Kaizen®/Lean concepts & methodologies have changed the landscape of manufacturing/service organizations who have adopted it. Kaizen® is globally proven approach to drive and sustain an operational excellence culture within any organization. Kaizen® helps organizations to improve its processes, quality, reduce waste and thus costs. Kaizen® improves employee participation in daily problem identification and solving. Kaizen® is a culture that drives continual improvement.
Business environment is getting competitive day by day and if organization continues to do what they have done in past, organizations may not survive! Organizations must manage their operations with greater efficiency in order to continue to provide high level of service to their customers. Companies have started preparing for this year which is unknown for the business community. Some companies are taking drastic changes as to reduce their overall costs & some are taking planned measures. Most of the companies have put operational excellence on their agenda this year and are going to be successful or improve their performance in the longer run.
Improve or Perish is the harsh reality!
Operational Excellence for Business Excellence
The way Plan is to Strategy, Do is to Operations. Although Operational Excellence for Business Excellence is a strategy but it has to do with Operations. Operational Excellence cannot be achieved by sitting in the conference room and planning for it. Companies will have to focus & go to gemba (English world for Shop floor). gemba is the real place where companies can identify real problem, meet real people & offer real solutions. It helps organizations to unlock high business performance in difficult times. The best way going ahead is to be operationally fit all the time.
What is Operational Excellence?
Operational Excellence…it is DOING your DO Well! Infact in the PDCA cycle, Operational Excellence covers DCA, while Pis the typical strategy part. We have innumerable examples of great strategies failing due to poor execution (of course the reverse happens too!). Irrespective of the size of the business or the industry it belongs to, OE is mission critical.
Often times, it is a pity that Operations is not considered or viewed as an important subject to be discussed. Strategy is the leader’s domain! It is seen as enriching, something that nourishes the visionary instincts inside the CEO or senior managers or the top management and as soon the strategy is set; operations is often left aside or left to the ‘boys’ below to tackle! In other words it is seen as trivial, not so engaging or inspiring! But if you see success lies in the details, it lies in ‘doing’ your plans well or implementing your plans well! Even simple plan, executed with minimum waste delivers excellence!
Operational Excellence is not a rocket science or a big boss game only. It is about identifying > reducing > eliminating undesirable elements from across the processes…which manifest as Waste, Variation or Strain. These three enemies cause obstruction to flow of materials & information within a shop floor, organization, economies, etc. Waste can be in the form of rework, over processing, waiting, unnecessary motion and such others, results in broken processes. Broken processes can’t deliver products or services on time in full and error free. On the other hand processes variations results in costly errors or at times in total failure!
OE is a challenge and an opportunity if taken seriously! We often know what to do, we often have great policies and plans, but we fail when it comes to implementation/time calls for action.
How can an organization achieve Operational Excellence?
True organizational transformation happens only when the skeletal structure is challenged and changed, when old paradigms & structures are questioned and replaced as required. One can’t fool oneself or others by mere ‘dressing up’ or ‘showing off’! Sadly, often time, this is the case within many organizations who adopt Kaizen®/LEAN or any other transformation approach. Especially this applies to manufacturing or transformation related to operations as in Kaizen®/LEAN or similar implementation.
Often organizations start with tools like 5s, SMED, AM, Cellular Layouts etc, and try to improve. These are tools that are launched and implemented with encouraging results, but many a times the efforts start and end with these tools only. These tools are a means to an end. The end being Sustainable Growth and Profits!
These disjointed & tool focused approach cannot be considered as organizational transformation! We do get enthused by book like The Toyota Way, which does offer more than a peep into Toyota’s culture transformation under way since some many decades (they say it is still work in progress! Kaizen®!). But many of us are not able to appreciate the deeper organization cultural/ habits/ beliefs which drive everything else. As said by our chairman Sensei Imai San – true Kaizen® is…Everyday, Everyone, Everywhere Kaizen® (continual improvement). It is not few people, few days, and few places ….driving Kaizen®!
From the Kaizen® Management System perspective, culture is an outcome that comes by staying focused on three key elements:
(a) system & model for change within the organization
(b) building skills / capability across the board to learn & drive change
(c) setting clear goals, an audit mechanism linked to performance management.
It is this judicious combination of these three elements that powers true transformation, which in turn, powers sustenance of a Kaizen® culture within any organization.
As one perfects the tools of change, one should not lose sight on the cultural aspects. There is no meaning in fooling ourselves or other stakeholders! The message is clear….apply tools, but address the culture!
In Imai san’s words….Six Sigma or Lean is the outcome, whereas KAIZEN™ is the process that drives these outcomes!
Operational excellence helps in providing products & services to the customers at better quality at affordable prices and in time.
It also results in two benefits:
Business Benefit – Better Flow of production, thus Less Inventories, and On Time In Full Error Free Deliveries.
Impact on Culture – Improved Discipline and higher Engagement of People in Company Wide Efficiency Improvements