1 © The Delos Partnership 2003 Business Excellence assessment Comparison of different assessment methodologies

2 © The Delos Partnership 2003 Many sources 1.EFQM - Europe : Baldridge Award - USA 3.Deming Award – Japan : keys 5.Class “A” Operational Excellence 6.Delos Partnership

3 © The Delos Partnership 2003 EFQM 1.European Foundation for Quality founded in 1988 to “rival” Baldridge and Deming developed Model for Business Excellence 3.Provides Annual awards for companies in Manufacturing and Service Sectors

4 © The Delos Partnership 2003 EFQM - Scope

5 © The Delos Partnership 2003 EFQM – Key criteria 1.Leadership – Excellent leaders develop and facilitate the achievement of the mission and vision 2.Policy and Strategy – develop a stakeholder focused strategy. Policies developed to deliver strategy 3.People – manage,develop and release the full potential of people 4.Partnerships and resources – plan and manage external partnerships, suppliers and internal resources 5.Processes – Design and improve processes to fully satisfy and generate value for customers and stakeholders 6.Customer Results – Measure and achieve outstanding results with respect to customers 7.People Results – Measure and achieve outstanding results with respect to their people 8.Society Results – Measure and achieve outstanding results with respect to society. 9.Key Performance Results - The measures are key results defined by the organisation and agreed in their policy and strategy.

6 © The Delos Partnership 2003 EFQM - observations 1.Can be used in all business sectors 2.High level criteria 3.Total Quality Management focus 4.Does not critique quality of Vision or mission 5.Does not provide detailed guidance on best practise

7 © The Delos Partnership 2003 Baldridge Award 1.Started in Designed for Manufacturing and Service 3.President of USA presents at special ceremony in Washington

8 © The Delos Partnership 2003 Baldridge Award - scope Organisational Profile: Environment, Relationships and Challenges Organisational Profile: Environment, Relationships and Challenges 2. Strategic Planning 5. Human Resource Focus 1. Leadership 3. Customer And Market Focus 6. Process Management 7. Business Results 4 Measurement,Analysis and Knowledge Management

9 © The Delos Partnership 2003 Baldridge – key criteria 1Leadership – deployment of values, and measurement of performance and Social responsibility. Vision and mission communicated 2Strategic Planning – Process and means of deployment 3Customer and Market Focus – Knowledge of customers and building relationships with customers 4Measurement, and Analysis and Knowledge Management – Performance measurement and alignment of measures and management of information 5Human Resource Focus – Compensation and rewards leading to High Performance, encouragement of motivation and employee wellbeing 6Process Management – Value creation process [customer management etc.] and supporting process development [finance, legal etc] 7Business Results – review of customer-focused, product and service, financial and market, human resource, organisational effectiveness and social responsibility results

10 © The Delos Partnership 2003 Baldridge - observations 1.Focus on Performance Measures and results 2.Detailed supporting questions 3.Total Quality Management pedigree 4.Applies to Manufacturing,Service Education and Heath Care sectors 5.More strategic than tactical in approach

11 © The Delos Partnership 2003 Deming Award 1.Developed by the Japanese Union of Scientists and Engineers in Focussed on Total Quality management

12 © The Delos Partnership 2003 Core Quality system Deming Award - Scope Management Policies and Their deployment Management Policies and Their deployment New Product Development, work process innovation New Product Development, work process innovation Maintenance And Improvement Maintenance And Improvement Human Resource Development Human Resource Development Information Analysis And IT Information Analysis And IT Management system Management system

13 © The Delos Partnership 2003 Deming – key criteria 1.Management Policies and their deployment : customer driven strategies deployed through the organisation 2.New Product development and process innovation ; active development for customer satisfaction 3.Maintenance and improvement of product and operational qualities : excellent process and continuous improvement 4.Establishment of systems for quality 5.Collection and analysis of quality information : uses IT to get useful information 6.Human Resources development; education and training planned for people

14 © The Delos Partnership keys 1.Developed by Iwao Kobayashi in Japan 2.Focus on application of Lean thinking to workspace [manufacturing and office]

