Operational excellence

Operational Excellence is the execution of the business strategy more consistently and reliably than the
competition, with lower operational risk, lower operating costs, and increased revenues relative to its
competitor. It is needed more than ever in today’s technology driven rapidly changing business models,
which require organizations to undergo end-to-end business transformation. Operational Excellence can
also be viewed as execution excellence.Some of the key process methodologies used are Lean
Manufacturing, Six Sigma, Kaizen, Hoshin Planning, Balanced Scorecard etc.

Companies in pursuit of Operational Excellence do two things significantly differently than other
companies: they manage their business and operational processes systematically and invest in
developing the right culture.

It focuses on meeting customer expectation through the continuous improvement of the operational
processes and the culture of the organization. The goal is to develop one single, integrated enterprise
level management system with ideal flow. The second component, a culture of Operational Discipline, is
commonly described as doing the right thing, the right way, every time. This culture is built upon guiding
principles of integrity, questioning attitude, always problem-solving, daily continuous improvement
mind-set, level of knowledge, teamwork, and process driven.

Process Improvement
Process improvement involves the business practice of identifying, analyzing and improving existing
business processes to optimize performance, meet best practice standards or simply improve quality
and the user experience for customers and end-users.

Process improvement can have several different names such as business process management (BPM),
business process improvement (BPI), business process re-engineering, continual improvement process
(CIP), to name a few. Regardless of the nomenclature, they all pursue the same goal: to minimize errors,
reduce waste, improve productivity and streamline efficiency.

The 6S method is a 6-step process:

Sort - Distinguish between necessary and unnecessary material, documents, equipment, data, and
information. For items that are not necessary, put together an orderly plan to take them out of the
workplace.

Set in order - “A place for everything and everything in its place.”

Shine (systematic cleaning) - Maintain a clean and functional workplace on a daily basis.

Standardize - Create clear and simple visual cues that indicate whether or not “sort” and “set-in-order”
are being maintained.

Sustain - Effective, ongoing application of knowledge regarding keeping an effective workplace.

Safety – A vital foundation for all of the other steps! We develop and maintain workplaces that are safe
for ourselves, our customers and anyone else who may be affected by our workplace.

Kanban
The Japanese word “kanban”, meaning “visual board” or a “sign”, has been used in the sense of a
process definition since the 1950s. It was first developed and applied by Toyota as a scheduling system
for just-in-time manufacturing. On the other hand, the capitalized term “Kanban” is known and
associated with the emergence of the “Kanban Method,” which was first defined in 2007.

Initially, it arose as a scheduling system for lean manufacturing, originating from the Toyota Production
System (TPS). In the late 1940s, Toyota introduced “just in time” manufacturing to its production. The
approach represents a pull system. This means that production is based on customer demand rather
than the standard push practice to produce goods and push them to the market.

You can start building your Kanban system by setting up the most straightforward Kanban board with
three basic columns – “Requested”, “In Progress” and “Done”. When constructed, managed, and
functioning correctly, it serves as a real-time information repository, highlighting bottlenecks within the
system and anything else that might interrupt smooth working practices.

Project Charter
A project charter is a short document that explains the project in clear, concise wording for high level
management. Project charters outline the entirety of projects to help teams quickly understand the
goals, tasks, timelines, and stakeholders. It is is an essential deliverable in any project and one of the
first deliverables as prescribed by the PMBOK Guide and other best practice standards. The document
provides key information about a project, and also provides approval to start the project. Therefore, it
serves as a formal announcement that a new approved project is about to commence. Contained also in
the project charter is the appointment of the project manager, the person who is overall responsible for
the project.

The project charter includes:

 Purpose and objectives of the project in clear, concise language

 Requirements of the project at a very high level and without much detail
 Project description in a paragraph or two that explains the project
 Known high-level, major categories of risks for the project
 Schedule of events with the start and end dates
 Major events or milestones along the path.
 Budget or summary of how much the project will cost
 Requirements from the organization for approval, including what to approve, who will approve,
and how to get the approval
  Key players or stakeholders in charge of which parts of the project and who will approve the
plans to go through
 An introduction of the project manager, project sponsor, and their authority level

As-is Analysis
As-is process analysis or current state analysis is a process management strategy that identifies and
evaluates a business’s current processes.

