Estimates range from “very, very large ” to “huge.” We are still in very early stages of eBusiness. Hard to find experts that fail to see that business-to-business commerce is headed to the Internet. Our CEO, Sanjiv Sidhu, compares the Internet to electricity. Early on, people believed that electricity was important simply because it would power electric lights. The real potential wasn’t realized until the world started to use it. Key Message: eBusiness is happening, it’s only going to accelerate, and there is a huge opportunity for your company.
First companies got a webiste to get on the “internet” Then they started selling some goods over the web. Basic eCommerce. Some value but faced challenges of high cost of fulfillment and treated eCommerce as a new channel with pre-allocated inventory for goods sold over the internet. This was not a sustainable strategy as the internet volumes continued to increase The next generation of eCommerce solution focussed beond eCommerce and companies started looking beyond web based selling. Traditional business processes were redeployed to leverage internet. For example, EDI was replaced with web-based EDI. Web sales were included as part of the entire inventory rather than specially allocated inventory eliminating dual inventory recording and tracking. The missing link was still smooth integration to the back-office business system.s Some additional value but still trying to force-fit traditional business processes in the new internet based framework. The true leverage comes from Intelligent eBusiness explained later
The financial opportunities exist throughout the company and the income statement.
HKU-PKKI Dr. Stephen W.K. Ng, QuST 2001
The Management Development Centre of Hong Kong TQM Development Group 2001 TQM Plus – History & Development Dr Stephen W. K. Ng Managing Director QuST Continuation Ltd April 24, 2001 - 6:30 P.M. to 8:30 P.M. -- Experience Sharing --
WHAT HAVE WE CHANGED IN THE PAST 30 YEARS ?????
Customers Expectation – One of the key Drivers OLD TRADITION Good Fast Cheap Pick Any Two! NEW TREND Increase Customer Satisfaction While reducing total cycle times and costs
Semiconductor Industry Drivers Over Time 1960’s 1970’s 1980’s 1990’s 2000’s Product Price Quality Service & speed Information & Integration Six Sigma 10X Cycle Performance Time Excellence and ??
Internet – The Speed Challenge No. of years to reach 50 million users Internet TV Radio
e-Commerce is Huge! World i-Commerce in Billions Forecast of Corporate Web-enabled Expenditures 0 500 1000 1500 2000 2500 Worldwide U.S. $479 Billion $2.2 Trillion Low potential $80 $170 $390 $970 $2,000 $3,200 $55 $145 $320 $640 $1,100 $1,800 Source: Forrester Research 1999 Source: International Data Corp. 1999 High potential 1998 1999 2000 2001 2002 2003 0 1000 2000 3000 4000 1998 1999 2000 2001 2002 2003
Six Sigma Implementation Highlights Metrics Strategy Sigma Quality Level C p’ C pk’ P p’ P pk DPMO RTY COPQ "30,000 Foot Level" Metrics Program Initiative Business Strategy Driven from the top Effective Project Selection Selecting the Right Players Defect Rates Cycle Times Expenditures 6σ By F. Breytogle III
Balancing the Change in Asia ( The 50/50 Rule ) 50 % Improve Productivity & Services 50 % Lower Total Costs Be No.1 The Leadership Practice in the 21 st Century
The Journey to Synchronization Commitment Interdependent Interactive/Aligned Investment Transactional Understanding Hostile Connection/ Culture Synergistic Integrate Collaborate Synchronized From A Consulting & QuST… Silo Communication Stream The SCM evolution The effect of * Globalization, * e- Commerce, & * The new economy
Total Cost Driver for e-SCM $100 5% $65 Before e-SCM R&D 35% savings opportunity After e-SCM Sales expense Others 4% 6% I2 Technologies, Inc. 10% Direct Material 4% Indirect Materials 3% Direct Overhead 3% Cost of Labor
The Challenge To TQM PLUS Triggers Redefine And Reposition Adopt Best Practices Do Nothing Prosper Survive Fail Advantage Decay Parity RIP … .. There comes a time in the history of every company where they have to change dramatically to move to the next level of performance. Miss that moment ….. and they begin to decline. A. Consulting SCM SIX SIGMA
Six Sigma Data Quality In the 80’s, inadequate process quality led to our Six Sigma initiative. In the decade ahead, data and information quality must make the Six Sigma journey. The Challenge of Six Sigma Quality in everything we do in the 21th Century
Performance Excellence Stephen’s Process Development Model A B C Could be Best-in-class Should be as is entitlement baseline as was Old standard A B C D Class Quality Performance Speed of Execution Benchmarking 6 Sigma & beyond
YOUR ROLE IN TQM PLUS MANAGEMENT is.. Leader Model Obstacle Remover Adviser Facilitator Mentor Supporter Motivator
Three Kinds of Corporations Need To Change In The Concept of Reengineering 1. Companies in deep trouble. They have no choice. 2. Companies not yet in trouble but have the foresight to see trouble coming. 3. Companies that are in peak condition. No discernable difficulties. Seek to raise the competitive bar even higher. What is you company’s position ???