15 © The Delos Partnership keys – main criteria 1.Cleaning and Organising 2.Rationalising the system 3.Improvement Team Activities 4.Reducing inventory 5.Quick changeover technology 6.Manufacturing Value analysis 7.Zero Monitor Manufacturing 8.Coupled Manufacturing 9.Maintaining Equipment 10.Time Control and commitment 11.Quality Assurance system 12.Developing your suppliers 13.Eliminating Waste 14.Empowering workers 15.Skill Versatility and Training 16.Production Scheduling 17.Efficiency Control 18.Using Information systems 19.Conserving Energy and materials 20.Leading Site and technology

16 © The Delos Partnership keys - observations 1.Wide ranging questions 2.Describes stages of excellence [ 5 stages for each criteria, and hence 100 points] 3.Covers Factory and office 4.Balance in favour of Lean and Total Quality

17 © The Delos Partnership 2003 Class “A” Operational Excellence 1.Developed by Oliver Wight in the USA around Series of questions divided into 5 chapters Strategy People and Teams Continuous Improvement New Product Development Planning and Control 3. Focussed on Manufacturing Companies

18 © The Delos Partnership 2003 Class “A” – key criteria 1.Strategy Vision and Mission Creation of Strategy Goal Deployment 2.People and Teams Culture Trust Education and Training 3.Continuous Improvement Total Quality Customer/Supplier Partnerships Focus on Customer 4.New Product Development Meeting Customer Requirements Partnership with suppliers 5.Planning and Control Excellence in all planning and execution processes Data Accuracy Performance measures

19 © The Delos Partnership 2003 Class “A” Observation 1.Comprehensive Review of company 2.Combines Quality, Lean and Planning and Control 3.Focussed on Manufacturing companies 4.Highly detailed supporting questionnaire 5.A collection of ideas and philosophies, rather than a holistic structure 6.Does not show distinction between process and non-process issues [New Product is a process, and should not be separated out from Planning and control processes]

20 © The Delos Partnership 2003 Delos Business Model DemandDemandSupplySupply VisionVision PrioritisationPrioritisation SupportSupport InnovationInnovation StrategyStrategy

21 © The Delos Partnership 2003 Delos Assessment criteria 1.Vision – quality and demonstration of leadership 2.Strategy – existence and quality 3.Integrated Enterprise Planning – Existence and quality of tolling business planning process 4.Customer Relationship management – quality of relationship with customers 5.Supplier Relationship Management – quality of relationship with suppliers 6.Innovation – quality of process for introducing and management of all innovation 7.Performance Measurement – modern performance measurement 8.Data Accuracy – 98 % plus Data Accuracy 9.Continuous Improvement – Proper application of Total Quality, and Lean philosophies across the business 10.People – Culture and style 11.Supporting Processes – IT HR and Finance

22 © The Delos Partnership 2003 Delos Assessment criteria 1.Extensive and incorporates the major part of other Business Excellence criteria 2.Allows progression from basic [bronze] to excellent [Platinum] 3.Describes 5 stages of development 4.Not too detailed 5.Applies to operational environments, but could easily be applied to service environments

23 © The Delos Partnership 2003 Philosophical differences Business Excellence has been based on “competing” philosophies MRP II – planning founded in 1978 by Oliver Wight in USA; computer developments in 1956 started this Total Quality now Six Sigma in effect founded by Deming in 1951 Just in Time now largely lean started with the Toyota Production system in 1960’s

24 © The Delos Partnership 2003 Philosophical Comparison Planning Processes [MRP II] Total Quality [TQM/Six Sigma] Lean [JIT] BaldridgeMediumStrongMedium EFQMWeakStrongMedium DemingMediumStrongMedium 20 keysWeakMediumStrong Class “A”StrongMedium DelosStrong

25 © The Delos Partnership 2003 Scope of audit All Business Excellence audits cover the following areas : –Leadership and direction around Vision and Mission –Quality of processes – Customer, Supplier, Innovation and internal supporting processes –Commitment to Continuous Improvement –Performance Measurement and results for business –People and Culture –Relationship with the outside world – society,environment

26 © The Delos Partnership 2003 Scope Comparison Vision, Mission, Leadership ProcessesContinuous Process Improvement MeasuresPeopleSocial Environment Baldridge StrongCustomer only WeakStrong EFQM Strong MediumStrong Deming MediumStrong on Quality Medium Weak 20 keys MediumStrong on Lean StrongMedium Weak Class “A” MediumStrong on planning Medium Weak Delos Strong Weak

