Managing Operations Generic

BMG343J4 – Managing Operations (Managing Organisational Improvement) Steve Pollard [email_address] [email_address] BMG343J4 Advanced Diploma in Management Practice

The aim of this module is to: provide participants with both the knowledge of effective operating systems and the understanding of the contexts in which they may be used. BMG343J4

By the end of this module you will be able to: outline the process involved in performance setting discuss the factors taken into account when determining team performance objectives list the main business improvement tools available critically evaluate business improvement initiatives assess the business improvement initiative/organisation best fit identify initiative compatibility for building organisational capability apply appropriate business improvement initiatives to a range of organisations, ie, voluntary, public, private and not-for-profit. BMG343J4

Agenda From Me….. What is Managing Operations Continuous Improvement & Innovation What is Performance Measurement What is Quality Total Quality Management Improvement & Change BMG343J4

Agenda To you…… Review of Business Improvement Tools Self-Assessment Organisational Fit BMG343J4

Time Compression BMG343J4 NVA Eliminate Non-Value Added Activities Quality at Source Organise around outcomes Fundamentals of business improvement

Set Demanding Targets BMG343J4 Customer Alignment Utilise Cost-Effective Technology Empower People

Operations Management The set of activities that creates goods and services through the transformation of inputs into outputs. BMG343J4 OM Managers Plan Model Processes Organise Staff Lead Control Activity: Informal Self Assessment

Pure Service Teaching House cleaning Plumbing repair Restaurant Made to measure clothing New car Radio Soft drinks Salt Pure Commodity BMG343J4

Objective Headings (objectives formulated for different jobs) BMG343J4 General manager Quality manager Sales manager Profitability Reduce waste Achievement of sales targets and plans Volume & business growth Quality registrations & external audits Contribution to profits and overheads Provision & utilisation of assets Product and service specification performance Customer satisfaction Product innovation Maintain the Quality Management System Customer needs Customer satisfaction Key process performance Identification of new products and services Operating costs Foster a customer focus philosophy Resource management of the sales force, including motivation Management effectiveness Foster a zero defects philosophy Resource management of the sales force, including motivation Employee productivity & attitude Foster a continuous improvement philosophy Marketing and market trends Public responsibility Environmentally sound awareness Legal needs and implications

Planning – the virtuous cycle BMG343J4 ACT Improvement planning Improvement tool Improvement culture PLAN Business Plan Balanced Scorecard DO Functional organisation Process organisation Policy Deployment Process CHECK EFQM Scorecard update

Significant events in the evolution of Business Improvement Smith (1776) - Division of Labour Whitney (1800) – Standardised parts Taylor (1881) – Scientific Management Ford (1913) – Coordinated assembly line Gantt (1922) – Gantt Charts The Gilbraiths (1922) – Motion Study Shewhart (1924) – Statistical Quality Control Deming and Juran (1945) – Quality culture Feigenbaum (1951) – Total Quality Control BMG343J4

Five ways to increase productivity Reduce Costs Manage Growth Work Smarter Pare Down Work Effectively Productivity Improvement (Oakland, J S. 2004. Total Quality Management, 3 rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562) BMG343J4 Output Input

Simple OM: BMG343J4 INPUT THROUGHPUT OUTPUT

Challenges driving Business Improvement FROM: Local or national focus Batch shipments Low bid purchasing Lengthy product development Standard products Job specialisation TO: Global focus Just-in-time Supply chain partnering Rapid product development Mass customisation Empowered employees BMG343J4

BMG343J4 Culture for continual improvement and innovation Role of management Leadership Focus on employees Focus on the customer/client Integration of continuous improvement activities Standardisation/ quality management system Focus on critical processes Measurement and feedback systems Learning from continual improvement results The Continuous Improvement Model for Self-Assessment (SACIM)

PERCENTAGE AWARENESS AND USAGE OF UK-WIDE QUALITY STANDARDS (Source: Futureskills, 2003. Base 1000 charities) [Accessed 16 November 2004 - http://www.redf.org/download.sroi/sroi_method_2.pdf] BMG343J4 Awareness Total usage Usage <£100K Usage £100K - £1m Usage £1m – 10m Usage >£10m IIP 94.4 39.3 18.1 38.7 55.7 67.5 ISO 9001 62.5 8.4 6.4 7.4 11.3 15.9 BEM 53.4 8.0 4.4 7.8 11.0 4.8 PQASSO 48.4 45.8 53.2 49.6 28.7 0.0

