MGT 563 OPERATIONS STRATEGIES Dr. Aneel SALMAN Department of Management Sciences COMSATS Institute of Information Technology, Islamabad

Recap Lecture 22 Technology Strategy and Development Technology Generation S Curve of Technology Evolution Dan Tapscott- Four Principles for the Open world

Using Models to Drive Process Improvement

Where are we going? Why? How? Is there something better?

Where are we going? Why? How? Is there something better?

Experience That Is Too Common A 2-year process improvement effort is completed Quickly or slowly, but steadily it begins to fade away A year or so later there is little evidence anything was done!

Why Do Organizations Most Often Do Process Improvement? Follow the leader - Everyone else is doing it A champion - An executive heard about it or read about it somewhere A prod - A customer demands it A cause – If we don’t do something, we won’t survive

Why Should Organizations Do Process Improvement? As a means to achieve organizational goals/objectives derived from strategic plans. Always maintain the link to the goals/objectives and strategies If you don’t, the process improvement effort will not survive an economic downturn or the loss of the key sponsor

Think “Programme Management” My advice to organizations used to be to treat process improvement efforts as a project This may not give enough emphasis to critical success factors Programme management is about tying the improvement effort to the goals/objectives and ensuring that the process capabilities developed return measurable results. For more info, google “OGC Managing Successful Programmes”

Where are we going? Why? How? Is there something better?

Lots Of Ways To Do “It”? SPC TQM ISO 6 Sigma CMMI/SPiCE Lean Lean/6 Sigma Other

Define “Models” What do you think of when you hear the word “Model”? Presidential Citizen’s Medal - Awarded to U.S. citizens who have performed exemplary deeds or services for his or her country or fellow citizens

Process Improvement Models Definition - A model is a collection of process elements and practices that can be used as a pattern for process development and a criteria against which a process can be assessed objectively. Some examples: ISO 9001 CMMI (Capability Maturity Model Integrated) MBNQA (Baldrige Award) ISO (SPiCE)

“Approaches”? Definition - An approach is any methodology or system of tools that is been used to guide problem solving, management, etc. Some examples: TQM 6-Sigma Lean

Look at Models/Approaches Each one developed to: Address a certain principle Resolve a certain issue

ISO 9001 Requirements: 4. Quality management system 5. Management responsibility 6. Resource management 7. Product realization 8. Measurement, analysis and improvement Focus in practice is usually on establishing foundational processes and being able to “Fly the Flag”. Should be used for much more.

CMMI Process areas Requirements Management Project Planning Project Monitoring and Control Supplier Agreement Management Measurement and Analysis Project and Process Quality Control Configuration Management Requirements Development Technical Solution Product Integration Verification Validation Organizational Process Focus Organizational Process Definition +IPPD Organizational Training Integrated Project Management + IPPD Risk Management Decision Analysis and Resolution Organizational Process Performance Quantitative Project Management Organizational Innovation and Deployment Causal Analysis and Resolution 5 Maturity Levels 22 Process Areas Specific Goals Specific Practices Generic Goals Generic Practices Staged Representation Continuous Representation Level 2 Managed Level 3 Defined Level 4 Quantitatively Managed Level 5 Optimizing Focus is on Product Development Process Maturity

CMMI Process areas Requirements Management Project Planning Project Monitoring and Control Supplier Agreement Management Measurement and Analysis Project and Process Quality Control Configuration Management Requirements Development Technical Solution Product Integration Verification Validation Organizational Process Focus Organizational Process Definition +IPPD Organizational Training Integrated Project Management + IPPD Risk Management Decision Analysis and Resolution Organizational Process Performance Quantitative Project Management Organizational Innovation and Deployment Causal Analysis and Resolution 5 Maturity Levels 22 Process Areas Specific Goals Specific Practices Generic Goals Generic Practices Staged Representation Continuous Representation Level 2 Managed Level 3 Defined Level 4 Quantitatively Managed Level 5 Optimizing Focus is on Product Development Process Maturity

MBNQA (and MQLA) 7 Categories (1,000 pts. Total) Leadership (120 pts.) – Sr. leaders, governance, ethics Strategic Planning (85 pts.) – Strategic objectives, action plans, deployment Customer and Market Focus (85 pts.) – Customer, customer, customer Measurement, Analysis, and Knowledge Management (90 pts.) – Data availability/usage/ communication, systematic performance improvement Workforce Focus (85 pts.) – High performance, alignment, capability, capacity Process Management (85 pts.) – Core competencies, work systems, customer value, sustainability Results (450 pts.) – Outcomes, performance, process effectiveness, customer- focused, financially-focused, workforce-focused, leadership driven Focus is on Business Excellence

SPiCE (ISO/IEC 15504) European answer to CMMI Process Reference Model (PRM) and Process Assessment Model (PAM) Domain specific (e.g. Automotive SPiCE – software development only for the auto industry) Focus on process maturity and continuous improvement with customization to specific domains.

ISO/IEC (SPiCE)

Automotive SPiCE (European Auto Mfrs.)

HIS (basically German Auto Mfrs.) Scope

TQM "TQM is a management approach for an organization, centered on quality, based on the participation of all its members and aiming at long- term success through customer satisfaction, and benefits to all members of the organization and to society." ISO 8402:1994 Focus is in involving everyone and all aspects of the business in problem solving.

6-Sigma Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit). DMAIC (problem solving approach) Specialists – black belts and green belts Focus on eliminating sources of error/variation with emphasis on the financial impact.

Lean A practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful, and thus a target for elimination. Focus on cutting waste

Where are we going? Why? How? Is there something better?

Pros and Cons What are your goals/objectives and strategies? What’s your SWOT look like? What are your “Pain Points”? What do your customers want/demand? What is your corporate culture?

Why do we put blinders on? Is your organization the same as that of the developers of any of these models? Do your needs match theirs? It’s easy to take what worked for them and apply it (as is) in your organization – We don’t have to think! No analysis required! Does it make sense?

Toolboxes

Match Process Improvement Methods to Needs Model/ApproachFocus ISO 9001 Usually establishing foundational processes and being able to “Fly the Flag” CMMI Product Development Process Maturity MBNQA Business Excellence SPiCE Process maturity and continuous improvement with customization to specific domains. TQM Involving everyone and all aspects of the business in problem solving. 6-Sigma Eliminating sources of error/variation, emphasis on the financial impact. Lean Focus on cutting waste

How Can the Organization Realize the Greatest Benefit? Good - Which of the models/ approaches seems to be the best fit or already has a champion? Better – What combination of elements from them will give the strongest/quickest benefits short term? Best – How is the choice going to help us reach our goals/objectives, achieve our goals long term?

How do you decide? What methods would you suggest? Look at things like decision matrix, force field analysis, mind maps, etc.

Conclusions 1.Program Management – Strategies  Process Improvement  Outcomes 2.Don’t get hung up on one methodology Don’t just “Study to the test” Think “toolboxes” 3.Look at the needs/benefits Stop focusing on the model/approach They are just tools

Final Recommendation Remember Deming’s 1 st Point “Constancy of purpose” Roudabush (plagiarized) paraphrase - “Keep On, Keepin’ On!”