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Don’t Make this Operational Excellence Mistake

Updated: Aug 2, 2021

To survive and thrive beyond the pandemic, forward thinking manufacturing businesses will focus on operational efficiency as a means of beating the competition. And no matter what anyone tells you there are no short cuts or silver bullets. To be truly excellent takes discipline, resilience and lots of effort. And when your customers are telling you that you are excellent, you have a unique advantage in the market, one that will clearly differentiate you from your competitors.

But what if, you spend time and commit resources for the next month, 3 months or even a year focused on operational efficiency and you don’t see a return. What if, you put all that hard work into pushing your team towards operational excellence; blood, sweat and tears, and it’s not providing you with a competitive advantage in the market?

Does this question resonate with you? Do you feel your hard work with your lean, six sigma, and operational excellence efforts is not providing you with the returns you imagined?

The main problem I have seen with manufacturers striving for operational excellence is that it can become too inward focused. Businesses become so entrenched with the day to day efforts embedding the improvement ‘tools and techniques’, you lose sight of the changing needs of customers and the subtle shifts in the market. That’s if you considered the needs of your customers before you started.

My theory is that Operational Excellence, lean and six sigma type improvements can become the ‘waste’ in business. Which is a complete paradox because the whole point of the initiative was to eliminate waste. Why does it become a form of waste? Because any Operational Excellence journey that has not been designed by listening to the voice of the customers and the needs of the market will not provide you with a return or any form of advantage of your competitors. It will just become a time waste and cost burden. The mistake you make is making the wrong product or providing the wrong service to perfection.

You need to understand where you add value to your customers today and where your potential future value opportunities lie before you begin designing your Operational Excellence journey. Here are a few tips that will help you to avoid the trap:

1. Get close to your customers. Do you talk to your customers often enough to understand their needs? You can’t beat good old face to face communication with customers to really get to understand their needs, but as we are all adapting to the situation, Zoom and Teams are a good substitute. Your customers will be on someone else’s prospect list, so make them feel special and give them a call. Or your competitors will.

2. Understand how you add value and know what you need to do well. What problems are you solving for your customers today? What are the problems they may experience in the future? Get ahead of the curve and start to plan for future value opportunities. The only way to gain a real strategic advantage in the market is to understand how you add value to you customers and becoming the better than your competitors at it.

3. Align the whole business with meeting the needs of the customer. Now you know what it is that you customers want, you can get everyone in the business on board and aligned with meeting the needs of the customer. Ex CEO of Leyland Truck, John J Oliver OBE wrote a book a few years ago, Growing Your Own Heroes that takes a practical approach to achieving high levels of employee engagement with your change process.

4. Measure performance and act when gaps need to be closed. You need to perform well in the key areas where you are looking to gain competitive advantage. You don’t need to be the best at everything. What are the vital few things that you need to be better than your competitors at to gain competitive advantage? Your customers insights should have provided you with a great indicator on what is most important to them. Cascading your key business objectives is vital to getting your organisation aligned with your customers. Good visual management and daily management of performance will provide a great framework for building and maintaining momentum. Not sure what to measure. There is a great article on the LNS Research website that will provide you with the 28 manufacturing metrics that actually matter.

Hopefully, you found these tips useful and they will help you to refocus your operational excellence efforts. If you have fallen into the trap of becoming too inward focused you now have a few ideas on making the necessary changes.

This article has been written by the Founder of the Manufacturers Alliance, Gary Sheader. The Manufacturers Alliance supports North West and Yorkshire based manufacturing businesses via their peer support groups and training academy. He is keen to support progressive manufacturing leaders in their quest for excellence.

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