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OpEx – A Driver For Excellence

XELLZ Operational Excellence (OpEx) has been an area that has been given substantial attention inside our organization and for good reasons. With project logistics management teams looking to find new optimization avenues by bringing their services to our customers both quicker and at better cost.

The intention of addressing OpEx is to rationalize business processes and to find a balance between improving costs while maintaining a high quality. This, in part, is achieved by implementing our Operational Excellence Management System (OEMS) tailored to our specific project logistics business’ needs and processes to achieve overall Business Excellence (BE).

Continuous Improvement Philosophy

An active OEMS, combined with the implementation of a continuous improvement philosophy (CIP), helps advance the efficiency and effectiveness of our projects, reducing excess and expenses, while preserving the project bottom line results. As a side-effect, this development of optimization also helps to reduce challenges and issues within the project workflow structure. Cultivating a continuous improvement philosophy is important when it comes to preserving business excellence in the long term.

Business Excellence

While the Project Logistics industry has been a slow adopter of the continuous improvement philosophy when it began to grow in acceptance in the 90s, it is now, and should be, one of the ground-breaking industries to adapt. Now that project forwarders are becoming less common in the near future, companies are looking to focus within on cultivating business processes to aid to increased revenues.

There are those that might disagree to strive for business excellence using the mantra, “if it ain’t broke, don’t fix it”, but it is important to understand that just because a company can bring a service to market, it doesn’t automatically mean they are using the most efficient processes accessible to them.

When it comes to applying an effective operational excellence approach, it needs to embrace the awareness that every process has the potential to be improved. Pareto’s Law states that 80% of the problems that occur in a process originate from 20% of the problem initiators. Meaning that the best process for improving operational performance is to aim to find and address this concerted 20%.

While old-style methods such as lean; which focuses on customer value – and six sigma; which utilizes data to rationalize processes – focusing on processes as individual units, Business Excellence takes into account this old-style groundwork and goes one step further: addressing operations as a whole. This switch from a bottom-up outlook to a top-down standpoint is about making competence inherent across the entire system. Operational excellence is a people-centric process and values the knowledge of the employees, which is then used to inform an logical approach.

For a considerable period, the Heavy Lift & Project Freight industry, and Project Logistics to be precise, have looked outwards– now time has come for them to look inward. These companies are beginning to reflect on how they can improve themselves and bring improved, more cost-effective services to the customers by taking away the needless excess from their processes.

What is a good OEMS?

It is not sufficient to just implement an OpEx management system and pray that it brings payout.  It is also about adapting a strategy to the business and maintaining an consciousness of how every part and process of operations can be enhanced.

7 Key Factors

There are seven essential elements when it comes to structuring operational excellence. These are:

  • Leadership
  • Management of change
  • Employee accountability
  • Risk identification
  • Risk control
  • Knowledge sharing
  • Continuous improvement

It is imperative to understand that an effective excellence strategy is about more than just taking steps to improving a business; it’s also about applying change in the company culture that adjusts how things are to be in the long-term.

OpEx in projects

Many companies, and also here at XELLZ, we found that the first wave of operational excellence developments had a success rate of between 75-90% when it came to realize the anticipated benefits. This high success is, in part, thanks to the sheer eagerness of the team at the start of each project – companies must ensure that they implemented processes help to preserve these standards in the long-term.

XELLZ internal study also revealed that some of the greatest barriers were: poor governance, inflexible leadership, and companies ‘taking on more than they could handle” Communication was cited by the members as one of the most valuable tools when it came to ensuring the success of any project. With regards to creating a philosophy of continuous improvement, scalability is important and is a vital reflection to make when applying an OEMS.

The future of OPEX?

Our talent typically specializes in project logistics process excellence. For BE in the project logistics industry to develop, we are likely to see more business excellence move to the Heavy Lift & Project Freight side. We have seen this trend in our own daily work scope and think it is likely this will translate to the industry very soon.

XELLZ is looking to diversify its talent so that we can implement systems or operations in a project logistics environment. It is in these areas that there is the most benefit to be gained for our customers.