Achieving Organizational Excellence Is your organization ready?

Presented by: Milton Krivokuca

How can organizational excellence be accomplished? MSys +MStr + QMS = OE

Where do we begin? Problem or Opportunity? Organizational Assessment

Common Management Systems  MRP (ERP)  JIT (Kanban)  Theory-of Constraints (Drum-Buffer-Rope)  Hybrid Systems

MRP (ERP)  Forward looking system  Predicts the need to manufacture products  Works well in an environment with uncertainty  Effective in handling custom orders and process changes

MRP (ERP)  Highly data dependent  Requires a well established infrastructure

JIT (Kanban)  Almost opposite of MRP  Eliminate or reduce process uncertainty  Very reactive system  Very little preplanning required  Stable and predictable market

JIT (Kanban)  Fails quickly in a highly volatile environment  Extensive product or process changes cannot be handled effectively

Theory-of-Constraints  Basis of identification and effective management of a constraint  Assumes constraint will be identified and managed long enough to be effective

Theory-of-Constraints  Not effective if the constraint cannot be identified or managed  Works better with a more stable process

Hybrid Systems  Combine the most applicable aspects of the MRP, JIT, and TOC to suit your particular situation  Requires an understanding of all three and the ability to effectively implement and manage the hybrid

Organizational Structures  Concepts:  Unity of command  Line and staff authority  Span of control  How work activities are organized:  What product or service is being provided  How customers are being served  What geographic area is covered  What is the product/service to customer process flow

Organizational Considerations  Strategy  Size  Technology  Core Competencies  Regulatory/Legal  Union  Competition  Workforce  Facilities  Environmental factors  Managerial hierarchy

Purpose of a Management System  Implement the chosen strategy of an organization by focusing on resources critical for organizational success  Establish requirements and guidelines that should provide reasonable assurance that outputs from the system will be as expected  Need to align processes to integrated systems of processes providing value to the customer

Management Systems Overview  Core Processes  Key Supporting Processes  Management System

Core Processes  Inputs  Transformation  Outputs

Key Supporting Processes  Maintain the awareness of related processes such a regulatory and various infrastructure related processes  Monitoring and reporting

Management System Reporting Processes  Document control  Record control  Auditing

Quality Management Systems  SPC  TQM  Quality Circles  ISO  Baldrige  Lean  Six Sigma

Statistical Process Control Provides quantitative representative of a process or activity. If you can measure it, you can improve it.

Total Quality Management (TQM):  Customer-focused  Total employee involvement  Process-centered  Integrated system  Strategic and systematic approach  Continual improvement  Fact-based decision making  Effective communication

Quality Circles  Team work  Empowerment  Beginning of systems thinking  Good starting point  Resources in place

ISO  ISO 9000:2000 Series:  Standards and guidelines  Eight principles  Three booklets:  Q Fundamentals and vocabulary  Q Requirements  Q Guidelines for performance improvements  Other ISO 9000 Standards:  Q Environmental  QS9000 (ISO/TS 16949) Automotive  ISO 13485:2003 Medical devices

ISO Other Standards:  JCAHO (healthcare)  NCQA (managed care)  CE mark (product safety)  GMP (medical device, pharmaceuticals, food)  SA8000 (social accountability)  TickIT (software)  SEI capability maturity model (software)

ISO  Data driven  Audit based  Disciplined management system

ISO  Environmental Standard  Good starting point  Regulatory reporting already in place  Not as complex as ISO 9000 series

Malcolm Baldrige Quality Award Seven areas: Leadership Strategic planning Customer and market focus Measurement analysis and knowledge management Human resource focus Process management Results.

Lean  Continuous elimination of waste  Meeting (or exceeding) customer’s expectations for cost, quality, delivery, and suitability of products and services  “Delighting the customer” means providing the best quality, service, and delivery at fair market price

Six Sigma A structured approach (data driven) to improve an organization’s effectiveness and efficiency.

Six Sigma Success Formula  Understand the formula Q x A = E  Define a stakeholder  Understand that resistance to change is natural  Identify four types of resistance  Understand the stakeholder’s involvement  Understand threats to the system from modifications

Organizational Excellence begins with Effective Business Metrics

 What are our business metrics?  What are our measurement criteria?  Do the metrics link to the criteria?  If they do not correlate, what must we change?

MSys +MStr + QMS = OE

MRP/ERPJIT/KanbanTOCHybrid SPCHigh TQMMod Quality Circles LowHighMod ISOHighLow Mod BaldrigeHighMod High LeanLowHigh Six SigmaMod High

Moving forward: Are you able to select and implement the best QMS to align your organization’s system and structure?

Achieving Organization Excellence Questions??

Milt Krivokuca Quality Program Coordinator California State University Dominguez Hills