27 © The Delos Partnership 2003 Delos Partnership Limited Our Approach

28 © The Delos Partnership 2003 Delos Delta Model OVERCOMINGOBSTACLESOVERCOMINGOBSTACLES DELIVERSDELIVERS INTEGRATEDINTEGRATED ManagingThechangesManagingThechanges ROCEModelROCEModel BusinessModelBusinessModel ChangeModelChangeModel = change

29 © The Delos Partnership 2003 Delos ROCE model ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects

30 © The Delos Partnership 2003 Delos Business Model DemandDemandSupplySupply VisionVision PrioritisationPrioritisation SupportSupport InnovationInnovation StrategyStrategy

31 © The Delos Partnership 2003 Delos Change Journey MobiliseDesignCommunicateReviewUnderstandASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS

32 © The Delos Partnership 2003 Successful Change projects successfully manage the interactions of culture, processes and technology. Failure to do so results in a new approach which is not sustainable for the business in the future. People, Process and Technology This means that all decisions regarding the programme must take all three elements into consideration. For instance: Project organisation – needs buy-in Design needs ways of working to be supported by the software Implementation needs Education as well training Governance needs to make sure IT systems support business strategy

33 © The Delos Partnership 2003 Delos Change Process Our experience enables change to Organisations Systems Processes Philosophies People Applied to hundreds of companies

34 © The Delos Partnership 2003 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand ASSESS Assessment of current position Initial Education programme Identify critical priorities for change Resources required to implement the change Business Assessment Top Management Overview Middle Management Overview Implementation Workshop Steering Committee Project Leader Project Team

35 © The Delos Partnership 2003 Delos Change Journey Integrated Enterprise Planning Sales Forecasting and Demand Management Supply Chain Techniques Programme Management Integrated Enterprise Planning Sales Forecasting and Demand Management Supply Chain Techniques Programme Management MobiliseDesignCommunicateReviewUnderstand ASSESS Set up the project/programme organisation Begin to communicate the planned changes Workshops support development of outline policies, procedures, and organisation Integrated Enterprise Planning SENIOR TEAM REVIEW PRIORITISATION PROCESS INNOVATIONINNOVATION CUSTOMERSCUSTOMERS SUPPLIERSSUPPLIERS STAGE- GATE PROJECT MANAGEMENT SUPPLY CHAIN LINKS FORECASTING ORDER MANAGEMENT SALES MANAGEMENT MASTER SCHEDULING PURCHASING PROCESS CUSTOMER SERVICE BUDGETSFINANCIALS

36 © The Delos Partnership 2003 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand ASSESS Task teams develop the ideas into policies, procedures, systems and jobs. Task teams made up of key business staff Prepare communication and training Integrated Performance Measurement Lean and Agile Management Supplier Relationship Management Customer Relationship Management Integrated Performance Measurement Lean and Agile Management Supplier Relationship Management Customer Relationship Management Integrated Performance Measurement Master Scheduling Course Master Production Schedule ManufacturingScheduleSupplierSchedule Annual Operating Plan Sales and Operations Planning

37 © The Delos Partnership 2003 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand ASSESS Demand Manager Roll out new policies, procedures, systems & jobs through education & communication The final stage of this step is “go live” or cutover Master Scheduler Master Scheduling Course Master Production Schedule ManufacturingScheduleSupplierSchedule Annua l Operat ing Plan Sales and Operations Planning

38 © The Delos Partnership 2003 Delos Change Journey MobiliseDesignCommunicateReviewUnderstand ASSESS Sustain the changes made Ensure maximum possible benefits Assessment to identify “next wave” of change ASSESS Business Assessment

39 © The Delos Partnership 2003 Proposal to Airbus Let us help you develop an assessment and improvement process for your suppliers based around our approach We will enable you to provide a common standard across all of your suppliers, and help in process improvement Where you want, we will enable your people to develop the capability to assess, manage and deliver fundamental far reaching change in your supply base Our aim would be to improve their Profitability and your Profitability simultaneously

40 © The Delos Partnership 2003 Airbus Supply Base Joint Improvement ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects ROCE Profit Capital Sales Costs Material Labour Overhead Fixed Current Stocks Creditors Debtors Projects MobiliseDesignCommunicateReviewUnderstandASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS