How To Achieve Operational Excellence

Organizations need to effectively establish, communicate and assess their requirements

by

Madeline Bigelow

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TTAINING OPERATIONAL excellenceinvolves a return to the basic buildingblocks of any organization: the establish-ment, communication and assessment ofrequirements. We need to make sure

requirements are clearly established, effectively com-municated and periodically assessed to promote andfacilitate the continuous achievement of operationalexcellence. We need to be sure we are providing ourmajor asset—employees—with the tools and mecha-nisms they need to do their jobs right the first time.

Concepts such as reengineering, lean manufactur-ing, just-in-time, statistical process control and SixSigma can significantly contribute to operationsenhancement. However, they cannot eliminate theday-to-day operational costs that arise from devia-tions, nonconformances and situations caused byhuman error.

In today’s unpredictable market and competitivebusiness environment, companies are either growingor dying. To grow, companies must be well-managedand committed to improving faster than the competi-tion. They also must minimize or eliminate unneces-sary operational costs. Management must believe inthe fundamentals of quality and be committed to con-tinuous improvement to enhance the organization’sefficiencies and drive its competitiveness. This means

management must understand the organization’soperations and systems well enough to recognize theorganization’s strengths and weaknesses.

There are three key goals pursued by all organiza-tions:• Maintain product and service quality. • Preserve total compliance. • Reduce quality related costs to satisfy customer

needs, ensure things are done right the first timeand remain competitive. These goals are not reached by accident. We have to

make them happen, and the approach we take toachieve them makes a difference in the end result.Goal attainment is a process, not just an outcome.

It requires commitment, determination, attention todetail and a team effort to attain these goals. I callthis the operational excellence cycle (see Figure 1).Following the cycle, management should:• Establish clear requirements.• Effectively communicate established requirements.• Continuously assess the communicated require-

ments.

Establish clear requirements

Philip B. Crosby said the first absolute in the attain-ment of quality is to comply with requirements.1 So itstands to reason the establishment of clear require-

A

ments is the first step toward the achievement of oper-ational excellence.

Requirements come from many internal and exter-nal sources, including state, federal and internationalregulatory organizations; customers; suppliers; andthe company’s own regulations, vendor contracts,quality agreements, corporate policies, procedures,product specifications, test and inspection methods,and qualification and validation protocols.

Established requirements should be clear, accurateand appropriate for their intended purpose. For exam-ple, written requirements need to:• Clearly define what needs to be done, why it needs

to be done, where it is to be done, how it will bedone, when it will be done and who will do it.

• Accurately establish responsibilities, frequencies,time frames, materials, components, equipment,quantities, formulas, methods, measurements, envi-ronmental conditions and documentation.

• Be appropriate for intended use and not impose lim-itations on the user, efficiencies and managementprerogative. For example, a requirement should notmandate something be done on a daily basis when itonly needs to be done prior to performance.

• Be written for the reader, taking into considerationthe reader’s age, education, experience, training,knowledge, skills and culture.

• Clearly outline key points to be performed or fol-lowed.

• Have pictures, diagrams, flowcharts or illustrationsto help facilitate the user’s understanding of therequirement.

• Be appropriately packaged. Show attention to pagedesign, instructions, table of contents, index,dividers, visual layouts and the type of binder used.

• Be readily accessible to the intended users at alltimes.If one or more of these attributes is missing, compli-

ance levels, product quality, efficiencies and profitscould be jeopardized. The missing attribute couldcause confusion, misinterpretation or undue con-straints, which are usually the root causes for dailyoperational errors.

As a certified corporate auditor for various majorpharmaceutical companies, I have audited multiplematerial, component and service suppliers, distribu-

tors and contractors throughout the United States,Canada and Europe. Unfortunately, I have found thatwritten operational procedures, sampling plans, testand inspection methods, product specifications, andqualification and validation protocols either do notexist or are lacking some important information.

In most companies, requirements are written,reviewed and approved by management or highlytechnical personnel who are either not the peopleresponsible for executing them or have not receivedany formal training in writing requirements. Inputfrom intended users is usually not obtained to ensurecomprehensive knowledge from different perspectivesis applied to the written requirement.

To ensure total compliance with established require-ments, it is vital to understand the regulations, poli-cies, procedures, specifications, plans, methods,protocols and agreements as they apply to employees’assigned functions within the organization.