What do you think …… ASIA COMPANIES BELONG To 1 2 3
VOICE OF CUSTOMERS …… BEFORE YEAR 2001 Expectations from Suppliers in Total Supply Chains <ul><li>World-class total supply chain leadership </li></ul><ul><li>Time compression - continued reduction in total cycle time </li></ul><ul><li>Perfect supplier in Quality, OTD & Responsiveness </li></ul><ul><li>Fourth party logistics management </li></ul><ul><li>World-class flex model of Compaq </li></ul><ul><li>DJIT to HUB concept </li></ul><ul><li>Consignment inventory, bill to use </li></ul><ul><li>One system, two companies </li></ul><ul><li>Customerized performance metrics - TQRD of HP </li></ul><ul><li>Schedule sharing & inventory management </li></ul><ul><li>Third party JIT service </li></ul><ul><li>Single unit procurement </li></ul><ul><li>4-week lead time support </li></ul><ul><li>Kitting service </li></ul><ul><li>Value-added services </li></ul><ul><li>Consignment warehouse of Motorola </li></ul><ul><li>Shared inventory </li></ul>
Motorola’s TQM Plus Process Quality Control (QC) 50‘ Quality Assurance (QA) 60‘ Total Quality Control (TQC ) 70‘ Total Quality Management (TQM) 80‘ Total Quality Service (TQS) 90‘ Six Sigma Challenge 1987 Total Service Quality Management (TSQM) 1997 Service Quality Excellence Customer Advocacy 2000 Motorola Total Customer Satisfaction Drive Performance Excellence Challenge To You and Your Plan NOW By Dr. S.W.K.Ng, QuST
What It Will Take To Win – example of a global corporation Race to Best-In-Class Compete Survive Automation 10 - 30% Integration 20 - 40% Simplification & Standardization 50 - 70% 1) Materials Requirements Planning 2) Output Scheduling 3) Factory On Time Delivery 4) Rough Cut Capacity Planning OF Release 1 Baseline Factory Execution Lead Time / Responsiveness Logistics Simplification Next Generation Tool Set Continuous Improvement in Factory & Planning Automation Step Number 1: Build a solid foundation • Consistent business practices • Predictable, repeatable processes • Metric consistent with service focus CRITICAL 4 :
TOTAL SERVICE QUALITY MANAGEMENT (TSQM TM ) MODEL Leadership Execution Communication Systems, Tools, Metrics, Processes and Rules By Dr. Stephen W.K. Ng The TQM Plus strategy…….starts with Service Quality Mindset TCS – Total Customer Satisfaction Service Vision, Strategy & Action People Training, Development and Culture TCS TQM Plus
COMBINING THE BEST OF EAST & WEST Quality & Speed A STRONG ORGANIZATIONAL CULTURE IS NEEDED TO SUPPORT TQM PLUS
THE QUST EVOLUTION IN MOTOROLA - a 6 sigma culture example QuST Timeline TM 1987 Work Improvement Team (WIT) approach 1991 ‘Total Quality Now’ Workshop Formed Quality and Speed Teams (QuST) Aim at delivering more values to customers <ul><li>1992-1994: </li></ul><ul><li>Quarterly Quality &Speed Excellence Sharing </li></ul><ul><li>Yearly ‘Quality Week’ </li></ul>Generic QuST Executive QuST <ul><li>1995-1996: </li></ul><ul><li>Quarterly Quality &Speed Excellence Sharing </li></ul><ul><li>Year round activities </li></ul>4 QuST 8 Domains <ul><li>1992: </li></ul><ul><li>Established ‘Small Win’ Recognition System </li></ul>1993 QuST renewed to include Teamwork & Technology as enabler Strategic QuST 1995 QuST integrated into Quality Department D o m a D o m a i n 2 D o m a i n 3 D o m a i n 4 D o m a i n 5 D o m a i n 6 Management System Communication Recognition Education Participation Measurement <ul><li>1998-2002: </li></ul><ul><li>Customer Loyalty </li></ul>MCTG MMTG CPSTG LATG
