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  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary Time compression: The longer a transaction is in the system the more cost it attracts and the more non-value-added effort is expended on it e.g. reporting. Increasing customer satisfaction is determined on turnaround time. The principle demands that the overall cycle time for a transaction is examined an alternative processes designed which dramatically reduce it e.g. instant mortgage quotations. Eliminate Non-value Added Activities: The longer a transaction is in the system the more cost it attracts and the more non-value-added effort is expended on it e.g. reporting. Increasing customer satisfaction is determined on turnaround time. The principle demands that the overall cycle time for a transaction is examined an alternative processes designed which dramatically reduce it e.g. instant mortgage quotations. Quality at Source: Process analysis often reveals that much of the dead time in process cycle times and many of the non-value-added activities are present in processes because of an underlying presumption of low quality. BPR suggests that processes should be redesigned on the basis of quality being established at the very earliest point and thereafter assumed. Organise around outcomes: “As-Is” processes often reveal that many of the aspects of a given process reflect the vested interests of the people or groups involved - over time the people involved in a process can organise the process for their own convenience, rather than operational effectiveness or customer satisfaction. This principle demands that everything is optimised for the desired outcome.
  • Managing Operations BMG343J4 Slides Used May Vary Empower People: Traditional industrial engineering typically broke work up into a series of small tasks each to be performed by a specialist e.g. the factory production line. A consequence of this approach is that the individuals involved become alienated from, or disinterested in, the purpose they are serving. The alternative is to organise the process around those involved having an end-to-end perspective in satisfying the outcome or customer. Utilise Cost-effective Technology: Traditional controls based process designs are based on the presumption that people are incompetent or dishonest. As a consequence many jobs are constructed to as to minimise the individual’s freedom and individuality. BPR recognises that this approach is misguided and wasteful of an organisation’s most precious asset - the commitment and creativity of its people. Re-engineered processes seek to enrich jobs and exploit the potential of workers. Customer Alignment: An examination of “As-Is” processes usually reveals that they are well and thoroughly designed, given the limitations of the technology available when they were conceived. BPR encourages processes designers to re-think processes from the perspective of seeking ways to exploit the power of the newest technologies. Set Demanding Targets: Human nature is often complacent. People need demanding targets if they are to achieve their potential. BPR suggests that all re-engineered processes should include performance targets which will stretch the stamina and creativity of the workers.
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary Understanding, Managing and Implementing Quality Frameworks, Techniques and Cases, (eds) J. Anthony and D. Preece. (2002) ISBN 0-415-22271-0 (Shelfmark 658.4013 UND)
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary
  • Managing Operations BMG343J4 Slides Used May Vary

Managing Operations Generic Managing Operations Generic Presentation Transcript

  • BMG343J4 – Managing Operations (Managing Organisational Improvement) Steve Pollard [email_address] [email_address] BMG343J4 Advanced Diploma in Management Practice
  • The aim of this module is to:
    • provide participants with both the knowledge of effective operating systems
    • and
    • the understanding of the contexts in which they may be used.
    BMG343J4
  • 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.
    BMG343J4
  • Agenda
    • From Me…..
    • What is Managing Operations
    • Continuous Improvement & Innovation
    • What is Performance Measurement
    • What is Quality
    • Total Quality Management
    • Improvement & Change
    BMG343J4
  • Agenda
    • To you……
    • Review of Business Improvement Tools
    • Self-Assessment
    • Organisational Fit
    BMG343J4
    • Time Compression
    BMG343J4 NVA
    • Eliminate Non-Value Added Activities
    • Quality at Source
    • Organise around outcomes
    Fundamentals of business improvement
    • Set Demanding Targets
    BMG343J4
    • Customer Alignment
    • Utilise Cost-Effective Technology
    • Empower People
  • Operations Management
    • The set of activities that creates goods and services through the transformation of inputs into outputs.
