BUSSINESS PHILOSOPHIES

INTRODUCTION

Quality capability is understood as the ability of the organization to produce products which fulfill quality requirements.

- fulfill the quality requirements during all phases of the product life cycle, also from an economical point of view.

- processes must be effective and efficient

Quality Management

Q Policy Q Planning Q Control

Q Assurance Q Improvement

. objectives . products . process control

. Q Management

. process improvement

. responsibilities

. procedures

Demonstration

.objective evidence

THE PROCESS CONCEPT

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Inputs PROCESS Outputs

1 TQM PRINCIPLES

The principles of totals quality management (TQM) are:

Customer orientation

- knowledge over and fulfillment of customer requirements (internal and external)

- everyone is responsible for his customer-supplier-relationship (integral concept)

Management behaviour

- to set examples, to convince and to motivate internally and externally- to manage towards quality-conscious thinking and behaviour

Preventive behaviour

- to avoid mistakes during all work activities (added value)- through quality strategy (target, achievement of target, control)

Process orientation

- continuous improvement of processes and operations (kaizen)- achieving better results by involving all employees in the continuous

improvement of processes.

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2 MANAGEMENT PROGRAMS

2.1 Total Quality Management (TQM)

As already described, TQM is an integrative business philosophy which places customer orientation and added value in the centre.

Added value is increased through avoidance of failures (prevention) and continuous improvement(process orientation).

Management is focused on strengthening the personal responsibility of all personnel.Human potential is utilized through teamwork and promotion of systems-thinking (thinking in terms of processes and effects, and customer-supplier relationships).

TQM integrates examples are Kaizen, CIP, Time Based Managements, Customer Focus, Project and Process Management, Lean Management.

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REENGINEERING

Purpose

Fundamentally rethink and radically redesign business processes to achieve dramatic improvements in critical measures of performance such as cost, quality, service, and speed.

DESCRIPTION

Driving the reengineering initiative: (1) customers, (2) competition, (3) change.The objective is to start over, with the expectation of producing a quantum leap in performance.

NOTES

50% to 70% redefinition efforts do not produce the dramatic results expected. Many common errors in reengineering:

1. Attempts to fix a process instead of changing it.2. A lack of focus on business processes.3. Ignoring everything except process design—everything associated

with the process must be refashioned in order to support the business system.

4. A failure to consider people’s values and beliefs.5. A willingness to settle for minor results.

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6. Giving up too soon.7. Placing prior constraints on the definition of the problem and the

scope of the Re-engineering effort.8. Allowing existing corporate cultures and management attitudes to

prevent reengineering from getting started.9. Attempting to make reengineering happen from the bottom up,

rather than from the top down.10. Assigning someone who does not understand reengineering to

lead the effort.11. Limiting the resources devoted to reengineering.12. Burying reengineering in the middle of the corporate agenda.13. Dissipating energy across a great many reengineering

projects.14. Attempting to reengineer when the CEO is 2 years from

retirement.15. Failing to distinguish reengineering from other business

improvement programs.16. Concentrating exclusively on design.17. Trying to make reengineering happen without making

anybody unhappy.18. Pulling back when people resist making reengineering

changes.19. Dragging the effort out than necessary.

Re-engineering(also known as Process Re-engineering or Change Management)drastic performance improvement through unconventional analysis, consideration and re-organization

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Functional orientation is replaced by process orientation: cross-functional management teams are directed towards the central processes in the organization. The manager becomes a change agent who introduces creative change.

- to be innovative and to think in cycles (e.g. production cycles) and to think laterally

- to act globally, towards international marketing;- to be customer orientated, also internally;- to think of profit instead of turnover, to have knowledge of

business economics - to continuously renew project teams and network structures,

ensure flexibility, fast reaction- to think as an entrepreneur- to be an entrepreneur within the organization

(entrapreneneurship);- to attain more competency as a project leader and copy to apply it;- to be successful rather than being right, to think positively.

