4 Ways Manufacturing Leaders Can Shape Operational Excellence Strategy


Matthew Littlefield, President and Principal Analyst of LNS Research in Boston, MA

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Experienced professionals know that buy-in from senior leadership is often the greatest success factor for an initiative. When high-level support is missing, the likelihood that lower-tier employees will be the ones to drive an initiative forward tends to lessen as time goes on, until it tapers off completely. It’s a shame when this happens. And when we’re talking about initiatives as important as Operational Excellence, it’s critical that executives provide consistent support from the start.

In this article, we’ll share four different manufacturing and Operational Excellence strategy examples of how you can actually influence whether or not an Operational Excellence initiative takes hold and how successful it is in the long-run.

1. Clearly Define Operational Excellence, How It Will be Measured, and How People Will be Rewarded

There’s no set definition for Operational Excellence. It’s really dependent on senior leadership to say “This is what Operational Excellence means to us” before any goals can be set and personnel can be held accountable. Because we’re talking about Operational Excellence, it’s important to get input on how it should be defined from senior leaders across the operation (not just manufacturing).

Some companies will focus the initiative on quality, while some will focus it on safety, efficiency, customer satisfaction, or an alternative area. The strategy for executing on the initiative will be tailored toward your focus area or combination of areas. After focus is identified, a set of measurable expectations should be shared. For instance, if you’re a contract manufacturer focused on customer satisfaction, you may measure the number supplier chargebacks against you.

It’s no surprise that people respond to rewards. With goals set for your Operational Excellence program and a plan for both achieving and measuring progress toward them, it only makes sense for you to put in place a corresponding incentive plan. Incentives could be monetary in nature, or simply in-kind rewards such as “Employee of the Month.”

2. Make Operational Excellence an Executive (and Personal) Priority

There’s a good reason that saying “practice what you preach” has been around for a long time. If your Operational Excellence program is focused on safety and you walk around the shop floor without your hard hat on, then those who follow you are more likely to do the same. As a leader, people look up to you, and for that very reason you must be the living, breathing version of Operational Excellence.

As mentioned, Operational Excellence is largely dependent on executive buy-in. Ensure buy-in by making it an executive priority, requiring that performance is regularly reviewed and reported on. This is not only beneficial for keeping executives accountable (and consequently everyone who reports to them), but also for assessing progress toward goals and understanding if additional or less resources are required to achieve them.

3. Develop Short- and Long-term Plans for Resource Investments

With goals in mind, you may then conduct a gap analysis to see where resources should be invested. Resources span the categories of people, processes, and technology. Some examples of where investments may be made are as follows:

  • People: internal training, change management, the development of SOPs and best practices, internal marketing and branding programs
  • Processes: process standardization (this is a great opportunity to rationalize and consolidate the many different management systems found in operations today: ISO 9001, Lean, Six Sigma, TQM, etc.)
  • Technology: a global Manufacturing Operations Management (MOM) software platform with other enterprise applications (this is critical for completing the digital thread and reaching your Operational Excellence goals)

4. Understand that Goals (and Resources for Achieving them) are Fluid

Operational Excellence requires resilience rather than resistance. Macro factors like fluctuations in the economy or more internal factors like taking on a major new customer may prompt you to adjust your original goals. Additionally, keep in mind the rate of advancement for business technology is fast. The potential for taking advantage of emerging technologies like intelligent devices (IoT) or Big Data analytics is becoming greater by the day, and having the flexibility to adopt such capabilities may help to accelerate progress toward your operational excellence goals.

The Impact Good Leaders Can Have

To round out these tips, let’s conclude with a lesson from one of the greats. Many thought leaders say the mindset of employees in an organization replicates that of its executives, which really brings into focus when ambition and passion are lacking at the top. Not long ago, we interviewed Quality Management expert Subir Chowdhury. The importance of executive leadership in building this “mindset” of excellence came up while we were discussing his time working with Apple and, specifically, Steve Jobs.

After mentioning how important customer experience and product quality were to Jobs, Chowdhury mentioned, “[Jobs] had a culture of people intent on delivering products that made Apple’s customers’ lives better, and doing that means you’re thinking about how each of your decisions will impact the quality of the product.” Essentially, Jobs was able to shape the mindset of Apple’s culture that closely aligned to the way he, himself, operated.

Apple’s a massive company, and Jobs will likely go down in history as one of the greatest, most innovative leaders ever, but the lessons for shaping culture and employee mindset hold true for any company. Never underestimate the power of effective leadership, and keep these Operational Excellence examples and lessons in mind as you go forward with your own initiative.

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