What is Operational Excellence in Manufacturing?

Operational excellence in manufacturing generally means applying lean manufacturing techniques. This involves employees at every level working to improve business operations to achieve long-term sustainable growth and profitability.

Operational excellence (or OpEx) got its start in the 1970s, when management consultant Dr. Joseph M. Juran taught Japanese business leaders how to improve organizational quality. The term is closely associated with lean manufacturing, made popular by Toyota. Today, it is used in lean operations to lower operational risks and costs.

If you want to learn more about operational excellence in manufacturing, explore this guide that goes over the following:

How can manufacturing operational excellence benefit your company?
What are examples of operational excellence?
How to achieve operational excellence with connected worker solutions

How can manufacturing operational excellence benefit your company?

Operational excellence is an organizational methodology that involves continuous improvement in the workplace. While it’s implemented from the top, employees at every skill level must work together to increase revenue and customer value. When done right, operational excellence can improve workplace coordination and increase profit-driving activities.

For example, this methodology empowers workers to solve problems with little or no management involvement. So employees who encounter problems in real time can fix them as soon as they arise. On a busy assembly line, this might mean the difference between meeting the day’s production quota and a work stoppage.

In return, supervisors and leaders can focus on ways to grow business operations, instead of putting out fires. They can also prioritize meeting with new customers, interfacing with existing ones, and creating new products.

What are examples of operational excellence?

Operational excellence gives manufacturers a framework for implementing business growth strategies better than their competitors. Some examples of activities include:

Evaluating resources
Analyzing production efficiency
Managing inventory
Analyzing delivery and distribution of products and services

That said, operational excellence can help a company meet three basic categories of goals:

Operational-oriented goals: Operational goals focus on boosting company productivity or improving product and service quality. Examples of these types of goals include enhancing product or service flexibility.
Financial-oriented goals: Financial goals seek to improve financial metrics through better operations and stronger customer interactions and sales. Companies try to meet these types of goals by growing profits, cutting expenses, and creating free cash flow.
People-oriented goals: These types of goals focus on creating a workforce that excels in product or service creation. Examples may include boosting employee morale and skill training.

Integrated work systems (IWS) are an example of a strategy for improving operational excellence in manufacturing. Integrated work systems bring together the core principles of people, process, and technology to drive higher levels of manufacturing performance and continuous improvement.

How to achieve operational excellence with connected worker solutions

Increasingly, manufacturing leaders are turning to digital technology to empower their employees to perform at their best and improve business operations. Connected worker solutions that bring together digital technology and data-driven workforce insights can be instrumental in improving operational excellence.

Digital Work Instructions – Digital work instructions are electronic versions of work instructions, quality manuals, or SOPs that provide necessary visual aids and real-time contextual information to help guide workers through complex tasks. Digital work instructions not only help to standardize knowledge, increase quality, reduces errors, and improve safety and efficiency but also help operations managers better understand the utilization and efficiency of their workforce and identify opportunities for improvement.
Workforce Collaboration – From frontline workers to executives, a connected worker strategy allows employees to collaborate seamlessly and easily access information. Connected worker solutions that include industrial collaboration tools allow workers to virtually connect to subject matter experts for remote guidance and assistance. These software tools are becoming commonplace in manufacturing and other industrial settings, where companies are faced with an increasingly distributed and remote workforce, yet still require team collaboration to help troubleshoot and resolve issues. In a nutshell, workers can get more done with greater accuracy in less time.
Continuous Improvement – Connected worker solutions that utilized data-driven workforce insights can drive continuous improvement. Connected worker technology can capture valuable data not just on the work that is performed, but also on how those workers are performing their jobs along with what activities or interactions are contributing to the success or performance of certain jobs. This data can be instrumental in driving continuous improvement and can be a foundation for a company’s lean manufacturing strategy.

Interested in learning how Augmentir’s suite of connected worker tools can help you achieve operational excellence within your manufacturing operation? Get in touch with us for a free demo.