CIm -IE775 Introduction Current wisdom maintains that organizations must be able to react to a changing competitive environment By implementing loose/decentralized.

cIm -IE775

Introduction

Current wisdom maintains that organizations must be able to react to a changing competitive environment

By implementing loose/decentralized organizational structures

By implementing information technology

But what does this mean???

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The Enterprise System

A system is;“a set of objects together with relationships

between the objects and between their attributes related to each other and to their environment so as to form a whole”

Business organizations can be viewed as very complex systems

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The Enterprise System

Systems, including business organizations, pursue goals. Purposeless Behavior Purposeful Behavior Purposive Behavior

Purposeful and Purposive behavior are the basis for organizational strategy

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The Enterprise System

Systems must also relate to their environment

A “closed” system has a fixed and inflexible behavior

Successful ongoing systems must monitor the environment, ...and respond appropriately!

Mechanisms to monitor and respond to the business environment are part of ongoing systems

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Definitions Of Agile Manufacturing A concept and a culture change and a way of doing business.

Agile manufacturing integrates TQM, concurrent engineering and flexible manufacturing.

Capable of responding rapidly to demand for high quality, highly customized products.

Ability of a manufacturing system to reconfigure itself to meet changing demands.

The dimensions of competition have moved beyond cost and quality - TIMELINESS.

“Agile-based competition is destined to displace mass-production based competition as the norm for global commerce” (Goldman, Nagel, and Preiss, 1995)

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The Agile Environment

Agility is defined as:“The ability of an organization to adapt proficiently (thrive) in a continuously changing, unpredictable business environment”

Rick Dove, 4th Annual Agility Forum Conference, Atlanta GA March 1995

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What is Agile Manufacturing?

The ability to thrive in an environment of constant change (Nagel, Dove, and Goldman, 1991)

The ability to delight customers by meeting unanticipated demands (Nagel, Dove, and Goldman, 1991)

Reconfigurable everything (Dove, 1994)

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Agility

• Ability to thrive on unanticipated change

• Leverages on an enterprise's knowledge

• Proactively meets customer requirements for quality, responsiveness, and customer satisfaction

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Definitions

Definition: (1) Agility - “ability to respond to unexpected and unpredicted changes” (2) Flexibility “ability to respond to the expected change and

implies adaptability and versatility in the manufacturing domain” (3) Lean “concerns with less of everything - less time to design, less inventory and less defects”

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The Agile Enterprise

Change in the business environment is driven an “impatient market”

Technology reorganize the market placeCustomers are aware of technological change and demand action

An “Agile” Enterprise is one that can respond appropriately to the demands of the market place

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Agile Technologies

Key Need Areas (KNA)TQMValue-based compensationDynamic MultiventuringRefined AccountabilityInformation Systems

Investment in KNA enable organization to meet requirements for global customers

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Million Dollar Question

So I need to invest in and implement all of the Key Need Area Technologies??

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Strategic Alignment

Technology investment and implementation should be closely tied to organizational environment

Internal Issues - Culture, Human Resources

External Issues - Industry Standards

Blind investment and implementation can result in failure

“Productivity Paradox”

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Strategic Alignment Models

Strategic Alignment Model

Henderson and Venkatramen, 1993

Highlights the dangers of failing to synchronize technology investment and corporate strategy

Taguchi “Cost to Society” Model

Investment in process capability is optimized when it is balanced with customer requirements

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Strategic Alignment for Agile Technologies

Costs of implementing technologies to support a strategy of agility can be expensive

Investment ExpenseHuman ResourcesOrganizational Disruption

Costs of NOT implementing technologies to support a strategy of agility can be expensive

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Strategic Alignment for Agile Technologies

The “Enterprise System” must:Monitor the environment proactivelyPursue purposive and purposeful goals

Information from environmental scanning activities will guide analysis criteria

Organization must develop an equilibrium between investment and costs of inaction

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Strategic Alignment Cost Structure

Satisfactory ExpenditureRegion

“Over Reaction”

“Cost of Inaction”

Costs Incurred

Costs Incurred

Increasing Costs

Increasing Costs

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Describing the Agile Challenge forYour Corporation and the Nation

Ability to thrive on change and uncertainty• Organization speed of change• Organization agility• “Concept To Cash” cycle time

Leverage People and Information Resources• Compensation• Freedom of action• Information products

Cooperation Increases Competitiveness• Inside organization• Outside organization

Selling Solutions for Value• Do customers get products or solutions?• Organized to sell solutions

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Two Main Pillars Of Agile Manufacturing

Organizational environment • Facilitate change and innovation• Decentralized decision-making• Quick moving market windows• Fast product turnaround• Industry take the lead

Technology Environment• Technology already exists• Build to order products

highly customized

upgradable

reconfigurable• Global supplier data base (FAN)

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Attributes of Agile Manufacturing

Cultural• Empowered people• Total Quality Management• Value based compensation• Concurrency

Business• Exceed Customer Requirements

Customer involvement

Customer education

Performance measurements and benchmarking

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Attributes Of Agile Manufacturing

Business (cont)• Synchronized Processes

Business Process Re-engineering

Database of skills and core competencies

Optimal use of distributed resources

Standards for product/process integration

Manufacturing process/product redesign• Dynamic Multiventuring

Agility index based on core competencies

Code for forming and dissolving enterprises

Legal requirements

Distributed cross-functional teams• Refined Accountability Processes

Process based performance measures

Continuous education and training

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Attributes Of Agile Manufacturing Business (cont.)

• Information System Infrastructure

Vision based leadership

Adaptable standards

Technical• Rapid Response• Information Management

Information is critical asset

Mathematical underpinning

Education and awareness program for end users

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Attributes Of Agile Manufacturing Technical (cont.)

