Managing Operations Generic

transcript

BMG343J4 1

BMG343J4 – Managing Operations(Managing Organisational Improvement)

Steve Pollard

sf.pollard@ulster.ac.uk

stevefpollard@hotmail.com

Advanced Diploma in Management Practice

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The aim of this module is to:

• provide participants with both the knowledge of effective operating systems

• the understanding of the contexts in which they may be used.

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By the end of this module you will be able to:

• outline the process involved in performance setting

• discuss the factors taken into account when determining team

performance objectives

• list the main business improvement tools available

• critically evaluate business improvement initiatives

• assess the business improvement initiative/organisation best fit

• identify initiative compatibility for building organisational capability

• apply appropriate business improvement initiatives to a range of

organisations, ie, voluntary, public, private and not-for-profit.

AgendaFrom Me…..

What is Managing Operations

Continuous Improvement & Innovation

What is Performance Measurement

What is Quality

Total Quality Management

Improvement & Change

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Agenda

To you……

Review of Business Improvement Tools

Self-Assessment

Organisational Fit

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• Time Compression

• Eliminate Non-Value Added Activities

• Quality at Source

• Organise around outcomes

Fundamentals of business improvement

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• Set Demanding Targets

• Customer Alignment

• Utilise Cost-Effective Technology

• Empower People

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Operations Management

• The set of activities that creates goods and services through the transformation of inputs into outputs.

OM Managers• Plan • Model Processes• Organise• Staff• Lead• Control

Activity: Informal Self Assessment

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Pure Service

TeachingHouse cleaningPlumbing repairRestaurantMade to measure clothingNew carRadioSoft drinksSalt

Pure Commodity

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Objective Headings (objectives formulated for different jobs)General manager Quality manager Sales manager

Profitability Reduce waste Achievement of sales targets and plans

Volume & business growth

Quality registrations & external audits

Contribution to profits and overheads

Provision & utilisation of assets

Product and service specification performance

Customer satisfaction

Product innovation Maintain the Quality Management System

Customer needs

Customer satisfaction

Key process performance Identification of new products and services

Operating costs Foster a customer focus philosophy

Resource management of the sales force, including motivation

Management effectiveness

Foster a zero defects philosophy

Resource management of the sales force, including motivation

Employee productivity & attitude

Foster a continuous improvement philosophy

Marketing and market trends

Public responsibility Environmentally sound awareness

Legal needs and implications

BMG343J4 11Planning – the virtuous cycle

• Improvement planning

• Improvement tool

• Improvement culture

• Business Plan

• Balanced Scorecard

• Functional organisation

• Process organisation

• Policy Deployment Process

• EFQM

• Scorecard update

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Significant events in the evolution of Business Improvement

• Smith (1776) - Division of Labour• Whitney (1800) – Standardised parts• Taylor (1881) – Scientific Management• Ford (1913) – Coordinated assembly line• Gantt (1922) – Gantt Charts• The Gilbraiths (1922) – Motion Study• Shewhart (1924) – Statistical Quality Control• Deming and Juran (1945) – Quality culture • Feigenbaum (1951) – Total Quality Control

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Five ways to increase productivity

1 Reduce Costs

2 Manage Growth

3 Work Smarter

4 Pare Down

5 Work Effectively

Productivity Improvement(Oakland, J S. 2004. Total Quality Management, 3rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562)

Output

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Simple OM:

INPUT THROUGHPUT OUTPUT

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Challenges driving Business Improvement

• Local or national focus• Batch shipments• Low bid purchasing• Lengthy product

development• Standard products• Job specialisation

• Global focus• Just-in-time• Supply chain partnering• Rapid product

development• Mass customisation• Empowered employees

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Culture for continual improvement and innovation

Role of management

Leadership Focus on employees

Focus on the customer/client

Integration of continuous improvement activities

Standardisation/ quality management system

Focus on critical processes

Measurement and feedback systems

Learning from continual improvement results

The Continuous Improvement Model for Self-Assessment (SACIM)

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PERCENTAGE AWARENESS AND USAGE OF UK-WIDE QUALITY STANDARDS

(Source: Futureskills, 2003. Base 1000 charities) [Accessed 16 November 2004 - http://www.redf.org/download.sroi/sroi_method_2.pdf]

