What is operational excellence [10 core principles]i

1. /
What is Operational Excellence [10 Core
Principles]
In every business, there is always at least one area that could be
improved. But
how exactly does meaningful change take place within an
organization?
Sometimes it can occur through a major initiative or total
upheaval within the
business. But most of the time, change happens in a much less
overt way; it
happens slowly and more gradually over time. Operational
excellence is an
example of this type of change.
In this guide, we will look more closely at what operational
excellence is, its 10 core
principles, as well as the different methodologies you can use to
implement it.
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2. Top 3 Operationa
What is Operational Excellence?
Operational excellence can simply be described as a philosophy
that embraces
problem-solving and leadership as the key to continuous
improvement.
(https://tallyfy.com/)
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People are often unsure of how to approach the subject of
operational excellence. It
is a dif�cult term to de�ne and most people either �nd the
topic to be too
ambiguous or too broad to talk about.
Operational excellence, however, is not a set of activities that
you perform. It’s
more of a mindset that should be present within you and your
employees.

3. Now, you’re probably thinking, “that sounds nice in theory, but
how do I translate
this into actionable steps?”
Well, we’re going to explain that in a bit. Before we get into
implementing
operational excellence, you need to understand how the concept
is related to
continuous improvement (https://tallyfy.com/guides/continuous-
improvement/).
How can you work more effectively from
home?
Tallyfy eliminates the many pains of using
Word/Google docs and �owcharts to document and
run your processes. It replaces static documents and
�owcharts - giving you the power to automate and run
your processes.
By making ourselves write down our processes and know-how
on Tallyfy – we can now ensure that steps are never missed or
done out of order. There’s fewer mistakes and a lot of time is
saved on training.
— Len Gilbert / Digital Prism
Learn more about Tallyfy (https://tallyfy.com/)
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4. https://tallyfy.com/guides/continuous-improvement/
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Operational Excellence vs Continuous Improvement
Continuous improvement is the on-going effort to improve an
organization’s
processes (https://tallyfy.com/business-process), products, or
services. It usually
takes place incrementally over time, rather than instantly
through some
breakthrough innovation.
By pursuing continuous improvement, an organization has a
greater likelihood of
continuing to maintain and build on these improvements.
However, while continuous improvement is important, it is not
enough on its own.
As the organization continues to re�ne its process, product, or
service, it needs a
way to continue to grow. This is where operational excellence
comes in.

5. Operational excellence is a mindset that embraces certain
principles and tools to
create sustainable improvement within an organization.
Or to put it more simply, operational excellence is achieved
when every member of
an organization can see the �ow of value to the customer.
Seeing it, however, isn’t
enough – they should actively try to improve both the value, as
well as its delivery.
Ultimately, operational excellence is not just about reducing
costs or increasing
productivity in the workplace. It’s about creating the company
culture that will
allow you to produce valuable products and services for your
customers and
achieve long-term sustainable growth.
Operational excellence is a journey that involves applying the
right tools to the right
processes. When this happens successfully, the ideal work
culture is created where
employees are provided for in a way that enables them to stay
empowered and
motivated.

6. Operational Excellence: 10 Core
Principles
Every year, the Shingo Institute of the Jon M. Huntsman School
of Business gives
out an award for operational excellence called the Shingo Prize
(http://www.shingoprize.org/). This prize is based on company
culture, company
results, and how well every employee demonstrates the Guiding
Principles of the
Shingo Model (http://www.shingoprize.org/model). Here is a
more in-depth look at
each of those ten principles…
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http://www.shingoprize.org/model
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/
Principle #1: Respect Every Individual
The Shingo Model emphasizes that because everyone has worth
and potential,

7. everyone deserves respect. However, it’s not enough to have
respect for others;
you must demonstrate this respect to them as well.
One of the best ways to demonstrate respect for your employees
is by involving
them in any necessary improvements to their department. This
will help them feel
more empowered and motivated to contribute to the changes in a
positive way.
To learn more about how to create a culture that engages every
employee, from
CEO to shop-�oor staff, read our guide to Kaizen.
(https://tallyfy.com/kaizen-
continuous-improvement )
Principle #2: Lead with Humility
Leaders should always exercise humility.
After all, the best improvements happen people can
acknowledge their
shortcomings and look for a better solution. Humility involves a
willingness to listen
and take suggestions from everyone, regardless of that person’s
position or status

8. within the company.
Principle #3: Seek perfection
This step in the model is often met with resistance as most
people are quick to
point out that perfection isn’t possible. While perfection may
feel unattainable that
doesn’t mean you can’t strive for it anyway.
By setting the bar high, you create a different mindset within
your organization.
When confronted with a problem, try to look for long-term
solutions and always
try to simplify your work without compromising the quality of
the outcome.
Principle #4: Embrace Scienti�c Thinking
Innovation comes from constant experimentation and learning.
Hence, it’s always useful to know what works and what doesn’t.
By systematically
exploring new ideas you can encourage employees to do the
same without fear of
failure.
Principle #5: Focus on the Process
(https://tallyfy.com/)

