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One Prediction on the ‘Future of Operational Excellence’

1 december 2016

In their 2016 Annual Report, The PEX Network discusses the “Emergence: The Future of Operational Excellence”, and predicts how changes in the business and economic landscape will impact the way that companies approach process excellence in the next 5-10 years. Their first prediction that “successful companies will manage their processes as strategic assets” is seen as a development necessary for organizations wishing to remain competitive.

It is evident that a culture of continuous improvement can have a significant positive impact on reducing costs, driving efficiency and improStrategy.pngving quality. However, a lack of alignment with organizational strategy can be costly and may lead to much more than just the failure of a continuous improvement program. 
For example: Small incremental changes can result in the sub-optimization of processes: By looking at processes with a myopic approach, it is possible and likely that improvements in one department create waste downstream by making another department less efficient. As an example, what if decreasing the turnaround time for lab results creates a bottleneck with patients having to wait longer to see their physician? How about a situation in which improving a sub-process at the start of a product line ends up increasing work-in-process and final inventory?

Continually improving a process can waste resources: It is conceivable and even expected that small incremental changes within a process will motivate front line employees to improve more. As they do so, they may require the assistance of process engineers, purchase tools/materials, or intentionally prolong machine downtime. What if the process in question pertains to a product or service line which management has decided to discontinue? In such cases, improvement efforts result in the waste of valuable resources.
For these reasons, it is important to know why we are engaged in specific improvement initiatives, and align these back to organizational strategy. Author David Hamme states,
“… processes are the actualization of your strategy… so we need to stop thinking about processes as efficiency tools and start thinking about them as strategic constructs.”

Regarding the link between change initiatives and business strategy, PEX Network columnist Dan Morris says,
"Once you redesign a process, you need continuous improvement – it’s important – because things keep changing and you need to work with everything you have in place. But you still have to periodically look at whether processes and systems make sense within the context of your current business strategy.”

Bron: Lean CI Journal