The document discusses strategies for becoming a world-class quality company through integrated performance management. It outlines adopting a "Master Improvement Story" with goals and strategies aligned across departments and individuals. This leads to continual improvement in areas like customer service, productivity, and waste elimination. Key elements include leadership driving the vision, competency development, and engaging all employees in understanding and working toward the shared goals.

1. Strategic Model to be a World Class Quality Company

2. What went wrong?? Random performance improvement Partial activity-based program

3. Random Performance Improvement

4. Partial Activity Based Program

5. What is right?? Integrated Performance Management through Master Improvement Story

6. Random Performance Improvement Individual works toward different goals Energy is diffused Limited Business Vision or Alignment:

7. Management System Assessment Energy is still diffused Business vision with limited departmental and individual alignment: Mission Vision

8. Master Improvement Story goals, objectives and strategies are focused and mutually supported in the Company Master Improvement Story Business Vision with departmental and individual alignment: Mission Vision

9. Organizational Excellence Model Continual Business Performance Improvement Continual Learning and Competence Improvement LEADERSHIP and Master Improvement Story Continual Waste Elimination and Cost Reduction Continual Selling and Market Improvement Continual Productivity and Profitability Improvement Excellent Customer Service Marketing, Selling and Value Distribution Management and Staff Innovation Excellent Operational Value Innovation Improvement along Enterprise Value Chain

10. Leadership and Master Improvement Story

11. Create Master Improvement Story

12. Customer Satisfaction = Value Creation To Be The Best and Continuously Improve Grow The Business Increase Products Percent of Revenue from Products of Services Less then 3 yr old 20 % Increase Customer Base Increase Repeat Business Reduce Cycle Time Faster Service Reduce Defects Reduce Waste & Reworks Reduce Suppliers Reduce Impacts Reduce Human Risk Percent of Revenue from New Customer Percent of Revenue from Repeat Customer Cycle time for product delivery Missed Commitments Number or percent defective Percent or Rework or Waste Number of Suppliers Increase Recycling Reduce Injuries Better Quality Lower Cost Reduce Risk 10 % Increase 10 % Increase 50 % Reduction 50 % Reduction 50 % Reduction 10 % Reduction 20 % Increase 10 % Increase 50 % Reduction Global Market Program Customer Relationship Management Cycle Time Reduction Six Sigma Quality Program Lean Supply Chain Management Environment Safety Health Program Vision Measures Annual Long Term Targets Result- Oriented Program

14. Ineffective Performance Management System

15. Case 1: Only Management Understand the Vision & MIS

16. Case 2: Management Has Different Understanding of the Vision and MIS

17. Case 3: No Body in The Company Understand the Vision and MIS

18. Case 4: Everyone Think They are Going in the Right Direction toward Vision and MIS but they are not

19. Future Organizational Excellence

20. Everyone Understand and Focused on the Vision and MIS

21. Main Strategy to Achieve Company Profitability and Growth Through Top Management Leadership Continual Learning and Competence Improvement Continual Waste Elimination and Cost Reduction Continual Selling and Market Improvement Continual Business Performance Improvement

22. Strategy #1 Continual Learning and Competence Improvement

23. Relationship Between Continual Learning Improvement and Organization Growth

24. Management and Staff Competency Analysis Matrix Management & Staff Motivation to do Company MIS Low High Low High Competence II IV I III

25. Model I: High Motivation –High Competence People with high knowledge of results-oriented program in Company Master Improvement Story are highly willing to do performance continues improvement through implementation of Master Improvement Story Good people in management or staff level are very competent resources to implement result-oriented programs This model requires at least 25% workers with above requirements Company Conditions: Solutions: Nothing. This company have very good human resources to do results-oriented programs

26. Model II: High Motivation–Low Competence People have low knowledge of results-oriented programs in Master Improvement Story but have a high motivation to do continues improvement Good people in management or staff level in this category still need education, training and guidance Company Conditions: Solutions: Education system improvement to do programs implementation