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Operational Excellence CycleFIGURE 1

2

Communicaterequirements

OrientationsTrainingSubject matter talks

3

Assessrequirements

Internal auditsExternal auditsExtrinsic audits

1

Establish requirements

RegulationsPoliciesProcedures SpecificationsMethodsProtocolsAgreementsContracts

1 2

3

Effectively communicate established requirementsAs stated by Joseph M. Juran in his Quality

Handbook, a person is in a state of self-control only ifhe or she possesses the means of knowing what issupposed to be done.2 Therefore, the second step inachieving operational excellence is to effectively com-municate established requirements through one ormore of the following means: • Subject matter talks with employees.• New employee orientations.• Employee training programs.

Employee training procedures should clearly indi-cate what will be defined as a subject matter talk, anorientation, a training, a refresh-er and a retraining. You can fol-low these guidelines:

Subject matter talks. Periodicinformative discussion meetingsintended to keep employees up-to-date on current on-the-joband company related matters.

Duration: 15 to 30 minutes.Frequency: As determined

appropriate.New employee orientations.

Informative discussion sessionsprovided by the HR, quality orengineering departments. Theyare intended to give new hiresguidance and direction on general and specific subjectmatters, such as company policies, regulatory require-ments and safety rules.

Duration: One to two hours per subject matter.Frequency: Upon employee hire.Trainings. Formal instruction sessions to provide

employees with knowledge, skills, competence andexpertise in specific subject matters or job functions.

Duration: Two hours or more. It depends on thenature and complexity of the subject matter or jobfunction.

Frequency: As determined appropriate by the sub-ject matter training procedures.

Refreshers. Periodic reviews to keep employeesfamiliar with applicable regulatory, client, corporate,company and job related requirements and revisions.

Duration: Depends on the nature and complexity ofthe training subject matter.

Frequency: As determined appropriate, but shouldbe held at least once every two years or when subjectmatter has been revised and changed.

Retrainings. Trainings offered when an employeehas committed a regulatory, corporate, company orjob related nonconformance, and it has been deter-

mined the employee needs to be retrained in the sub-ject matter as a preventive action.

Duration: Depends on the nature and complexity oftraining’s subject matter.

Frequency: As determined necessary, but not toexceed three times without further investigation intothe root cause as to why the training has not beeneffective.

Most companies don’t limit how many times anemployee can be retrained in the same subject matterwithout an investigation into the root cause of theemployee’s inability to learn or comply with therequirements. No effort is made to identify whether

the problem is the train-ing, the trainer or thetrainee. An adequateemployee training pro-gram should provide forthis type of investigation.

If management takesthe time to do trainingright the first time, it willhave fewer errors, devia-tions, reworks, rejects,returns, back orders, re-calls and complaints, notto mention the significantlong-term operational costreductions it will achieve.

Employee communication and training involve aninvestment of time, resources and money. Therefore, itis crucial certain elements be present to ensure a maxi-mum return on investment, provide workers with amechanism for self-control, ensure conformance torequirements, guarantee product and service quality,reduce the tangible and hidden costs of poor qualityand ensure optimum levels of regulatory compliance(see “Communicate Established Requirements”):

Trainings must be performed by qualified train-ers. Someone who not only has the education andexperience to be a trainer, but who has also been for-mally trained in the subject matter. Unfortunately,many on-site trainers have never received trainerdevelopment courses, are not familiar with adultlearning theories and have not received prior trainingin the subject matter.

The current International Organization forStandardization’s, known as ISO, standards and goodmanufacturing practices require assigned functions tobe performed by employees who have the education,experience and training to perform them.

How many times have you seen on-the-job trainingperformed in five to 15 minutes or found that 10 ormore standard operating procedure (SOP) training

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Most companies don’t limit how manytimes an employee can be retrained inthe same subject matter without aninvestigation into the root cause of theemployee’s inability to learn or complywith the requirements.

sessions have been scheduled within a one-hour time frame? How adequate or effectivecan that be? SOP and on-the-job traininginvolve both a theoretical and practical learn-ing process. They require the following genericinstructional steps be followed: • Worker preparation. Put the worker at ease,

state the job to be learned, find out what theworker knows (pretest), get the workerinterested in learning the job and providethe worker with sufficient time to read theSOP or job requirements prior to actualtraining.

