Once, there was a pin factory. It employed ten workers – each of whom performed a different task. This organizational structure allowed them to generate 48,000 pins every day. If the people working at the plant were working independently, the output of each would have been limited to 20 pins at most – totaling 200 pins. This story describing division of labor was used in Adam Smith’s 1776 book The Wealth of Nations, as an example of operational excellence (OE).
If your company is to survive in a competitive market, OE must be sought, explained Faisal Hoque in Fast Company. In other words, the enterprise must “identify, understand and create the capabilities, behaviors and focuses necessary for repeatable, continuous and measurable operational improvement,” said Hoque.