The document discusses how organizational management impacts customer loyalty and profit earning. It covers reviewing business goals, operations like product design and quality control, and organizational management through policies and empowering leadership. Effective management requires clear goals, well-designed systems aligned with quality expectations, and standardized procedures to guide employees consistently and reduce risks. However, recent management trends have emphasized quick profits over well-managed operations, with negative long-term effects on businesses and job security.

1. EFFECTS OF ORGANIZATION MANAGEMENT ON
CUSTOMER LOYALTY & EARNING PROFIT
A SYSTEMATIC APPROACH TO OPERATIONS MANAGEMENT
Concept Design
Design & Development
Quality Expectations Product Test
Benchmarking Voice of Customer
Another presentation by Volpe (Mahzad Pakzad); Copyright © February 26, 2012
Please, contact pakzad0@yahoo.com for any requests.
Wednesday, February 29, 2012

2. PRESENTATION SCOPE
EFFECTS OF ORGANIZATION MANAGEMENT ON
CUSTOMER LOYALTY & PROFIT EARNING
This presentation is designed to review the importance of effects of organizational management systems on the
organization’s ability to assure employee commitment to gaining customer loyalty, while earning maximum profit.
To do so, we will briefly review the factors contributing to both development and management of operations.
In order to deliver effective results, we intend to logically review the structure of an organization, and then how the
management systems can impact success of stake holders. The stake holders, to the author of this presentation include
everyone from the company shareholders, to the operators, and the customers.
The presentation will be divided into three major topics:
• Review Business Goals.
• Review Operations: Product Design, Process Design, Operations Management, Quality Control,….
• Organizational Management: Policies and Procedures Enforcing Empowering Leadership
Wednesday, February 29, 2012

3. BUSINESS GOALS
In order to develop a high performance controllable operation, business goals need to be
clear during concept design and R & D stages, as well as the rest of product’s life cycle. All
tasks performed need appropriate evaluation, for assurance that their output is aligned with
needs for delivering the business goals. It is important to take all necessary precautions to
assure that all employees are continuously trained, appropriately. Few helpful hints:
• Proper benchmarking of market, products, and processes are to be continuous efforts.
• Profit earnings must be evaluated considering the “LONG TERM” results.
• Customer loyalty must be made measurable and linked to the elements that drive at it.
• Quality expectations need to be objective, realistic, and specific.
Wednesday, February 29, 2012

4. Operations Management
Product Design, Process Design, Operations, Quality Control,…..
Most people are in one way or another using a product lifecycle management software/system or other
systems to document, organize, and communicate data used to manage their operations. It is very
important to clearly show the connection of used data to quality & customer needs. Unfortunately, many
use metrics that are not effective enough, for reasons such as neglecting some of the requirements
needed to produce the expected quality, this is a procedural as well as technical weakness.
3-Concept Design
4-Design & Development
2-Quality Expectations 5-Product Test
1-Benchmarking 6-Voice of Customer
A well designed operation produces quality efficiently
Wednesday, February 29, 2012

5. Concept Design
Design & Development
Cont’d
Quality Expectations Product Test
Benchmarking Voice of Customer
OPERATION OF A SYSTEM DEPENDS ON ITS IMPLEMENTATION AS WELL AS THE DESIGN OF THE SYSTEM
When we started PLM, the objective was to use a well thought & organized system for managing operations. We were using PLM to:
a) Identify all tasks that needed to be evaluated.
b) Organize the required tasks in an orderly manner, step by step, through products’ life cycle, in order to process the evaluated data efficiently, as
necessary from each step to the next step.
c) Have a systematic link among the tasks for communication, and collaboration to assure alignment of tasks’ goals and milestones for achieving the
business goals in the most efficient way possible.
However, in many situations, under pressure from the high level management, the technical managers cut corners, skip steps, and push the data/parts
through to the next level for processing, before completing the necessary analysis.
Examples are allowing product designers release a final design, before evaluating the manufacturing ability to deliver the expected quality, and/or
evaluating the cost of quality. A designer has choices in choosing materials and processes used to build a product, and these choices need to be
made based on quality expectations and their effect on cost of product and/or desired customer loyalty.
Allowing modifications to a system, skipping necessary steps used in design process, weakens the system’s abilities and effectiveness. Ten to make it
even worse, now days people are being given the freedom to change such systems randomly, in order to Push For Market, or to deliver the goods.
Wednesday, February 29, 2012

6. ORGANIZATION MANAGEMENT
ENFORCING AN EMPOWERING SYSTEM
MOTIVATING EFFECTIVE LEADERSHIP
Operations’ efficiency within organizations depends on the people & the systems used.
Any short coming in the system deign or management capability will be reflected onto
the profit earnings.
Identifying business goals & having well designed systems to achieve them are only the
first two steps in developing profitable operations, next step is organizational
management systems, such as procedures and policies.
The importance of use of procedures and policies has been academically proven and it
used to be the core system for managing operations in many companies. However,
globalization of industries and outsourcing, have developed new management systems
and have encouraged companies to adopt “Push For Market” as a business strategy, and
bypass the values that were the foundations of well managed operations.
Wednesday, February 29, 2012