Current state analysis can focus on an entire business organization or on one or more specific processes
within a department or team.

There are several key goals or motivations for implementing current state analysis, including:

 Saving money
 Improving existing processes or creating new processes
 Increasing customer satisfaction
 Improving business coordination and organizational responsiveness
 Complying with new regulatory standards
 Adapting processes following a merger or acquisition

The as-is phase outlines the current state of your processes and any gaps or issues with the
current mode of operation. Once you have that mapped out, you can enter the to-be phase of
process management.

Value Stream Mapping

Also called: value stream analysis, lean process mapping

Value stream mapping (VSM) is defined as a lean tool that employs a flowchart documenting every step
in the process. Many lean practitioners see VSM as a fundamental tool to identify waste, reduce process
cycle times, and implement process improvement.

VSM is a workplace efficiency tool designed to combine material processing steps with information flow,
along with other important related data. VSM is an essential lean tool for an organization wanting to
plan, implement, and improve while on its lean journey. VSM helps users create a solid implementation
plan that will maximize their available resources and help ensure that materials and time are used
efficiently.
The original VSM template was created by Toyota Motor Company and implemented via material and
process flowcharts. This VSM illustrated the necessary process steps that existed from order entry to
final product delivery and was useful for gaining a wide-reaching view of the company’s activities. It
allowed Toyota to remove nonessential activities that created waste while maintaining the
manufacturing process.

The "value stream" portion of the VSM system centers on how value can be added to a product or
service by changing the market form or function to meet the customer’s needs. This includes adding
features and functionality to a product or service that benefit the customer without increasing wasted
time and materials (also called muda, the Japanese term for waste) on the company’s side.

NVA and VA
Value Added activities: These activities are those which adds value to a business process or product and
for which customer is willing to pay. Value Added activities help in converting a product from a state of
raw material to a finished product in the least possible time, at minimum costs. It aims at completing a
business activity correctly the very first time, and helping the business to deliver the product or service
while fully conforming to customer requirements or specifications.

Non-Value Added activities: These are those which do not add any value to the product or service but
are an inherent part of the process. Customers are not willing to pay for such services. These activities
prove to be a burden on the organization and affect its efficiency. Valuable resources in the organization
are engaged in completing these activities despite the fact that such activity is slowing the progress of
the organization.

There are several examples of Non-Value Added activities found commonly among different
organizations. Some of the most commonly found are:

• Process steps which are not needed

• Unnecessary movement of goods or resources within or outside the organization

• Unnecessary paper work within or in between departments which is not required

• Rework due to defects found in products

• Corrections or rechecking done due to important process steps not completed properly

• Services to customers(inside and outside) not properly delivered leading to customer dissatisfaction

• Unnecessary storage of raw materials or finished goods or storing more than required

• Important Organization resources such as expensive machinery or labor lying idle or waiting for work
as inputs not delivered on time

• Delay in delivery to customers (inside and outside) due to unnecessary waiting time
Spaghetti Diagram
A spaghetti diagram is defined as a visual representation using a continuous flow line tracing the path of
an item or activity through a process. As a process analysis tool, the continuous flow line enables
process teams to identify redundancies in the work flow and opportunities to expedite process flow.

For example, areas where many walkways overlap are causes of congestion and delay. Waiting is one of
the eight wastes of lean, because it is considered "unnecessary motion." The spaghetti diagram helps
highlight major intersection points such as these that may not be noticed otherwise.

GEMBA
Gemba (現場, also spelt less commonly as genba) is a japanese term meaning "the real place." Japanese
police could refer to a crime scene as gemba, and TV reporters often refer to themselves as reporting
live from gemba.