    BMG343J4 OM Managers
    • Plan
    • Model Processes
    • Organise
    • Staff
    • Lead
    • Control
    Activity: Informal Self Assessment
    • Pure Service
    • Teaching
    • House cleaning
    • Plumbing repair
    • Restaurant
    • Made to measure clothing
    • New car
    • Radio
    • Soft drinks
    • Salt
    • Pure Commodity
    BMG343J4
  • Objective Headings (objectives formulated for different jobs) BMG343J4 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
  • Planning – the virtuous cycle BMG343J4 ACT
    • Improvement planning
    • Improvement tool
    • Improvement culture
    PLAN
    • Business Plan
    • Balanced Scorecard
    DO
    • Functional organisation
    • Process organisation
    • Policy Deployment Process
    CHECK
    • EFQM
    • Scorecard update
  • 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
    BMG343J4
    • Five ways to increase productivity
    • Reduce Costs
    • Manage Growth
    • Work Smarter
    • Pare Down
    • Work Effectively
    Productivity Improvement (Oakland, J S. 2004. Total Quality Management, 3 rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562) BMG343J4 Output Input
  • Simple OM: BMG343J4 INPUT THROUGHPUT OUTPUT
  • Challenges driving Business Improvement
    • FROM:
    • Local or national focus
    • Batch shipments
    • Low bid purchasing
    • Lengthy product development
    • Standard products
    • Job specialisation
    • TO:
    • Global focus
    • Just-in-time
    • Supply chain partnering
    • Rapid product development
    • Mass customisation
    • Empowered employees
    BMG343J4
  • BMG343J4 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)
  • 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] BMG343J4 Awareness Total usage Usage <£100K Usage £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
  • PERFORMANCE MEASUREMENT BMG343J4
    • Design supporting
    • data collection systems/
    • determine presentation
    • method
    Refine measures if data not available 1 Decide what is to be measured 2 Decide which measures to use 3 Ascertain sources of data 4 Design Support Systems
    • Analyse/clarify
    • policy objectives
    • (goals)
    • Select performance
    • measures to match objectives
    • Select comparators
    • Review availability/
    • collectability of data
  • PERFORMANCE MEASUREMENT BMG343J4 delivered by allocated to linked to Reporting Systems Budget Process Performance Related Rewards mgrs answerable to results feed to Overall Strategy Policy Objectives Other targets eg cost or quality Performance Measures Manager’s sphere of responsibility Review process
  • 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
  • Kanji, G K. (1996) Implementation and Pitfalls of Total Quality Management, TQM, vol 7. pp331-343. BMG343J4 Business Excellence DELIGHT THE CUSTOMER CONTINUOUS IMPROVEMENT TQM (principles) MANAGEMENT BY FACT PEOPLE-BASED MANAGEMENT Leadership (prime) Leadership (prime) Customer satisfaction Continuous improvement cycle (concepts) Prevention Measurement (concepts) Internal customers are real (concepts) Teamwork All work is process People make quality (concepts) Prime Business Excellence Principles Core Concepts
  • 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.
    BMG343J4
  • 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.)
    BMG343J4
  • ORIENTATION DISCUSSION ACTIVITY
    • 1 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      D oes 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?
    BMG343J4
  • BMG343J4 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.) Staff Skills Superordinate goals (Vision) Structure Systems Strategy Style
  • BMG343J4 Total Quality Management Model Teams Tools Systems Culture Communication Commitment (Oakland, J S. 2004. Total Quality Management, 3rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562) Process C S ustomer upplier
  • New framework for quality management BMG343J4 Planning Performance Commitment Process People Communication Culture (Oakland, J S. 2004. Total Quality Management, 3rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562)
  • Oakland, J S. (2003) TQM Text with Cases, 3 rd ed. ISBN 0-7506-5740-5. BMG343J4 Process Feedback Feedback The “voice” of the customer Consistent INPUTS The “voice” of the process OUTPUTS SUPPLIERS CUSTOMERS Materials Procedures Methods Information (including specifications) People Skills Knowledge Training Plant/equipment Products Services Information Paperwork
  • Greiner, L G. (1972) Evolution and Revolution as Organizations Grow , Harvard Business Review, p41. BMG343J4 AGE OF ORGANISATION SIZE OF ORGANISATION Small Large 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 ??
