Pursuit of Operational Excellence: A Systemic Approach

Introduction

Operational excellence (OE) has been defined in a number of ways by different authorities and groups (see, e.g. Duggan, 2011; Wilson, Perumal & Co, 2016), but it is generally agreed to be present when high performance teams are seeking for continuous improvement in well-designed processes, using appropriate tools and technologies. Excellence is underpinned by a philosophy in which problem-solving, team-working and effective leadership combine to focus upon customer needs, and all employees are empowered to act to maintain optimal flows of value. It is therefore concerned with capacity and flows in the organization’s primary value chain, good process design and dealing with problems such as bottlenecks, poor performance, ineffective processes and methods, and poor product delivery or customer service.

It has been pointed out that excellence, and the competitive advantages that may flow from it, cannot be gained once and for all. “… excellence is relative and can shift over time. What looks like excellence today, may not be tomorrow. Best-in-class competitors, technology, and management paradigms all evolve” (Wilson, Perumal & Company, 2016: n.p.). Thus, although the heart of OE is considered to be based upon self-healing flows of value, it must be recognized that these are not immutable. Change in organizations is endemic and continual, since the environment within which an organization subsists is constantly changing. Thus, Operational Excellence must go hand-in-hand with readiness to innovate. New products and services are developed; new technologies emerge; legal frameworks evolve; and customer tastes/requirements change. However well-designed value streams may be, and however effective the correction mechanisms personnel are empowered to enact, processes will inevitably require change and development over time.

This paper has been conceived in the context of a Community of Practice of improvement professionals drawn from public and private sector organizations, large and small, located in the south of England, who have been meeting regularly over a period of more than five years (see Welch, et al, 2014). Meetings typically incorporate opportunities to reflect upon practice, explore a range of different approaches, tools and techniques and share experiences of the quest for continuous improvement. Areas considered have included, inter alia: Systems thinking, visual management and creativity, value stream mapping, tools from Lean/6 Sigma, emotional intelligence, leadership and diversity networking. We reflect upon members’ feedback upon a range of ideas and tools, both hard and soft, in order to develop a systemic, ‘landscape’ model for pursuit of operational excellence (see Figure 4). The model addresses a forward momentum of process improvement and more radical change, recognizing a need to contextualise use of particular methods and tools, and incorporating stories from the field contributed by members of the community. The result, we believe, will provide a useful resource for practitioners, researchers and students concerned with pursuit of operational excellence.

Process improvers are always seeking to answer three questions: Does the process meet customer needs? Does it cut down on the usage of resources? Is the process flexible enough to change as requirements change? When the answers are negative, then they have work to do. In fact, since the world is never static, customer requirements, technologies and resource constraints are constantly changing. Process improvement is therefore a continuing cycle, drawing upon knowledge from many domains. During 2015, the agenda for the sessions related to Operational Excellence, covering inter alia: Managing Capacity and Demand; Value Streams and the Challenges of ICT; Systems Thinking in Practice (case study of DSTL); Performance Measures and Quality; and High Performance Teams. Each of these topics was discussed in relation to real world experiences of members of the group in their organizational contexts. As a result of these discussions, it has been possible to design a model encompassing the landscape for excellence-related change, drawing upon sources of learning from literature and practice.