Erudite Relics of Loc Huu Ho

In its simplest terms, operational excellence means consistently doing things well across the value chain as a way of gaining competitive advantage. In its broadest terms, it is a discipline that drives corporate strategy. In their book The Discipline of Market Leadership, Michael Treacy and Fred Wiersema sugget that operational excellence is one of three “value disciplines” that a successful organisation must choose from as its underlying operational model.

In practice, operational excellence is a means to achieving the other value disciplines: product leadership and customer intimacy. Doing things well across the organisation is fundamental, but most successful companies do one thing exceedingly well and identifying and reinforcing core competitive strengths is part of operational excellence.

The definition has three elements:

• superior performance and visibility across the value chain
• value-added delivered to customers
• effective integration with external partners.

While the concept of operational excellence is simple enough, execution is another matter. A drive for efficiency is implicit, but this must be achieved in a coordinated way by building links across the organisation so that all functions share a harmonised set of performance metrics. The ultimate goal is a “single source of truth” where senior executives have shared visibility into all parts of the organisation, enabling management by facts. The ideal result is a high-level dashboard for senior executives with the ability to drill down into different business functions, including operations, finance, IT, and sales and marketing.