1 Lecture 7 MBF2213 | Operations Management Prepared by Dr Khairul Anuar L7: Operations Improvement
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Lecture 7
MBF2213 | Operations ManagementPrepared by Dr Khairul Anuar
L7: Operations Improvement
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
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
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
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?
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.
(Refer to Slack et al. page 549-554)
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
• 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
TimeframeChange
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
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
Plan Do
CheckAct
Plan
Two improvement cycles
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
Perf
orm
ance
Time
Planned ‘breakthrough’ improvements
Actual improvement pattern
‘Breakthrough’ improvement, does not always deliver hoped-for improvements.
Breakthrough improvement
Perf
orm
ance
Time
Continuous improvement
Standardize and maintain
Improvement
Continuous improvement
Perf
orm
ance
Time
PDCA cycle repeated to create continuous improvement
Plan
Do
Check
Act
Continuous improvement (Continued)
Perf
orm
ance
Time
Combined‘breakthrough’ and
continuous improvement
Combined improvement
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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.
What techniques can be used for improvement?
Some common techniques for process improvement
Cause–effect diagrams Why–why analysis
Why?
Why?
Why?
Flow charts Scatter diagrams
xx
x x
x xxx
x
x x
Input/output analysis
Input Output
Pareto diagrams
5 Principles of Continuous Improvement
What is Continuous Improvement?
There are 2 keys to ensuring CI improves Business Performance Identify
key processes for improvement, provide colleagues with the
necessary skills
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CI is a systematic approach for driving better performance
CI links the strategic and the CI
CI Methodologies
CI Project execution