Operational excellence or Lean Management: differences or same goal
Lean management is a management approach that aims to optimize an organization’s performance by eliminating waste and creating value for the customer. In the same way, operational improvement is a similar process of analyzing activities,identifying problems and implementing solutions to increase the efficiency and quality of products or services.
In a context of increased competition, rapid changes and demanding requirements (the famous VUCA: Volatile, Uncertain, Complex and Ambiguous), organizations must constantly seek to improve their performance. To this end, they can draw on two complementary approaches: lean management and operational improvement.
Lean management is a management philosophy that aims to optimize an organization’s performance by eliminating waste and creating value for the customer. Lean management is inspired by the Toyota production system, which is based on five principles.
01.
Defining the value
02.
Mapping value flows
03.
Creating a continuous flow
04.
Implementing a pull production
05.
Aiming for perfection
Lean management reduces costs, improves quality, shortens lead times and enhances customer satisfaction.
Operational improvement is a continuous process of analyzing activities, identifying problems and implementing solutions to increase the efficiency and quality of products or services. It is based on techniques and tools such as influence diagrams, Brown Papers and PDCA, to which we return later in this article. Finally, it enables problem-solving, process improvement, reinforcement of the culture of operational excellence and innovation.
Lean management and operational improvement are therefore two approaches that complement and reinforce each other.They both aim at optimizing organizational performance by focusing on customer value and involving all the players in the organization. They enable organizations to differentiate, adapt and develop in a complex and uncertain environment.
Lean management principles
A management philosophy inspired by the Toyota production system, based on five principles:
- Defining the value : understand the customer’s needs and expectations, and what he is willing to pay.
- Mapping value flows : identify the steps in the value-creation process, and eliminate the unnecessary ones or those that generate non-value-added costs.
- Creating a continuous flow : organize work so that activities follow one another without interruption, waiting or storage.
- Implementing a pull production : produce only what the customer asks for, when the customer asks for it, and in sufficient quantity.
- Aiming for perfection : strive for continuous improvement in quality, productivity and customer satisfaction, involving all the organization’s players.
Principles of operational improvement methods
A re-appropriation of techniques and tools designed to optimize processes, solve problems and reinforce the culture of operational excellence.
A few operational improvement methods :
- The PDCA : a problem-solving method aimed at improving processes by following a four-step cycle: plan, do, check and act.
- The influence diagram : identify levers for improvement
- Brown paper ou operations and decisions flowchart : materialize the complexity (or simplicity) of the process through the various players involved
And what about operational excellence?
Lean, like operational improvement, seeks to optimize the performance of organizations. If they were to be given a goal, it would be operational excellence. These approaches blend and enrich each other.
Operating in a VUCA environment, striving for excellence is almost more akin to a philosophy. It is a method for remaining consistent with our markets, partners, employees and the environment.