Successful reengineering leads to several common results:- Changes from functional departments to process teams- Job focus changes from simple tasks to multidimensional work.- People empowered, controlled- Job preparation changes from training to education- Performance measures changes from activity to results.- Advancement criteria change from performance to ability- Values changes from protective to productive- Organizational structure changes from hierarchical to flat.- Executives change from scorekeepers to leaders.

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Implementation is done from the top, employees do not make any input at conception of the re-organization activities, usually implemented only in crisis times.

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CONCURRENT ENGINEERING

PURPOSE

Concurrent engineering is to focus a multidisciplinary task force on product and process definition and design so as to shorten lead time and result in fewer changes beyond the definition and design phases.

Parallel engineering or simultaneous engineering-Task force –remains permanent in the sense that it typically remains in force for the duration of the project.

Consist of people with expertise in product design, manufacturing, marketing, purchasing, and finance, as well as principal vendors.

Goal of concurrent engineering:- is to cut time to market as bringing improvements in product

design, quality, ease of manufacture, and performance in field.- gains are cited:

reduced concept-to-production time, life-cycle cost reductions, reduced assembly, reduced parts counts.

Vital elements:1. multidisciplinary task force2. product definition in customer’s terms3. parameter design to ensure optimization of quality4. design for manufacture

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5. design for development of product, equipment, processes, qc and marketing.

Value Analysis – Value Management

- a system for the solution of complex problems which cannot be not completely be approached with algorithms. It involves the application of systems elements method, behavior and management, and considers the mutual influence of these elements on the objective to optimize the results.

Single System Sourcing and Global Sourcing

- is to reduce the number of suppliers- reliable and capable system suppliers are selected- development -partnership- globally selected to ensure independence of local developments

Customer Focus

- programs aimed at customer satisfaction. All processes affecting the customer are the focus of attention, to check whether they run optimally, new customers are gained, existing customer also retained (pro-active)

Environmental Management- protecting the environment, preserving the ecological balance.

Pressure on the environment is minimized through reducing waste, saving energy, recycling and responsible processing of raw material.

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- actual savings are brought about through processes being thoroughly analysed

- image of the organization is also improved.

Lean Management

- started of Toyota, Lean Production – focuses on time, cost savings, replace blind performance with purposeful value adding, achieved by optimization and rationalization of structure and processes

Organization-wide, reducing development, Engineering and lean processes (Just in time)

Continuous improvement where small, continuous improvement steps form a continuous improvement process (CIP)

Muda = wastage of time/money

Muri = overloading

Mura = deviations

Poka-Yoke are failures due to human shortcomings ….must prevented or discovered at an early stage.

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Time Based Management

- focuses on the creation of maximum value at minimum cost and in the shortest possible time

- activities not contributing, eliminated thereby reducing cycle time.- “closed loop team” – experts and decision makers- above responsible for managing the project and taking and

implementing decisions- “breakthrough teams” responsible to determine important problem

solutions, guide the implementation thereof, similarto Re-engineering

Just in time stock capacity and costs are minimized and processing time is reduced

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MISTAKEPROOFING (POKA-YOKE)

PURPOSEProactively ensure that events will happen as planned, as well to prevent unintended events from happening.

DESCRIPTION

- on Shingo’s manufacturing initiatives, as a systematic initiative to eliminate defects

- based series of 100% source inspections,- the zero quality control system

Principles:1. Use source inspection- control where defects originate2. Always use 100% source inspections rather than sampling3. Minimize the time to carry out corrective action when

abnormalities appear4. Set up poke-yoke (mistake proofing) devices, such as sensors and

monitors, according to product or process requirements

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Strategy and Focus (Principle) Objective ExampleElimination: Technology (selection/development)Design out (hazards/threats)

Eliminate the possibility of the error

Redesign so that task is no longer required.Alternative materials, productionMechanization, automation

Replacement: Substitute more reliable process for worker

Use robotics in welding or painting

Facilitation Make work easier to perform Colour coding parts

Prevention:Design in (redundancy/barriers/safeguards)Methods (operating procedures)

