4 Ways to Achieve Operational Excellence in the New Year
Executives and shop-floor stakeholders have been pursuing operational excellence for decades, but a fraction of these industrial idealists have actually achieved it. In fact, just 32 percent of supervisors and one-quarter of employees believe that their organizations boast true operational excellence, according to research from Wrike.
Business leaders who have yet to cultivate workflows that adhere to the guiding principles of operational excellence – treating customers and employees with respect, embracing scientific thinking and emphasizing value creation, according to the Shingo Institute – can make progress toward this goal in 2019 by implementing these four workable strategies for achieving operational excellence:
1. Define operational excellence
Analysts for the Institute for Operational Excellence believe that manufacturing firms that have achieved operational excellence make it so that “each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.” This is a tall order, even for larger firms with significant financial resources and manpower. Even so, enterprises in any industry can set themselves up for success by unpacking the idea of operational excellence and mapping out how it might manifest on the shop floor. The IOE recommends leveraging operational flow charts, which help contributors at all levels visualize the progress of value creation. For instance, a chemicals manufacturing firm might dodge procurement issues by building flexibility into its supply chain and developing relationships with multiple raw materials providers, along with shipping and logistics contingencies to match.
2. Establish and monitor KPIs
Achieving sustained operational excellence is impossible without access to baseline performance data from your shop floor. Unfortunately, too many manufacturers either maintain poor data collection and analysis processes or forgo these essential activities altogether. Both actions have the same outcome: dysfunction, a deep lack of understanding, and an inability to strategize intelligently.
Businesses that want to avoid these end results and achieve operational excellence must focus on implementing fast and accurate measures for collecting data and assessing key performance indicators. Automation is important here, as manual methods almost always lead to cumbersome amounts of data entry, errors, and eventually abandonment. Best-in-class manufacturers that have managed to achieve operational excellence leverage automated KPI-collection setups that deliver real-time intelligence to decision-makers, who, in turn, can address production roadblocks and move the operation forward in a timely manner.
3. Empower the employees
Sprinkled in among the more technical best practices included in the Shingo Institute’s guiding principles of operational excellence are some gentler strategies centered on cultivating effective leaders and executors – two key ingredients in an industry-leading manufacturing enterprise.
Principle No. 1, which advises firms to respect workers by empowering them through professional development initiatives, is perhaps the most important. When employees feel empowered and engaged, they take ownership of their work and pursue individual excellence, which contributes to the organization as a whole. However, many businesses struggle in this area. In fact, a mere 34 percent of American workers say they are engaged on the job, according to research from Gallup. Worse yet, the manufacturing sector ranks at the bottom for employee happiness, analysts for TINYpulse found. Companies must overcome these obstacles to achieve operational excellence, which means investing in training programs and other initiatives designed to keep key shop-floor contributors engaged and focused on driving value.
4. Facilitate continuous improvement
Operational excellence is not the end all be all. What matters more is continuing forward with augmentation and understanding that various internal and external variables can easily knock previously rock-solid processes off course, which can cause significant issues that inhibit value creation and drag down the bottom line. Continuous improvement is the engine that drives sustained success. Top performers in the industrial sector facilitate this never-ending search for betterment by deploying risk identification and mitigation methodologies, which make it easier for shop-floor stakeholders to spot burgeoning problems and develop upgraded processes to address them. For example, an automotive manufacturer with access to strong asset management processes – staples of organizations with effective continuous improvement workflows – can identify small mechanical kinks before they devolve into downtime-causing catastrophes that wreck productivity.
Businesses in the manufacturing space can move closer to achieving operational excellence by adopting these impactful best practices. Of course, executing these strategies at scale might prove difficult for some. Here at USC Consulting Group, we have been helping manufacturers optimize their operations for decades, leveraging proven techniques and tools that accelerate change and lay the foundation for growth.
Contact us today to learn more about our work in the manufacturing arena and how we can help your firm pursue operational excellence in 2019.