Operational excellence involves providing the lowest cost goods and services while simultaneously minimizing problems for the customer. A business with a focus on operational excellence finds that working with customers and partners can be a lot like working with departments within its own company. For example, allowing suppliers to see such things as inventory levels, production plans, and product designs would make them more responsive in meeting our needs. We would spend a lot less time on the phone or at the fax machine coordinating routine purchasing.

The success of operational excellence depends on several key principles:-

Efficient leveraging of assets: Resources are allocated in the most efficient manner and at the lowest cost possible.

Management of efficient transactions: For greater efficiency and speed, processes between suppliers and the organization are often integrated.

Management of sales intelligence: For example, a sales person needs to know what is selling, where it is selling, when it is selling and what trends are catching on.

Dedication to measurement systems: Businesses dedicated to operational excellence monitor and measure all processes, continually searching for ways to reduce cost and improve both service and quality.