DS Busuit - Premium Business Template for Joomla!

English (United Kingdom)简体中文

RSS

Operations Management Methodologies (such as Six Sigma) for the Broader Business Context PDF Print E-mail
Written by Kek Sei Wee   
Monday, 11 May 2009 10:12

We have been seeing increasing organizations that have approached us to come from the non-traditional manufacturing based environment. This includes non manufacturing businesses (eg. health care, financial services, government, non profit) and non manufacturing functions in manufacturing firms (eg. accounts, HR, legal). In the shift of the economy from being manufacturing based to being service based, profitability of organization is derived beyond simply in the effective management of operations on the factory floor. A major portion of the processes, people and technology that determines the success of organizations today lie beyond manufacturing. 

The concepts and frameworks behind operations management is increasingly being recognized as an effective enabler for improving business performance. This is especially important for non manufacturing organizations, which may not have the legacy of a continual improvement culture. For example, Six Sigma can be adopted as an initiative to guide improvement strategy and overall process management system. Six Sigma uses many individual tools that includes process mapping, cause-effect matrix, measurement system analysis, failure modes and effect analysis (FMEA), multi-vari study, design of experiments and control plans, that are linked in the DMAIC (define, measure, analyze, improve, control) framework to ensure proper integration. The strategic deployment of an operations management methodology like Six Sigma will be useful in all broadened aspects of business operations. But it will be critical that the road map be customized based on each organization’s goals and objectives, characteristics of culture, nature of processes, and background and skills of employees; and the existing infrastructure and management systems.

With the successful implementation of such methodologies for manufacturing improvements, let us review some challenges and enablers that will ensure that it can be just as rewarding if adopted in a wider business context:


Barriers
•    Lack of tangible product, difficult to see processes used to provide services (output)
•    Lack of process view of the work. In manufacturing it is easy to visualize the process
•    Lack of improvement culture or mindset. Eg. Hospital nurses not expected or legally allowed to develop or improve standard medical procedures; Accounts are responsible to adhere to GAAP, rather than improving it
•    Lack of prevalent need or drive to improve. Eg Government sector which are isolated from competition
•    Lack of defined measurement system
•    Lack of standardized work process
•    Greater human element

Lessons taught from manufacturing environment
•    All work occurs through process
•    Processes contains information and data that be measured and used to improved them
•    All processes contains “hidden factories that add cost and reduce output
•    All processes involve people, machine, materials, measurement, methods and environment
•    Undesired variation is a common source of process problems

Critical enablers
•    Clear and unwavering management support, executive sponsorship and leadership
•    Commitment to required resources
•    Supportive infrastructure (organization structure, training system)
•    Adopting process thinking
•    Adopting statistical thinking towards quality
•    Eliminating the “it does not apply to us” mentality
•    Reward and recognition of success
•    Insistence on tangible results

Common reasons for failures
•    Fuzzy objectives
•    Too many objectives
•    Poor metrics (think CTQ, KPOV, KPIV)
•    Not tied to financial
•    Too broad a scope
•    Pre-identified solution
•    Weak connection to strategic directions

Key Priorities
•    Customer satisfaction
•    Quality of product / service
•    Timeliness / speed / convenience
•    Cost
Last Updated on Wednesday, 09 December 2009 11:41