1. Lecture 6 MBF2213 | Operations Management
Prepared by Dr Khairul Anuar
L6: Operations Improvement

2. Operations improvement
Organizing for improvement
Risk management stops processes becoming worse
Operations improvement makes processes better
Operations strategy
Operations management
Design
Improvement
Planning and control

3. Key operations questions
Operations improvement – Slack et al. identify the following key questions:
Why is improvement so important in operations management?
What are the key elements of operations improvement?
What are the broad approaches to managing improvement?
What techniques can be used for improvement?

4. The Red Queen effect
In ‘Alice’s adventures through the looking glass’, by Lewis Carroll, Alice encounters living chess pieces and, in particular, the ‘Red Queen’.
‘Well, in our country’, said Alice, still panting a little, ‘you’d generally get to somewhere else – if you ran very fast for a long time, as we’ve been doing’. ‘A slow sort of country!’ said the Queen. ‘Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!

5. What are the key elements of operations improvement?
The ‘elements’ that are the building blocks of improvement include:
Radical or breakthrough improvement
Continuous improvement
Improvement cycles
A process perspective
End-to-end processes
Radical change
Evidence-based problem-solving
Customer-centricity
Systems and procedures
Reduce process variation
Synchronized flow
Emphasize education/training
Perfection is the goal
Waste identification
Include everybody
Develop internal customer–supplier relationships.

6. Four broad approaches to managing improvement
Business process reengineering (BPR) – a radical approach to improvement that attempts to redesign operations along customer-focused processes rather than on the traditional functional basis.
Total quality management (TQM) – puts quality and improvement at the heart of everything that is done by an operation.
Lean – an approach that emphasizes the smooth flow of items synchronized to demand so as to identify waste.
Six Sigma – a disciplined methodology of improving every product, process, and transaction.
All these improvement approaches share overlapping sets of elements.
(Refer to Slack et al. page )

7. Some of the elements of improvement approaches
Emphasis on gradual change
Emphasis on rapid change
Business process reengineering (BPR)
End-to-end processes
Radical/ breakthrough improvement
Evidence-based decisions
Systems and procedures
Improvement cycles
Perfection is the goal
Reduce variation
Customer centric
Emphasis on education
Include all people
Customer relationships
Waste identification
Synchronized flow
Process based analysis
Continuous improvement
Six Sigma
Lean
Total quality management (TQM)
Emphasis on solutions – what to do
Emphasis on methods – how to do it

8. Innovation or ‘breakthrough’ improvement versus Kaizen or continuous improvement
Short-term, dramatic
Large steps
Intermittent
Abrupt, volatile
Few champions
Individual ideas and effort
Scrap and rebuild
New inventions/theories
Large investment
Low effort
Technology
Profit
Long-term, undramatic
Small steps
Continuous, incremental
Gradual and consistent
Everyone
Group efforts, systematic
Protect and improve
Established know-how
Low investment
Large maintenance effort
People
Process
Effect
Pace
Timeframe
Change
Involvement
Approach
Mode
Spark
Capex
Maintenance
Focus
Evaluation

9. Two improvement cycles
The plan–do–check–act, or ‘Deming’ improvement cycle, and the define–measure–analyze–improve–control, or DMAIC six sigma improvement cycle.
Plan Do
Check
Act
Define
Measure
Analyze
Improve
Control

10. Define–identify problem, define requirements and set the goal
The DMAIC cycle
Control–establish performance standards and deal with any problems
Measure–gather data, refine problem and measure inputs and outputs
Analyze–develop problem hypotheses, identify ‘root causes’ and validate hypotheses
Improve–develop improvement ideas, test, establish solution and measure results

11. Breakthrough improvement
‘Breakthrough’ improvement, does not always deliver hoped-for improvements.
Planned ‘breakthrough’ improvements
Performance
Actual improvement pattern
Time

12. Continuous improvement
Standardize and maintain
Improvement
Performance
Time

13. Continuous improvement (Continued)
PDCA cycle repeated to create continuous improvement
Plan Do
Check
Act
Performance
Time

14. Combined ‘breakthrough’ and continuous improvement
Combined improvement
Combined ‘breakthrough’ and continuous improvement
Performance
Time

15. What techniques can be used for improvement?

16. What techniques can be used for improvement?
Many techniques described throughout Slack et al. could be considered improvement techniques. Specific ‘improvement techniques’ include:
Scatter diagrams, which attempt to identify relationships and influences within processes;
Flow charts, which attempt to describe the nature of information flow and decision-making within operations;
Cause–effect diagrams, which structure the brainstorming that can help to reveal the root causes of problems;
Pareto diagrams, which attempt to sort out the ‘important few’ causes from the ‘trivial many’ causes;
Why–why analysis that pursues a formal questioning to find root causes of problems.

17. Some common techniques for process improvement
Input/output analysis
Input
Output
Flow charts
Scatter diagrams x
Cause–effect diagrams
Pareto diagrams
Why–why analysis
Why?