Controls, shields, guardsTraining, operating displays, labels

Detection:Warning (predictive/corrective)Fail-safe (shutdown/minor damage)

Detecting error before further processing

Warning displays, horns, lights, odorsMechanical, electrical fuses, emergency shutdown

Mitigation:Loss control:Containment (system damage)Isolation (system damage)

Catastrophe management (system and extended loss)

Minimizing the effect of error FusesPersonal protection and restraints, crush zoneSingle-system incident, harmless environmental releaseMultiple-system incident, harmful environmental releases

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5-S movement:

Seiri (sort)- omitting unnecessary work-in-progress, tools, machinery, defective product, unnecessary documents papers

Seiton (set in order)- Label things so they are easy to identify; things organized

Seiso (shine)- Maintain a clean workplace, a proactive system for maintenance.

Seiketsu (standardise)- A clean and neat person; best-practice methods

Additional S : shituke.Shituke. Be well mannered.

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BENCHMARKING

PURPOSELearn from others, seek out, study, and emulate the best practices associated with high performance/results___ so as to enhance or better our own performance.

Description

Benchmarking encompasses four issues: (1) analyze the operation, (2) know the competition and industry leaders, (3) incorporate the best of the best, and (4) gain superiority.

Six phases in benchmarking: (1) preplanning, (2) planning, (3) analysis, (4) integration, (5) action(6) maturity

Planning involves identifying the focal process, comparative organizations, and data needs.Analysis involves data collection, the assessment of performance gaps, and projections and targets for the future performance.

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Integration involves communicating findings, establishing functional goals, and gaining acceptance thereof. Action consists of developing action plans, implementation, and monitoring and measuring progress, as well as recalibrating the benchmarks when necessary. Maturity refers to establishing and maintaining the permanency of benchmarking in the corporate culture.

The driving force is profit-oriented, as addressed through three parameters: (1) quality beyond that of competitors, (2) technology before that of competitors (3) costs below those of competitors.

4 types of benchmarking:Internal- Internal benchmarking focuses on the best practices within our organization.

Competitive - Competitive benchmarking provides a comparison between direct competitors.

Functional - Functional benchmarking refers to comparisons of methods across organizations executing the same basic functions, outside our industry.

Generic - Generic process benchmarking focuses on innovative work processes in general, wherever they occur.

We recognize performance gaps and address them with improvement plans.

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Phases in benchmarking

Steps Description

Preplanning Assess and understand customer needs and business results/outcomes desired.

Planning Identify what is to be benchmarked Identify comparative organizations

Determine data collection method and collect data

Analysis Determine current performance gap Project future performance levels/goals

Integration Communicate findings and gain acceptance Establish functional goals

Action Develop action plans Implement specific actions and monitor progress Recalibrate benchmarks

Maturity Attain a leadership position

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Integrate benchmarking practices into processes

CONTINUOUS IMPROVEMENT

PURPOSE

Provide an environment that encourages incremental change- though collaborative efforts of managers and workers

Description

- empowers the work force- small work or improvements teams, focused on problems and

challenges - involving everyone

Three levels of activities are recognized:(1) perceptiveness(2) idea development(3) decision/implementation

- process focus rather than a product focus- Kaizen, tied to the Deming plan-do-check

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Preparation involves training in interpersonal communications, meeting and team building skills

Hierarchy of Kaizen involvement

Top Management Middle Management Supervisors Workers Be determined to Deploy and implement Use Kaizen in functional Engage in Kaizen introduce Kaizen as a Kaizen goals as direct role and provide through the suggestionCorporate strategy by top management Kaizen suggestions system and small-

through policy group activities deployment and cross- functional management

Provide support and Use Kaizen in functional Formulate plans for Practice discipline indirection for Kaizen by capabilities Kaizen and provide the workshopallocating resources guidance to workers

Establish policy for Establish, maintain, and Improve communication Engage in continuousKaizen and cross- upgrade standards with workers and self-development tofunctional goals sustain high morale become better problem solvers

