Monday, May 4, 2009

Operational Excellence

These are tough days, and the CEO's and senior leaders of organizations are tasked with cutting costs. Unfortunately they look at the easiest way of doing it. Layoffs. Its sad that people of such experience and calibre look to the easist way of accomplishing a task, thereby ignoring the most efficient way of doing the same thing. Operations excellence culminates to a steady state of operational efficiency that has optimised the performance of resources, services, functions, tasks and activities transforming an organization into a performing unit. Tools such as Lean, Six Sigma, Kaizan have helped achieve these goals. How many CEO's endorse these tools for excellence. Very little. Reducing and eliminating waste in the value chain alone significantly reduces cost, and improves efficiencies. Following a deciplined method such as the above and implementing it in a methodically alone will surfice in this transformation. Senior managers need to be trained and re-trained in these concepts and methods so that they can re-enforce them at all times. Many fail to realise that process improvements can be achieved by even having the simpliest of management and operational dashboards which shows the trends of key performance indicators over a period of time. This enables the managment to take corrective action to the indicators with a declining trend. Do will still need layoffs to cut cost?