A Systems Approach to Operational Excellence

These days, organizations strive to do more with less – to do things economically and efficiently, all while maintaining a steady progression of improvement.

In these regards, tools and efforts such as Lean, Six Sigma, Total Quality Management (TQM), as well as others, are often employed to track, manage and improve inputs, processes, and outputs.  However, these systems sometimes fail to yield the expected benefits and improvements.  Too, these systems often fail to be predictive; and if business cannot effectively pilot to the future, how secure can the prospects be?

For example, Bank of America’s deployment of Lean Six Sigma did not forestall severe problems due to the financial crisis beginning in 2008.  We can also look to Toyota, and its much touted Toyota Production System, which nonetheless led to quality and design problems in 2009, resulting in significant financial loss.

Make no mistake: “Improvement” systems do have overhead costs – therefore, they must justify themselves, not in breaking even, but in making measurable and meaningful significant gains.  This is where Integrated Enterprise Excellence (IEE) makes its mark.

IEE establishes a long-standing, permanent, and sanctioned business system of process improvement, as supported by a sustainable, stable, and understood measurement system.  These measurements are whole-view performance metrics, leveraging understanding for the organization’s overall input, process, output cycle.  Further, predictive measurements are established, allowing the organization to not only view static snapshots of some sliver of past or present business, but to predict the measure of business for prudent views to the future.

Further, IEE supports an important set of principles:  Business has to adhere to the “Three Rs of Business” – everyone doing the Right things, in the Right way, at the Right time.  How?  One manifest practice is IEE’s removal of “silos.”  Frequently, businesses harbor departments that practice various aspects of process as discreet elements, rather than as elements of a cohesive whole.  By establishing an overall business management system with a coherent view to big-picture analytics and innovation, it becomes much easier to do those right things in service to the big picture – to do things the right way, in service to cost effectiveness, as one example, and to do things at the right time – in service to efficiency, as another.

Another important concept is the Value Chain and its true measure of what the enterprise does, via the performance measures of cost, quality, and time, and their relation to both the customer and business point of view:  That is, delivery of success.

As an organization may change its departmental structure, its processes, and certainly its governance, the Organization Chart is subordinate to the Value Chain.  The Value Chain’s metrics are long-lasting, stable, and therefore provide a true measure of progress and success over time.

IEE has many manifest parts in its business management system of governance, and the prudent organization will want to examine all aspects and appropriate fits in optimizing today’s and the future’s business.

About the Author: Forrest W. Breyfogle III is CEO of Smarter Solutions, Inc. and founder of the Integrated Enterprise Excellence System. He is a Professional Engineer and ASQ Fellow and received the 2004 Crosby Medal for his book, Implementing Six Sigma.

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