1. Operational Excellence Maturity Review ‘OEMR’-Model
Maturity of the Demand Supply Chain
Minna Kärkkäinen
Ville Isoherranan
Pekka Kess
Student 1
Student 2
Student 3
Student 4
Student 5

2. MATURITY MODEL Background to the evaluation of production excellence
Maturity models describe the maturity level in which an organization or a process is as well as what does it require to achieve the next maturity level
In order to achieve a higher maturity level the organization or the process has to fulfill the requirements of the lower levels.
This model is based and is in line with several maturity models:
CMM
Fisherin BPMM
Hammerin PEMM
Harmon BPM
OMG’s BPMM
Minna Kärkkäinen / Pekka Kess

3. Structure of the model: 6 process factors
Defining the processes
Skills of the employees
Process management
Process performance measurement
Process optimization
IT systems and integration
Minna Kärkkäinen / Pekka Kess

4. Structure of the model: 6 Process factors
Minna Kärkkäinen / Pekka Kess
Etunimi Sukunimi

5. Process factors 1. Defining the process 2. Skills of the employees 3
Process factors 1. Defining the process 2. Skills of the employees 3. Process management 4. Process performance measurement 5. Process optimization 6. IT systems and integration
Defining the process:
Has the process been defined and documented?
What sub-processes and tasks are included?
What work is included?
What skills and knowledge are needed to execute the process?
Are the related job descriptions in place?
How the process is integrated to other core processes of the organisation?
Minna Kärkkäinen / Pekka Kess

6. Process factors 1. Defining the process 2. Skills of the employees 3
Process factors 1. Defining the process 2. Skills of the employees 3. Process management 4. Process performance measurement 5. Process optimization 6. IT systems and integration
Skills of the employees:
How extensively the employees master their work required in the process?
How well they master the work of others in that process?
How well the employees know and understand the process their are working in?
How well the employees can improve the performance of the process?
Has the organisation taken any steps in knowledge management?
Are the job descriptions and work instructions in place?
Can the employees use tools for process improvement?
Minna Kärkkäinen / Pekka Kess

7. Process factors 1. Defining the process 2. Skills of the employees 3
Process factors 1. Defining the process 2. Skills of the employees 3. Process management 4. Process performance measurement 5. Process optimization 6. IT systems and integration
Process management:
How and in which ways the process is managed?
Is the process manager aware of the various aspects of the process performance and process improvement?
How well those in charge can utilize process management techniques related to improvement, re-engineering, predictability, reliability?
Minna Kärkkäinen / Pekka Kess

8. Process factors 1. Defining the process 2. Skills of the employees 3
Process factors 1. Defining the process 2. Skills of the employees 3. Process management 4. Process performance measurement 5. Process optimization 6. IT systems and integration
Process performance measurement:
Are any metrics defined for the processes? Any metrics to measure the performance?
Are the measurements in line with the customer requirements and with the company strategy as well as company goals?
Is measurement data collected and analysed? Are statistical methods used?
Minna Kärkkäinen / Pekka Kess

9. Process factors 1. Defining the process 2. Skills of the employees 3
Process factors 1. Defining the process 2. Skills of the employees 3. Process management 4. Process performance measurement 5. Process optimization 6. IT systems and integration
Process optimization:
What is done with the collected measurement data?
Is process optimized based on the measurement data. Or is the optimization done only in case-by-case situations (like in crisis)?
Are all processes optimized?
Are integrated processes optimized?
Are the processes designed/optimized to fit into the IT systems?
Minna Kärkkäinen / Pekka Kess

10. Process factors 1. Defining the process 2. Skills of the employees 3
Process factors 1. Defining the process 2. Skills of the employees 3. Process management 4. Process performance measurement 5. Process optimization 6. IT systems and integration
IT systems and integration:
How information is shared between departments?
Is data/information accurate (real time) and reliable?
How (what type of systems) are the IT systems of the organisation? Do every department have their own systems or is there a company wide system?
Minna Kärkkäinen / Pekka Kess

11. Levels of the maturity model 1. Ad hoc / Initial level and isolated 2
Levels of the maturity model 1. Ad hoc / Initial level and isolated 2. Defined ja integrating operationally 3. Process orientation and managed 4. Optimized and standardized process flow 5. State of continuous improvement smart operating network
Ad hoc /Initial level and isolated
The definition of the processes and tasks is very limited
Processes are isolated
Processes are managed in individual styles
No team work across departmental borders
No measures, no data collection and no analysis of the performance
Independent information systems – no integration
Minna Kärkkäinen / Pekka Kess

12. Levels of the maturity model 1. Ad hoc /Initial level and isolated 2
Levels of the maturity model 1. Ad hoc /Initial level and isolated 2. Defined ja integrating operationally 3. Process orientation and managed 4. Optimized and standardized process flow 5. State of continuous improvement smart operating network
Defined and integrating operationally
More extensive process identification and definition
More extensive process integration
Department wide team work is used more often
Some techniques used to improve processes performance
Creation of stable work environment
Some data collection and analysis is used
Basic measurements are in place
IT systems integrated to some extent but not completely
Minna Kärkkäinen / Pekka Kess

13. Levels of the maturity model 1. Ad hoc /Initial level and isolated 2
Levels of the maturity model 1. Ad hoc /Initial level and isolated 2. Defined ja integrating operationally 3. Process orientation and managed 4. Optimized and standardized process flow 5. State of continuous improvement smart operating network
Process orientation and managed
Most processes are defined
Processes are integrated into other processes and inti line organisation (departments)
Teams across departments are trained to team work
Process management is done using bes available methods to improve process performance
Process performance is measured by collecting and analysing data
Measurements are based on customer requirements
Process manager establishes priorities
Departments in charge of the core processes have a common IT system (ERP)
Minna Kärkkäinen / Pekka Kess

