Misplaced Pages

Operational excellence

Article snapshot taken from Wikipedia with creative commons attribution-sharealike license. Give it a read and then ask your questions in the chat. We can research this topic together.
(Redirected from Operational Excellence) Philosophy of business effectiveness
This article relies excessively on references to primary sources. Please improve this article by adding secondary or tertiary sources.
Find sources: "Operational excellence" – news · newspapers · books · scholar · JSTOR (October 2024) (Learn how and when to remove this message)

Operational Excellence (OE) is the systematic implementation of principles and tools designed to enhance organizational performance, and create a culture focused on continuous improvement. It is intended to enable employees to identify, deliver, and enhance the flow of value to customers. Common frameworks associated with operational excellence include: lean management and Six Sigma, which emphasize efficiency, waste reduction, and quality improvement. Organizations that adopt these practices may report increased customer satisfaction and operational efficiency.

Operational Excellence leverages earlier continuous improvement methodologies such as Lean Thinking, Six Sigma, OKAPI, and scientific management. The concept was introduced in the 1970s by Dr. Joseph M. Juran, who taught Japanese business leaders quality improvement methods. It gained prominence in the United States during the 1980s as a response to the competitive pressure from Japanese imports, leading to what some termed a "quality crisis".

Key Components of Operational Excellence

  • Customer Focus
  • Continuous Improvement
  • Standardization
  • Efficiency and Waste Reduction
  • Employee Engagement and Empowerment
  • Data-Driven Decision Making
  • Strategic Alignment

Models of Operational Excellence

The Juran Model

In the early 1970s, Dr. Joseph M. Juran was one of the few experts at the time who taught Japanese business leaders how to improve quality. As more companies began to adopt the methods of Juran, William Edwards Deming, and others, Toyota's Operational Excellence movement grew. In contemporary manufacturing, Operational Excellence employs a strategic approach to achieve lean operations.

According to Juran's Model, there are five key components fundamental to operational excellence:

The first component, an Integrated Management System (IMS), offers a framework of processes and standards that help define the organization's direction, identify potential risks, mitigate those risks, manage change, and ensure continuous improvement. A single integrated management system may reduce overlap, redundancy, and conflict. Early adopters of this practice include companies such as ExxonMobil and Chevron, which have implemented the Operations Integrity Management System (OIMS) and the Operations Excellence Management System (OEMS), respectively.

The second component, a culture of operational discipline, refers to the consistent adherence to established procedures and standards ensuring tasks are performed correctly and uniformly. This culture is based on five guiding principles derived from the practices of the United States Nuclear Navy. The guiding principles consist of integrity, a questioning attitude, level of knowledge, team backup, and formality. These principles define the expected behaviors of employees and explain how they contribute to achieving the goals and objectives of the organization.

The core components of the Juran Model for operational excellence are as follows:

  1. Understand Juran's guiding principles, which provide the foundation for operational excellence.
  2. Shift the organizational culture from viewing quality as a product attribute (often referred to as "little q") to recognizing it as a comprehensive customer experience (often referred to as "Big Q").
  3. Recognize when and how to involve leadership and the workforce to enhance performance.
  4. Establish an effective and efficient change infrastructure by utilizing appropriate tools and methods.
  5. Focus on improving business process effectiveness and agility.

The Shingo Model

Devised by Dr. Shigeo Shingo, the Shingo Model encompasses ten guiding principles for operational excellence. The Shingo Institute, an organization that awards the Shingo Prize, has identified "Ten Guiding Principles in the Shingo Model" as forming the basis for building a sustainable culture of organizational excellence:

  1. Respect every individual
  2. Lead with humility
  3. Seek perfection
  4. Assure quality at the source
  5. Flow and pull value
  6. Embrace scientific thinking
  7. Focus on process
  8. Think systemically
  9. Create constancy of purpose
  10. Create value for the customer

The FLEX Methodology

This section contains promotional content. Please help improve it by removing promotional language and inappropriate external links, and by adding encyclopedic text written from a neutral point of view. (November 2020) (Learn how and when to remove this message)

The FLEX methodology, also known as PBED (Plan-Brief-Execute-Debrief), is a structured management system originally used in aviation and later adapted for business operations in 1998.

The FLEX methodology involves four iterative steps to improve performance and align objectives:

  • Plan: Formulating a strategy and aligning objectives among team members.
  • Brief: Effectively communicating the plan to the execution team to ensure understanding.
  • Execute: Implementing the plan whilst focusing on the defined objectives.
  • Debrief: Analyzing the execution results against the initial plan, reflect on mistakes and learn from them to improve future performance.

See also

References

  1. "Six sigma versus lean manufacturing – An overview".
  2. Morash, Edward A. (2001). "Supply Chain Strategies, Capabilities, and Performance". Transportation Journal. 41 (1): 37–54. ISSN 0041-1612.
  3. Flint, Jacob (September 5, 2023). "Unveiling Success With the OKAPI Framework". Salford Professional Development. Retrieved 16 October 2024.
  4. ^ "What Does Operational Excellence Look Like?". Juran. 2020-08-05. Retrieved 2021-12-07.
  5. DeFeo, Joseph (5 January 2024). "What Does Operational Excellence Look Like?". Juran. Retrieved 16 October 2024.
  6. "Operational Excellence Programs for Organizations | Juran". Juran Institute, An Attain Partners Company. 2024-01-05. Retrieved 2024-10-15.
  7. "Learn about the Operations integrity Management System at ExxonMobil". ExxonMobil. Archived from the original on 2017-12-06. Retrieved 2017-12-07.
  8. "Chevron OEMS - Chevron". chevron.com. Retrieved 2017-12-07.
  9. "The Juran Model". Juran. Retrieved 2021-12-07.
  10. "The Shingo Model". The Shingo Institute.

Further reading

  • Cole, R. E. (1999). Managing quality fads: How American business learned to play the quality game. Oxford University Press.
  • Deming, W. E. (1986). Out of the crisis. MIT Press.
  • Flint, J. (2023). Unveiling success with the OKAPI framework. Salford Professional Development. https://www.salford.ac.uk/okapi-framework
  • Imai, M. (1986). Kaizen: The key to Japan's competitive success. McGraw-Hill.
  • Juran, J. M., & De Feo, J. A. (2010). Juran’s quality handbook: The complete guide to performance excellence. McGraw-Hill.
  • Liker, J. K. (2004). The Toyota way: 14 management principles from the world’s greatest manufacturer. McGraw-Hill.
  • Mann, D. (2014). Creating a lean culture: Tools to sustain lean conversions. CRC Press.
  • Pande, P. S., Neuman, R. P., & Cavanagh, R. R. (2000). The Six Sigma way: How GE, Motorola, and other top companies are honing their performance. McGraw-Hill.
  • Weick, K. E., & Sutcliffe, K. M. (2001). Managing the unexpected: Assuring high performance in an age of complexity. Jossey-Bass.
Categories: