The Path to Operational Excellence: Starting Your Journey

Many manufacturing businesses share a common challenge: They become so focused on managing customer relationships and getting products out the door that they lose sight of how to improve their operations. In other words, they spend too much time working in the business to work on the business.

If your business isn’t innovating and moving forward, it’s stagnating and falling behind. Breaking out of this pattern requires a new approach guided by an intentional strategy.

This is where operational excellence comes in – not just as a business framework, but as a fundamental shift in how leaders approach manufacturing operations. When manufacturers first hear about operational excellence, they often think of it as just another management methodology like Lean Six Sigma. But at its core, operational excellence begins with something more basic: building a mindset of continuous improvement.

If you’re starting down the path of improving operations in your manufacturing business, this guide is for you. We’ll explore what the path to operational excellence looks like, focusing in particular on the tangible first steps you can take to start initiating change in your business.

Building the Foundation: A Mindset of Continuous Improvement

The journey to operational excellence starts with a crucial shift in perspective. Leaders at all levels of manufacturing businesses should constantly ask themselves questions like:

• What can go wrong in our processes?
• Where is our waste?
• What are our inefficiencies?

The point of asking these questions isn’t to find fault and assign blame. It’s to build a culture and mindset that sets the stage for teams to embrace how we can do things better. Without this foundation, even the most sophisticated improvement methodologies will fail to deliver lasting results. A willingness to change and to invest in improvement is a prerequisite to any journey toward operational excellence.

Securing Buy-In: Connecting Operational Excellence to Business Impact

One of the most critical aspects of operational excellence is understanding its relationship to business growth and scalability. Consider this scenario: If you’re currently a $10 million company and want to become a $20 million company, that means doubling your throughput. But how does that translate to your current operations? Simply doubling your workforce isn’t the answer (and shouldn’t be necessary). The key is finding ways to scale efficiently, which means challenging current processes and finding better ways to operate.

Your company doesn’t have to grow at a fast pace for it to successfully implement operational excellence processes. You might be a stable $10 million manufacturing business with conservative growth goals. Operational excellence projects help your business reduce waste, enhance profitability and ultimately become more profitable –– regardless of your growth trajectory. Progress isn’t about cutting the workforce. It’s about increasing productivity, capacity and the ability to take on more customers while becoming more profitable.

Going to the Gemba: Spending Time on the Shop Floor

For operational excellence initiatives to take root, leaders must understand the reality of what’s happening on their factory floor. Often, there can be a stark difference between what management thinks is happening and what is actually happening. Perhaps employees have developed workarounds for problems rather than addressing the root cause of an issue, or maybe new team members haven’t been trained correctly.

It’s best practice to always start your assessment with the process rather than the people. When examining operations, focus on ensuring a good process is in place before addressing any personnel-related issues. If employees are struggling, it might be due to training gaps, capability mismatches or simply inadequate processes. This approach helps avoid the common pitfall of blaming individuals when the system itself needs improvement. Many organizations bring in external consultants to provide an objective analysis of their processes based on accepted best practices.

One of the most powerful tools in operational excellence comes from the Lean and Kaizen methodologies. It’s the concept of going to the gemba, which means visiting the actual place where the work happens. As a leader, spending time on the production floor observing operations often reveals surprising insights. You might discover processes that have evolved organically or inefficiencies that aren’t visible from weekly reports. These observations are invaluable for helping leaders understand what is happening at every level and for identifying improvement opportunities. Seeking out cross-functional input is key to ensuring all perspectives are incorporated in your quest to design effective solutions.

Plus, when it comes to implementing changes, engaging your frontline workers is key. By spending time on the floor with employees, leaders can help their people see the value of continuous improvement. Getting their input on changes is important too. These individuals are your subject matter experts; they perform the work every day and understand the challenges intimately.

Moving Forward: Building a Scalable, Systemic Approach to Operational Excellence

Once your management team has developed an understanding of the issues, moving forward requires a systematic approach. Start by mapping your current state and your value stream (the entire path your product follows, from beginning of production to when it’s delivered to your customer). This helps you understand exactly what’s happening in your processes, where the issues lie and how these problems impact your business.

Use data to identify bottlenecks and quality issues, but don’t stop at surface-level solutions. Too many companies implement additional checks and safety nets to catch problems instead of eliminating the root cause. The goal should be to find and treat the underlying issues, not just their symptoms.

As you progress on your operational excellence journey, remember that this isn’t a one-time project. It’s an ongoing process of evaluation and improvement. You might start by addressing the issues that most directly impact EBITDA (earnings before interest, taxes, depreciation and amortization), but work shouldn’t stop there. Solving these challenges is a process of iteration and it may take several refinements to truly optimize a process.

Plus, as you solve one set of problems, new opportunities for improvement will emerge. Sometimes, improving one area can create issues either up or downstream in the manufacturing process. This is why it’s crucial to consider the entire value stream when making changes.

Many companies find great benefit in seeking out external perspectives and expertise. Whether it’s by bringing in operational excellence consultants or sending key team members on formal training programs, guidance from those who have seen various challenges and solutions can accelerate your progress. Don’t be too reliant on external help, though. The key to sustainable success is building internal capability and ensuring your team can drive improvements with appropriate guidance.

Start Your Journey to Operational Excellence with James Moore

While the path to operational excellence is neither quick nor simple, it’s essential for manufacturing companies that want to remain competitive. It requires commitment, systematic thinking and a willingness to challenge the status quo. But with the right mindset and approach, every manufacturing operation can begin this journey and realize significant improvements in their operations, profitability and ability to serve their customers.

At James Moore, we work alongside manufacturing companies at every stage of their operational excellence journey. Our approach begins with understanding your current state — mapping processes, identifying bottlenecks and analyzing how these impact your EBITDA. We partner with your internal teams, leveraging their expertise while providing the external perspective and structured methodology needed to drive meaningful improvements.

Whether you’re just beginning to explore operational excellence or looking to accelerate your existing initiatives, our manufacturing CPAs and consultants can help you identify opportunities, implement solutions and build the internal capabilities needed for sustained success. We’ve helped companies reduce waste, improve productivity and create scalable operations that support profitable growth.

If you’re interested in learning more about how we can help you build a more efficient, profitable manufacturing business, contact a James Moore advisor today.

All content provided in this article is for informational purposes only. Matters discussed in this article are subject to change. For up-to-date information on this subject please contact a James Moore professional. James Moore will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any information accessed through this site.