Tekni-Plex, Inc

Operational excellence and continuous improvement are related concepts, but they are not the same. Continuous improvement is a methodology within operational excellence that focuses on incremental improvements to processes and systems over time. It involves the ongoing identification and elimination of waste and inefficiencies to create an organization's culture of continuous improvement. Continuous improvement is based on the principle that small incremental improvements can achieve significant gains over time.

Operational excellence is a broader business strategy that focuses on achieving superior performance with greater consistency and efficiency than the competition by improving all aspects of an organization's operations. It involves optimizing processes and systems to create maximum value for customers, employees, and stakeholders. Let’s look at the four pillars of a practical operational excellence framework.

Managing the Business

Managing the business sounds basic; this encompasses ensuring the safety, quality, delivery, and cost objectives are achieved. But it is essential to have a system to do this efficiently and more consistently than the competition. Where most systems fall short is that they are focused only on achieving this in the near term, yet it is essential in an operational excellence framework that managing the business is focused on achieving this daily, monthly, and quarterly/yearly for long-term success. There are three elements to managing the business: daily management, monthly business reviews, and quarterly/annual business reviews.

Daily management ensures the day-to-day activities go as planned and continuously improve. The major components are daily rhythm and equipment reliability. Having a daily rhythm is about creating the expectation that we have a daily routine for managing our factory safely and efficiently and planning what to do when something unexpected happens. This has many familiar elements, including hour-by-hour boards, escalation processes, and shift handoffs, to name a few. Equipment reliability means keeping the equipment in good running condition so that the machines can safely produce good-quality products when needed.

" Having a daily rhythm is about creating the expectation that we have a daily routine for managing our factory safely and efficiently and planning what to do when something unexpected happens "

The monthly business review is about reviewing the progress of KPIs, financials, and operations strategy and adjusting activities based on performance. The monthly reviews should review and discuss plant and financial performance, sales volume, key customers, cost ops performance to budget, continuous improvement activities, and capital project activities.

The quarterly/annual business review needs to consider items from the monthly business review and additional items to ensure alignment with long-term business needs, which includes identifying performance gaps and changes in the customers and markets served, then reviewing and adjusting, and if needed, the execution plan. The quarterly/annual reviews are the opportunity to review and evaluate how you are performing and update items from the operations strategy like the capital deployment plan, the supply chain/global footprint, the continuous improvement plan, evaluation of the current condition of equipment, capabilities, and plans for automation, quality improvements, and cost improvement.

Continuous Improvement

Many practitioners of continuous improvement focus on the tools used to solve a problem or make an improvement. While the tools are essential, they represent only one element of the process that will help reduce the business's waste, variation, and complexity. This approach starts with opportunity identification and teaches everyone to recognize opportunities for improvement. Once an opportunity is recognized, we need to start tracking it. Then we need to review, prioritize, and select the opportunities that align with the financial goals and operations strategy. Once selected, you must resource and execute the continuous improvement activity using the appropriate tool. After improvement occurs, it is time to share the successes, learnings, concepts, ideas, policies, and experiences that may be useful for others.

Operations Strategy

Your operations strategy is a consequence of your business strategy. The operations strategy is the strategy for operations that will support the execution of the business strategy and ensure that operations are capable and aligned to execute the long-term plan of the business. Common elements for the operations strategy include automation, equipment refresh, supply chain/global footprint and capacity, equipment technology/platform, quality processes, and product/process design.

Operational Excellence Office

The operational excellence office’s role is to support the organization in implementing operational excellence. This includes collaborating with the business on a single approach to operational excellence, as well as the tools, processes, and even forms. Assist, support, and collaborate with the business on implementing and executing the operational excellence framework. Provide training so everyone uses the same language and approach for operational excellence. Evaluate the execution of operational excellence to encourage correct usage and recognize and celebrate excellence.

None of the elements in an operational excellence framework are earth-shattering, but they are all essential. The trick is to combine these activities to function as one. What does this mean? Are items discovered from your daily rhythm activities informing your continuous improvement plans and capital deployment, or is your operations strategy informing your continuous improvement plans? Is what you learn from equipment reliability teaching you how to improve your product/process design? The strength of the operational excellence system lies in the connection between the pieces.