9. https://tallyfy.com/kaizen-continuous-improvement
https://tallyfy.com/
/
When things go wrong, there is a tendency to want to blame
other people. In a lot
of cases, however, problem is rooted in the process, not the
person. This is because
even great employees can’t consistently produce ideal results
with a bad process.
When a mistake occurs, rather than immediately pointing
�ngers at the employees
involved, assess what part of the process the error occurred in.
Once you have
done this you can make adjustments to try to achieve the results
you want.
Principle #6: Assure Quality at the Source
High quality can only be achieved once every part of the
process is done correctly.
It can be helpful to organize work areas in a way that will allow
potential problems
to become visible right away. When a mistake does occur, stop

10. working
immediately to correct the mistake before continuing.
Principle #7: Flow and Pull Value
The object of every organization is to provide maximum value
to its customers.
Because of this, organizations should ensure that the process
and work�ow
(https://tallyfy.com/what-is-a-work�ow/) are continuous
because interruptions
create waste and inef�ciencies.
It is also important to evaluate customer demands to ensure that
your organization
is only meeting those demands and not creating more than what
is necessary.
Principle #8: Think Systematically
In a system, there are many different interconnected parts that
work together. It is
important to understand the relationship between each of these
parts because it
will help you make better decisions. You should avoid taking on
a narrow vision of
your organization and get rid of any barriers that interrupt the
�ow of ideas and

11. information.
Principle #9: Create Constancy of Purpose
Employees should be informed of the goals and mission
statement of the
organization from day one. This shouldn’t just stop after day
one, however. You
should continue to emphasize these goals and principles every
day going forward.
Every employee should have an unwavering certainty of why the
organization
exists, where it’s going, and how it will get there. Knowing this
will help them align
their own actions and goals with those of the company.
(https://tallyfy.com/)
https://tallyfy.com/what-is-a-workflow/
https://tallyfy.com/
/
Principle #10: Create Value for the Customer
To create value for the customer you have to understa nd what
the customer

12. needs. The value is simply what that person is willing to pay
for.
Organizations must continue to work to understand the needs
and expectations of
their customers. An organization that stops delivering value to
the customer is not
sustainable over time.
Top 3 Operational Excellence
Methodologies
Through operational excellence, an organization can improve its
company culture
and performance, which leads to long-term sustainable growth.
Businesses should consider looking past the traditional one-time
event and move
toward a more long-term system for change.
Over the years, numerous methodologies have been introduced
to the mainstream
business culture as a method of achieving operational
excellence. We will look
more 3 of the most popular ones below…
Methodology #1: Lean Manufacturing
Lean manufacturing focuses on systematically eliminating waste

13. in a production
system.
It teaches that the only thing a business should focus on is that
which adds value.
Lean also teaches that every process has some sort of bottleneck
and that
focusing all your improvement efforts on that bottleneck is the
quickest path to
success.
The key principles of lean manufacturing focus on improving
the quality of
products and services, eliminating anything that doesn’t add
value, and reducing
overall costs.
Traditional lean manufacturing identi�es seven areas of waste
which are commonly
referred to as the “seven deadly wastes (https://tallyfy.com/7-
wastes-lean/).”
Speci�cally, these are…
Overproduction: Overproduction happens when employees
produce something
before it is actually needed. This is one of the worst forms of
waste because it

14. leads to excessive inventory and often masks underlying
problems.
(https://tallyfy.com/)
https://tallyfy.com/7-wastes-lean/
https://tallyfy.com/
/
Waiting: When employees are left waiting for the next step in
production no value
is being added. It can be very eye-opening to examine each step
from the
beginning to the end and then evaluate how much time is
actually being spent
adding value and how much time is spent waiting.
Transport: Transport is waste caused by unnecessary movement
of uncompleted
or �nished products.

15. Motion: This step refers to all movement that doesn’t add any
value to the product
and is usually caused by poor work standards.
Over-processing: This happens when more time is spent on
processing than is
necessary to produce what the customer needs. It is also one of
the hardest wastes
to get rid of.
Inventory: This type of waste occurs when the supply exceeds
what the actual
demands are.
Defects: Defects are mistakes that will either need to be �xed
or the process will
have to start over entirely. In manufacturing, this usually looks
like a part that either
has to be scrapped or completely remade.
Methodology #2: Six Sigma

16. Six Sigma (https://tallyfy.com/what-is-six-sigma/) is a set of
tools
(https://tallyfy.com/six-sigma-tools/) and techniques that are
designed to improve
business processes which will result in a better product or
service. The goal of Six
Sigma is to improve the customer experience
(https://tallyfy.com/customer-
experience/) by identifying and eliminating variation.
Over 50 percent (http://asq.org/public/six-sigma-
training/asqsigma.pdf) of all
Fortune 500 companies have implemented Six Sigma to some
degree. It has been
shown that Six Sigma has helped Fortune 500 companies save
over $427 billion
over the past 20 years.
A Six Sigma business will produce no more than 3.4 defects for
every million
opportunities. A defect is de�ned as anything that fails to meet
the customer’s
expectations. It does this primarily by implementing DMAIC
(https://tallyfy.com/what-is-dmaic/).
DMAIC is an acronym that stands for de�ne, measure, analysis,

