Lessons on evolving from Lean to OPEX

To some degree, everyone knows what lean is. And whether an organization has done continuous improvement for years or has never undertaken any lean efforts, it can be challenging to understand how to go beyond lean and start pursuing the destination of Operational Excellence. Here are three things to remember.

  1. Lean tools still apply
    With Operational Excellence, all the same lean tools work. But instead of applying these tools on an endless journey to eliminate waste, they are used to achieve a destination. So even if an organization hasn’t done any 5S, mistake proofing or other lean techniques, that’s okay. But now when the company starts on the journey to OpEx, the key is to pick a value stream and start with 5S and teach employees why the organization’s doing it. And for those companies that are doing Six Sigma, it still applies at the process level, For example, a tool like Kaizen is great for determining standard work for abnormal flow. So don’t lose what you’ve learned from lean, but use it as a way to get to OpEx.
  2. Use lean to grow, not just to be lean
    It’s important to understand the real reason for using lean tools. And it’s not to be lean, because even if a company is the leanest, its customers won’t necessarily be loyal if there’s another source that’s cheaper or faster. Rather, the real reason for applying lean tools is to achieve Operational Excellence, the goal of which is to grow the business. That’s because, when an organization achieves OpEx, management will be able to focus on offence activities, such as working with customers and new product development that will drive market share and retention. Business growth provides employees context for why the company is undertaking the efforts as well as a motivational incentive – more so than doing lean for lean’s sake.
  3. Recognize when the destination is reached.  Unlike an endless journey of continuous improvement, with Operational Excellence, a company can move from Point A to Point B in a short period of time – as little as a few months. And when it does, it’s important to recognize the progress made. That means rewarding top-line business growth through any variety of activities, like an ESOP or employee profit sharing plan. It also means celebrating when management is working on activities to grow the business, such as working with sales to build a prototype for a prospective customer. And organizations may even need to applaud some “failures.” For example, when an employee scraps a part number when trying to test the design of the value stream, the result may not be desirable, but the intentions are and should be recognized.

About the author

Kevin J. Duggan is a renowned expert in applying advanced lean techniques to achieve Operational Excellence and the author of four books on the subject: Design for Operational Excellence: A Breakthrough Strategy for Business Growth, Creating Mixed Model Value Streams, Operational Excellence in Your Office: A Guide to Achieving Autonomous Value Stream Flow with Lean Techniques and Beyond the Lean Office: A Novel on Progressing from Lean Tools to Operational Excellence. As the Founder of the Institute for Operational Excellence, the leading educational center on Operational Excellence, and President of Duggan Associates, an international training and advisory firm, Kevin has assisted many major corporations worldwide, including General Dynamics, FMC Technologies, Chromalloy, Aetna, SpaceX, Caterpillar, Pratt & Whitney, Singapore Airlines, Sikorsky, IDEX Corporation and Parker Hannifin. A recognized expert on Operational Excellence, Kevin is a frequent keynote speaker, master of ceremonies, and panelist at international conferences, and has appeared on CNN and the Fox Business Network.