AwarenessTotal usage

Usage <£100K

£100K - £1m

Usage £1m – 10m

Usage >£10m

IIP 94.4 39.3 18.1 38.7 55.7 67.5

ISO 9001 62.5 8.4 6.4 7.4 11.3 15.9

BEM 53.4 8.0 4.4 7.8 11.0 4.8

PQASSO 48.4 45.8 53.2 49.6 28.7 0.0

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PERFORMANCE MEASUREMENT

• Analyse/clarifypolicy objectives

(goals)

• Design supportingdata collection systems/determine presentation

method

Refinemeasures

if datanot

available

• Select performancemeasures to match objectives

• Select comparators

• Review availability/collectability of data

1 Decide what is to be measured

2 Decide which measures to use

3 Ascertain sources of data

4 Design Support Systems

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PERFORMANCE MEASUREMENT

OverallStrategy

delivered by allocated to

Policy Objectives

linked to

Other targetseg cost or quality

PerformanceMeasures

Manager’s sphereof responsibility

Reporting Systems

BudgetProcess

PerformanceRelated Rewards

mgrs answerable to

results feed to

Reviewprocess

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ACTIVITY (25 minutes)

• What performance measures are used in your organisation?

• What is actually measured?• What evidence is used to support performance

management?• How does the management information system

support performance management?

BMG343J4 21Kanji, G K. (1996) Implementation and Pitfalls of Total Quality

Management, TQM, vol 7. pp331-343.

Business Excellence

DELIGHT THE CUSTOMERCONTINUOUS IM

PROVEMENT

TQM (principles)

MANAGEMENT BY FACT

PEOPLE-BASED M

ANAGEMENT

Leadership (prim

Leadership (prime)

All work is process

People make quality (concepts)

Business Excellence

Principles

Core Concepts

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Fundamental Rules of Customer Service

Remember:

• To always treat the customer as you would like to be treated

• if you don’t look after the customer, someone else will• If in doubt, under promise and over deliver• Nothing is gained by winning an argument, but losing a

customer• The reputation of the company is in the hands of the

individual.

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Quality

• “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes Quality.”

(Drucker, P. (1968) The Practice of Management.)

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ORIENTATION DISCUSSION ACTIVITY1 Is there a good understanding within

the organisation of the needs, wants and behaviour patterns of clients/customers?

2 Is your organisation results-driven or people-directed?

3 Does the SMT see itself as the organisation’s senior strategist or strategic ‘champion’?

4 Does the organisation have a results-driven mission?

5 Do the organisation’s strategies reflect the realities of the external environment?

6 Is there any one function perceived as having more important than others?

7 Is the organisation organised in such a way that it can be responsive to stakeholder changes?

8 Is the Management Information System (MIS) well designed and operating effectively?

9 Do the organisation’s managers make full use of MIS in their decision making?

10 Are costs v monies recovered analysed to ensure effectiveness?

11 Is there a strong link between the MIS and the stakeholders?

12 Does the organisation deploy staff with the appropriate skills and competences?

13 Are effectiveness and efficiency recognised as the responsibility of the entire organisation?

14 Are decisions made in a well co-ordinated way and executed in an integrated manner?

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THE SEVEN S FRAMEWORK(Waterman, R H, Jr, Peters, T J and Phillips, J R. 1980. Structure is not organization, Business

Horizons, vol. 23, pp. 14-26.)

Skills

Superordinate goals

(Vision)

Structure

Systems

Strategy

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Total Quality Management Model

Process

CSustomer

upplier

ToolsSystems

munication

Commitment

(Oakland, J S. 2004. Total Quality Management, 3rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562)

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New framework for quality management

Planning

Performance

Commitment ProcessPeople

munication

(Oakland, J S. 2004. Total Quality Management, 3rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562)

BMG343J4 28Oakland, J S. (2003) TQM Text with Cases, 3rd ed. ISBN 0-7506-5740-

Process

Feedback

The “voice” of the customer

Consistent

INPUTSThe “voice” of the process

OUTPUTS

Materials

Procedures

Methods

Information (including specifications)

People

Skills

Knowledge

Training

Plant/equipment

Products

Services

Information

Paperwork

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Greiner, L G. (1972) Evolution and Revolution as Organizations Grow, Harvard Business Review, p41.

