What Is Operational Excellence? Principles and Examples
Operational excellence means delivering value reliably and efficiently while improving continuously. Learn the principles, frameworks and tools.
4 min read
Lean management is an approach to running operations that maximizes value for the customer by systematically removing waste. Waste is any activity that consumes time or resources without adding value the customer would pay for. Lean groups waste into eight types, often remembered with the word DOWNTIME.
The 8 wastes (DOWNTIME)
| Waste | What it means | Office example | Operations example |
|---|---|---|---|
| Defects | Errors that need correcting | Invoice with wrong details | Damaged or rejected products |
| Overproduction | Producing more or earlier than needed | Reports no one reads | Making stock before orders arrive |
| Waiting | Idle time between steps | Waiting days for approval | Machines idle waiting for parts |
| Non-utilized talent | Not using people’s skills and ideas | Experts doing data entry | Operators’ improvement ideas ignored |
| Transportation | Unnecessary movement of materials or information | Emailing files between five people | Moving goods between warehouses |
| Inventory | Excess stock or work-in-progress | Backlog of unprocessed requests | Surplus raw materials |
| Motion | Unnecessary movement of people | Searching for files and passwords | Walking to fetch tools |
| Extra processing | Doing more than the customer needs | Three signatures for a small purchase | Polishing hidden surfaces |
The five principles of Lean
Lean thinking is often summarized in five principles, set out by James Womack and Daniel Jones in their 1996 book Lean Thinking (see the Lean Enterprise Institute’s overview):
- Value: define what the customer actually values and is willing to pay for.
- Value stream: map all the steps that deliver that value and identify waste.
- Flow: make the remaining steps flow smoothly, without delays or batches.
- Pull: produce or process only what the next step or customer needs, when they need it.
- Perfection: keep improving, because there is always more waste to remove.
How to find waste
- Walk the process (a “gemba walk”) and watch the work as it happens.
- Map the value stream, marking value-adding and non-value-adding steps. See how to map a business process.
- Measure time: in many processes, the actual work is a small fraction of the total lead time; the rest is waiting.
- Ask the people doing the work where they lose time.
How to eliminate it
- Defects: error-proofing (checklists, validation rules), root-cause analysis.
- Overproduction: produce to real demand; cancel unused reports.
- Waiting: reduce approval layers, set service levels between teams.
- Unused talent: suggestion systems, problem-solving training, empowered teams.
- Transportation: shared digital workspaces, better layouts.
- Inventory: smaller batches, pull systems such as Kanban.
- Motion: 5S workplace organization (sort, set in order, shine, standardize, sustain).
- Extra processing: agree on what the customer really needs and stop the rest.
A quick waste audit for your team
Ask each team member to note, for one week, every time they wait, search, redo work or produce something unused. Group the notes by the eight wastes, pick the top two, and solve them together. Small, visible wins build momentum for wider operational excellence.
Example: Lean in an office approval process
An illustrative purchase-approval process takes ten days for small purchases. Mapping it shows that the actual work takes about an hour; the rest is waiting in inboxes. The team finds:
- Waiting: approvals sit with busy managers for days.
- Extra processing: three signatures for purchases below a small threshold.
- Defects: requests returned because of missing quotes.
- Motion: staff walk printed forms between offices.
The improved process uses a digital form with mandatory fields, one approver for purchases below the threshold, and a service-level target of one working day. Lead time drops from days to hours, and managers spend their time on purchases that need judgement.
Frequently asked questions
Where does Lean come from?
Lean grew from the Toyota Production System and was later applied to services, healthcare and government.
Is “non-utilized talent” really a waste?
Yes. It was added to the original seven wastes because ignoring people’s knowledge blocks improvement.
Does Lean mean fewer staff?
Lean aims to free capacity for more valuable work. Organizations that use it to cut jobs often lose employees’ trust and their ideas.
Prime Consulting runs Lean improvement programs for organizations in Qatar. See our Operational Excellence service.