OPEX: A Definition

There is no clear-cut definition of Operational Excellence (OPEX) in theory or practice. Especially the inflationary use of the term for almost every launched improvement activity rather obscured than clarified its meaning. In some companies it has been used synonymously for cost-cutting, in others similar to Six Sigma or lean production. This chapter explains our understanding of, and our philosophy behind, OPEX. Based on this understanding we discuss the benefits of striving for OPEX in the Pharmaceutical Industry. We start with a short story from a completely different field, the management of a major airline's baggage handling department. This will foster the understanding of hindrances to excellence in today's companies. We proceed with examining existing excellence models, and derive common elements. This sets the stage for the introduction and the explanation of the St. Gallen OPEX Model. We then conclude this chapter with our definition of Operational Excellence.