AGE OF ORGANISATION

Young Mature

PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5

1 Growth through CREATIVITY

2 Growth through DIRECTION

3 Growth through DELEGATION

4 Growth through COORDINATION

5 Growth through COLLABORATION

1 Crisis of LEADERSHIP

2 Crisis of AUTONOMY

3 Crisis of CONTROL

4 Crisis of RED TAPE

5 Crisis of ??

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Size may . . .

provide the leverage for capturing significant market share improve access to low-cost capital bring improved brand recognition and advertising benefits permit greater investment in research and development enable global reach facilitate expertise and systems development.

lead to lower employee satisfaction lead to resistance to innovation lead to coordination problems lead to high formalisation lead to a higher risk of litigation.

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Organisational Life CycleRobbins, SP and Barnwell, N. (2002) Pearson Education Australia. ISBN 1-74009-545-6

Entrepreneurial stage

• Ambiguous goals

• High creativity

Collectivity stage

• Informal communication and structure

• High commitment

Formalisation-and-control stage

• Formalisation of rules

• Stable structure

• Emphasis on efficiency

Elaboration-of-structure stage

• More complex structure

• Decentralisation

• Diversified markets

Decline stage

• High employee turnover

• Increased conflict

• Centralisation

Formation

Growth

Maturity

Decline

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Types of Organisational ChangeOsborne, S P and Brown, K. (2005) Managing Change in Public Sector Organisations.

England. Routledge.

Small-scale incremental change

Large-scale radical change

Reactive change Proactive change

Reactive change to shifting contextual conditions, involving reconfiguration and adaptation to change

Proactive refinement and development of procedures, work arrangements and technology updates

Radical response to critical junctures, major shifts in business markets etc, to maintain and secure survival

Major restructuring and reinvention referred to as transformational and revolutionary proactive change

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Maslow’s Theory v Personal Change

Physiological

Safety or Security

Belonging Social

Ego & Self Esteem

Does the Change completely rock my world to its foundation?

Has the Change the capacity to undermine me personally?

Does the Change alter my belonging to a social grouping?

Will I still have a job?

Does the Change alter my earnings capacity?

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Perception of Change Model

DENIAL

EXPLORATIONRESISTANCE

COMMITMENT

Denial

Frustration

Acceptance

Experimentation

Understanding

Integration

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Life event 8+ months

Well being

Feel good

Distress / despair

First shock

Provisional adjustment

Inner contradictions

Inner crisis

Re-construction and recovery

Positive events

Excitement Honeymoon

Uncertainty

Losing confidence

Confusion

Depression

Crisis Letting go

Accepting

Exploring

Testing

New confidence, transformation

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Well being

Feel good

Distress / despair

First shock

Inner crisis

Trauma or loss

Confusion

Depression

Crisis

Quitting

NumbnessDisbelief

Minimising or denial

Letting go

Accepting

Partial recovery

Extended crisis

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Well being

Feel good

Distress / despair

First shock

Inner crisis

Confusion

Depression

Crisis

Quitting

NumbnessDisbelief

Letting go

Accepting

Partial recovery

Extended crisis

Excitement Honeymoon

Uncertainty

Losing confidence

Confusion

Depression

Crisis Letting go

Accepting

Exploring

Testing

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Life event

Well being

Feel good

Distress / despair

First shock

Inner crisis

Uncertainty

Losing confidence

Testing

Confusion

DepressionCrisisNumbness

Disbelief

Letting go

Accepting

Exploring

Taylor’s empirical model

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For Duck . . . (Duck. J. (2003) The Change Monster.)

“Change is inescapably an emotional human process that encompasses the whole gambit of emotions

- fear, curiosity, exhaustion, loyalty, paranoia, depression, optimism, rage, revelation, delight, love........”

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Consider Duck’s change model: -

• What are staff likely to be feeling, experiencing and doing at each of the five stages?

• What can managers do at each stage to make the overall change as stress-free and successful as possible?

• What impact does the stage of change have on communication?

GROUP ACTIVITY

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Making Change Happen(Rogers, E M. (1995) Diffusion of Innovations (4th ed). New York. The Free

Press.)

• Relative Advantage

• Compatibility

• Complexity

• Trialability

• Observability

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Press.)

• Relative Advantage (Better than previous solution)

– How well does my plan show how much better off people will be when they adopt the plan?

– Why is this plan better than what has been done before?

– What advantages or benefits might there be to accepting the plan?

– Who will gain from the implementation of the plan?

– How will I (or others) be rewarded by adopting the plan?

– How will I emphasize the plan’s benefits to all?

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Press.)

• Compatibility (Consistent with values, experiences and needs)

– How well does my plan demonstrate that it is compatible with current values, past experiences and needs?