27. People with high knowledge of results-oriented programs are hardly willing to to implement performance continues improvement. Good people in this category have problems with their motivation so that they need an appropriate rewards and recognition to do the results-oriented programs Model III: Low Motivation–High Competence Company Conditions: Solutions: Rewards and recognition system improvement

28. People have low knowledge of results-oriented programs and low motivation to do continues improvement. Good people in management of staff level in this category have problems related to insufficient education and training, and have not been posted in the right place. Generally, company with traditional management will group lots of people in this category If this company have more than 40% people in this category, performance management system in this traditional company are certainly not goint to work. Model IV: Low Motivation–Low Competence Company Conditions:

29. This company have problems with selection, recruitment, promotion and posting therefore the solutions are to fix the system of selection, recuitment, promotion and posting of management and staff workers Solutions: HR system development

30. Management and Staff Competency Analysis Matrix Management & Staff Motivation to do Company MIS Low High Low High Competence Problems related to lack of knowledge and skills to do results-oriented program. Solutions: education, training and guidance system improvement to implement performance improvement programs Problems related to selection, recruitment,promotion and placement system. Solution: improvement on manager and staff selection, recruitment, promotion and placement system No problem. Organization already have good human resources to do results-oriented program in MIS Problems related to motivation. Solutions: rewards and recognition system improvement

31. Strategy #2: Continual Waste Elimination and Cost Reduction

32. Waste and Cost Reduction Strategy of Traditional and World Class Company High Priority Low Quality Awareness Very High Low Operational Knowledge Waste & Quality Cost Over-budget Focus All cost in Operational System (Design-Production-Marketing) HR Cost and other Application Continual Periodical/ Cyclical Time All Workers Finance/ Accounting Responsibility Potential Profit Part from the price Concepts Competitiveness/ Strategy Efficiency Objective Modern Industry Traditional Industry Description

33. Difference Between Standard Company and World Class Company Product damage and defect 85% caused by system failure (no MIS), 15% by workers Product damage and defect caused by the workers Quality made in the boardroom through a clear goals and objective determining in MIS QA Engineer and Inspectors assure quality Inspection is too late. If workers can produce defect-free products, eliminate inspection. Inspections is the key to quality Quality leads to lower cost Quality is Costly World Class Company Standard Company

34. Make the people feel secure in their job or position to make them active in implement programs in MIS People in the company are treated as commodity. Use them when needful, ignore them when not needless Workers fear of punishment could lead to a chaos because everyone will be afraid to implement risky programs Punishment and Reward are the right way to motivate workers Eliminate working standard, production quota if needed and continually improve to increase product quality beyond available working standards through continual learning and competence improvement as well as waste elimination and cost reduction Working standard, production quota, and targets usage can improve productivity Process can be improved through system improvement and workers contributions through result-oriented programs in MIS Operational and Manufacturing process can be optimized by using consultant or outside expert World Class Company Standard Company

35. Growing profit by creating customer loyalty from continual customer satisfaction improvement through programs in MIS Profit gained simply by increasing total revenue Profit only reflects where we are not where we’re heading. Success indicator is to fulfill vision and performance indicator target in MIS Profit is the most important indicator in company Giving time and knowledge to help suppliers improving quality and reducing cost. Develop long term relationship with suppliers Rapidly change supplier based on lower price consideration Purchasing material from suppliers based on suppliers commitment to the continual quality improvement to achieve performance indicator target in MIS Purchasing material from suppliers based or lowest price Most of product failure aspects caused by the system, therefore reward and punishment system to individual could ruin teamwork in implementing programs Rewarding people with good performance and punishing people with bad performance will lead to productivity and creativity World Class Company Standard Company

36. Waste Type Type One: non value added activities in transformation process from input to output along the value stream, but currently unavoidable for some reasons. E.g. necessary inspections and sorting, worker supervision Type Two: non value added activities can be eliminated right away

37. 7 + 1 Types of Waste Overproduction Delays (waiting time) Transportation Process Inventories Motions Defective Products 7 + 1. Defective Designs

