Fri, November 5

Operational Excellence

The Importance of an Operational Excellence based Culture

Author : Carlos Gaspar

In the last two decades businesses are undergoing constant changes due to society’s high level of demand. Customers no longer accept a product or service with a medium level of quality delivered to them, and low quality has consequences and penalties that impact the company’s profitability and reputation.

To be part of the dynamic “game” of global competitiveness, it is necessary that companies are  conditioned to win. Being well positioned and based on Excellence allows companies to be increasingly competitive and profitable.

To say a company has a Culture of Operational Excellence is to refer to a complex set of values, beliefs and actions that define how an organization conducts its business and whether it works systematically well.


Implementing a Culture of Excellence

It is important that Senior Leadership understands this strategic concept and the establishment of Operational Excellence Culture is a priority.  It must be deployed at all levels with transparency, clarity, and objectivity. The beginning of this change should begin with the Leadership team.

The mentality  of people is the largest barrier found in companies that conduct cultural transformation processes aiming at the pursuit of Excellence. When an employee has a conventional mentality, they are familiar with losses and wastes that impact their performance. This is common and normal in the daily operations. Machines in poor condition that break and stop, a disorganized work environment, wasted time in unnecessary moves, are normal for them. This is due to the lack of investment in people’s knowledge and development. When you invest in training experts on this topic and implement a strong Culture of Operational Excellence, there is a mindset change towards the pursuit of Zero Loss. That is why it is important to identify and map this type of behavior within companies so that effective countermeasures are implemented and behavioral changes occur in the workplace.


Understanding the current organizational culture

A company needs to understand their current situation before they can begin their journey to excellence. The question to ask yourself is; Has my company been working systematically or is  “firefighting” a daily routine? Do my employees know which direction they should go?

In traditional management, employees spend 60% of their time solving daily unforeseen problems that we call “firefighting”. Imagine what would happen if you were able to transform 60% of time “lost” due to daily unforeseen and unplanned activities to focus on process improvement.

Knowing where you are and where you want to go is important and leadership must provide this vision. Does your current scenario allow for this? To answer these questions, it is helpful to benchmark your organization against a reference for Operational Excellence. Milliken & Company manufacturing plants have a strong culture focused on Operational Excellence.

Performance Solutions by Milliken has worked with over 400 operations in more than 27 countries in various segments, around the world,  helping to understand their current situation and support their journey of cultural transformation.  This is done through the transfer of knowledge and know-how by Practitioners, seeking to develop people and a sustainable and ideal system that generates results.

It is important to have skilled and versatile people to build a Culture of Excellence.  This is required when implementing methods that help configure the ideal system that meets the current and future needs with benefits that impact performance and profitability. There is no formula or “magic wand”. What exists is a configuration of experiences and resilience based on results.

Performance Solutions practitioners bring deep experiences and versatility that help our customers in how to create an Operational Experience Culture that addresses People, Product, Processes and Technology.

Establishing a Culture of Sustainable Operational Excellence

Best practices convert basic principles into objective recommendations, aligning interests to preserve and optimize the organization’s long-term economic value, facilitating its access to resources and contributing to the quality of the organization’s management, its longevity and the common good.

There are 4 important elements that we should focus on implementing that will help sustain a Culture in Operational Excellence.

  1. People
  2. Products
  3. Processes
  4. Technology

These elements are fundamental factors that must be integrated in a systemic way. If any of these elements do not correlate and work well, there is a tendency to work with conventional management characterized by a routine of firefighting. This happens because there are silos that need to be eliminated through methods and tools that provide this operating condition in a systematic way to meet the needs of the processes.

If there are people and processes, but no technology, then we can experience inefficiency and high operating costs. After all, without the help of technology, it will take a lot of energy from people to be able to deliver on all the demands.

When there is technology and processes, but no skilled people, the result is transfer of responsibility and turnover. It is no use to have technology and processes if there are no people with high skills and the ability to operate the technology and perform the process efficiently and effectively.

When there are technology and skilled people, but no well-defined processes, we have systematic errors and constant daily chaos.

However, if there is technology, skilled people, defined processes, but no product innovation, then companies fail to reach new markets, increase their revenues, conduct new partnerships, acquire new knowledge, and increase the value of their brands in the current competitive scenario.

The search for excellence cannot be faced without a defined process/methodology. This is  a continuous journey focused on building a culture of excellence and sustainability.

When operational excellence is achieved, the company functions in harmony and all employees become empowered and committed to the objective and goals. Work teams have the opportunities to expand activities and improve their performance driving results and creating engagement.