Operational excellence to improve quality and working methods

In an increasingly competitive environment, companies look for ways to improve their competitiveness. Cost reduction is one lever, but the most powerful one is the involvement of employees, the real driving force of the company. Engaging teams in continuous improvement raises the quality of service provided to customers and, with it, the company's results. Introducing operational excellence is therefore part of a coherent management strategy, in line with the evolution of working methods.

The objectives of operational excellence

Operational excellence pursues three objectives:

• optimise productivity;
• improve the quality of products and services;
• reduce costs.

These objectives are linked. A defect costs twice: once to produce it, once to correct it, not to mention the effect on customer satisfaction. Improving quality is therefore often the most direct route to better productivity and lower costs.

Improving quality through operational excellence

Among these objectives, quality remains a priority, both to keep existing customers satisfied and to win new ones. Quality depends on the processes and on the work of the people who carry them out. Improving it means:

• making processes reliable: clear standards, checks at the right step, fewer manual re-entries and hand-overs;
• detecting problems early: indicators that show deviations before they reach the customer;
• solving causes rather than symptoms: analysing why a defect occurs instead of correcting it again and again;
• capitalising on solutions: turning each improvement into a new standard shared with other teams.

The human factor: the foundation of quality

Operational excellence is built with people, not against them. Managers who see training as a cost are mistaken: it is an investment. Time spent developing skills is not time lost, it is an additional contribution in added value.

Several actions contribute directly to operational excellence:

• training employees in the methods and tools they are asked to use;
• encouraging them to propose solutions to the problems they encounter;
• using collective intelligence: problem-solving workshops, sharing good practices between teams;
• recognising the involvement of each person and the results obtained.

Most employees want to do their job well and produce quality work. The personal satisfaction of a job well done is a strong motivation that should not be underestimated. Recognition, development opportunities and fair compensation of skills reinforce it.

Which management methods to achieve operational excellence?

Companies committed to operational excellence get better results with proven methods. These methods were born in industry but apply to all departments: logistics, purchasing, administration, customer service.

They share one principle: involving staff in a continuous improvement process. The manager's role changes. Rather than controlling, the manager leads: sets the objectives, supports the team when problems arise, removes obstacles and reports to management, intervening quickly in case of malfunction. Collaborative management, which values the autonomy of employees, works better than a purely hierarchical approach: employees who are never consulted tend to disengage from the process.

Clear roles help a great deal. On shared processes, a RACI matrix clarifies who does the work, who approves, who is consulted and who is informed.

Using Lean Six Sigma

Lean Six Sigma combines two methods. Lean comes from the Toyota Production System and focuses on eliminating waste and speeding up flows. Six Sigma was developed at Motorola in the 1980s and focuses on reducing process variability and defects. Although they are several decades old, both continue to prove their effectiveness.

Their main principles:

• put the customer at the centre and define quality from their point of view;
• let employees control the processes throughout the customer order;
• work "just in time" to reduce inventory, and avoid overproduction;
• use organisational tools such as Kanban, Kaizen or Jidoka (stopping the process as soon as a defect is detected);
• aim for zero defects in what is delivered to the customer;
• measure process variability: the name Six Sigma refers to a process so stable that six standard deviations fit between its average and the nearest specification limit;
• follow a structured improvement cycle, usually DMAIC: define, measure, analyse, improve, control;
• keep an eye on the competition to do better;
• engage everyone in continuous improvement.

By combining the two methods, a company increases the efficiency of its teams and reduces errors, defects, waste and costs, while meeting customer expectations. To discover the Lean tools in detail, see operational excellence methods: the example of Lean management.

Improving working methods day to day

Operational excellence is not reserved for large transformation projects. It shows in the way teams work every day:

• Short, regular meetings around a few indicators and the list of current actions, rather than long, infrequent meetings.
• One shared action plan instead of actions scattered across emails and personal notes.
• Problems raised as soon as they appear, without fear of blame, and dealt with at the right level.
• Small improvements implemented quickly, in the spirit of Kaizen, rather than waiting for a perfect solution.

Measuring progress

Operational excellence requires improving processes as well as skills and working conditions, and it is measured through performance indicators: defect rate, lead times, customer complaints, costs, but also employee involvement (ideas proposed, actions completed). These indicators help identify as early as possible the problems that call for an adjustment of processes or skills.

Customer satisfaction remains the final measure: the quality delivered must match what customers expect at the price they are willing to pay. Since improvement concerns all levels, it also involves management teams themselves. To organise the resulting actions, see our article on the action plan for operational excellence.