Operational Excellence vs. Continuous Improvement

In operations, the word improvement means different things to different people. Some define improvement as lower operating cost or reduced inventory while others describe it in terms of increased efficiency or better quality. The process of achieving improvement in an organization often involves management setting a goal, employees making changes in their areas to achieve it, then management setting a new goal. If everything goes right, the best this cycle will yield is continuous improvement year after year. This approach becomes a never-ending cycle of getting better but with no specific destination.

Operational Excellence

A more holistic approach than continuous improvement is operational excellence. This approach begins with a strategic design for operational performance to make the organization consistently the best amongst the competition. Rather than focusing solely on continuous improvement (adjusting processes to reduce waste, improve quality, and maximize human potential), operational excellence goes further. Operational excellence involves setting up the organization for growth by understanding what the market wants and creating an uninterrupted value stream that always feeds the need, even if it changes.

Operational excellence is not confined to the executive suite or the factory floor; it involves every person at every level of the organization because every role is doing something that brings value to the customer. The 8 key components of a successful Operational Excellence Program are:

  • Strategic direction
  • Leadership engagement
  • Process excellence (continuous improvement efforts)
  • Product/service innovation
  • Employee involvement
  • Commitment to quality
  • Superior safety
  • Commitment to surpassing customer expectations

Operational excellence, problem solving, teamwork, and leadership drive continuous improvement. The process involves keeping the focus on customer needs, positive attitudes, and empowered employees.

Achieving Operational Excellence

Achieving operational excellence requires a clear plan of action and a good partner to help with implementing the key elements of an Operational Excellence Program. Methodologies such as Lean Six Sigma, Lean, Kaizen, and Change Management are critical components for equipping a team and driving Operational Excellence.

Acuity Institute offers proven training, toolkits, and know-how to help organizations of all types and sizes reach long-term goals through operational excellence. Reach out today to see how Acuity can help.