• SOP or job presentation. Tell, show andillustrate one important SOP or job step at atime; stress each key point of the job beingtaught; and instruct the worker clearly, com-pletely and patiently.

• Performance trial. Have the worker perform thejob, and constructively correct errors made by theworker, having the worker explain each key pointas he or she performs the job again. Make sure theworker understands the job (post-test), and havethe worker repeat the job until he or she knows howto perform it.

• Follow-up. Put the worker on his or her own, underadequate supervision. Encourage questions, pro-vide feedback, and periodically check and evaluatethe worker’s job performance.Trainings must be measured for effectiveness.

Management needs to measure and trend/track theresults of the training sessions offered, the trainers’teaching skills and the trainees’ learning curves todetermine whether the training sessions are achievingthe desired results and the trainers are effective.

The effectiveness of the training sessions can bemeasured through one or any combination of the fol-lowing methods: • Pre and post-testing. Measure training and trainer

effectiveness and an employee’s prior knowledgeand learning curve.

• Workshops or debates. Provide a trainee with theopportunity to practice learned knowledge. Presenttrainees with hypothetical cases and key questionsrelated to the subject matter.

• One-on-one discussions. Allow the trainer to dis-cuss the subject matter, answer questions or clarifyany doubts the trainees may have.

• Performance checklists. Allow trainees to performthe job under direct supervision and demonstratetheir ability to perform learned processes and oper-ations.

• Progress checklists. Periodically evaluate trainedpersonnel to make sure they continue to perform

the learned processes and operations.Employee training sessions should be trended to

identify improvement opportunities. They should alsobe maintained so there’s a historical reference of thetrainees’ qualifications.

Follow these training trending guidelines:• Trend and analyze training performance and effec-

tiveness results to identify improvement opportuni-ties and areas of concern related to employeetraining sessions, training procedures, trainers andthe overall employee training program.

• Report trending results to site management forinformation, evaluation and determination ofappropriate actions.

• Develop and implement action plans to addressidentified training improvement opportunities andareas of concern based on management feedbackand trend analysis results.

• Follow up, confirm and ensure the timely and satis-factory closure of employee training action plans.Trainings must be appropriately documented. To

show required trainings have been performed andthat all necessary personnel have attended, and totrack and follow up on the training, managementmust adequately document the training sessionsoffered.

Training documentation should include the trainingdate, training title, summary of topics covered, train-ing’s duration, trainer’s printed name and signature,and the printed name and signature of all attendees.

Upon review of employee training records in mostof the audits I’ve performed, I have found trainingdocumentation does not indicate the session’s dura-tion. There is then no way to know if adequate timewas allowed for the training process, and the company cannot accurately assess its training costs.

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Communicate EstablishedRequirements

Valuable employee orientations, training and talks

must meet the following elements:

• They must be performed by qualified trainers.

• They must be measured for effectiveness.

• They must be appropriately documented.

Most training documentation does not summarize orindicate topics covered during the training process;therefore, there is no way to determine what the actu-al training consisted of. For example, in the case of anSOP training, was the complete SOP discussed or onlychanges to the SOP?

Also, many employee training records do not includethe printed names of the trainer and the employeeswho attended the training; only their signatures. Thismakes it difficult to assess or confirm employee atten-dance without looking up each signature in the compa-ny’s master signature log, assuming the company hasone and that it has been maintained.

Continuously assess the communicated requirementsTo ensure compliance with communicated require-

ments, continuous assessments must be performed todetermine compliance levels, verify actual practicesand challenge the requirements’ effectiveness.

Auditing is the process by which we assess actualconditions, compare them to established requirementsand report results to management. It is a fact findingprocess by which we help our organization, suppliersand clients identify improvement opportunities, areasof concern, and ways to reduce quality related costsand achieve operational excellence.

The three types of audits performed to assess com-pliance to communicated requirements are:• Internal first-party audits. Periodic self-inspections

performed internally to confirm, measure anddetermine the effectiveness of communicatedrequirements.

• External second-party audits. Supplier assessmentsand audits performed to determine and confirm asupplier’s capability, capacity and reliability to pro-vide materials, components and services withinrequired specifications. These audits also investigatethe root cause of any nonconformance found in thematerials and components received from a supplier.

