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Performance Measurements and Improvement - Coggle Diagram

- - - - It does not matter if successive improvements are small; what does matter is that every month (or week, or quarter, etc.) some kind of improvement has actually happened
- - - - Organisational ambidexterity means the ability of a firm to both exploit and explore as it seeks to improve; to be able to compete in mature markets where efficiency is important by improving existing resources and processes while also competing in new technologies and/or markets where novelty, innovation, and experimentation are required.
- - - - These are the fundamental ideas of what improves operations; they are the building blocks of improvement.
    - - These are the underlying sets of beliefs that form a coherent philosophy and shape how improvement should be accomplished. Some improvement approaches (such as total quality management) are well-established, while others are relatively recent (such as Six Sigma).
    - - These are many step-by-step techniques, methods, and tools that can be used ti help find improved ways of doing things
- - - - The classic approach to assessing potential failures is to inspect and audit operations activities
      - Unfortunately, inspection and audit cannot, on their own, provide complete assurance that undesirable events will be avoided
      - Alongside this, The cause of some failures are purely random, like lightning strikes, and are difficult, if not impossible, to predict
- - - - enhanced safety
      - increased reliability
      - higher quality (badly maintained equipment is more likely to cause errors)
      - low operating costs (because regularly serviced process technology is more efficient)
      - a longer life for process technology
- - - - PDCS cycle
        
        Plan
        
        an examination of the problem – collecting and analysing data so as to formulate a plan of action that is intended to improve performance
        
        Do
        
        the plan is tried out in the operation
        
        Check
        
        the new implemented solution is evaluated
        
        Act
        
        the change is consolidated or standardized if it has been successful
        
        if the change has not been successful, the lessons learned from the trial are formalised before the cycle starts again
      - DMAIC cycle
        
        Define
        
        defining the problem or problems, partly to understand the scope of what needs to be done and partly to define exactly the requirements of the process improvement
        
        Measure
        
        the validation of the problem to make sure that it really is a problem worth solving
        
        Analyse
        
        the measurements can be analysed
        
        Improve
        
        the improved process then needs to be continually monitored
        
        Controle
        
        controlled to check that the improved level of performance is sustainable
  - - - It means that improvement can be focused on what actually happens in reality
      - All parts of the business manage process
  - - - This should define and cover all facets of an organisation’s operation, from identifying and meeting the needs and requirements of the customers, design, planning, purchasing, manufacturing, packaging, storage, delivery, and service, together with all relevant activities carried out within these functions
      - It deals with organisation, responsibility, procedures, and processes. But simply it is good management practice
- - - - By an absolute target, this means the theoretical level of perfection (zero errors, instant delivery, delivery absolutely when promised, infinite flexibility, zero waste)
- - - - an approach to how operations and processes should be managed and improved generally. It is best thought of as a philosophy of how to approach improvement
      - Stressed areas
        
        Meeting the needs and expectations of customers
        
        Improvement that covers all parts of the organisation (and should be group-based)
        
        Improvement that includes every person in the organisation (and success is recognised)
        
        Including all costs of quality
        
        Getting things right first time -designing-in quality, rather than inspecting it in
        
        Developing the systems and procedures that support improvement
    - - The lean approach aims to meet demand instantaneously, with perfect quality and no waste. The key elements of lean, when used as an improvement approach, are:
      - Key areas
        
        Customer-centricity
        
        Interna; customer-supplier relationships
        
        Perfection as the goal
        
        Synchronised flow
        
        Reduced variation
        
        Including all people
        
        Waste elimination
    - - Hammer proposed that rather than using technology to automate work, it would be better applied to doing away with the need for the work in the first place (don’t automate, obliterate)
      - warning against establishing non-value-added work within an information technology system where it would be even more difficult to identify and eliminate
      - This advocates radical rather than incremental changes and has been defined as the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality service, and speed
      - Main principles
        
        Rethink business processes in a cross-functional manner that organises work around the natural flow of information (or material/customers)
        
        Strive for dramatic improvements in performance by radical rethinking and redesigning the process
        
        Have those who use the output from the process perform the process. Check the see if all internal customers can be their own suppliers rather than depending on another function in the business to supply them (which takes longer and separates out the stages in the process)
        
        Put decision points where the work is performed. Do not separate those who do the work from those who control and manage the work
      - Sections
        
        Purchasing Operations dealt with everything concerning relationships with suppliers. It was this process’ focused and unambiguous responsibility to develop good working relationships with suppliers
        
        Customer Service Operations had total responsibility for satisfying customers’ needs, which included speaking with one voice to customers
    - - The concept was called the six sigma approach because it required that the natural variation of process (±3 standard deviation) should be half of their specification range
        
        In other words, the specification range of any part of a product or service should be ±6 the standard deviation of the process
        
        Associated elemetns
        
        Customer-driven objectives – Six Sigma is sometimes defined as the process of comparing process output against customer requirements
        
        Use of evidence – Although Six Sigma was not the first approach to operations to use statistical methods, it has done a lot to emphasise the use of quantitative evidence
        
        Structured improvement cycle – The structured improvement cycle used in Six Sigma is the DMAIC cycle
        
        Process capability and control – Not surprisingly, given its origins, process capability and control are important within the Six Sigma approach
        
        Process design – Latterly, Six Sigma proponents also include process design into the collection of elements that define the Six Sigma approach
        
        Structured training and organisation of improvement – The Six Sigma approach holds that improvement initiatives can only be successful if significant resources and training are devoted to their management
        
        The Marshal Arts Analogy
        
        Master Black Belts are experts in the use of Six Sigma tools and techniques, as well as how such techniques can be used and implemented
        
        They are seen as teachers who can guide not only improvement projects but also coach and mentor Black Belts and Green Belts, who are closer to the day-to-day improvement activity
        
        They are expected to have the quantitative analytical skills to help with Six Sigma techniques and also the organisational and interpersonal skills to teach and mentor
        
        Like Master Black Belts, Black Belts are expected to develop their quantitative analytical skills and also act as coaches for Green Belts
      - The defect-per-million measure is used within the Six Sigma approach to emphasise the derive towards a virtually zero-defect objective
    - - D
        
        relates to whether the approaches emphasise a gradual/continuous approach to change or whether they recommend a more radical/breakthrough change
        
        concerns the aims of the approach (what is the balance between whether the approach emphasises what changes should be made or how changes should be made)
        
        Some approaches have a firm view of what is the best way to organise the operation’s processes and resources whilst others hold no particular view on what an operation should do, but rather concentrate on the method of deciding how an operation should decide what to do
        
        The approaches differ in the extent that they prescribe appropriate operations practice (BPR, for example, is very clear in what it is recommending – namely, that all processes should be organised on an end-to-end basis)
        
        lean is the same as it has a defined list of things that processes should or should not be – waste should be eliminated, inventory should be reduced, technology should be flexible
        
        They also differ in terms of whether they emphasise gradual or rapid change
      - S
        
        both Six Sigma and TQM, which focus to a far greater extent on how operations should be improved
- - - - Once the reason for the problem occurring have been identified, each of the reason is taken in turn, and again, the question is asked why those reasons have occurred and so on
  - - - Problems in a process are almost certainly shared by processes elsewhere
      - That there are probably other operations somewhere that have developed a better way of doing things
    - - Firstly, it is not a one-off project; it is best practised as a continuous process of comparison
      - Second, it does not provide solutions; rather, it provides ideas and information that can lead to solutions
      - Third, it does not involve simply copying or imitating their operations; it is a process of learning and adapting in a pragmatic manner