Operations Strategy - Improvement Strategy

Information about Operations Strategy - Improvement Strategy

Published on July 22, 2014

Author: sujith5989

Source: authorstream.com

Content

Operations Strategy 6: Operations Strategy 6 Improvement Strategy Ch 6 Slack Lewis PowerPoint Presentation: Decision areas Capacity Supply network Market competitiveness Process technology Resource usage Issues covered in this chapter Development and Organisation (Operations development and improvement) Issues include, Big radical improvement projects or small continuous improvements. Performance measurement used for setting the direction of improvement. Benchmarking against other operators. Prioritising improvements. Learning and enhancing process knowledge through control. Expectations on, and contributions from, the operations function. Quality Performance objectives Dependability Speed Flexibility Cost Process Improvement: Process Improvement Breakthrough improvement Innovation based, dramatic change Represents a step change in performance and practice Expensive, may involve change in product and process technology Continuous improvement Small incremental improvements Kaizen Differences between breakthrough and continuous improvement (Refer Slack & Lewis page 168) PowerPoint Presentation: Intended market position Market strategy Operations resources Market requirements The ‘Direct’, ‘Develop’, ‘Deploy’ strategic improvement cycle Operation’s capabilities DEVELOP operations capabilities through learning Operation’s resources and processes DIRECT performance and prioritisation Market potential DEPLOY operation’s contribution The strategic operations improvement cycle PowerPoint Presentation: Continuous improvement at a strategic level Market requirements Operations resources Intended competitive position in the market place D EPLOY operation’s contribution by exploiting superior capabilities Potential competitive position in the market place MARKET STRATEGY DEVELOP operations capabilities through learning The operation’s capabilities and performance Getting the fit right The operation’s resources and processes DIRECT performance PowerPoint Presentation: DIRECT – getting the fit right ‘Fit’ means that the operation’s resources and processes are aligned with the requirements of its markets. Line of fit Market requirements Operation’s resource capability PowerPoint Presentation: Intended market position Operation’s resources and processes Targets Performance DIRECT Directing improvement is a cycle of comparing targets with performance PowerPoint Presentation: Customer Satisfaction Resilience Quality Dependability Speed Flexibility Cost Agility Market strategic objectives Financial strategic objectives Overall strategic objectives Detailed performance measures, e.g. Operations strategic objectives Broad strategic measures Functional strategic measures, e.g. Composite performance measures, e.g. Generic operations performance measures, e.g. Defects per unit Level of customer complaints Scrap level Mean time between failures Lateness complaints Customer query time Order lead- time Throughput time Time to market Product range Transaction costs Labour productivity Machine efficiency Performance targets can involve different levels of aggregation PowerPoint Presentation: Performance targets can involve different levels of aggregation Detailed performance measures Broad strategic measures Functional strategic measures Composite performance measures Generic operations performance measures High strategic relevance and aggregation High diagnostic power and frequency of measurement (Refer Slack & Lewis page 172) PowerPoint Presentation: 40 X X X X X X Time Last year’s average performance = 60% Actual performance = 83% Performance by historical standards is GOOD 50 60 70 80 90 100 Different standards of comparison give different messages PowerPoint Presentation: Different standards of comparison give different messages 40 X X X X X X Time Last year’s average performance = 60% Actual performance = 83% Performance by historical standards is GOOD Performance against improvement goal is POOR 50 60 70 80 90 100 Improvement goal = 95% PowerPoint Presentation: Different standards of comparison give different messages 40 X X X X X X Time Last year’s average performance = 60% Actual performance = 83% Performance by historical standards is GOOD Performance against improvement goal is POOR Performance against competitors is GOOD 50 60 70 80 90 100 Improvement goal = 95% Competitor performance = 75% PowerPoint Presentation: Different standards of comparison give different messages 40 X X X X X X Time Last year’s average performance = 60% Actual performance = 83% Performance by historical standards is GOOD Performance against improvement goal is POOR Performance against competitors is GOOD Absolute performance is POOR 50 60 70 80 90 100 Improvement goal = 95% Competitor performance = 75% Absolute performance =100% PowerPoint Presentation: 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 I mportance for customers LOW HIGH P erformance against competitors GOOD BAD URGENT ACTION IMPROVE APPROPRIATE EXCESS? F E A C D B The importance–performance matrix PowerPoint Presentation: The importance–performance matrix for TAG’s ‘overnight temperature-controlled’ service 1 2 3 4 5 6 7 8 9 1 2 3 4 5 6 7 8 9 I mportance for customers LOW HIGH P erformance against competitors GOOD BAD X X X X X X X X X X Volume flexibility Delivery Drop quote Window quote Distribution quality Documentation service Delivery flexibility Enquiry lead-time Order/dispatch quality Price/Cost PowerPoint Presentation: Cost Quality + dependability + speed + flexibility + cost Flexibility Quality + dependability + speed + flexibility Speed Quality + dependability + speed Dependability Quality + dependability Quality Quality The sandcone model of improvement; cost reduction relies on a cumulative foundation of improvement in the other performance objectives PowerPoint Presentation: Key Indicators All staff are able to explain the operation’s strategic objectives Individuals and groups use the strategic objectives to focus improvement activity All proposed changes are assessed against strategic objectives All improvement is monitored and measured against strategic objectives DIRECT – getting the fit right PowerPoint Presentation: DEVELOP Knowledge Control Operation’s capabilities Operation’s resources and processes Developing operation’s capabilities is encouraged by a cycle of attempting to control processes which enhances process knowledge which, in turn, makes control easier PowerPoint Presentation: How they are able to learn DEVELOP – through learning It isn’t just a matter of being given the right resources. Operations with the same resources will not all give the same performance. So what makes the difference? PowerPoint Presentation: Systematic learning You can’t learn about a process when it’s out of control. If things are in control you notice changes you can investigate them you can identify root causes you can put things right and improve the process and learn more about it PowerPoint Presentation: Process Control Learning Process Knowledge Process control starts the learning which develops process knowledge PowerPoint Presentation: ‘Knowledge is power’ 1 Complete ignorance Nowhere 2 Awareness Tacit 3 Measurement Written 4 Control of mean Written and in hardware 5 Process capability Hardware and operating manual 6 Process characterisation Empirical equations 7 Know why Scientific models 8 Complete knowledge None Full Stage Term Knowledge Typical form of knowledge DEVELOP – through learning PowerPoint Presentation: DEVELOP Knowledge Control Operation’s capabilities Operation’s resources and processes Understanding process limits Better products and services Wide product/service range Less costly flexibility Enhanced quality Customer loyalty Retain best staff Staff job satisfaction Understanding of process inputs Higher process efficiency Enhanced supplier relationships Lower costs Process control may be one of the most operational of tasks, but it can bring strategic benefit PowerPoint Presentation: Building on learning Key Indicators Learning is made explicit, ‘What have you learned at work today?’ Process knowledge is seen as a key operations objective Individuals and groups share their learning Individuals seek out opportunities to learn actively and experiment Learning is captured and debated Designated individuals are responsible for learning from other operations PowerPoint Presentation: DEPLOY – the c ontribution and role of operations In everyday life we all switch roles How we see our role shapes how we behave and interact with others So critical to success operations strategy is changing how operations management see themselves and are seen by others The key issues is ‘What should we expect from operations management?’ PowerPoint Presentation: DEPLOY Contribution Expectations Market potential Operation’s capabilities Deploying operation’s capabilities to create market potential means ensuring that the operations function is expected to contribute to market positioning PowerPoint Presentation: The four- stage model of operations contribution Internally neutral Holding the organisation back Externally neutral As good as competitors Internally supportive Clearly the best in the industry Externally supportive Redefining industry expectations Increasing contribution of operations STAGE 2 Adopt best practice STAGE 3 Link strategy with operations STAGE 4 Give an operations Advantage Implementing strategy Supporting strategy Driving strategy Increasing operations capabilities Increasing strategic impact STAGE 1 Correct the worst problems PowerPoint Presentation: Contribution and role Key Indicators Staff cooperate and contribute in areas other than their own Staff understand their role in the internal and external supply chain The concept of internal supplier development is established Staff have visited and talked with their internal and external customers Staff are capable of making a contribution to organisational levels above their own PowerPoint Presentation: Balanced Scorecard Approach Balanced scorecard attempts to bring together the elements that reflect a business’ strategic position, product and service quality measures, product and service development times, customer complaints, labour productivity……. How do we look at our shareholders? (Financial perspective) What must we excel at? (Internal process perspective) How do our customers see us? (Customer perspective) How can we continue to improve and build capabilities? (Learning and growth perspective) PowerPoint Presentation: The measures used in the balanced scorecard Customer performance measures To achieve strategic impact, how should we be viewed by customers? Financial performance measures To achieve strategic impact, how should we be viewed by shareholders? Internal process performance measures To achieve strategic impact, what aspects of performance should business process excel at? Learning and growth performance measures To achieve strategic impact, how will we build capabilities over time? Overall strategic objectives

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