Realize Kaizen goals Make employees Support small-group Enhance skills andthrough policy Kaizen-conscious activities (such as job performancedeployment and audits through intensive quality circles) and the expertise with training programs individual suggestion cross-education System

Build system, Help employees Introduce discipline inprocedures, and develop skills and tools the workshopstructures conducive for problem solving to Kaizen

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Kaizen Innovation

Effect Long-term and long-lasting but undramatic Short-term but dramatic

Pace Small steps Big steps

Time frame Continuous and incremental Intermittent and non-incremental

Change Gradual and constant Abrupt and volatile

Involvement Everybody Select few “champions”

Approach Collectivism, group efforts, systems approach Rugged individualism,individual Ideas and efforts

Mode Maintenance and improvement Scrap and rebuild

Spark Conventional know-how and state of the art Technological breakthroughs, new Inventions, new theoriesPractical requirements Requires little investment but great effort Requires large investment but little To maintain it effort to maintain it

Efforts orientation People Technology

Evaluation criteria Process and efforts for better results Results for profits

Advantage Works well in slow-growth economy Better suited to fast-growth economy

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FIFTH DISCIPLINE

PURPOSE

Fifth Discipline is to describe the concept of a “learning” organization and encourage transformations towards “learning” organizations.

DESCRIPTIONEssential elements for building the learning organization. - systems thinking - learns faster than competing organizations

- Focus on how we think and how we interact - Personal mastery- Focusing energy, developing patience- Viewing reality objectively- clarifying personal vision, holding creative tension in terms of

focusing on the result and current reality, and making choices- Use mental models to help to focus - Allow freedom of choice- Team learning – collective intelligence

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THEORY OF CONSTRAINTS

PURPOSE

(TOC) is to expose and address the limiting factor in a production system, such that the constraint’s negative impact on production can be eliminated.

- initiative focuses on locating constraints and breaking them- must readily identify our overall goals- then drives the decisions we make and everything we do as a

result of the decision- discovery of the core problem

Summarized TOC principles

Principles

-Systems thinking is preferable to analytical thinking-An optimal system solution deteriorates over time as the system’s environment changes.

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-The system optimum is not the sum of the local optima (of the parts)-System are analogous to chain—each has a weakest link.-Strengthening of any link in a chain, other than the weakest link, does nothing to improve the strength of the chain-Knowing what to change requires an understanding of the system’s current reality and its goal, and the difference between the two.-Most of the undesirable effects within a system are caused by a few core problems.-Core problems manifest themselves through undesirable effects (UDEs), the causes of which are never readily apparent.

-Elimination UDEs provides a false sense of security, while solution of a core problem simultaneously eliminates all resulting UDEs- Core problems are usually perpetuated by a hidden or underlying conflict; resolution of a core problem typically requires challenging the assumptions underlying the conflict and invalidating at least one.-System constraints can be of a physical or a policy nature.-Inertia is the worst enemy of a process of ongoing improvement—solutions tend to assume a mass of their own that resists further change.-Ideas are not solutions.

TOC tree structureWhat to change?What to change to ?How to cause the change ?

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CYCLE TIME/WASTE REDUCTION

PURPOSE

- cycle time/waste reduction is to lower the time and resources required for any and all activities within the confines of a production system from the identification of customer needs to the receipt of customer payments.

DESCRIPTION

- two types of activities in production systems:

(1) value-added activities(2) non-value-added activities- eliminate non-value-added activities

For example, tool changeovers, rework, parts shortages, travel time, downtime, and so on all add Unnecessarily to cycle time.

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- services such as sales order changes, engineering changes, engineering changes, clerical delays, and so onadd unnecessarily to business cycle time.

Several steps are suggested in order to reduce cycle times:

1. Identify the process/activity to improve.2. Establish a baseline cycle time/resource level.3. Propose process improvements.4. Evaluate the proposed improvements.5. Implement the selected improvement.6. Assess the effectiveness of the implemented improvement.

NOTES

- 90% of existing activities are nonessential and can be eliminated

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