How Do I Achieve OpEx?

Published on December 17, 2012

How Do I Achieve OpEx?

Achieving Operational Excellence won’t happen overnight, but it won’t take years or decades either.  There are two major steps that, done correctly in the beginning, will enable us to “jump” to Operational Excellence.  These steps are:

  • Establishing a destination.
  • Building a roadmap to that destination.

To achieve Operational Excellence, we first have to set it as the destination for our organization.  But in order to understand where we are trying to move the organization, we need to understand exactly what Operational Excellence is:  what it looks like, how it functions and, perhaps just as importantly, what it is not. 

Once we define Operational Excellence, we then need to create a roadmap that everyone in the organization can follow in order to reach our destination.  The roadmap starts with education for each employee, regardless of where they work in the company, so everyone understands what Operational Excellence is and what they need to do in their area to achieve it. 

The Destination

Establishing the destination of our efforts is key.  It lets everyone know we are not trying to just get better every day; we are trying to attain a level of performance in the operation where management is no longer needed to tell each employee what to do.  To achieve this, a good destination to set is Operational Excellence.  Of course, the next step is to then define Operational Excellence clearly in a way that each employee understands. 

With that in mind, we will define Operational Excellence as when, “Each and every employee can see the flow of value to the customer, and fix that flow before it breaks down.”SM  This means we want to get our operation to a point where the flow of product has been made so visual that everyone in the operation can see if we are on time to the customer without asking any questions. We also want to make disruptions to the flow visual, too, and then create standard work for abnormal flow conditions that employees can enact when – or even before – flow breaks down. 

To further define the destination in terms of what it looks like and how will we work in it, we need to drill down deeper to ensure everyone in the organization understands the true answers to some fundamental questions about continuous improvement.  There are nine questions about continuous improvement that do just this.  These questions are critical to achieving Operational Excellence because they show that there are many “opinions” on why we do continuous improvement instead of one straightforward, solid answer that each employee can understand.  Here are the nine questions.1

  1. Why do we do continuous improvement?
  2. What is the best way to improve?
  3. How do we know where to improve?
  4. Why do we strive to create flow?
  5. What causes the death of flow?
  6. What would the shop floor look like if we did everything right?
  7. What would the office look like if we did everything right?
  8. What would the supply chain look like if we did everything right?
  9. Where will our continuous improvement journey take us?

Once we’ve set our destination as Operational Excellence and understand what it is, we then need to create the roadmap that will get us there. 

The Roadmap

Once we’ve taught each employee to think the same way about continuous improvement and Operational Excellence, we can start on the more practical side of achieving Operational Excellence by building a roadmap.  What’s key here is not to have a meeting where we “brainstorm” an implementation plan to get there.  Instead, we’re after something else. 

Simply put, first we design how the operation will work when the customer gives us an order using design guidelines.  These are analogous to the “laws of physics” that engineers use when they design an aircraft or car.  Included among the design criteria are the eight guidelines for end-to-end value stream design and the ten guidelines for a mixed model pacemaker (the pacemaker is the single point in a value stream that gets a schedule).  There are also six guidelines for handling shared resources, nine for office value stream design, and six for designing the supply chain. 

All of these steps fall into the first principle of Operational Excellence, which is to design lean value streams.  The rest of the roadmap deals with implementing the design in a step-by-step fashion.  Together, the step-by-step process (or our roadmap) goes like this:2

  1. Design lean value streams.
  2. Make lean value streams flow.
  3. Make flow visual.
  4. Create standard work for flow.
  5. Make abnormal flow visual.
  6. Create standard work for abnormal flow.
  7. Have employees in the flow improve the flow.
  8. Perform offense activities.

By establishing the destination and building a roadmap, we move very quickly to achieve Operational Excellence.  It’s key that each employee understands the definition and how it impacts their specific work area and job function.  It’s also critical that we follow a roadmap that was created using design principles and the step-by-step process to implement the design. 

Just think of it this way:  companies that know where they are going will simply get there faster, and companies that achieve Operational Excellence will grow their businesses by taking market share – most likely from those who don’t.

1- Duggan, Kevin J.  Design for Operational Excellence:  A Breakthrough Strategy for Business Growth.  McGraw-Hill.  New York.  2011. 

2- Ibid.