OEP will subscribe to the characteristics outlined above, and if a characteristic is missing then either the program isn’t really an OEP or it indicates a potential opportunity to dramatically improve the program.
Learn how popular Quality and Process Improvement Methods support OE, or review program roles and how they fit into the structure of OEPs.
Poet-Net is designed to support any size Operational Excellence Program. It is methodology agnostic, focusing on proven best practices and allowing organizations to set their level of engagement. We provide tools to support large improvement projects and a knowledge management solution that allows cost effective training and continuous improvement efforts.
One of the challenges with starting any OEP is the upfront costs and resource commitment. Training, full-time staff, and consulting costs can add up quickly. The Poet-Net solution allows a program leader to engage his or her organization at a fraction of the cost of a single FTE, and then grow the OEP as employees gain experience with the content and tools provided.