Toyota made news when it overtook General Motors as the world’s largest automaker, a position it had held for nearly 80 years.
So how did Toyota do it?
Toyota’s success can be attributed to a variety of factors, but one of the most important is that it provides affordable cars with unsurpassed durability and exceptional customer care.
Toyota, on the other hand, got to that point by cultivating a culture of continuous improvement, which helped the automaker decrease waste and enhance vehicle quality.
These concepts are founded on operational excellence, and using them in your own business can provide you a significant competitive edge.
This post will go over operational excellence in detail and how to attain it in your company. We’ll also go through the fundamentals of the system and how to put it into practice.
What Is Operational Excellence?
Operational excellence is a framework that places a strong emphasis on continual improvement. It enables businesses to better execute goals, reduce operating costs, and boost productivity.
Optimizing value streams, a set of actions that deliver value to end customers, is one of the key operational excellence aims.
The manufacturing line is an obvious example of a value stream in a factory. You can manufacture more things if you increase its efficiency.
Henry Ford introduced the first assembly line in the early 1900s, which was an early example of operational excellence. Rather than having each person assemble a car on their own, Ford divided the Model T assembly into 84 steps and instructed individuals to only perform one of them.
The strategies that corporations use to support continual improvement are known as operational excellence. It entails fostering a culture in which employees contribute to the value chain.
5 Principles of Operational Excellence
The Shingo Model, developed by Dr. Shigeo Shino, is the foundation for the following ideas. He was an industrial engineer whose work paved the way for organizations like Toyota to use lean manufacturing techniques to enhance their processes.
Let’s look at each one in more detail.
1. Respect Every Individual
Respect for each individual is the first step in achieving operational excellence. This applies to both your staff and your partners and customers.
Respect was regarded as the most important leadership behavior in a survey of 20,000 employees who were asked what was most important to them. Respected employees are more engaged at work and have higher job satisfaction.
One of the best ways to demonstrate respect is to involve your employees and empower them to make decisions on process improvements.
2. Lead with Humility
Every employee can make a difference. Instead of discarding new ideas outright, leaders must be willing to seek input from their team and be open to new ideas.
Strong leader relationships and great team climates are the most essential drivers of psychological safety, where employees can speak up without fear of retaliation.
Yet, just 43% of employees report a positive climate at their workplace. This can cause employees to hold back their opinions.
3. Seek Perfection
There’s no such thing as “perfection.” But that doesn’t mean you can’t strive for it anyway, which is what this principle really means.
By setting the bar high, you encourage employees to adopt a continuous improvement mindset and constantly seek ways to do things better.
4. Embrace Scientific Thinking
Experimenting with new ideas and learning from failure are all part of scientific thinking in the business world.
You won’t always get the results you want when you make a new move. What matters is that you learn from your mistakes.
5. Focus on Process
When things go wrong, it’s easy to point the finger at the people involved.
A process is usually the source of a problem’s root cause. You can attain more consistent results if you address the root source of a problem.