Operations Excellence – a new world if you can take it….

Operations Excellence – a new world if you can take it….

Introduction

According to the recent BTOES / Proqis survey on Operations Excellence, the top three areas of focus in operations excellence are: rising customer expectations, a more demanding competitive landscape and the rise of digitalization. These are for sure extremely important areas to consider for the success of any business. Yet, according to the same report, there are some real concerns: 16% of the respondents of the survey, 16% of the respondents do not have any program, another 16% has a pilot and 15% has a single business unit engaged.

Some key data points are the maturity of the teams engaged in operations excellence: 15% does not have an operations excellence team and 13% of the respondents has less than six months. That is, almost 30% of the respondents have very little to show or nothing. Not good. Interesting is that everybody I talk to, regardless of the level in the organization, thinks that operations excellence is important. That is, being excellent is important. Looks good right? Not really, the problem is that people do not truly understand what is operations excellence, what is means, how to achieve it and how to make into an improvement process.

Some fundamental understanding

I consider operations excellence the ability to address the customer needs in a consistent, repeatable and predictable manner, in a way recognized by the customer. Yes, it is not just about one side, it is about both sides agreeing that there is excellence from the expectations themselves. One side delivers it, the other side receives it and, in a business setting, the vice-versa is also happening many times – that is, organizations require the inputs and clarity of needs and expectations from their customers, at all levels. One may argue that this is the job of the provider, I would say it is a joint responsibility, when excellence is present, it starts here: with a strong, clear, honest, measured, frequent, efficient and effective communication process among parties.  So, it is very simple to know that the customer-relationship engagement, internal or external, is the pre-requisite to eventually achieve customer excellence. And please, operations excellence is not about operations as we narrowly understand it. It is about the operations of all the company, all areas, all sectors, groups, products and organizations. Simple right?

Everybody is a a salesperson, everybody buys, everybody sells, all the time. Get it?  Second key understanding is that it takes time, patience is required, it can’t be transformational in a short period of time. The senior leaders need to support the program and understand the key concepts very clearly. We can rush into the program because there are changes required: cultural, organizational. So, the third understanding is change. Management of change is a fundamental concept within any operational excellence program, grounded by the concept of internal and external sales and addressing the customer needs so that they recognize it. Fourth, measurements are required. But this is tricky: organizations measure too many things,  it is very distracting.

The operation is already not excellent when we have so many metrics. Can you imagine an operations excellence program that is non-excellent in its structure? Fifth, the concept of continuous improvement is required. But again, there is a conceptual mistake that organizations make and that kill these continuous improvement efforts: improve to what? What is the target? Where are we going? It is needs to be established clear start and end points in any phase or program. So it can be reviewed, people know where they are going and what the expectations are. Then repeat. Repeat, repeat, patiently. Finally, the operations excellence team, to be transformational, need to balance pressure and release, push and pull, tension and friendship. A complicated balance, but if they are to be transformational, change needs to happen and it is not always rosy.

Paving the way

In keeping this article objective, what are the recommendations for an operations excellence program. First, ensure that everybody understands the concept of sales. We are all sales – and buyers -  in an organization, all the time, as well as at home, with your families, our friends, our sports. Groups need to be prepared in the customer engagement, what it means and what is required. Secondly, operations excellence needs to be clearly understood and communicated within the organization. Speaking the same operations excellence language is required, or things will not be excellent in the program itself. Defining metrics and where the program is going is very critical.

There could be operations excellence programs in sales, marketing, finance, human resources, research and development, manufacturing, supply chain, logistics, information technology, retail. It also reaches distributors and partners, as well as government and other industrial bodies. The whole chain, according to the program scope, needs to be educated.

Invest in management of change: cultural and organization ways will have to change or adjust (that is change anyway). Build the management of change foundation so it becomes part of the organization DNA. People as we know are resistant to change and in many cases operation excellence could be disruptive, could lead to some tension, some contention. Normal, let’s be realistic. From a core operations excellence team that is passionate, enthusiastic, high energy about customer relationships, about the on-going engagement I mentioned before. Define few but key metrics accepted by the groups involved, define the improvement targets and how to land the continuous improvement cycles and you are good to go.

Some final words

First, do not do operational excellence pilots. This is a program for all the organization, it does not make sense to define it as a pilot or just start in a single organization. Start small, select few or a single metric, and go. Again, understand who is the customer, what it expects and ask the question: can it be delivered consistently, repeatedly, efficiently and effectively, from your and the customer standpoint? If just a single group has a operational excellence pilot, what it means to the others? They operate in a non-excellent way? It does not make any sense.

Note that I did not mention technology anywhere. It is understood that we have many technology tools available today, including networks, systems, applications, databases, productivity tools, mobility, control systems. But technology is a foundation, it is a tool. It can be a great enabler of an operations excellence program, but the inception is not about technology. Besides, let’s not forget that functionality and features are poorly used. Organizations pay a lot for technology and get a small return. Clearly, an area for operations excellence to be in strong action.

Finally, do not agonize about making the program perfect. Be concerned about starting and applying the same concepts to the program itself. As there is no bad situation that stays forever, there is absolutely nothing that can’t be improved.