• Enabling Tools and Techniques

Tools with effective human interfaces

Global communications

Virtual reality systems

Simulation and modeling• Adaptive Infrastructure

Modularity

Extensibility

Distributed information

Monitoring support• Connectivity

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Agile Manufacturing

Fast response to opportunity

Comfortable with uncertainty and change

Customer involved in design

Higher employee involvement

Leverages lean

High technology and information integration

Increased customization of product

Leverage resources

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Agile Production

Eight Agile Change Domains

• Recovery : Return failed systems to service

• Performance: Unanticipated requirements

• Improvement: Continuous incremental upgrades

• Creation: Build something new

• Capacity: Increase/decrease existing resource mix

• Capability: Add/delete resource types

• Reconfiguration: Change relationships among modules

• Migration: To different products, processes and systems

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Develop Vision and Strategy

Agile Dimensions

Developing a vision requires a formal assessment of the internal and external environment which includes internal and external customers

“an agile company is one that is perceived by its customers as enriching them in a

significant way, not only itself” - Goldman et al, 1995

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Develop Vision and Strategy

Agile Dimensions

Organizing for improvement: Involves redesigning the enterprise to support the vision Sets the stage for change

“an agile company is organized in a way that allows it to thrive on change and uncertainty”

Goldman et al, 1995

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Change Culture

Agile Dimensions

Prepares an enterprise for realizing the potential of their human resources

“People - what they know, the skills they possess, the initiative they display - and the

information are the differentiators ....”Goldman et al, 1995

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Improve & Integrate the Enterprise

Agile Dimensions

Holistically analyzes the enterprise to integrate processes

“Cooperation - internally and with other companies - is an agile competitor's operational strategy of first choice”

Goldman et al, 1995

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Develop Technology Solutions

Agile Dimensions

Technology is viewed as an enabler for agile processes

“Today, technology makes it possible to interact in a customized, personalized way with

many customers and still make many varied products”Goldman et al, 1995

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Determinants of Agility

From Dove (1995)

Four change proficiency metrics Cost, time, robustness, and scope

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Dimensions of Agility

Create Agile EnterpriseEnterOrg

Organization

Leveraging the Impact ofPeople and Information

CooperatingResources

CustomerEnrichment

Relentless ChangeMastering Change & Uncertainty

Enriching The CustomerCooperating to EnhanceCompetitiveness

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Cooperating to Enhance Competitiveness

input

both internally and externally cooperating

enterprise needs to utilize existing resources regardless of location

bring the product to market as cost effectively and rapidly as possible.

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Enriching the Customer

output

providing solutions, not just products

long-term stable customer relationships

End user designed products

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Mastering Change and Uncertainty control

environment

flexible structure to allow for rapid reconfiguration

an entrepreneurial company culture

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Leveraging Impact of People & Information mechanism

people and information most valued resource

improved motivation through empowerment

An agile enterprise sells its ability to convert the knowledge, skills, and information embodied in its personnel into solution products for the individual customers

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Agile Characteristics Worksheet

The table shows the activity, the four dimensions of agility, and the four determinants.

• This matrix provides a framework for understanding the relationship between the agile dimensions and the agile determinants

• The agile characteristics are options of what can be implemented to improve the activity Fill Order.

5. Fill Orders Cost Time Robustness Scope

Leverage People & Information

Internalization of Societal Values

Cross-Functional Training

Continuous Education and Training

Value-Added Enterprise Metrics

Open Information/Communication Policies

Competency Driven Operations

Master Change & Uncertainty

Modification Flexibility - Process

Routing Flexibility

Expansion Flexibility

Mix/Range Flexibility

Machine Flexibility

Volume Flexibility

Collaborative Relationships

Integrated Interactive Partnering Relationships

Proactive Information Sharing Policies

Virtual Enterprise Partnering

CICSS

Enrich Customer

Individualized Products

Production To Order

Extra-Ordinary Quality Standard

Market Opportunity Pulled Products

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Agility Model

A-0 level of Attaining Agile Enterprise

Attain Agilityat Enterprise

level

A0

Customer needs

Reduced production cost

Management

Agile Enterprise

Existing performance/technology

Evaluation methods and tools

Budget

Quality product/service

Environment

Motivation

Time

Wong, Whitman 1999

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Five primary activities to attain agility

Develop Vision and Business Strategy

Provide Education and Training

Set and Enhance Product Development

Foster Interaction Among People and Technology

Integrate and Improve Enterprise

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Develop Vision and Business Strategy

Develop a vision

Establish strategic business plan

Achieve long-term goals

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Provide Education and Training

Introduce training programs

Continuous learning

Increase knowledge and skills of the employees

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Set and Enhance Product Development

Study market needs

Set specification standards

Increase quality of product

Reduce production cost

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Foster Interaction Among People and Technology

People and technology are integrated

Yield a competent culture within the organization

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Integrate and Improve Enterprise

Focus on increasing the efficiency and effectiveness

Identify technology that made process improvements possible

Achieve Agile Enterprise

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A0 – Activities to attain Agility

I1Customer needs

O3Reduced production cost

M1Management

O1

Agile Enterprise

I2

Existing performance/technology Develop vision

and businessstrategy

A1

Provideeducation and

trainingA2

Set andenhanceproduct

developmentA3

Fosterinteraction

among peopleand

technologyA4Integrate and

improveEnterprise

A5

C1Environment

C2

Budget

C3 Motivation

M2

Evaluation methods and tools

O2

Quality product/service

Steering team

Planned strategy

Commitment to excellence

Enhanced performance

Trainedemployee

Competentculture Empowered

people

Wong, Whitman 1999

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Conclusion

Unexpected or unpredictable changes could bring damage

To survive is to be agile

Five activities determined to be factors for agility

Provides useful strategic plan

Provides a path to achieve agility in future