ALLANA MANAGEMENT JOURNAL OF RESEARCH, PUNE - Volume 5, Issue 2, July 2015 - December 2015

Pages: 30-35
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A STUDY ON OPERATIONAL EXCELLENCE WHEN IT COMES TO SERVICES

Author: Prof Shahid Sayed

Category: General Management

Abstract:

Today operational excellence is the number one concern for many executives in order Associate Professorto ensure long-term profitability and consistency. Operational excellence is not only important to industrial companies, but to all organizations that create products and/or provide services. A survey of energy companies reveals that over 80% of them have Pune incorporated operational excellence into their strategy. Operational excellence is also the most widely adopted strategy among professional service providers such as banks and insurers. In 80% of cases, cost reduction was the main reason for the centralization and optimization of internal processes. But in the longer term, this efficiency-oriented operational excellence approach has not produced much savings. This is due to dissatisfied or even lost customers and the fact that service quality suffers under this approach. The optimization of operations management based on this traditional cost-saving approach is obviously not the answer to competing in the face of current market demands and management dilemmas.

Operational excellence is however not a new notion. Originally it stood for standardization, efficiency and cost-savings. But nowadays this cost-based perspective on operations is no longer adequate. Companies must satisfy more market demands than simply offering the lowest prices, although globalization and technological developments are bound to intensify competition on cost. Operational excellence nowadays basically aims for the maximization of operating profit through the continuous operation of an excellent production and/or delivery system that offers customers the right value (through the offering of products and services); see for instance. This definition of operational excellence is particularly appropriate for profitorganizations, but not so much for non-profit organizations. However, non-profit organizations also face increasingly more pressure for efficiency; they also require world-class operating systems and service processes. A world-class operating system consists of lean primary processes, adequate planning and control processes, a highly committed high-performance organization and appropriate information systems required to implement and execute the processes efficiently and effectively.

KEYWORDS

Six sigma , operational excellence, services concept, DMAIC Define, measure, analyze, improve and control, Lean approach.