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In order to make significant impact, Operational Excellence programs must deliver tangible benefits to customers, shareholders and employees. The following are the key building blocks of successful Operational Excellence functions/ programmes.
1. STRATEGY: OpEx must align itself with the Corporate and Business Strategy of the organisation. More importantly, OpEx must strongly align with the Operations Strategy, and if the existing Operations Strategy is ineffective, then OpEx must contribute towards delineating a robust Operations Strategy, which is important for operational performance and competitive edge.
2. MEASUREMENT SYSTEM: OpEx must seek to build or improve a measurement system that collects data, analyses and summarises Key Performance Indicators around several areas, including Customer Experience, Financial and Operational Performance, Employee Engagement and finally Safety, Risk and Compliance, that are key to the success of operations.
3. OPERATING SYSTEM consists of strategic and annual planning processes, setting targets to KPIs, assignment and cascading of goals to leaders and their teams across businesses and locations; detailed Operating Plans, Management Information for planning and reviews, operational review calendars, terms of reference, action tracking etc to form a Closed Loop Planning & Control System.
4. CHANGE PORTFOLIO consisting of a combination of step change/ transformation projects and continuous improvement initiatives, an idea hopper and prioritisation mechanism/ process, project review and control process, and benefits realisation.
5. CAPABILITIES: OpEx must seek to develop strong capabilities both within the function and in the wider organisation to be able to deliver its agenda. And this includes development of highly motivated high performance teams, securing tools, training and improvement methodologies, and building the necessary technology and infrastructure.
6. CULTURE: OpEx must seek to build culture both within the function and in the wider organisation. This culture (a set of values, behaviours and habits) includes strategic alignment, results orientation, embracing change, initiative to contribute and collaborate, data driven and scientific, passion for learning and personal accountability.
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