38. 9 waste in industry  E-DOWNTIME E = Environmental, Health and Safety Waste, waste from ignoring EHS principals D = Defects O = Overproduction W = Waiting N = Not utilizing employee knowledge, skill and ability T = Transportation I = Inventories M = Motion E = Excess Processing

39. Identify your waste…. Solutions (How) Why Happen Time (When) PIC (Who) Waste Source (Where) Waste Type (What)

40. Strategy #3: Continual Selling and Market Improvement

41. Strategy #4: Continual Business Performance Improvement

42. Management Duties Identify company management team readiness to implement process improvement program using next checklist

43. Process Improvement Readiness Assessment Process redesign and improvement projects have clearly defined tasks, responsibilities, timing, measurements and expected results Process Improvement teams understand fully what improvement objectives the company is seeking The process redesign teams have reviewed each business process and defined specific improvement opportunities Process redesign team have been organized for analyzing and redesigning manufacturing and the support functions Methods have been developed to assure cross functional cooperation and to eliminate barriers Employees understand root-cause problem analysis as the foundation to ensure process improvement Business process have been value-stream mapped according to how they are working today Every worker has been trained to identify and categorize activities as either value-adding or cost-adding Not Sure No Yes

44. All managers understand the need to operate the supply chain a seamless defect-free process with the shortest possible cycle time The organization understand that constant process improvement is one of the beste routes to permanent cost reduction The organization understand that constant process improvement is one of the best routes to permanent cost reduction The organization understands that manufacturing, administrative, and engineering defects and queues must be eliminated to reduce total cycle time Business processes that serve internal and external customers are designed to achieve the goal of “doing the right things right the first time and every time” Redesign efforts will include, as a major objective, the elimination of defects in creating information and products Effective techniques are used to ensure that necessary changes in work activities and accountability do, in fact, occur There are tactical implementation plan that detail near-terms tasks along with the key people in the organization that need to be involved Not Sure No Yes

45. Management Duties Identify Quality Improvement Projects directly connected to company MIS Chose QI Projects based on project selection criteria that has been determined by management. Use PICK CHART in the next slide

46. PICK CHART BIG RESULT (HIGH VALUE PROJECTS) EASY TO IMPLEMENT SMALL RESULT (LOW VALUE PROJECTS) HARD TO IMPLEMENT K ill C hallenge P ick I mplement

47. Continues Improvement Matrix Lean Project opportunity Identified cause and solution unknown functional in nature Study Analysis Required Expert Process Investigation Data Collection Required Specialized Skills Required Lead: Lean Implementer Focus: Product/ process improvement Goal: - eliminate waste, variation - pace of customer demand Process/ Product Redesign, New Design upfront research conducted internal and external participants cross-functional in nature Research Research Required Expertise/ Specialists Special studies/ benchmarks Lead: Project Implementer Focus: new product, service, processes, offering Goal: - eliminate waste and variability in design “ Just Do It Team” Solution known investigation not needed Execute Plan not needed End Result Known Lead: Process Owner Focus: Any improvement opportunity Goal: improve/ restore quality Can it be done immediately? Kaizen Teams Team Formation Necessary In-house Experts Specific opportunity focus Structured Execution High Level Plan Lead: Kaizen Specialist Focus: Structured improvement Goal: improve quality/ efficiency Can it be done < 60 days? Narrow Broad Need for Engagement/ Time Low High Complexity and/or Risk

48. QI Projects Selection Criteria 1. Business Benefit or Results Positive impact on customer and their need Advantages on business strategy and competition Increase the strength of organization core competition Positive impact on organization finance Are the issue important, major and urgent to be taking care of immediately Are the problems likely to outgrow in the future Are the problems inter-connected/ interrelated and/ or depend on other problems

49. Management Duties Set up a QI Task Force that will perform the selected QI Projects In root cause analysis, use whys question and Fishbone diagram Create procedure Create visual documentation and communication of business performance improvement result and set up best practices as standard working method in the entire company

50. Good Luck… Crea’ by: oetjie/ July 2007