• Extrinsic third-party audits. Audits and inspectionsperformed by third parties (state, federal or interna-tional regulatory agency investigators, client audi-tors or corporate auditors) to determine, confirmand challenge a company’s level of compliance withrequired regulations, agreements or specifications. The current Food and Drug Administration (FDA)

Compliance Policy Guide, chapter 1, subsection 130.300,says, “FDA regulated industries may establish qualityassurance units to perform functions independentlyfrom the manufacturing or quality control organiza-tion to periodically audit and critically review itsprocesses and procedures to determine whether estab-lished protocols and procedures are being followed.”3

Although most FDA regulated and nonregulated

industries have some sort of internal audit program inplace, the audits are not necessarily independent fromtheir manufacturing or quality control business units.This practice tends to significantly jeopardize andlimit the independence and objectivity of the internalaudit units, especially when it comes to auditing theirown processes and quality systems. It also createsadversarial relationships between assigned internalauditors and their co-workers.

To address this issue, management can either estab-lish an independent audit department that does notreport to its manufacturing or quality departments, orhave an outsider review or assess the business once ayear or every other year. Outsiders can often see whatinsiders cannot. Outsourcing professional services hasbecome not only an alternative, but also a necessity inachieving operational excellence. It is an opportunity tohave an unbiased assessment of an organization and itsfacilities, equipment, processes and systems performedby qualified, independent and certified professionals.

Another problem associated with internal auditingis that many companies will assign people who haveno formal training in auditing to perform audits. Theyare unaware of the auditing requirements for eachtype of audit, auditing liabilities, auditor responsibili-ties and the actions required prior to, during and afterthe audit process. Usually these employees have limit-ed knowledge of the standards and regulations thatapply to the entity they are assigned to audit.

Furthermore, many companies do not have timelimits in place for the issuing of audit reports andaudit report responses or an effective follow-up sys-tem for the closure of audit findings and actions. Inother words, they lack a system to report, respond to,follow up and close the audit loop. In many compa-nies, the auditing process is finished once the audit iscomplete and the audit report is distributed. Othersdo not clearly assign responsibilities and target datesfor the completion of the required actions when devel-oping the audit action plan.

According to the FDA Compliance Policy Guide, theFDA will not review or copy reports resulting frominternal audits performed during routine inspectionsconducted at regulated entities, but it may seek writ-ten certification such audits have been performed anddocumented and that the required corrective actionshave been taken.

The action plans based on the audit results shouldbe developed to address areas in which improvementscan be made. The cycle then begins again through theestablishment, communication and assessment of newrequirements.

If we are to consistently ensure the quality of ourproducts and services, remain competitive and ensure

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we are in compliance with current regulatory require-ments, we need to identify and act on improvementopportunities at a revolutionary pace,4 as well asensure required corrective and preventive actions aretaken.

A commitment to qualityTo achieve the goals of the operational excellence

cycle, organizations and management must be com-mitted to quality, continuous improvement and totalcompliance. They have to be willing to invest in thetraining and development of their requirement writ-ers, trainers and auditors to ensure requirements arealways clearly written, effectively communicated andcontinuously assessed by properly trained personnel.No matter what industry you are in or what structureyour organization may have, the principles of thedefined operational excellence cycle apply.

REFERENCES

1. Philip B. Crosby, Quality Without Tears, McGraw-Hill,1995.

2. Joseph M. Juran, Juran’s Quality Handbook, fifth edition,McGraw-Hill, 1998.

3. FDA/ORA Compliance Policy Guide, chapter 1, subchapter130.300, U.S. Food & Drug Administration, 1969.

4. Joseph M. Juran, Juran’s Quality Handbook, fifth edition, seereference 2.

BIBL IOGRAPHY

ASQ’s Quality Audit Division, J.P. Russell, ed., The QualityAudit Handbook, ASQ Quality Press, 2000.

Friedman, Kenneth, Guide to Writing Standard OperatingProcedures, Lehigh University, 1999.

Journal of GXP Compliance, www.ivthome.com/journals.The Small Business Journal, www.tsbj.com.Tracey, William R., Managing Training and Development Systems,

Amacom, 1974.

MADELINE BIGELOW is proprietor and president of OperationalExcellence Services in San Juan, Puerto Rico. She earned a mas-ter’s degree in business management from LaSalle University inMandeville, LA. Bigelow is an ASQ member and certified qualityauditor.

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