PERFORMANCE MEASUREMENT BMG343J4 Design supporting data collection systems/ determine presentation method Refine measures if data not available 1 Decide what is to be measured 2 Decide which measures to use 3 Ascertain sources of data 4 Design Support Systems Analyse/clarify policy objectives (goals) Select performance measures to match objectives Select comparators Review availability/ collectability of data

PERFORMANCE MEASUREMENT BMG343J4 delivered by allocated to linked to Reporting Systems Budget Process Performance Related Rewards mgrs answerable to results feed to Overall Strategy Policy Objectives Other targets eg cost or quality Performance Measures Manager’s sphere of responsibility Review process

ACTIVITY (25 minutes) What performance measures are used in your organisation? What is actually measured? What evidence is used to support performance management? How does the management information system support performance management? BMG343J4

Kanji, G K. (1996) Implementation and Pitfalls of Total Quality Management, TQM, vol 7. pp331-343. BMG343J4 Business Excellence DELIGHT THE CUSTOMER CONTINUOUS IMPROVEMENT TQM (principles) MANAGEMENT BY FACT PEOPLE-BASED MANAGEMENT Leadership (prime) Leadership (prime) Customer satisfaction Continuous improvement cycle (concepts) Prevention Measurement (concepts) Internal customers are real (concepts) Teamwork All work is process People make quality (concepts) Prime Business Excellence Principles Core Concepts

Fundamental Rules of Customer Service Remember: To always treat the customer as you would like to be treated if you don’t look after the customer, someone else will If in doubt, under promise and over deliver Nothing is gained by winning an argument, but losing a customer The reputation of the company is in the hands of the individual. BMG343J4

Quality “ Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for. A product is not quality because it is hard to make and costs a lot of money, as manufacturers typically believe. This is incompetence. Customers pay only for what is of use to them and gives them value. Nothing else constitutes Quality.” (Drucker, P. (1968) The Practice of Management.) BMG343J4

ORIENTATION DISCUSSION ACTIVITY 1 Is there a good understanding within the organisation of the needs, wants and behaviour patterns of clients/customers? 2 Is your organisation results-driven or people-directed? 3 Does the SMT see itself as the organisation’s senior strategist or strategic ‘champion’? 4 D oes the organisation have a results-driven mission? 5 Do the organisation’s strategies reflect the realities of the external environment? 6 Is there any one function perceived as having more important than others? 7 Is the organisation organised in such a way that it can be responsive to stakeholder changes? 8 Is the Management Information System (MIS) well designed and operating effectively? 9 Do the organisation’s managers make full use of MIS in their decision making? 10 Are costs v monies recovered analysed to ensure effectiveness? 11 Is there a strong link between the MIS and the stakeholders? 12 Does the organisation deploy staff with the appropriate skills and competences? 13 Are effectiveness and efficiency recognised as the responsibility of the entire organisation? 14 Are decisions made in a well co-ordinated way and executed in an integrated manner? BMG343J4

BMG343J4 THE SEVEN S FRAMEWORK (Waterman, R H, Jr, Peters, T J and Phillips, J R. 1980. Structure is not organization, Business Horizons, vol. 23, pp. 14-26.) Staff Skills Superordinate goals (Vision) Structure Systems Strategy Style

BMG343J4 Total Quality Management Model Teams Tools Systems Culture Communication Commitment (Oakland, J S. 2004. Total Quality Management, 3rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562) Process C S ustomer upplier

New framework for quality management BMG343J4 Planning Performance Commitment Process People Communication Culture (Oakland, J S. 2004. Total Quality Management, 3rd ed. Text, Cases and Readings. ISBN 0-7506-5741-3 (Shelfmark 658.562)

Oakland, J S. (2003) TQM Text with Cases, 3 rd ed. ISBN 0-7506-5740-5. BMG343J4 Process Feedback Feedback The “voice” of the customer Consistent INPUTS The “voice” of the process OUTPUTS SUPPLIERS CUSTOMERS Materials Procedures Methods Information (including specifications) People Skills Knowledge Training Plant/equipment Products Services Information Paperwork

Greiner, L G. (1972) Evolution and Revolution as Organizations Grow , Harvard Business Review, p41. BMG343J4 AGE OF ORGANISATION SIZE OF ORGANISATION Small Large Young Mature PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5 1 Growth through CREATIVITY 2 Growth through DIRECTION 3 Growth through DELEGATION 4 Growth through COORDINATION 5 Growth through COLLABORATION 1 Crisis of LEADERSHIP 2 Crisis of AUTONOMY 3 Crisis of CONTROL 4 Crisis of RED TAPE 5 Crisis of ??

