operational excellence

Six Sigma – iSixSigma Forums Old Forums Europe operational excellence

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    L M

    In our annual plan we measure several lean sigma results like hard savings, number of projects etc. We also do a lot of projects were we improve operational excellence but with no hard saving. We would like to include the result of these projects in our annual plan and roll these improvements up into 1 metric.
    Does anyone have experience/ideas how to roll up the results of this kind of projects which only impact operational excellence? 



    Good and common question. Idea generation has been a common measure as a leading indicator of continuous improvement driving to operational excellence. Of course, idea implementation is clsoer to “The end in mind” of favorable impropvement and this metric is also used. ONe of hte most popular methods if measuring idea generation using Lean and Six Sigma is to post the Map of the process’ value stream in the process and provide plenty of sticky notes and pencils for people to post ideas and improvements. A couple of major auto companies do this well and my companies.
    Another metric to consider is always customer satisfaction improvement – commonly hard to identify hard savings but very important, we would all agree. A well designed survey and good statistically based sampling can make this metric work for showing excellence in the entire operation including sourcing through reverse logistics.
    Lastly, maybe help us with your definition of operational excellence and you may get more fine-tuned tips.


    Krishna Rao

    Hi LM ,
    Good concern. We encounter the same situation 2 years back while I was working with management team.There is no single fit for all situation , which every body agree. Operational excellence definition depends on the Managerial objectives finally. However to monitor monthly , we came out with all-agreed metrics like below :
    1) Value added per project ( manhrssaved ,$$ savings,Sales improvement, Productivity index)  
    2) Customer Satisfaction Index ( Survey index if not No.of repeated orders generated from TOP 3 customers and No.of complaints from the same)
    3) CRDD ( Customer required Delivery Date) committment : This is no.of orders shipped/received by the customers as per the committed date
    4) Financial measure Like IRR or ROI
    These 4 measures are highly likely accepted by Management board. Pls try
    Best of luck



    A common problem for everyone is when projects you do can’t be shown to have a direct impact on hard measures which the Board would recognise, i.e. they have qualitative results but no quantitative results.
    In a situation like this I would suggest a self assessment using something like the EFQM Excellence Model. This is done internally through a number of channels and you effectively give yourself a score against the excellence scale and this can then be used as a measure of how well you’re doing in different aspects of the business such as leadership, people, processes, societal results, etc.
    This process is undertaken on a regular basis (annualy) and based on each assessment you get a measure of how you have improved both within each area of the model and overal as an organisation.


    Bill Woehr

    I have had an experience where the business objective was to reduce the cycle time of final container release from an average of 75 days with a maximum of 100 days per batch to consistently deliver against 45 days within a day. We targeted processes in the labs, quality transactional processes and inventory flow from warehouse to production. The project used a DMAIC methodology for a black belt led project with the execution of 15 Kaizen events at the facility by different Kaizen leaders. The total impact was to go from a (Define phase) baseline in May to the objective in September (Control phase). It was never possible to quantify the results and impact of each Kaizen event, but the umbrella project results delivered a cycle time reduction with $30 million impact on inevntory and better customer fulfillment.

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