“Toto, I’ve a feeling we’re not in Kansas anymore”, Dorothy from Wizard of Oz[1]

Every lean transformation has both physical and mental change element challenges for employees and the organization clearly represented in the Wizard of Oz quote.  There are many studies providing data for this case indicating lean program failure rates from 50% to 95%[2].  In a study of 1,100 companies in 2011, most companies have implemented lean (71.6%) and Six Sigma (58.2%) but only 2% found their lean initiatives advanced where clear financial improvement was identified[3].  The reasons are many for the failure rate including lack of standardize board of metrics, dependence on one individual, and slowness to realize improvement.  To eliminate this uncertainty, operational excellence provides a direct path for your organization to produce quick results, easy to understand performance metrics, processed based implementation, and the direction to grow your business.

Many lean transformations fail after a certain period of time due to lack of continued leadership and momentum.  This is due to the unfocused nature of many lean implementations.  Operational excellence provide a clear focus through performance metrics for everyday tasks, emphasis on process eliminates any reliance on one or few people championing the project after installation for continued development of lean, and quick sustained results provide continual positive reinforcement to sustain the lean journey as it becomes part of the organization’s competitive advantage and strategy.  Thus, operational excellence becomes the next evolution of lean after foundational lean training and understanding.

This article will provide clarity for organizations to implement lean, provide a path for quick performance results, sustained competitive advantage, and business growth.  We start with defining operational excellence, understand the flow for operational excellence, identify steps for implementation, and lastly provide an example of implementation.  The cost accountant provides a critical role in lean transformation due to the many processes that fit into their parameters for operational excellence.  These cycles include revenue, payment, fixed asset, month-end, and audit just to name a few.  Providing guaranteed turnaround time for results will produce improved quality of service to the customer with reduced cost translating into additional business opportunities or growth.  Thus, having either external or internal customers doesn’t matter as long as we eliminate waste, improve the speed and quality of service, and lower cost resulting in growth opportunities.

[1] Quote from Dorothy from movie “Wizard of Oz” (1939)

[2] Supply Chain News: What are the barriers to lean success?, Supply Chain Digest Editorial Staff, 1/30/2013

[3] Supply Chain News: What are the barriers to lean success?, Supply Chain Digest Editorial Staff, 1/30/2013

Published:  Journal of Cost Management.  May / June 2017 Issue.

Gary Kapanowski – Lean Six Sigma Master Black Belt – Excelsior

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