Size may . . . provide the leverage for capturing significant market share improve access to low-cost capital bring improved brand recognition and advertising benefits permit greater investment in research and development enable global reach facilitate expertise and systems development. BMG343J4 lead to lower employee satisfaction lead to resistance to innovation lead to coordination problems lead to high formalisation lead to a higher risk of litigation.

Organisational Life Cycle Robbins, SP and Barnwell, N. (2002) Pearson Education Australia. ISBN 1-74009-545-6 BMG343J4 Entrepreneurial stage Ambiguous goals High creativity Collectivity stage Informal communication and structure High commitment Formalisation-and-control stage Formalisation of rules Stable structure Emphasis on efficiency Elaboration-of-structure stage More complex structure Decentralisation Diversified markets Decline stage High employee turnover Increased conflict Centralisation Formation Growth Maturity Decline

Types of Organisational Change Osborne, S P and Brown, K. (2005) Managing Change in Public Sector Organisations. England. Routledge. BMG343J4 Small-scale incremental change Large-scale radical change Reactive change Proactive change Reactive change to shifting contextual conditions, involving reconfiguration and adaptation to change Proactive refinement and development of procedures, work arrangements and technology updates Radical response to critical junctures, major shifts in business markets etc, to maintain and secure survival Major restructuring and reinvention referred to as transformational and revolutionary proactive change

Maslow’s Theory v Personal Change BMG343J4 Physiological Safety or Security Belonging Social Ego & Self Esteem SA Does the Change completely rock my world to its foundation? Has the Change the capacity to undermine me personally? Does the Change alter my belonging to a social grouping? Will I still have a job? Does the Change alter my earnings capacity?

Perception of Change Model BMG343J4 DENIAL EXPLORATION RESISTANCE COMMITMENT Denial Shock Frustration Acceptance Experimentation Understanding Integration

BMG343J4 Life event 8+ months Well being Feel good OK Distress / despair First shock Provisional adjustment Inner contradictions Inner crisis Re-construction and recovery Positive events Excitement Honeymoon Uncertainty Losing confidence Confusion Depression Crisis Letting go Accepting Exploring Testing New confidence, transformation

BMG343J4 Life event 8+ months Well being Feel good OK Distress / despair First shock Provisional adjustment Inner contradictions Inner crisis Re-construction and recovery Trauma or loss Confusion Depression Crisis Quitting Numbness Disbelief Minimising or denial Letting go Accepting Partial recovery Extended crisis

BMG343J4 Life event 8+ months Well being Feel good OK Distress / despair First shock Provisional adjustment Inner contradictions Inner crisis Re-construction and recovery Confusion Depression Crisis Quitting Numbness Disbelief Minimising or denial Letting go Accepting Partial recovery Extended crisis Excitement Honeymoon Uncertainty Losing confidence Confusion Depression Crisis Letting go Accepting Exploring Testing New confidence, transformation

BMG343J4 Life event Well being Feel good OK Distress / despair First shock Provisional adjustment Inner contradictions Inner crisis Re-construction and recovery Uncertainty Losing confidence Testing New confidence, transformation Confusion Depression Crisis Numbness Disbelief Minimising or denial Letting go Accepting Exploring Taylor’s empirical model

For Duck . . . (Duck. J. (2003) The Change Monster.) “ Change is inescapably an emotional human process that encompasses the whole gambit of emotions - fear, curiosity, exhaustion, loyalty , paranoia , depression , optimism, rage, revelation, delight, love ........” BMG343J4

BMG343J4 Consider Duck’s change model: - What are staff likely to be feeling, experiencing and doing at each of the five stages? What can managers do at each stage to make the overall change as stress-free and successful as possible? What impact does the stage of change have on communication? GROUP ACTIVITY

Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free Press.) Relative Advantage Compatibility Complexity Trialability Observability BMG343J4

Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free Press.) Relative Advantage (Better than previous solution) How well does my plan show how much better off people will be when they adopt the plan? Why is this plan better than what has been done before? What advantages or benefits might there be to accepting the plan? Who will gain from the implementation of the plan? How will I (or others) be rewarded by adopting the plan? How will I emphasize the plan’s benefits to all? BMG343J4

Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free Press.) Compatibility (Consistent with values, experiences and needs) How well does my plan demonstrate that it is compatible with current values, past experiences and needs? Is the plan consistent with current practice? Does the plan meet the needs of a particular group? Does it offer better ways to reach our common goals? Who will naturally support and agree with the plan? Can it be favourably named, packaged and/or presented? BMG343J4

Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free Press.) Complexity (Being difficult to understand or use) How well does my plan provide for easy communication, comprehension and use? Is the plan easy for others to understand? Can it be explained clearly to many different people? Will the plan be easily communicated? How might the plan be made more simple or easy to understand? Is the plan easy to use or follow? BMG343J4

Making Change Happen (Rogers, E M. (1995) Diffusion of Innovations (4 th ed). New York. The Free Press.) Trialability (May be experimented with on a limited basis) How well does my plan allow for trialability? Can the plan be tried out or tested? Can uncertainty be reduced? Can we begin with a few parts of the plan? How might others be encouraged to try out the plan? Can the plan be modified by you or others? BMG343J4

BMG343J4 ELAPSED TIME OF ADOPTION % HAVING ADOPTED EARLY MAJORITY (34%) LATE MAJORITY (34%) LAGGARDS (15%) (2.5%) INNOVATORS (13.5%) EARLY ADOPTERS (Spence, W R. 1994. Innovation, The Communication of Change Ideas, Practices and Products. Chapman Hall.) POINT OF INFLEXION POINT OF INFLEXION

The Effectiveness Matrix (Carnall, C. (2007) Managing Change in Organisations, 5 th ed. P193) BMG343J4 Quantitative Measures Qualitative Measures Effectiveness Efficiency Resources Costs Waste Employee turnover Resources Staff flexibility Training and development Objectives Growth New products/ services Objectives Corporate image Excellence Adaptability Resources Management style Management development Corporate culture Resources Satisfaction Commitment Objectives Competitive position Utilization of new technology Objectives Profit Market share Volume Delivery

PLANNING FOR QUALITY Policy and Strategy Based on Concept of Total Quality (Values, Vision, Mission Statement) Use of Relevant Information Feedback from suppliers, customers and employees Methods of Communication Regular Review and Improvement BMG343J4 People Management Human Resource Planning Recruitment, Selection and Training Appraisal and Review Promoting Individual Involvement Resources Financial Information Material Technology Processes Identification of Key Processes Systematic Management of Key Processes Review of Key Processes Implementation and Evaluation of Process Changes

Getting the Balance Right BMG343J4

BMG343J4 Enterprise Strategy Executive Leadership Principle 1 Mobilize Change Through Leadership 1 Top Leadership committed 4 Vision and strategy clarified 2 Case for change clearly articulated 5 New way of managing understood 3 Leadership team engaged 6 Office of strategy management established Strategic Fit Principle 2 Translate the Strategy to Measurement Terms 1 Strategy map developed 2 Balanced scorecard created 3 Targets established 4 Initiatives rationalized 5 Accountability assigned. Organization Alignment Principle 3 Translate the Strategy to Operational Terms 1 Corporate role defined 2 Corporate and SBUs aligned 3 SBU and support units aligned 4 SBU and external partners. 5 Board of directors aligned Human Capital Alignment Principle 4 Motivate to Make Strategy Everyone’s Job 1 Strategic awareness created 2 Personal goals aligned 3 Personal incentives aligned 4 Competency development aligned. Planning and Control Alignment Principle 5 Govern to Make Strategy a Continual Process Planning Process 1 Initiative planning 2 Integrated HR/ IT planning 3 Budget linkage Operations Management 1 Process improvement 2 Initiative management 3 Knowledge sharing Learning and Control 1 BSC reporting system 2 Strategy review meetings.

Remember with business improvement there is no finish line! BMG343J4

DID WE ACHIEVE ANY OF OUR OBJECTIVES? By the end of these sessions you will be able to: identify and evaluate customer service critical success factors discuss the factors taken into account when determining team performance objectives outline the process involved in performance setting identify a range of business improvement tools and techniques critically evaluate business improvement initiatives suggest how business improvement initiatives might be applied to own organisation. BMG343J4      

Managing Operations Generic

More Related Content

What's hot (18)

Viewers also liked (6)

Similar to Managing Operations Generic (20)

Recently uploaded (20)

Managing Operations Generic

Editor's Notes