Operational Excellence Basic Question

The operational Excellence program reflects organizational leadership’s approach to the application of a variety of principles, concepts, systems, and tools to create sustainable improvement and growth. Many blindly believe that implementing a procedure around Lean and Six Sigma is all about operations excellence. A few feel that operational excellence is a separate department responsible for driving improvements in the organization. You will also find a few who feel that operations excellence means cost-cutting.

The true success measure of operational excellence is not the $$ value saved through the projects. The true success is when employees are following operations excellence activities as SOP (standard operating procedure). In other words, when employees’ regular activities should be in line with the operational excellence program and they should not do anything extra for the ‘sake’ of operational excellence. $$ savings can be achieved even without an operational excellence program.

For small and medium-sized businesses, I always suggest that your business plan itself should be the operational excellence plan.

If you are designing an operational excellence program or thinking of revamping the existing one, consider the following questions. At a minimum, your operations excellence program should provide clear answers to these questions:

–          How the business problems are identified and reported?

–          What is the procedure for identifying improvement opportunities?

–          How to initiate improvement initiatives / problem-solving initiatives?

–          What is the approach for increasing customer satisfaction? (must cover quality)

–          How to drive strategic initiatives? How to measure the success of these initiatives?

–          How to ensure employee involvement. How do employees feel that they are part of the overall flow of providing value to the customer?

–          What are leadership responsibilities and how to exhibit them? Leadership commitment is crucial.

–          How to ensure adherence to compliance and safety requirements?

–          What is the continuous learning plan – for all levels in the organization?

–          How to ensure that the program is applicable to EVERYONE in the organization. HR, Facilities, training team, security and ALL.

–          Where will our organization be in next 12-18 months with the help off this program? Mention both measurable and non-measurable targets. Then try to find out how to measure the latter ones.

There is one other very important question (or discussion) that companies usually do not think about. Or they assume they have clarity around it. When we, NyuWaz Solutions, help organizations design their operations excellence program, we spend adequate effort to make this question clarified.

The question is

“What is your business structure or value proposition structure”?

Let me explain. All businesses can be majorly categorized into one of these three structures.

  • A.  Product driven:
  • B. Customer driven:
  • C. Operations driven:
CategoryCharacteristicsOperational excellence suggestions
A. Product driven:Company is known for its unique (or almost unique) products. So focus should be more on product improvement and getting more usage– Focus on empowering employees to come up with new ideas – Drive idea generation – Spend efforts on innovation
B. Customer’s business driven:Company’s core work depends on the customer’s process. E.g. BPOs. The focus should be on understanding customer’s business and get more engagement.– Prioritize client management – Increase client connection. Make strategies at every touchpoint – Service quality is more important than low cost – Drive initiatives to improve customer’s KPIs
C. Operations driven:Company has many competitors and the work is usually of low complexity or you are easily replaceable.– Focus on cost reduction and efficiency – Bring innovation in regular operations to decrease input and increase output – Produce more products using the same setup

Note: These are categories and not grades. Therefore, in no way one category is to be considered better than the other one.

Why is this categorization important?

Consider this classic and real example.

One of our clients is a BPO company and their 90% of the time/effort is driven by their client’s business so they are in B category in the above table.

They aspire to be a product-driven company in their industry and that is how they advertise, hence they believe that they are of A category. (But the current business structure is still of B category)

Due to cost pressure from the key stakeholders their operational excellence efforts are completely driven towards cost savings and very little is being done to engage more with customers/clients.

                In short, they are actually B, think that they are A but ops excellence efforts are like C

Our solution made them realize that ‘for now’ they should consider themselves as B category and focus more on client engagement, which will, in turn, result in revenue increase. In addition, they should take strategic and long-term initiatives to become A category.

Some of the companies see themselves falling into two categories. E.g. A company with both IT and BPO services. In such cases, there is a need to treat both these areas as two separate segments and design operations excellence plan separately for each segment. If these two segments are interrelated or have common customers, then design an integrated operations excellence plan supporting both segments adequately.

This is one of the basic questions that ensure, to a great extent, that the subsequent actions/decisions will be right. 

When basics are strong, we make educated decisions and put efforts in the right direction.

NyuWaz Solutions is loved by it’s clients for providing following most suitable and customized services:

  • Ready and tailored IT/Software solutions
  • Process automation and digitization
  • Quality assurance and Operations/Business Excellence programs
  • Employee up-skilling trainings

Our ready to implement applications can make your operations/business run faster and more efficient. Click below for product demo.

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