– Is the plan consistent with current practice?

– Does the plan meet the needs of a particular group?

– Does it offer better ways to reach our common goals?

– Who will naturally support and agree with the plan?

– Can it be favourably named, packaged and/or presented?

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Press.)

• Complexity (Being difficult to understand or use)

– How well does my plan provide for easy communication, comprehension and use?

– Is the plan easy for others to understand?

– Can it be explained clearly to many different people?

– Will the plan be easily communicated?

– How might the plan be made more simple or easy to understand?

– Is the plan easy to use or follow?

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Press.)

• Trialability(May be experimented with on a limited basis)

– How well does my plan allow for trialability?

– Can the plan be tried out or tested?

– Can uncertainty be reduced?

– Can we begin with a few parts of the plan?

– How might others be encouraged to try out the plan?

– Can the plan be modified by you or others?

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Press.)

• Trialability(May be experimented with on a limited basis)

– How well does my plan allow for trialability?

– Can the plan be tried out or tested?

– Can uncertainty be reduced?

– Can we begin with a few parts of the plan?

– How might others be encouraged to try out the plan?

– Can the plan be modified by you or others?

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ELAPSED TIME OF ADOPTION

HAVING ADOPTED

EARLY MAJORITY

LATE MAJORITY

LAGGARDS

POINT OF INFLEXION

(2.5%)

INNOVATORS

(13.5%)

EARLY ADOPTERS

(Spence, W R. 1994. Innovation, The Communication of Change Ideas, Practices and Products. Chapman Hall.)

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The Effectiveness Matrix(Carnall, C. (2007) Managing Change in Organisations, 5th ed. P193)

Quantitative Measures

Qualitative Measures

EffectivenessEfficiency

ResourcesCostsWaste

Employee turnover

ResourcesStaff flexibility

Training and development

ObjectivesGrowthNew products/services

ObjectivesCorporate imageExcellenceAdaptability

Resources

Management style

Management development

Corporate culture

Resources

Satisfaction

Commitment

Objectives

Competitive position

Utilization of new technology

Objectives

Profit

Market share

Volume

Delivery

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PLANNING FOR QUALITYPolicy and StrategyBased on Concept of Total Quality

– (Values, Vision, Mission Statement)• Use of Relevant Information

– Feedback from suppliers, customers and employees• Methods of Communication• Regular Review and Improvement

People Management• Human Resource

Planning

• Recruitment, Selection and Training

• Appraisal and Review

• Promoting Individual Involvement

Resources• Financial

• Information

• Material

• Technology

Processes• Identification of Key Processes

• Systematic Management of Key Processes

• Review of Key Processes

• Implementation and Evaluation of Process Changes

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Getting the Balance Right

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Enterprise Strategy

Executive Leadership

Principle 1Mobilize Change Through Leadership

1 Top Leadership committed 4 Vision and strategy clarified

2 Case for change clearly articulated 5 New way of managing understood

3 Leadership team engaged 6 Office of strategy management established

Strategic Fit

Principle 2

Translate the Strategy to Measurement Terms

1 Strategy map developed

2 Balanced scorecard created

3 Targets established

4 Initiatives rationalized

5 Accountability assigned.

Organization Alignment

Principle 3

Translate the Strategy to Operational Terms

1 Corporate role defined

2 Corporate and SBUs aligned

3 SBU and support units aligned

4 SBU and external partners.

5 Board of directors aligned

Human Capital Alignment

Principle 4

Motivate to Make Strategy Everyone’s Job

1 Strategic awareness created

2 Personal goals aligned

3 Personal incentives aligned

4 Competency development aligned.

Planning and Control Alignment

Principle 5

Govern to Make Strategy a Continual Process

Planning Process

1 Initiative planning

2 Integrated HR/ IT planning

3 Budget linkage

Operations Management

1 Process improvement

2 Initiative management

3 Knowledge sharing

Learning and Control

1 BSC reporting system

2 Strategy review meetings.

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Remember with business improvement there is no finish line!

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DID WE ACHIEVE ANY OF OUR OBJECTIVES?By the end of these sessions you will be able to:

• identify and evaluate customer service critical success factors

• discuss the factors taken into account when determining team performance objectives

• outline the process involved in performance setting• identify a range of business improvement tools and

techniques • critically evaluate business improvement initiatives • suggest how business improvement initiatives might be

applied to own organisation.