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Capabilities, Competition, and Operations - Coggle Diagram

- - - - market segmentation
  - - - best = assuming OS runs at designed volumes
      - any deviation from designed volume generates a volume cost delta
  - - - is the volume-(or utilization) cost differential
        
        the extra costs incurred by operating at less than the strategically-
        targeted utilization level
        
        because of spreading a fixed cost over fewer units
    - - is the competitive strategy-driven cost differential
        
        the cost difference inherent in the way each company chooses to compete
        
        Expect a a strategy emphasizing product innovation and customer responsiveness to be more costly than a pure low-cost strategy
    - - is the operational efficiency-driven cost differential
        
        the remainder of the cost differential after controlling for volume and strategy
        
        measures how one company is just more efficient in their operations and management than another
        
        even if both were to run at their desired utilizations and to provide identical value proposition
        
        is operationally efficient if the cost advantage of our most threatening competitor is zero or negative
        
        otherwise, is operationally inefficient at the rate of the cost advantage of our most threatening competitor
- - - - Over-production
      - Motion
      - Rework
      - Inventory
      - Over-processing
      - Transportation
      - Waiting
      - *8 Intellect - Failure to make full use of the whole team’s experience and knowledge
- - - - The amount of time a given asset is actually manufacturing product
      - Sources of loss
        
        Scheduled breaks and lunches
        
        Maintenance breakdowns
        
        Scheduled meetings
        
        Setup / changeovers
        
        Material shortages
        
        Crewing issues
      - OEE Levers for availability losses
        
        Operating Procedures
        
        Cleaning
        
        Adjustments/ change-overs
        
        Quality control
        
        Staff meetings
        
        Business status
        
        Equipment Condition
        
        Mechanically caused failures
        
        Emergency interruptions
        
        Failures of up- and downstream lines
        
        Process Capabilities
        
        Lack of material
        
        Lack of transportation capacities
        
        Poor quality
        
        Scheduling
        
        Frequent production changes
        
        Sup-optimal processes
        
        Lack of staff
    - - Ensuring that production is running with the proper cycle times and at the design production rate
      - Sources of loss
        
        Cycle times
        
        Equipment speed vs. design rates
        
        Shop floor scheduling and
        planning
        
        Process capability
      - OEE Levers for performance (speed) losses
        
        Operating Procedures
        
        Uneconomical lot sizes
        
        Mixed lots
        
        Non-optimal working processes (breaks, ...)
        
        Management decisions
        
        Process Capabilities
        
        Changing conditions (heat, dust, humidity, ...)
        
        Equipment Condition
        
        Reduced production rate due to follow-up processes (e.g. wrong product mix)
        
        Interruption due to preceding change-over
        
        Interruption due to succeeding change-over
        
        Scheduling
        
        Limited demand
        
        Poor production scheduling
    - - Ensuring that Availability and Performance goals are met with the highest levels of quality
      - Sources of loss
        
        Scrap
        
        Product quality
        
        Process capability
      - OEE Levers for Quality
        
        Equipment Condition
        
        Losses at start of production line
        
        Process waste (material drops from conveyor belts, inappropriate handling, ...)
        
        Losses due to production interruptions
        
        Inclusions (type of defect)
        
        Rework
        
        Operating Procedures
        
        Poor quality due to changed process parameters
        
        Transportation damages
        
        Process Capabilities
        
        Excessive high humidity, dust, ...
        
        Human errors
        
        Scheduling
        
        Deviation from formulas, standards, ...
- - - - Partition products and services into groups with homogeneous capability needs
      - For each group, separate those assets and processes that critically support its value proposition while sharing the others
      - Create a charter for each operation to retain focus over time
  - - - Operational focus can lead to rigidity