PowerPoint Presentations 18

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18.1
Chapter 18
Operations improvement
Pearson Education Ltd. Naki Kouyioumtzis
18.1
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.2
Operations improvement
Operations
strategy
Design
Operations
management Improvement
Planning
and control
18.2
Operations
improvement
makes processes
better
Organizing for
improvement
Risk
management
stops processes
becoming worse
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.3
Key operations questions
In Chapter 18 – 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?
18.3
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.4
The Red Queen effect
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!
18.4
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.5
What are the key elements of operations improvement?
The ‘elements’ that are the building blocks of improvement include:
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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.
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.6
Four broad approaches to managing improvement
Business process reengineering (BPR) – a radical approach to
improvement that attempts to redesign operations along customerfocused 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.
18.6
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
BPR advocates reorganizing processes to reflect the natural
processes that fulfill customer needs
18.7
Functionally-based processes
Function 1
Function 2
Function 3
Function 4
18.7
End-to-end process 3
Customer needs fulfilled
End-to-end process 2
Business processes
Customer needs
End-to-end process 1
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.8
Some of the elements of improvement approaches
Emphasis on
rapid change
End-to-end
processes
Lean
18.8
Radical/
breakthrough
improvement
Six Sigma
Process based
analysis
Customer
centric
Emphasis on
solutions – what
to do
Business process
reengineering (BPR)
Evidence-based
decisions
Emphasis on
methods – how
to do it
Systems and
procedures
Synchronized
Reduce
flow
variation
Emphasis
on
Waste
education Perfection
identification
is the goal Improvement
Customer
Include all
Continuous
cycles
relationships
people
improvement
Total quality
management
(TQM)
Emphasis on gradual
change
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
Innovation or ‘breakthrough’ improvement versus Kaizen or
continuous improvement
18.9
Innovation
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Kaizen
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
Timeframe
Change
Involvement
Approach
Mode
Spark
Capex
Maintenance
Focus
Evaluation
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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
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.10
Two improvement cycles
The plan–do–check–act, or ‘Deming’ improvement cycle, and
the define–measure–analyze–improve–control, or DMAIC
six sigma improvement cycle.
Define
Plan
Do
Control
Act
18.10
Check
Improve
Measure
Analyze
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.11
The DMAIC cycle
The DMAIC
cycle
Define–identify
problem, define
requirements and set
the goal
Control–establish
performance
standards and deal
with any problems
Improve–develop
improvement
ideas, test,
establish solution
and measure
results
18.11
Measure–gather data,
refine problem and
measure inputs and
outputs
Analyze–develop
problem hypotheses,
identify ‘root causes’
and validate
hypotheses
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.12
Breakthrough improvement
‘Breakthrough’ improvement, does not always deliver
hoped-for improvements.
Performance
Planned ‘breakthrough’
improvements
Actual improvement
pattern
Time
18.12
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.13
Continuous improvement
Continuous improvement
Performance
Continuous improvement
Standardize and maintain
Improvement
Time
18.13
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.14
Continuous improvement (Continued)
Continuous improvement
Performance
PDCA cycle repeated to create continuous improvement
Plan
Act
Do
Check
Time
18.14
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.15
Combined improvement
Performance
Combined improvement
Combined
‘breakthrough’ and
continuous improvement
Time
18.15
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.16
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.
18.16
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010
18.17
Some common techniques for process improvement
Input/output analysis
Flow charts
Scatter diagrams
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Input
Output
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Cause–effect diagrams
Pareto diagrams
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Why–why analysis
Why?
Why?
Why?
18.17
Slack, Chambers and Johnston, Operations Management, 6th Edition,
© Nigel Slack, Stuart Chambers, and Robert Johnston 2010

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