7. (CONT’D)
Standard operating procedures guide employees with details on how to perform their tasks accurately, and
repeatedly. Policies are used to enforce the necessary procedures, and to assure consistency.
Modern management is now lacking detailed evaluation of all tasks, therefor it does not have adequate
procedures for related situations in place. As a result people are making technical & business decisions on the
spot, as they face unpredicted situations, more often than ever before. This is a very unstable, unreliable, & risky
method of running an operation, the worst part is that often, people fail to identify the output of the risks that
they are taking and as a result, we have seen many issues within many organizations, issues include losing
customers, even losing businesses, which in turn cause a job insecurity for all.
Other side effects of modern management are excessive politics & manipulation of people.
Let’s review why we changed our management style, and the long term effects that the changes have had on our
businesses.
WHY WE CHANGED: Our motivation to change was economy crash, creating a need to cut costs & find
QUICK ways to turn in profit. Outsourcing to countries with cheap labor was a solution enabled by the
governments & accepted by business managers.
EFFECTS OF MODERN MANAGEMENT ON BUSINESSES: There barely was any time to investigate
the consequences or take the necessary precautions to assure a smooth transition from traditional organization
management to the modern one, even companies with established policies and procedures jumped at the
alternate short cuts (outsourcing) placed in front of them to quickly cut cost. But now, we all can see the resulted
profit & customer losses due to poor quality. This is not a time to blame anyone, this is a time to sit back and re-
evaluate all facts, the values, and learn from the experiences.
Wednesday, February 29, 2012

8. ORGANIZATION MANAGEMENT
ENFORCING AN EMPOWERING SYSTEM
MOTIVATING EFFECTIVE LEADERSHIP(Cont’d)
Is going with the flow a leadership characteristic?! No, however, taking actions, making quick decision, in order
to survive the economy downturn can be considered as a leadership characteristic.
Decision to accept push for market, and turn into outsourcing, without a thorough plan was made during a
time of panic due to “signs” of economy downturn. Conveniently enough, governments had lready prepared
the path, implementing new free trade laws.
Results are weakened control over engineering, manufacturing, and quality of products. The truth is that
cutting corners has not turned in the profits that companies were expecting, not in the long run at least. On
the contrary, companies are losing profits and customers, as well as control over economy that is more and
more becoming regulated and controlled by the governments.
Wednesday, February 29, 2012

9. ORGANIZATION MANAGEMENT
ENFORCING AN EMPOWERING SYSTEM
MOTIVATING EFFECTIVE LEADERSHIP(Cont’d)
Push for market and Outsourcing have side effects!!!
Both provide limited control over product/process design & development, and do not work out many
details that surface during operations. This makes operations management too complex and interactive
to be reasonably controlled. The resulted issues include quality problems, customer complaints, and out
of control costs.
The truth is that there are many who see this as a job security opportunity, because this method
increases required efforts to deliver quality to the customers.
AFRAID OF BEING LEFT OUT
WITH NO COVER?!
Hint: If there were no job cuts in the first place, there would be no need for job insecurity, & everyone would
have more encouragement to produce a quality product, efficiently, increasing profits in the long run.
Wednesday, February 29, 2012

10. ENFORCING AN EMPOWERING SYSTEM, MOTIVATING
EFFECTIVE LEADERSHIP(Cont’d)
Leadership characteristics are required for everyone, however, it is important to understand the structure of an
organization, and build teams that support its elements correctly, rather than applying uncontrolled forces at the
wrong places and at the wrong times.This why it is very important to have procedures and fair policies that
give guidance to the employees, as well as the freedom to act on their own. Following reliable procedures
to operate well designed systems will deliver results and enable employees to feel empowered.
Team Building Factors
Operations’ Support
Motivation By
Hidden Issues
Training
Satisfying Needs Professional
Emotions
Personal
Wednesday, February 29, 2012

11. ORGANIZATION MANAGEMENT
ENFORCING AN EMPOWERING SYSTEM, MOTIVATING
EFFECTIVE LEADERSHIP(Cont’d)
Standard operating procedures guide employees with details on how to perform their tasks accurately. Policies
are used to enforce the necessary procedures, in order to assure consistent performance.
Most people are in one way or another using a product lifecycle management software/system or other
systems to document, organize, and communicate data used to manage their operations. It is very
important to clearly show the connection of used data to quality & customer needs. Unfortunately, many
use metrics that are not effective enough, for reasons such as neglecting some of the requirements
needed to produce the expected quality, this is a technical as well as procedural weakness.
3-Concept Design
4-Design & Development
2-Quality Expectations 5-Product Test
1-Benchmarking 6-Voice of Customer
A well designed operation produces quality efficiently
Wednesday, February 29, 2012

12. ABOUT THE AUTHOR
CROSS FUNCTIONAL (ENGINEER, DESIGNER, PROJECT MANAGER, LOGISTICS CONSULTANT,
BUSINESS ANALYST, TECHNICAL ADVISOR, PHILOSOPHER)
http://engineering-future.com
http://www.linkedin.com/groups/Advanced-Manufacturing-Engineering-Society-3891960?trk=myg_ugrp_ovr
http://www.linkedin.com/groups/Beverly-Hills-Design-4011627?gid=4011627&trk=hb_side_g
Senior mechanical engineer & designer with extensive experience in
managing design & development of products, processes, & equipment.
Started with automation, project management, & supplier quality
assurance engineering; Then focused on Launching new Products,
Design For Manufacturing & Process Excellence/Lean Manufacturing.
Expert in using cross functional training for making quick decisions in
identifying, and applying technology, as well as solving problems.
Excellent business analysis, marketing and development experience.
Another presentation by Volpe (Mahzad Pakzad); Copyright © February 26, 2012
Please, contact pakzad0@yahoo.com for any requests.
Wednesday, February 29, 2012