17. improvement, and
control. Here is a closer look at each step in this process and
how it helps to build
Six Sigma businesses:
De�ne: In this �rst step, you will simply de�ne the problem
because without
knowing what the problem is, you really can’t �x it. Once you
have de�ned the
problem you can begin creating a plan and evaluating your
available resources.
(https://tallyfy.com/)
https://tallyfy.com/what-is-six-sigma/
https://tallyfy.com/six-sigma-tools/
https://tallyfy.com/customer-experience/
http://asq.org/public/six-sigma-training/asqsigma.pdf
https://tallyfy.com/what-is-dmaic/
https://tallyfy.com/
/
Measure: Now that you understand the problem, you need to
measure all of your
available data and look closely at your current process. What is

18. working well and
what needs to be improved?
Analysis: Once you have measured your data, you can analyze
your �ndings and
get to the root of the problem.
Improvement: After you analyze your data, begin coming up
with possible
solutions. Implement these solutions on a small scale to test the
results so you can
make any necessary changes.
Control: Once you have implemented your new process you
need to �nd a way to
maintain that process. Continuous improvement is important to
ensure that your
process stays effective.
Methodology #3: Kaizen
Kaizen means “continuous improvement” in Japanese and in

19. business, it used to
implement positive, ongoing changes in the workplace.
The guiding principles of Kaizen are that a good process will
lead to positive
results, teamwork is crucial to success, and that any process can
be improved.
Organizations implement kaizen to help them create a culture of
continuous
improvement. Employees will work together to achieve ongoing
workplace
improvements.
Kaizen teaches that when applied consistently, small changes
will compound over
time and produce big results. The methodology does not
necessarily encourage
only making small changes, though; kaizen focuses on the
participation of all
employees to effect real change.
Kaizen stresses the importance of continuous improvement and
that it is not
enough to make a change once and hope it sticks. You must
continue to make
improvements repeatedly. Many businesses have used Kaizen to

20. help them
increase employee productivity, cut costs, and improve the
customer experience.
Achieving Operational Excellence
Operational excellence is the ultimate goal of all organizations
striving for
continuous improvement. Projects and tools are a useful place
to start but on their
own, they are not enough to create lasting change.
People often think that buying legacy BPM software is a great
answer to running
operations well. Nothing could be further from the truth.
(https://tallyfy.com/)
https://tallyfy.com/
/
“Old BPM” software is tired and broken. It never worked for
business users. Here’s
why:
Users are now deciding to buy software themselves. Old BPM
was bought by

21. your IT department, who didn’t generally care about user
experience – as long as it
was made by a large/boring company.
Cloud tools are now free to try by anyone, anytime. With Old
BPM you had to call
sales and wait for 50 questions just to look at it and �nally
decide it sucks.
People want to share work�ows with clients. With Old BPM
you were stuck with
trying to automate internal processes only. Your clients would
be very scared and
run a mile from it.
People expect to integrate cloud tools without IT. With Old
BPM you had get
engineers to write code to make a simple integration. That’s
now become a drag-
and-drop service.

22. People expect to work on phones. This means giant, clunky
�owcharts in Old
BPM are dead – because they don’t �t on your phone’s screen –
and only de�ne
“the perfect process”.
People are tired of �owcharts. Old BPM was all about the high
priest telling you
how a process can/will be done, and you would obey. Now –
modern workers and
teams are paid to collaborate.
People expect all the bene�ts of the cloud. Old BPM was never
cloud-born and
was never designed for the cloud. And that creates a massive
bunch of missed
opportunities.
Companies of all sizes need process management – and never
had it. Since Old
BPM was so expensive and complicated, only large companies
could afford it. The

23. rest of us were left out.
People are excited about AI – but confused about where to
begin. With Old BPM
you have zero chance of using AI without an army of engineers.
With cloud-born
systems like Tallyfy – it’s childs’ play to use any AI you like to
run amazing
automations for photos, voice, video and more.
The above reasons are why we built Tallyfy
(https://tallyfy.com) – the only software
that anyone can understand in 60 seconds. Start your journey in
operational
excellence by picking a platform people will really love.
Lasting change can only happen when the principles of
operational excellence are
understood and deeply rooted in the culture of an organization.
So, make sure that both the management and the company
employees understand
& follow the core principles of operational excellence.
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28. is Operational Excellence [10 Core Principles]
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Operational Excellence Paper - Part 1
Read the attached article on Operational excellence. Then, in a
single Word document (excluding cover page and citations),

30. APA style, 3 full pages minimum, answer the following
questions.
1. In your own words, define operational excellence
2. List and briefly describe in your own words the 10 core
principles
3. How would you as an analyst, use the 10 core principles to
optimize an operational process.
4. Summarize the article including your key take-aways
Link -
https://www.youtube.com/watch?v=bCpAWW2ZESs&feature=y
outu.be