“ MOST WELL RUN AND WELL MANAGED COMPANIES STILL ONLY USE 50% OF THEIR AVAILABLE RESOURCES” Alexander Proudfoot
“ EIGHTY PERCENT OF THE ABILITY TO GET RESULTS IS BELIEVING THAT THEY ARE THERE TO GET” Alexander Proudfoot
P REPARING F OR T HE 21 ST C ENTURY A nd B eyond “ If a process doesn’t work over a period of time, don’t keep trying to fix it. CHANGE it!” J. Anklesaria
Effects of Service Programs on Customer Delivery
PKKI Balanced Scorecard 2002 Vision Provide enjoyable environment for high quality knowledge transfer between academia and business world Mission <ul><li>Be a Premier Institute of Management focusing on consultancy, executive learning and action research </li></ul><ul><li>Equip employees and professionals with competencies to achieve higher quality and speed performance </li></ul>Financial <ul><li>Healthy with surplus </li></ul><ul><li>Reliability of performance </li></ul><ul><li>Donation continuation </li></ul><ul><li>Repayment of debt </li></ul><ul><li>Reward & incentive </li></ul>Customer <ul><li>Value for money </li></ul><ul><li>Customer loyalty </li></ul><ul><li>Corporate account </li></ul><ul><li>SQ excellence </li></ul>Internal <ul><li>Exceed customer expectations </li></ul><ul><li>Effective SCM </li></ul><ul><li>System management </li></ul><ul><li>Superior project management </li></ul>Learning & growth <ul><li>Continuous improvement </li></ul><ul><li>Service innovation </li></ul><ul><li>New programs </li></ul><ul><li>Empowered professionals </li></ul>
SERVICE QUALITY INDEX - INTERNAL CUSTOMERS Warehouse Customer Picking and Inventory Accuracy Performance: Warehouse Customer Picking Performance Inventory Accuracy Performance Source of Information: Inventory Audit Accuracy (in %) 100 99.75 99.25 98.25 1991 1992 1993 1994 1995 1996 1997 Time 98.75 . . . . . . . 98.30% 99.61% 99.99% 100% 100% 100% 100%
Our Challenge is to Become A Transformational Leader You and me now
Elements of transformational leadership <ul><li>Has a vision & be able to articulate it in concrete terms </li></ul><ul><li>Perceived as a change agent </li></ul><ul><li>Able to develop rapport with his followers </li></ul><ul><li>Able to energize his followers to action to achieve challenging goals </li></ul><ul><li>Provides supports to, and act as a coach & teacher to his followers </li></ul><ul><li>Exhibits distinctive and consistent behavior (that is consistent with his vision) </li></ul><ul><li>Sensitive to & knowledgeable about the ‘environment’ (internal & external) </li></ul>
THE TRANSFORMATIONAL LEADERS CONSIDER….. * Incremental change isn’t enough for many companies today. They don’t need to change what is; they need to create what isn’t * Some people see things as they are and ask why, transformational leaders see things as they never were and ask why not…….
A “ Wake Up Call ” to Business Leaders It’s Time to kill your organization before it kills your business and you !! !