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8/3/2019 chap11 (1)
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Nigel Slack and Michael Lewis 2003
Quality
P
erformance
objectives
Dependability
Development
and Organization(Operations developmentand improvement)
Speed
Flexibility
Cost
Resource Usage
Market
Competitiveness
Decision areas
Issues covered in this chapter
Capacity SupplyNetwork
ProcessTechnology
Issues include: Organizational structure and
operations effectiveness
Performance measurementused for setting thedirection of improvements
Benchmarking againstother operators
Prioritising improvements Learning and enhancing
process knowledgethrough control
Expectations on, andcontributions from, theoperations function
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Market
potential
Intended
market
position
Market
strategy
Operations
capabilities
Operations
resources and
processes
Operations Resources Market Requirements
The Direct, Develop, Deploy strategic improvement cycle
DEVELOP operations
capabilities through
learning
DEPLOY operations
contribution
DIRECT performanceand prioritization
The StrategicOperations
Improvement
Cycle
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Continuous improvement at a strategic level
Market RequirementsOperations Resources
Intended
competitive
position in the
market place
DEPLOY operations
contribution by exploiting
superior capabilitiesPotential
competitive
position in the
market place
MARKET
STRATEGY
DEVELOP
operations
capabilities
through learning
The operations
capabilities
and
performance
Getting the fit
right
The
operations
resources and
processes
DIRECT performance
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DIRECT getting the fit right
Fit means that the operations resources and processes are
aligned with the requirements of its markets.
Marketr
equirements
Operations resource capability
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Intended market
position
Operations
resources and
processes
Targets
Performance
DIRECT
Directing improvement is a cycle of comparing targets
with performance
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Customer
Satisfaction
Productivity
Quality
Dependability
Speed
Flexibility
Cost
Agility
Market
Objectives
Financial
Objectives
OverallStrategy
Detailed
performance
targets
Increasing aggregation
Increasing strategic relevance
Increasing diagnostic power
Increasing frequency of measurement
Performance targets can involve different
levels of aggregation
Intended
marketposition
Operations
resources
andprocesses
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40
50
6070
80
90
100
X XX
X
X
X
Time
Last years averageperformance = 60%
Actual performance = 83%
Performance by historical standards is GOOD
Different standards of comparison
give different messages
4050
60
70
80
90
100
X XX
X
X
X
Time
Last years averageperformance = 60%
Actual performance = 83%
Performance by historical standards is GOODPerformance against improvement goal is POOR
Improvement goal = 95%
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Nigel Slack and Michael Lewis 2003
40
50
6070
80
90
100
X XX
X
X
X
Time
Last years averageperformance = 60%
Actual performance = 83%
Performance by historical standards is GOODPerformance against improvement goal is POORPerformance against competitors is GOOD
Different standards of comparison
give different messages
4050
60
70
80
90
100
X XX
X
X
X
Time
Last years averageperformance = 60%
Actual performance = 83%
Performance by historical standards is GOODPerformance against improvement goal is POORPerformance against competitors is GOODAbsolute performance is POOR
Improvement goal = 95%
Improvement goal = 95%
Competitor performance = 75%
Competitor performance = 75%
Absolute performance = 100%
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1
2
3
4
5
6
7
8
9
123456789
Importance for customersLOW HIGH
Perform
anceagainst
competitors
GOOD
BAD
URGENT
ACTION
IMPROVE
APPROPRIATE
EXCESS?
F
E
A
C
D
B
The importance-performance matrix
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1
2
3
4
5
6
7
8
9
123456789
Importance for customersLOW HIGH
Perform
anceagainst
competitors
GOOD
BAD
The importance-performance matrix for TAGs
overnight temperature-controlled service
X
X X
X
X
X
X
X
X
XVolume
flexibility
Delivery
Dropquote
Windowquote
Distributionquality
Documentationservice
Deliveryflexibility
Enquirylead-time
Order/dispatchquality
Price/Cost
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Cost
Flexibility
Speed
Dependability
Quality
Quality + dependability
Quality
Quality + dependability + speed
Quality + dependability + speed + flexibilityQuality + dependability + speed + flexibility + cost
The sandcone model of improvement; cost reduction relies on a cumulative
foundation of improvement in the other performance objectives
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Key Indicators
All staff are able to explain the operations
strategic objectives
Individuals and groups use the strategic
objectives to focus improvement activity
All proposed changes are assessed against
strategic objectives
All improvement is monitored and measured
against strategic objectives
DIRECT getting the fit right
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DEV
ELOP
Kno
wledge
Control
Operations
capabilities
Operations
resources and
processes
Developing operations capabilities is encouraged by a cycle
of attempting to control processes which enhances process
knowledge which, in turn, makes control easier
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It isnt just a matter of being given the
right resources
Operations with the same resources will
not all give the same performance
So what makes the difference?
How they are able to learn
DEVELOP through learning
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Processperforma
ncevariable
Upper bound of acceptability
Upper bound of variation
Lower bound of variation
Lower bound of acceptability
TIME
A process performance chart
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Processperforma
ncevariable
Upper bound of acceptability
Upper control limit
Lower control limit
Lower bound of acceptability
TIME
A statistical process control chart
Distribution of normalvariation in process
performance
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Lower control limits
Upper control limits
TIME TIME
Low process variation allows changes in process
performance to be readily detected
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Systematic learning
You cant learn about a process when its out
of control
If things are in control
you notice changes
so you can investigate them
so you can identify root causes
so you can put things right
and improve the process
and learn more about it
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ProcessControl
Learning
Process
Knowledge
Process control starts the learning which develops
process knowledge
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Knowledge is power
1 Complete ignorance Nowhere
2 Awareness Tacit
3 Measurement Written
4 Control of mean Written and in hardware
5 Process capability Hardware and operating manual
6 Process characterization Empirical equations
7 Know why Scientific models
8 Complete knowledge
None
Full
Stage Term Knowledge Typical form of knowledge
DEVELOP through learning
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DEV
ELOP
Knowledge
Co
ntrol
Operationscapabilities
Operations
resources and
processes
Understanding
process limits
Better products
and services
Wide
product/service
range
Less costly
flexibility
Enhanced
quality
Customer
loyalty
Retain best
staff
Staff job
satisfaction
Understanding of
process inputs
Higher process
efficiency
Enhanced supplier
relationships
Lower
costs
Process control may be one of the most operational of
tasks, but it can bring strategic benefit
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Building on learning
Key Indicators
Learning is made explicit, What have you
learned at work today?
Individuals and groups share their learning
Individuals seek out opportunities to actively
learn and experiment
Learning is captured and debated
Designated individuals are responsible for
learning from other operations
Process knowledge is seen as a key operationsobjective
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DEPLOY the contribution and role of
OperationsIn everyday life we all switch roles
How we see our role shapes how we
behave and interact with others
So critical to success operations strategy is
changing how operations management see
themselves and are seen by others
The key issues is What should we expect from
operations management?
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DEPLOY
Contribution
Expectations
Market
potentialOperations
capabilities
Deploying operations capabilities to create market
potential means ensuring that the operations function isexpected to contribute to market positioning
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Link strategy
with
operations
Give an
operations
advantage
Externallysupportive
Adopt
best
practice
Correct the
worstproblems
Internally
supportive
Externally
neutral
Internally
neutral
STAGE 1 STAGE 2 STAGE 3 STAGE 4
Stop holding
the
organization
back
Be as good
as
competitors
Be clearly
the best in
the
industry
Redefine the
industrys
expectations
Challenges
for
operations
Operations
are expected
to be .
Hays and Wheelwrights 4-stage model
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Nigel Slack and Michael Lewis 2003
Correct the
Worst
Problems
Internally
neutral
The role of operations can be defined by its aspirations
STAGE 1 STAGE 2 STAGE 3 STAGE 4
Stop holding
the
organization
back
Adopt best
Practice
Externally
neutral
Be as goodas
competitors
Theability
toImplementstrategy
Link Strategy
With
Operations
Internally
supportive
Be clearly
the best in
the
industry
Theability
toSupportstrategy
Give an
OperationsAdvantage
Externally
supportive
Redefine the
industrysexpectations
Theability
toDrive
strategy
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Contribution and Role
Key Indicators
Staff cooperate and contribute in areas other
than their own
Staff understand their role in the internal and
external supply chain
The concept of internal supplier development is
established
Staff have visited and talked with their internal
and external customers
Staff are capable of making a contribution two
organizational levels above their own
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9 8 7 6 5 4 3 2 1
9
8
7
6
5
4
3
2
1
Staffattitude Knowledge
of staff
Getting to
right person
Time toresolution
Kept informed
Completeness
Staff understanding
LOW HIGHIMPORTANCEBAD
GOOD
PERFOR
MANCE
Importance-performance matrix for the New Jersey survey
Slide 11.17
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0.1
1.0
0.01
1000 100000 100000 1000000 10000000
Cumulative volume of calls processed
Log-log experience curve for KPG Atlanta call center
Associatehourspercall
10.0
Slide 11.18