In today's increasingly competitive business world, businesses must achieve operational excellence to compete sustainably.  Operational excellence is a management approach that focuses on helping businesses increase their productivity, quality, and customer satisfaction by continuously improving their processes, systems, and employees.

Operational Excellence and Its Definition

Operational excellence is the more consistent and reliable execution of a business's strategy, resulting in lower operational risk, lower operating costs, and increased revenue compared to its competitors. This is a concept that requires organizations to undergo an end-to-end transformation in today's world, where business models are rapidly evolving and technology is at the forefront.

Kevin Dugan, founder of the Operational Excellence Institute, defines operational excellence as a point where every employee can see the flow of value to the customer and intervene if there is a problem at any stage of this flow.

In an operationally excellent organization, each individual can clearly see their contribution to the value flow to the customer. They can also determine whether this flow is normal or abnormal and correct any anomalies without requiring management intervention.

In this model, where every employee is proactively accountable, operationally excellent company leaders can increase recurring revenue by shifting their focus to continuous innovation and other activities.

Operational Excellence Fundamental Principles

The fundamental principles of operational excellence help businesses improve customer satisfaction, financial performance, and competitiveness. These principles enable them to manage their processes, systems, and resources efficiently and effectively.

• Customer focus: This is one of the most important principles of this management approach. This principle focuses on businesses understanding customer needs and expectations and striving to meet them. Customer focus can help businesses increase customer satisfaction and boost profitability.

• Continuous improvement: Another fundamental principle of the operational approach. This principle focuses on continuously improving businesses' processes and systems. Continuous improvement can help businesses reduce waste, lower costs, and increase efficiency.

• Efficiency: A key goal of operational excellence. This principle focuses on businesses using their resources efficiently. Efficiency can help businesses reduce costs and increase profitability.

• Reliability: Another key goal of operational excellence. This principle focuses on ensuring businesses' processes and systems are consistent and reliable. Reliability can help businesses increase customer satisfaction and stand out from their competitors.

Benefits of Operational Excellence

This management approach can provide businesses with the following benefits:

Increases customer satisfaction

Operational excellence helps produce products and services that meet customer needs and expectations. This increases customer satisfaction and loyalty.

Customer satisfaction is a critical success factor for businesses. Customers are more satisfied with businesses that offer products and services that meet their needs and expectations. This satisfaction fosters customer loyalty and helps businesses increase revenue and profits.

This management approach provides several ways to improve customer satisfaction. For example, by collecting and analyzing customer feedback, businesses can better understand customer needs and expectations. This information can be used to improve processes and systems.

Improves financial performance

Operational excellence reduces waste and makes processes more efficient. This lowers costs and increases profitability.

Waste is a significant cost driver for businesses. It's the inefficient use of resources. This management approach can help businesses reduce costs by reducing waste.

There are many different types of waste. For example, waste can be caused by unnecessary processes, excess inventory, material losses, and manufacturing errors. Operational excellence uses a variety of techniques to reduce these types of waste.

Increases competitiveness

This management approach helps businesses better meet customer needs and be more competitive than their competitors.

Competitiveness is a business's ability to gain an advantage over its competitors. Operational excellence provides various ways for businesses to increase their competitiveness. For example, by implementing operational excellence, businesses can:

• By better understanding customer needs, they can better meet customer demands.
• By reducing their costs, they can offer lower prices than their competitors.
• By shortening production times, they can deliver faster.
• By improving quality, they can provide better customer satisfaction.

Operational excellence is a strategic approach that helps businesses gain competitive advantage and sustain long-term success.

Operational Excellence Methodologies and Characteristics

Operational excellence encompasses a variety of globally proven methodologies. These methodologies are used to improve businesses' operational processes, minimize errors, and increase efficiency and profitability.

Lean 6 Sigma: Lean 6 Sigma is a methodology that aims to improve business processes and increase efficiency by minimizing errors. Developed at Motorola in 1986, this strategy aims to achieve operational excellence through the use of statistical tools. While Lean reduces process interruptions, 6 Sigma helps control variability that impacts product quality.

TPM (Total Productive Maintenance): TPM is a development methodology that aims to prevent problems rather than solve them through the participation of employees in production activities and service processes. It aims to increase productivity and reduce losses. In addition to developing employees and processes, it also ensures continuous equipment improvement. It ensures the smooth operation of machines with the principle of "0 failures, 0 errors, 0 accidents."

These methodologies can be tailored to the specific needs of organizations and support effective operational excellence.

Operational excellence enables a business to go beyond simply saving the day. At Lean Model Training, Consulting, and Coaching, we offer a comprehensive approach to helping businesses become leaders in this critical area. This management approach requires continuous effort, and businesses can achieve success on this journey by creating a culture that is open to change, focused on innovation, and eager to learn. Therefore, setting operational excellence as a goal is a crucial step toward shaping the future of your business.