Achieve Operational Excellence

Differentiate your costs and become the premier supplier.

Operational excellence means doing things effectively across a company’s operations—across the entire supply chain—so that it gives your company a competitive advantage in the marketplace. TAP Resources recommends a process that helps define the proper operational-based strategy and develop an operating plan that will help your company achieve operational excellence.

Begin the process by defining your company’s goals compared to current levels of performance, and develop your strategic priorities. Develop an operations plan that focuses on capabilities that create a competitive advantage. Your plan should be a schedule of events, programs and responsibilities with actions necessary to accomplish the goals and objectives while measuring success.

Benchmark Performance Measures
When selecting performance measures, assure that they reflect the actual improvements desired. They need to be easily produced and translatable to all your employees. The measures should include industry benchmark performance for activities and communicate what’s important to your company. The following benchmarks are some examples:
Cylinder Utilization 85%
Nitrogen Losses 8%
Oxygen Losses 8%
Argon Losses 5%
On Time Delivery 98+%

This approach to building capabilities recognizes the need to develop internally and accept that excellent operations capabilities take time to be developed. You need to implement motivational practices to cultivate internal innovation and develop in-house best practice capability to drive continuous improvement.

Communicating your operations plan with its short- and long-term goals is essential to gaining acceptance and the enthusiastic cooperation of everyone in the organization. The ongoing communication of your performance measures will provide evidence that you are serious about the plan and the results.

What Gets Measured and Displayed Is What Gets Done
Implementation of your short- and long-term goals can take place at any time during the year, but it is recommended that you establish an annual process that coincides with your fiscal year. If you have an operations plan in place, you may want to determine if you could make it more effective. Do not wait until next year. Get started and do it now. A Gain Share Plan for Supervisors and Employees can be an effective way of gaining support, especially if it has been a practice to award bonuses at the end of the year.

When you have completed this process, you will have a focused operations plan with prioritized programs that support the strategic plan/vision for your company. After you do this the first time, it becomes easier to update your plan annually and establish programs that support your objectives. It is your business plan for success.

What does operational excellence mean to your company? Many compressed gas operations are quite similar, with profitability directly linked to costs. You can differentiate your costs from that of your competitor and therefore increase your ability to become the premier supplier. You need to do everything you can to separate yourself from the competition.


Gases and Welding Distributors Association
Paul Matlock Meet the Author
GAWDA Lean Operations Consultant Paul Matlock is with TAP Resources in Orefield, Pennsylvania. Members can reach him at 888-803-3918 and at matlocpe@earthlink.net.