1. Oliver Laasch, Roger N. Conaway, by
Center for Responsible Management Education (CRME)
and
Roger N. Conaway,
Tecnológico de Monterrey (ITESM)

3. After reading this chapter…

5. IKEA Group: Responsible Operations Management
IKEA´s People & Planet Positive (PP) initiative has many operatinal implications.

6. Responsible Operations Management
Responsible operations management: A process-based framework that aims at creating efficiency, zero resource consumption, and optimum stakeholder value through process effectiveness.
Operations management (OM): The area of management concerned with the effectiveness and efficiency of processes for the production of goods and services.

7. Figure 9.1 Responsible Operations Process

8. The Goal: Responsible Enterprise Excellence
Responsible enterprise excellence refers to above-average operational performance for the triple bottom line, stakeholder value, and moral excellence.
Operational performance describes the effectiveness and efficiency of processes for the production of goods and services.

9. PHASE 1
describe the process

10. Food for Thought

11. Figure 9.2 Process Structure

12. Process Effectiveness and Efficiency
A process is any activity or set of activities that uses resources to transform inputs to outputs.
Effectiveness is the extent to which planned activities are realized and planned results achieved.
Efficiency is the relationship between the result achieved and the resources used.

13. Figure 9.3 Zooming into Responsible Organizations (1)

14. Figure 9.3 Zooming into Responsible Organizations (2)

15. Figure 9.3 Zooming into Responsible Organizations (3)

16. Figure 9.7 Documents Constituting a Management System

17. Figure 9.4 Mapping Responsible Operations on the Process Level (1)

18. Figure 9.4 Mapping Responsible Operations on the Process Level (2)

19. Procedures
A procedure is a specified way of carrying out an activity or a process.
Procedure documents describe processes, typically verbally, graphically, and through metrics.

20. Figure 9.6 Typical Sections of Procedure Descriptions

21. Management Systems
A management system establishes policies and objectives and is the framework to control the achievement of these objectives.
An integrated management system houses all components of a business in one coherent system in order to enable the achievement of organizational purpose and mission.

22. 9.7 Documents Constituting a Management System

23. Figure 9.8 Continual Improvement Cycles in ISO 14000 and 9000 (1)

24. Figure 9.8 Continual Improvement Cycles in ISO 14000 and 9000 (2)

25. Steps for Developing Management Systems
Policy: Establish policies and principles.
Planning: Identify needs, resources, requirements, relevant organizational structures, potential contingencies, and, most importantly, the issues to be addressed through the management system and the relevant processes.
Implementation and operation: Establish operational control and documentation, and manage human and other resources, as well as the relationship with suppliers, contractors, and related stakeholders.
Performance: Monitor, measure, and handle nonconformities.
Improvement: Take preventive and corrective actions and ensure continual improvement.
Management review: Review the system and its outcomes concerning the adequacy of the system to achieve established objectives.

26. Be Efficient through Lean Enterprise Methods
PHASE 2
Be Efficient through Lean Enterprise Methods

27. Food for Thought

28. Central Concepts in Lean Management
Lean enterprise methods aim to increase the efficiency of a process by reducing non-valueadding activities, so-called wastes.
Toyota production system (TPS) is a management method that led to the lean enterprise methods.
Resource consumption describes all resources used as inputs in a process.
Waste is any nonstakeholder value-adding efforts that must be incorporated in the current form of a process.
Ecoefficiency aims to minimize environmental resource consumption and ecological damage by optimizing the efficiency of the firm’s production processes.

29. Table 9.2 Lean Enterprise Core Principles and Processes

30. Waste in Lean Enterprise Methods
Lean management and enterprise methods typically target waste reduction and elimination, where waste is often divided into three categories Muda, Muri, and Mura.
Muda translates as any of the following near synonyms: futility, uselessness, idleness, superfluity, waste, wastage, and wastefulness. Shingo45 illustrated this idea by
Muri translates in most contexts as being unreasonable, impossible, beyond one’s ability or authority, or too difficult, or as by force, compulsory, excessive, or immoderate.
Mura translates as unevenness, irregularity, nonuniformity, or inequality.

31. Table 9.3 NOW TIME Lean Enterprise Muda

32. Be Effective through Quality Management
PHASE 3
Be Effective through Quality Management

33. Food for Thought

34. Central Concepts in Quality Management
Quality management is a framework that aims at creating products and services that are perfectly aligned with customer (stakeholder) needs by reducing nonconformities with customer requirements
Total responsibility management (TRM) translates total quality management tools and practices to the field of responsibility management.
Stakeholder effectiveness refers to creating operational outcomes that satisfy stakeholder requirements.
Voice-of-the-customer (VOC) describes the efforts to identify customer needs.
Voice-of-thestakeholder (VOS) describes the efforts to identify customer needs for responsible management.

35. Figure 9.9 Comparing Criteria for Baldrige National Quality Award and Total Responsibility Management

36. Centrally Important Algorythms
COPIS is an algorithm for quality management, formed by the words Customer, Outputs, Processes, Inputs, and Suppliers.
PDSA is the abbreviation of the improvement cycle following the stages Plan, Do, Study, and Act.

37. Figure 9.10 COPIS ⇨ SIPOC Business Conception-to-Conduct Connection

38. Figure 9.11 Kano Customer Needs Model

39. Figure 9.12 VOC Alignment and Integration

40. Figure 9.13 Modified Plan-Do-Study- Act Cycle

41. Six Sigma
Six Sigma is a framework for process improvement that is centered on the assessment of customer (stakeholder) needs and elimination of process errors.
Sigma is a measure of process variation recognizable as the standard deviation of output from the process, product, or system.

42. Table 9.6 DMAIC and DMADV Structure Descriptions

43. Benchmarking and Breakthrough Improvement
Best practices benchmarking is the process of continually searching for and studying internal and external methods, practices, and processes that yield superior performance and either adopting or adapting their good features to become the “best of the best.”
The benchmarking perspective on measures is that two types of indicators should be combined:
Lagging indicators describe actual results
Leading indicators forecast future outcomes

44. Figure 9.14 Best Practices Benchmarking

45. Principles of Operations: Responsible Enterprise Excellence
The goal of responsible operations management is responsible enterprise excellence, which refers to above-average operational performance of the triple bottom line, stakeholder value, and moral excellence.
Operational performance describes the effectiveness and efficiency of processes for the production of goods and services.
For responsible operational performance, processes must integrate stakeholder value, environmental impacts, and ethical dilemmas in their description and management.
Lean enterprise methods aim to increase the efficiency of a process by reducing non-value-adding activities, so-called wastes. Lean thinking is the basis for ecoefficiency, which reduces pollution and resource consumption from existing processes.

46. Principles of Operations: Responsible Enterprise Excellence
Quality management is a framework that aims at creating products and services that are perfectly aligned with the customer (stakeholder) needs by reducing nonconformities (errors) with customer requirements. Six Sigma is a prominent quality management framework.
A continuous improvement cycle is one in which after each pass through the cycle, a new planning phase is initiated and the cycle is repeated in order to continue improving the product, process, or system. A prominent cycle is PDSA, which is the abbreviation of the improvement cycle following the stages: plan, do, study, and act.
Best practices benchmarking is the process of continually searching for and studying internal and external methods, practices, and processes that yield superior performance and either adopting or adapting their best features to become the “best of the best.”

47. Responsible Organization Checklist

48. People in Operations, Responsible Enterprise Excellence