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Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston 2010 18.1 Chapter 18 Operations.

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Presentation on theme: "Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston 2010 18.1 Chapter 18 Operations."— Presentation transcript:

1 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Chapter 18 Operations improvement Pearson Education Ltd. Naki Kouyioumtzis

2 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Operations improvement Operations strategy Design Improvement Planning and control Organizing for improvement Risk management stops processes becoming worse Operations improvement makes processes better Operations management

3 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston In Chapter 18 – 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? Key operations questions

4 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston 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! The Red Queen effect

5 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston 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. What are the key elements of operations improvement?

6 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston 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.

7 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs Function 1 Customer needs fulfilled Functionally-based processes Function 2Function 3Function 4 Business processes End-to-end process 1 End-to-end process 2 End-to-end process 3 Customer needs

8 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Business process reengineering (BPR) Six Sigma Lean Total quality management (TQM) 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 Some of the elements of improvement approaches Emphasis on solutions – what to do Emphasis on methods – how to do it Emphasis on gradual change Emphasis on rapid change

9 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston 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 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 Effect Pace Timeframe Change Involvement Approach Mode Spark Capex Maintenance Focus Evaluation Innovation Kaizen Innovation or ‘breakthrough’ improvement versus Kaizen or continuous improvement 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 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

10 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston The plan–do–check–act, or ‘Deming’ improvement cycle, and the define–measure–analyze–improve–control, or DMAIC six sigma improvement cycle. Define Measure AnalyzeImprove Control PlanDo CheckAct Plan Two improvement cycles

11 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Define–identify problem, define requirements and set the goal 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 Control–establish performance standards and deal with any problems The DMAIC cycle

12 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Performance Time Planned ‘breakthrough’ improvements Actual improvement pattern ‘Breakthrough’ improvement, does not always deliver hoped-for improvements. Breakthrough improvement

13 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Performance Time Continuous improvement Standardize and maintain Improvement Continuous improvement

14 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Performance Time PDCA cycle repeated to create continuous improvement Continuous improvement Plan Do Check Act Continuous improvement (Continued)

15 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Performance Time Combined ‘breakthrough’ and continuous improvement Combined improvement

16 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston 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. What techniques can be used for improvement?

17 Slack, Chambers and Johnston, Operations Management, 6 th Edition, © Nigel Slack, Stuart Chambers, and Robert Johnston Some common techniques for process improvement Cause–effect diagramsWhy–why analysis Why? Flow chartsScatter diagrams x x xx xxx x x xx Input/output analysis InputOutput Pareto diagrams


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