Operation technology and information sysytem
Mira15
operations_improvement_2.pptxOperations Improvement
BUS255
Goals
By the end of this chapter, you should know:
Importance of Operations improvement
Improvement Techniques
Broad approaches to improvement
Elements of Improvement
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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
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Think about examples!
Automotive sector
Telecommunications sector (cell phones)
Implications
Operations Improvement is necessary to retain competitive position
Greater operations improvements (comparatively) are necessary to improve competitive position
Improvement Techniques
Scatter Diagram
Scatter Diagram: A graph of the value of one variable vs. another variable
Absenteeism
Productivity
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Scatter Diagram
Help us understand the relationship between variables (tool to generate ideas)
Remember, correlation doesn’t mean causation
X and Y have positive relationship doesn’t necessarily mean X causes Y.
Refer to in-class problem # 1
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Flowchart
Flowchart (Process Diagram): A chart that describes the steps in a process. It is also called as process map.
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Flow Chart
MRI Flowchart
Physician schedules MRI
Patient taken to MRI
Patient signs in
Patient is prepped
Technician carries out MRI
Technician inspects film
If unsatisfactory, repeat
Patient taken back to room
MRI read by radiologist
MRI report transferred to physician
Patient and physician discuss
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10
20%
9
8
80%
1
2
3
4
5
6
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Flow Chart
Flowcharts are vey useful in visually describing processes (tool to organize data)
Refer to in-class problem # 2
Let’s do it in Visio
Cause and Effect Diagram
Cause-and-Effect Diagram: A tool that identifies process elements (causes) that might effect an outcome. Also called Fishbone diagram or Ishikawa diagram.
Cause
Materials
Methods
Manpower
Machinery
Effect
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Cause-and-Effect Diagram
Material
(ball)
Method
(shooting process)
Machine
(hoop &
backboard)
Manpower
(shooter)
Missed free-throws
Rim alignment
Rim size
Backboard stability
Rim height
Follow-through
Hand position
Aiming point
Bend knees
Balance
Size of ball
Lopsidedness
Grain/Feel (grip)
Air pressure
Training
Conditioning
Motivation
Concentration
Consistency
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Cause-and-Effect Diagram
Very helpful for performing root cause analysis. Can also identify areas where further data is needed (tool to generate ideas)
Most used categories: Machinery, Manpower, Materials, Methods, and Money
Other categories can also be used
Refer to in-class problem # 3
Pareto Chart
A graph to identify and plot problems or defects in descending order of frequency
Frequency
Percent
A B C D E
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Pareto Charts
Number of occurrences
Room svc Check-in Pool hours Minibar Misc.
72% 16% 5% 4% 3%
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4
3
2
54
– 100
– 93
– 88
– 72
70 –
60 –
50 –
40 –
30 –
20 –
10 –
0 –
Frequency (number)
Causes and percent of the total
Cumulative percent
Data for October
Pareto Chart
Pareto analysis is based on “relatively few causes” explaining the “majority of effects”
Helps differentiate between “vital few” issues and “trivial many”
A good tool to organize data
Let’s work on problem # 4 of in-class exercise
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Four broad approaches to improvement
Total Quality Management (TQM)
Puts quality and improvement at the heart of everything that is done by an operation.
Meet the needs and expectations of customers
Improvement covers all aspects of a company
Improvement includes every person in a company
Getting things “right first time”
Develop the systems and procedures
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Lean or Just-in-time (JIT) approach
An approach to meet demand instantaneously, with perfect quality, and no waste .
Customer-centricity
Internal customer-supplier relationships
Perfection is the goal
Synchronized flow
Reduce variation
Include all people
Waste elimination
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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.
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BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs
Function 1
Customer needs fulfilled
Functionally-based processes
Function 2
Function 3
Function 4
Business processes
End-to-end process 1
End-to-end process 2
End-to-end process 3
Customer needs
Business Process Reengineering (BPR)
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BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs
Before BPR
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BPR advocates reorganizing processes to reflect the natural processes that fulfill customer needs
After BPR
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Six Sigma
Two meanings
Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)
A program designed to reduce defects, lower costs, save time, and improve customer satisfaction
A comprehensive system for achieving and sustaining business success
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Six Sigma
Two meanings
Statistical definition of a process that is 99.9997% capable, 3.4 defects per million opportunities (DPMO)
A program designed to reduce defects, lower costs, save time, and improve customer satisfaction
A comprehensive system for achieving and sustaining business success
Mean
Lower limits
Upper limits
3.4 defects/million
±6
2,700 defects/million
±3
Six Sigma Program
Originally developed by Motorola, adopted and enhanced by Honeywell and GE
Highly structured approach to process improvement
A strategy
A discipline – DMAIC
Let’s work on a problem
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Strategy: Because it focuses on total customer satisfaction
Discipline: Because it follows DMAIC model of improvement
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Six Sigma
Defines the project’s purpose, scope, and outputs, identifies the required process information keeping in mind the customer’s definition of quality
Measures the process and collects data
Analyzes the data ensuring repeatability and reproducibility
Improves by modifying or redesigning existing processes and procedures
Controls the new process to make sure performance levels are maintained
DMAIC Approach
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.
You are responsible for this slide. Please read in textbook from p. 84-90.
What are the key elements of operations improvement?
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References
Slack, N., Chambers, S., & Johnston, R. (2010). Operations management. 6th ed. Pearson Education.
Heizer, J. H., & Render, B. (2014). Operations management (11th ed.). Pearson Education.
