A-Z Popular Blog Processes Search »
Business Analysis
 Advertisements
Related Guides
Related Topics
Strategic Planning

9 Examples of Operational Excellence

 , December 15, 2019
Operational excellence is the long-term outperformance of a business in terms of actual results on the market. This is measured in decades as opposed to quarters and is indicative of an enduring culture that is superior to the competition. Operational excellence is a buzzword that originated within continuous improvement practices in the 1980s. Today, the term feels cliche and dated but it is nonetheless a valuable idea. The following are illustrative examples of operational excellence.

Design

Designing products and services that are better than the competition as measured by actual results such as customer perceptions and brand image. For example, a technology company that produces mobile devices that are widely perceived as more pleasing and productive to use than all alternatives on the market.

Quality

Producing products and services that are more consistently high quality than the competition. For example, a shoe company that produces a product that doesn't look overly worn after 6 months of use.

Productivity

Producing more in an hour of work such as a telecom company that produces $1.5 million revenue per employee when the competition are mostly around $0.5 million per employee. Operational excellence implies an apples-to-apples comparison whereby hiding inefficiencies doesn't count as improvement. For example, outsourcing may appear to raise your productivity but not if you count everyone working for you at your outsourcing partner.

Efficiency

More output for each unit of input. For example, a data center that uses less power relative to its computing capacity than all other competitors in the same area.

Unit Cost

A lower unit cost at the same level of quality. For example, a restaurant that bakes its own bread to reduce cost and increase quality at the same time.

Overhead Cost

Lower overhead cost without reduced capabilities or more risk. For example, a firm with a billion in revenue that spends $17 million on human resources versus a firm with the same revenue that spends $70 million on human resources.

Business Risk

A firm with lower business risk than its direct competitors. For example, a manufacturer that reduces supply risk with a deep network of suppliers versus a competitor that heavily relies on a single supplier.

Performance

Cheaper, faster, less risky or higher quality business processes. For example, a fashion retailer that assembles and ships ecommerce orders within an hour where competitors commonly take as long as a day.

Customer Satisfaction

Delivering to customer expectations. For example, a hotel that manages to offer a more professional, prompt and pleasant front desk experience than its competitors in the same area.

Notes

Traditionally, operational excellence was only applied to core operations processes, particularly manufacturing. This has changed as firms are increasing focused on service operations and may view their entire business as "operations." For example, the view that HR is "people operations."
Overview: Operational Excellence
Type
Definition
The long-term outperformance of a business in terms of actual results on the market.
Related Concepts

Business Processes

This is the complete list of articles we have written about business processes.
Automation
Batch Production
Business Rules
Choreography
Continuous Process
Event Processing
Internal Controls
Iterative Process
Kaizen
Lead Time
Orchestration
Process
Process Analysis
SOPs
Task Analysis
Work Process
Workflow
More ...
If you enjoyed this page, please consider bookmarking Simplicable.
 

Business Processes

A list of business process terms.

Cell Production

The definition of cell production with examples.

Innovation Process

A complete guide to the innovation process.

Business Process Improvement

The definition of business process improvement with examples.

Iterative Process

The definition of iterative process with examples.

Process Opposite

The true opposites of process.

Process

The 7 types of process with examples of each.

Productivity Analysis

An overview of the common types of productivity analysis with examples.

Work Process

An overview of work processes with examples.

Business Software Examples

A list of common types of business software.

Types Of Business

A list of the common types of business.

Internal Context

An overview of internal context with examples.

Process Analysis

An overview of process analysis with examples.

Continuous Improvement

A definition of continuous improvement with examples.

Plan-Do-Check-Act

An overview of plan-do-check-act.

Performance Improvement

The common types of performance improvement.

Business Improvement

A list of business improvement techniques.

Overplanning

A list of planning reduction techniques for business.
The most popular articles on Simplicable in the past day.

New Articles

Recent posts or updates on Simplicable.
Site Map