In business, however, gemba refers to the place where value is created. The most common use of the
term is in manufacturing, where the gemba is the factory floor. Beyond this, gemba can really be any
"site", such as a building site in construction, the sales floor in retail, or somewhere the service provider
interacts directly with the customer e.g. a car dealership showroom.

In lean manufacturing, the whole point of gemba is that problems in a business process or production
line are often easily visible, and the best improvement come from going to 'the real place', where
leaders can see the state of the process for themselves.

"Go see, ask why, show respect"

Over the course of a Gemba Walk, leaders, managers and supervisors are expected to simply observe
and understand process. As part of the Kaizen methodology, it is also supposed to encourage greater
communication, transparency and trust between the lower-level of employees and leadership. For this
reason, it is not appropriate to use a Gemba walk to point out employee flaws, or enforce policy - this
runs the risk of employees putting up barriers to leadership, or closing off altogether.

MUDA, MURI, MURA

Mura (斑)

Mura means unevenness, non-uniformity, and irregularity. Mura is the reason for the existence of any of
the seven wastes. In other words, Mura drives and leads to Muda. For example, in a manufacturing line,
products need to pass through several workstations during the assembly process. When the capacity of
one station is greater than the other stations, you will see an accumulation of waste in the form of
overproduction, waiting, etc. The goal of a Lean production system is to level out the workload so that
there is no unevenness or waste accumulation.

Mura can be avoided through the Just-In-Time ‘Kanban’ systems and other pull-based strategies that
limits overproduction and excess inventory. The key concept of a Just-In-Time system is delivering and
producing the right part, at the right amount, and at the right time.

Muri (無理)

Muri means overburden, beyond one’s power, excessiveness, impossible or unreasonableness. Muri can
result from Mura and in some cases be caused by excessive removal of Muda (waste) from the process.
Muri also exists when machines or operators are utilized for more than 100% capability to complete a
task or in an unsustainable way. Muri over a period of time can result in employee absenteeism, illness,
and breakdowns of machines. Standardize work can help avoid Muri by designing the work processes to
evenly distribute the workload and not overburden any particular employee or equipment.

Muda (無駄)

Muda means wastefulness, uselessness and futility, which is contradicting value-addition. Value-added
work is a process that adds value to the product or service that the customer is willing to pay for. There
are two types of Muda, Type 1 and Type 2. Muda Type 1 includes non-value-added activities in the
processes that are necessary for the end customer. For example, inspection and safety testing does not
directly add value to the final product; however, they are necessary activities to ensure a safe product
for customers. Muda Type 2 includes non-value added activities in the processes, but these activities are
unnecessary for the customer. As a result, Muda Type 2 should be eliminated.

There are seven categories of waste under Muda Type 2 that follow the abbreviation TIMWOOD. The
seven wastes are (1) Transport i.e. excess movement of product, (2) Inventory i.e. stocks of goods and
raw materials, (3) Motion i.e. excess movement of machine or people, (4) Waiting, (5) Overproduction,
(6) Over-processing, and (7) Defects.

PDCA
The Plan-do-check-act cycle (Figure 1) is a four-step model for carrying out change. Just as a circle has no
end, the PDCA cycle should be repeated again and again for continuous improvement. The PDCA cycle is
considered a project planning tool.

Use the PDCA cycle when:

 Starting a new improvement project

 Developing a new or improved design of a process, product, or service
  Defining a repetitive work process
 Planning data collection and analysis in order to verify and prioritize problems or root causes
 Implementing any change
 Working toward continuous improvement

The Plan-do-check-act Procedure

 Plan: Recognize an opportunity and plan a change.

 Do: Test the change. Carry out a small-scale study.
 Check: Review the test, analyze the results, and identify what you’ve learned.
 Act: Take action based on what you learned in the study step. If the change did not work, go
through the cycle again with a different plan. If you were successful, incorporate what you
learned from the test into wider changes. Use what you learned to plan new improvements,
beginning the cycle again.