3 Cost-effective Ways to Successfully Reinvigorate your Operational Excellence Program

August 12, 2015

Has the flame gone out? Are the once impressive results of your continuous improvement initiative dissipating? Operational excellence programs can begin to wane for a number of reasons and it can be a relatively common occurrence.

As with any project, there is typically much excitement at the onset, but that enthusiasm is difficult to maintain as the program evolves. The ongoing nature of operational excellence programs mean they don’t necessarily have a completion date attached. But that doesn’t mean you have to settle for the status quo – there’s always room to improve even in the midst of your program development.

Most operational excellence plans begin by attacking “low-hanging fruit” – those projects for which you can see immediate and satisfying results. Once those initial improvement projects see success, where do you go from there?

Getting back on track

Consider these three ways to bolster your operational excellence program:

1. Look to see where you should focus next.

 As key business metrics start to improve, such as cycle time, on-time delivery and product line profitability, use thorough analytics to identify where you should focus next. Create a plan and target what you want to measure. Ever been to a football game with no scoreboard? Of course not.

When you’re using data to make these decisions, at the end of the day you know whether you had a good day or not – just as a football team knows who won or lost when the clock runs out.

2. Recalibrate metrics for the most important key performance indicators.

 You’ve developed key metrics to measure achievement. But to drive further performance improvement, you need to carefully consider which one or two KPIs are paramount to your success. Once you do that, identify ways to revive and improve them.

For example, say you’ve determined you need to focus on improving your on-time delivery. You created a base line for your current performance, which is hovering at 80%. This was an increase from your prior data of 60-80%, but is still not where you’d like to see it. For some reason, you can’t seem to get to 90% without additional people or equipment. Now what?

Using an operational assessment, you can find ways to improve your results without adding people. The process focuses on understanding key business drivers, strategic direction, customer focus and using observations to identify ways to add consistency and reduce travel distance within your facility. Using this information, you can create a plan to positively affect your key performance indicators – and, ultimately, your operational excellence program.

3. Integrate human resources and information technology with your operations.

 These areas are not mutually exclusive; you can’t do one without the others and their importance should not be discounted. Are your performance plans integrated with cost savings plans for employees? Are you fully leveraging purchased software rather than just pulling everything into Excel?

OPERATIONS

  • Align with strategy
  • The customer’s perspective should be the first and last consideration
  • Benchmark where feasible
  • Follow-up to ensure changes meet expected benefits

INFORMATION TECHNOLOGY

  • Evaluate current software functionality vs. buying the newest thing
  • Develop a structure and process for idea generation, prioritizing and savings validation

PEOPLE

  • “We've always done it this way” is no longer in the vocabulary
  •  Cost and time savings is integrated in employee goals and incentive plans
  • Recognize and celebrate accomplishments
  • Incremental improvement should be promoted

Similar to beginning an operational excellence program, during a reinvigoration process, prioritize the items that have the most immediate and greatest impact. Implement formal practices, including policies and guidelines to ensure new processes are followed well into the future. Create a customized plan and institute a mechanism to track and quantify the results.

Why is this important?

By reinvigorating your operational excellence program, you can create a great place to work, improve customer satisfaction and strengthen your market presence. Reducing business complexity creates efficiencies and can reduce costs.

Ultimately, your goal should be to provide additional value to customers by implementing ideas from engaged employees while eliminating waste, and measuring the process effectively.

 

For more information about how you can strengthen your operational excellence program, contact any member of our Operations Consulting team.