14. Levels of the maturity model 1. Ad hoc /Initial level and isolated 2
Levels of the maturity model 1. Ad hoc /Initial level and isolated 2. Defined ja integrating operationally 3. Process orientation and managed 4. Optimized and standardized process flow 5. State of continuous improvement smart operating network
Optimized and standardized process flow
Processes fully defined
Processes have been standardized
Integration between core processes are strong
Team work between departments is a standard practice
Process team are responsible for the process performance
In management common standards across the company
Performance data is collected and analysed statistically
Measurements are based on the strategy
Core process is designed to integrate with other core processes, which is strongly supported with a common IT system
Minna Kärkkäinen / Pekka Kess

15. Levels of the maturity model 1. Ad hoc /Initial level and isolated 2
Levels of the maturity model 1. Ad hoc /Initial level and isolated 2. Defined ja integrating operationally 3. Process orientation and managed 4. Optimized and standardized process flow 5. State of continuous improvement smart operating network
State of continuous improvement smart operating network
State of continuous improvement
Processes connecting companies are defined
Processes are integrated strongly with processes from other companies in the network
Process teams inlcude members from other companies as well
Process team is responsible of the two way performance measurement
Measurements are defined based on the objectives between companies
Common IT system
Minna Kärkkäinen / Pekka Kess

16. When an organisation moves to the next higher maturity level:
Defining processes increases
Operational integration between departments will increase
Emplyees become more multi skilled.
Team work becomes more common
Team integration between departments will become more extensive
Individuasl management lead towards process management
Process perormance is improved with best possible methods
Processes are measured and the data is collected and analysed
Processes are optimized towards the state of continuous improvement
IT systems are more integrated and more modular
Development towards horizontal process organization
Minna Kärkkäinen / Pekka Kess

17. The goal Evaluation of the processes Process improvement
Skills of employees
Process improvement
IT systems
Process management
Process performance measurement
Process optimization
Minna Kärkkäinen / Pekka Kess

18. Improvement of the company results
Improvement of the performence of the processes
Process improvement
Minna Kärkkäinen / Pekka Kess

19. Production processes Demand supply chain
OUTPUTS
INPUTS
Tärkeää rajata prosessialueet. Mitkä osastot ovat mukana kussakin prosessialueessa/ mitkä prosessit integroituvat toisiinsa
PROCESSES
Minna Kärkkäinen / Pekka Kess

20. Core processes of the demand-supply chain
1. SALES PROCESSES
Customer 1.
Customer relation processes:
Sales processes
Order processes
Customer service
4. PRODUCT DEVELOPMENT PROCESSES 4.
Order
3. PRODUCTION PROCESSES
2. PURCHASES PROCESSES 3. 2.
Production processes:
Production planning
Manufacturing
Delivery
Sourcing / purchases processes:
Purchasing
Inventory management
Supplier network management
Tilaus-toimitusketju jaettu 4 osaan
Delivery
Customer
Minna Kärkkäinen / Pekka Kess

21. Sales processes (N/A in this work)
Sales and marketing processes
Order receiving processes
Customer service processes
Minna Kärkkäinen / Pekka Kess

22. Production processes
Production planning processes, including resource and scheduling planning
Production execution processes where inputs are converted into outputs
Product delivery processes: Operative processes of the inventories as well transportation processes
Production process includes various phases/tasks/actions/work, which interconnect into a production chain. In every stage of the production chain some value is added.
Minna Kärkkäinen / Pekka Kess

23. Purchase processes Materials sourcing processes:
definition of the material specifications
supllier relations, supplier selection, supplier evaluations
purchasing processes
Inventory management processes:
Purchasing tools (ABC analysis, inventory management practices, order-point- techniques
VMI
Minna Kärkkäinen / Pekka Kess

24. Product development processes (N/A in this work)
Product development process with four phases:
Planning
Analysing
Development
Launch
Product development is integral part of the demand supply chain of the company
Minna Kärkkäinen / Pekka Kess

25. -tilaus-toimitusketju, prosessivirta, osastojen integroituminen
Minna Kärkkäinen / Pekka Kess

26. RESULTS State of the process Skills of the employees Team work
IT systems
Skills of the employees
Production
Levels
State of the process
3,50
Skills of the employees
1,67
Team work
3,67
Process management
1,00
Process performance measurement
Process optimisation
IT systems
5,00
Process optimisation
Team work
Process performance measurement
Process management
Minna Kärkkäinen / Pekka Kess

27. LEVEL BASED ON THE SCORE
COMBINED RESULTS
PROCESS AREA
LEVEL
SCORE
LEVEL BASED ON THE SCORE
SALES
2,40
1990,00
3,00
PURCHASES
3,07
1775,00
PRODUCTION
3,31
3310,00
4,00
PRODUCT DEV
2,52
2150,00
COMBINED
2,83
9225,00
SALES
PRODUCT DEVELOPMENT
PURCHASES
PRODUCTION
Minna Kärkkäinen / Pekka Kess
Etunimi Sukunimi

28. Report Table of Contents Intro To process management
To maturity models
Empirical study
Case organisation
Products / industry
Turnover
Number of employees
Maturity assessment
Results
Level
Development ideas
Reliability analysis
Analysis of the tool
Ideas for improvement
Lessons learned
Minna Kärkkäinen / Pekka Kess