  • 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.
    BMG343J4
    • 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.
  • Organisational Life Cycle Robbins, SP and Barnwell, N. (2002) Pearson Education Australia. ISBN 1-74009-545-6 BMG343J4
    • 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
  • Types of Organisational Change Osborne, S P and Brown, K. (2005) Managing Change in Public Sector Organisations. England. Routledge. BMG343J4 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
  • Maslow’s Theory v Personal Change BMG343J4 Physiological Safety or Security Belonging Social Ego & Self Esteem SA 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?
  • Perception of Change Model BMG343J4 DENIAL EXPLORATION RESISTANCE COMMITMENT Denial Shock Frustration Acceptance Experimentation Understanding Integration
  • BMG343J4 Life event 8+ months Well being Feel good OK 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
  • BMG343J4 Life event 8+ months Well being Feel good OK Distress / despair First shock Provisional adjustment Inner contradictions Inner crisis Re-construction and recovery Trauma or loss Confusion Depression Crisis Quitting Numbness Disbelief Minimising or denial Letting go Accepting Partial recovery Extended crisis
  • BMG343J4 Life event 8+ months Well being Feel good OK Distress / despair First shock Provisional adjustment Inner contradictions Inner crisis Re-construction and recovery Confusion Depression Crisis Quitting Numbness Disbelief Minimising or denial Letting go Accepting Partial recovery Extended crisis Excitement Honeymoon Uncertainty Losing confidence Confusion Depression Crisis Letting go Accepting Exploring Testing New confidence, transformation
  • BMG343J4 Life event Well being Feel good OK Distress / despair First shock Provisional adjustment Inner contradictions Inner crisis Re-construction and recovery Uncertainty Losing confidence Testing New confidence, transformation Confusion Depression Crisis Numbness Disbelief Minimising or denial Letting go Accepting Exploring Taylor’s empirical model
  • BMG343J4
  • 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 ........”
    BMG343J4
  • BMG343J4
    • 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
  • Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free Press.)
    • Relative Advantage
    • Compatibility
    • Complexity
    • Trialability
    • Observability
    BMG343J4
  • Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free 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?
    BMG343J4
  • Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free 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?
    BMG343J4
  • Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free 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?
    BMG343J4
  • Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free 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?
    BMG343J4
  • Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free 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?
    BMG343J4
  • BMG343J4 ELAPSED TIME OF ADOPTION % HAVING ADOPTED EARLY MAJORITY (34%) LATE MAJORITY (34%) LAGGARDS (15%) (2.5%) INNOVATORS (13.5%) EARLY ADOPTERS (Spence, W R. 1994. Innovation, The Communication of Change Ideas, Practices and Products. Chapman Hall.) POINT OF INFLEXION POINT OF INFLEXION
  • The Effectiveness Matrix (Carnall, C. (2007) Managing Change in Organisations, 5 th ed. P193) BMG343J4 Quantitative Measures Qualitative Measures Effectiveness Efficiency Resources Costs Waste Employee turnover Resources Staff flexibility Training and development Objectives Growth New products/ services Objectives Corporate image Excellence Adaptability Resources Management style Management development Corporate culture Resources Satisfaction Commitment Objectives Competitive position Utilization of new technology Objectives Profit Market share Volume Delivery
  • PLANNING FOR QUALITY
    • Policy and Strategy
    • Based 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
    BMG343J4
    • 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
  • Getting the Balance Right BMG343J4
  • BMG343J4 Enterprise Strategy Executive Leadership Principle 1 Mobilize 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.
  • Remember with business improvement there is no finish line! BMG343J4
  • 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.
    BMG343J4      