Operational excellence is the pursuit of conducting business in a manner that continuously improves the quality of goods and services, reduces costs, increases speed and enhances flexibility to achieve competitive superiority.
From a core manufacturing point of view, there are three pillars of operational excellence; they are production planning & control, manufacturing execution and operational effectiveness of people, processes and assets. Tight coordination among these three pillars is required in order to achieve overall operational excellence.
Global competitiveness is placing tremendous pressure on cost, quality and responsiveness to customer demands. Some of the key challenges in the process industry are lack of visibility and control into manufacturing exceptions and events in real time and the inability to fulfill customer orders and carry out production operations in a predictable manner. Managers and production personnel cannot measure, monitor, and control performance in real time across people, processes, assets and plants.
Reports and surveys have identified following key pressures for process manufacturers:
- Need to reduce operating costs
- Need to reduce process operations variability
- Global competition from low-cost sources
- Regulatory compliance (FDA, EPA, OSHA, EU)
- Inability to meet market demands
- Need to improve brand value
- Environmental impact
Operational Excellence is a systematic approach to attaining world class performance in productivity, quality and delivery of services and/or goods. It is the goal of achieving superior yields, lead time and through-put while eliminating waste. Operational excellence is surrounded around three main pillars:
Production Planning and Control
- Monitor Demand
- Monitor Inventory
- Perform Material and Capacity Checks
- Plan Orders
- Align Production
- Supplier Quality Checks
- Track Deliveries against customer orders
- Shop Floor Visibility
- Shop Order Sequencing and Execution
- Real Time Data Acquisition
- Data Mining
- Alarms and Alert Orders
- Operational Effectiveness of people, processes and assets
Operational Excellence is not a destination it is a journey.