Every Company’s Operational Excellence Journey Is Similar—But Different

Competition has reached unprecedented levels for manufacturing organizations. Spurred on by global competition, the complexity of global supply chains, international regulatory issues, the speed of new product introduction cycles, and increasing customer demands, leading companies today are being forced to accelerate their journeys toward their visions of optimized operations so they can begin realizing them today.

While individual strategic objectives and challenges that companies experience may vary significantly, the initial steps in facing them do not. Regardless of focus, each pursuit of Operational Excellence—effectively optimizing people, process, and supporting technology resources—first requires adopting a mindset of Continuous Improvement and the needed cultural adjustments toward increased collaboration across contributing departments across the business. Whatever problems need to be tackled, a team effort is required, with information clearly and efficiently communicated throughout to all relevant stakeholders.

In addition, all Operational Excellence initiatives also require some target, combination of metrics, or other process maturity yardstick to effectively measure progress and push momentum forward. And once these culture and process related initiatives have begun, Operational Excellence journeys are then typically accelerated and sustained using the appropriate supporting technology.

To state simply, every Operational Excellence initiative starts with critical similarities, including:

  • Coordination across people, process and technology
  • Continuous improvement approach and mentality
  • Measurement and targets to drive action and results
  • Increased levels of team collaboration
  • Sustained and accelerated by technology

But this is where similarities usually end. A company’s strategic objectives, challenges, and Key Performance Indicators (KPIs) are highly dependent on industry, specific business situation, and where it currently finds itself along its unique Operational Excellence journey.

Quality Is a Key Component of Many Operational Excellence Journeys

In our most recent Manufacturing Operations Management survey, respondents were asked to choose their top 3 strategic objectives in operations. The list to choose from was long, but below are the top 5 selected by respondents. Interestingly, there was quite a bit of variation by industry groupings of Process, Discrete, Hybrid, Food & Beverage/Consumer Packaged Goods and Life Sciences. However, through all of these manufacturing industry segments, ensuring consistent product quality was the top strategic objective, followed by increasing production capacity. It should also be noted that for specific industry groupings, getting new products to market faster and ensuring regulatory compliance were also top objectives.

Top 5 Strategic Objectives

Given that product quality was one of the top strategic objectives for so many companies surveyed, it is not surprising that so many companies today focus on quality as a critical component of both the supporting management systems and software applications. In the same survey, when looking at the use of management systems and technology, we saw quality management bubbling to the top again.

Both ISO 9000/9001 and Six Sigma are specifically focused on quality and are two of the three most broadly adopted management systems across industries today. In each case they provide a set of measurement, continuous improvement, variability reduction, and accountability tools to ensure quality is being addressed in operations, and are a critical component of a company’s overall Operational Excellence program.

Top 5 Management Systems

Technology Adoption

When it comes to the technology being adopted by companies successful in managing their production operations, again we see quality bubble to the top. Quality Management software is the most widely adopted software application and helps companies manage quality processes like NC/CAPA, Audits, and Supplier Quality. It is also an important tool for managing in-line and at-line testing in manufacturing processes while tracking the variability of processes over time for continuous improvement.

Operational Excellence Journey Differences

Clearly not every company approaches Operational Excellence with the same needs or goals and this manifests itself into important differences, including:

  • Areas of focus that vary by industry and specific business situation
  • Different associated goals, objectives, and KPI targets
  • Best processes and programs to utilize in order to meet the goals and objectives
  • Organizational capabilities and available talent
  • Technology strategy dependent on existing technology infrastructure and future needs

However, once a company chooses to focus on a particular critical area for improvement like Quality Management, it is important that the initiative is supported with the necessary people, process, and technology capabilities and resources. In the next blog post of this series, we will examine the strategies in selecting the right approach and how that can increase responsiveness to customer order demands.

We will also further discuss many of these critical people, process, and technology issues in the upcoming LNS Research webcast: “How to Accelerate Your Operational Excellence Journey,” on January 29, 2014.