Operational Excellence is a structured and systematic approach to strive for sustainable outstanding performance. Performance is to be understood in the broadest way and in the context of the purpose of the organization.
- For a manufacturing company, performance means high productivity, high quality, low scrap and minimum wastes and tight control of operational expenses.
- In services, Operational Excellence is fast and accurate response, swift and error-free handling of files, and a pleasant customer experience, e.g. not required to repeat same data over and again because of multiple internal handovers.
- For a hospital, performance is about patient care and experience, effective treatment, seamless journey and so on.
None of the above can be done at the expense of manpower, therefore employees’ safety and morale are to be taken into account.
Operational Excellence was/is sometimes referred to as “world class” or “best in class”.
Operational Excellence is built on continuous improvement, which uses many methods, tools and techniques. Among these, Theory of Constraints (ToC), Lean and Six Sigma are the most common, each having specificities but also sharing many common tools and complementary mindsets.
Some people are accustomed to one or two of them, some stick to one only. The best results can be achieved when pragmatically mixing Theory of Constraints, Lean and Six Sigma. This mixed synergistic approach is called TLS, an acronym made of the initials of the three approaches.