2 Operations improvement Organizing for improvementRisk management stops processes becoming worseOperations improvement makes processes betterOperations strategyOperations managementDesignImprovementPlanning and control
3 Key operations questions 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?
4 The Red Queen effectIn ‘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 improvementContinuous improvementImprovement cyclesA process perspectiveEnd-to-end processesRadical changeEvidence-based problem-solvingCustomer-centricitySystems and proceduresReduce process variationSynchronized flowEmphasize education/trainingPerfection is the goalWaste identificationInclude everybodyDevelop 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.
7 BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs Functionally-based processesFunction 1Function 2Function 3Function 4End-to-end process 1End-to-end process 2End-to-end process 3Customer needsBusiness processesCustomer needs fulfilled
8 Some of the elements of improvement approaches Emphasis on gradual changeEmphasis on rapid changeBusiness process reengineering (BPR)End-to-end processesRadical/ breakthrough improvementEvidence-based decisionsSystems and proceduresImprovement cyclesPerfection is the goalReduce variationCustomer centricEmphasis on educationInclude all peopleCustomer relationshipsWaste identificationSynchronized flowProcess based analysisContinuous improvementSix SigmaLeanTotal quality management (TQM)Emphasis on solutions – what to doEmphasis on methods – how to do it
9 Innovation or ‘breakthrough’ improvement versus Kaizen or continuous improvement Short-term, dramaticLarge stepsIntermittentAbrupt, volatileFew championsIndividual ideas and effortScrap and rebuildNew inventions/theoriesLarge investmentLow effortTechnologyProfitLong-term, undramaticSmall stepsContinuous, incrementalGradual and consistentEveryoneGroup efforts, systematicProtect and improveEstablished know-howLow investmentLarge maintenance effortPeopleProcessEffectPaceTimeframeChangeInvolvementApproachModeSparkCapexMaintenanceFocusEvaluation
10 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.PlanDoCheckActDefineMeasureAnalyzeImproveControl
11 The DMAIC cycle The DMAIC cycle Define–identify problem, define requirements and set the goalControl–establish performance standards and deal with any problemsThe DMAIC cycleMeasure–gather data, refine problem and measure inputs and outputsAnalyze–develop problem hypotheses, identify ‘root causes’ and validate hypothesesImprove–develop improvement ideas, test, establish solution and measure results
12 Breakthrough improvement ‘Breakthrough’ improvement, does not always deliver hoped-for improvements.Planned ‘breakthrough’ improvementsPerformanceActual improvement patternTime
13 Continuous improvement Standardize and maintainImprovementPerformanceTime
15 Combined ‘breakthrough’ and continuous improvement Combined improvementCombined improvementCombined ‘breakthrough’ and continuous improvementPerformanceTime
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 analysisInputOutputFlow chartsScatter diagramsxCause–effect diagramsPareto diagramsWhy–why analysisWhy?