Question 3 SPC is an operational-level technique of ensuring quality conformance. How many of the benefits of bringing the plant under control would you class as
3. What purpose do the ‘corrective’ decision trees serve in controlling the process?
The ‘corrective’ decision trees provide a means of identifying root causes of a problem and thro- ugh this simple algorithm and the provision of the necessary changes for each cause prevents
‘trial and error’ decisions by operators. By analyzing all the possible types of problems that the process might incur and the solutions for each one, engineers can allow production workers to control the process knowing that, in the main, the right decisions will be made.
C H A P T E R 1 8
Operations improvement Teaching guide
Introduction
Again, this is one of those topics that can be taught either from a general managerial perspective or as a set of techniques. Of course we have to get both perspectives over to the students, the issue is ‘how do we mix these two elements’. Whereas in some topics (such as project management) we have found it useful to start with techniques and then draw the managerial implications out of them, this topic of ‘improvement’ seems to work best the other way round.
Getting straight into improvement techniques without any broad managerial context has not worked particularly well for us. Rather, it is better to discuss improvement generally to begin with. Most students after all have an idea of how important improvement is. Furthermore, they can recognize what improvement actually means. Even in their everyday lives they can see that better scheduling of tasks, routing themselves round the shops in a logical manner, getting things right the first time, providing check lists to stop making mistakes and so on, can all make life easier.
The contrast between the differing philosophies of continuous improvement and breakthrough improvement in particular, can stimulate lively debate. The solid and virtuous approach of continuous improvement, often involving the skills of all people in the operation, versus the drama and glamour of a major breakthrough project can provide very stimulating debate.
Similarly, the topics of performance measurement and benchmarking are both readily understandable even by students with little previous experience, especially if related to everyday life. In a very similar way the idea of trade-offs can be integrated into any treatment of operations improvement.
Key teaching objectives
• To convince students of the fundamental importance of operations performance to any operations manager
• To relate performance measurement and benchmarking both to each other and to the overall topic of operations improvement
• To get over the idea that improvement must be prioritized in some way
• To contrast continuous against breakthrough improvement
• To describe operations in terms of overcoming trade-offs
Nigel Slack, Stuart Chambers & Robert Johnston, Operations Management, fifth edition, Instructor’s Manual
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© Nigel Slack, Stuart Chambers & Robert Johnston 2007
Exercises/discussion points
There are several cases in the companion volume to this book (Johnston, R. et al, 3rd edition, ISBN 0273 65531-0), which can be used to support this lesson. The Eurocamp Travel, Prye and Byll and Runne cases are ideal for this topic.
• Teaching tip – The idea of performance measurement is relatively easy to devise exercises around. For example, get students to identify operations with which they are familiar (fast- food restaurants, shops, public transport systems, etc.) and task them with devising suitable performance measurement systems. This should involve them in deciding on the most important performance objectives for the type of operation, devising performance measures that reflect the performance objectives, debating the most appropriate form of performance standards and then discussing the practical implications of how to make such a performance system work. For example, how often should measurements be taken, who should take the measurements and so on.
• Teaching tip – If you are feeling bold. It asks the students to list ways in which the performance of a university lecturer could be assessed.
• Teaching tip – Get students to devise benchmarking strategies for different types of operations. For example, ‘how could a retail bank benchmark itself against its competitors’ levels of branch service?’
• Exercise – The importance–performance matrix teaches this particularly well. Of all the techniques and approaches described in the book this one is probably the most successful across the broad spectrum of teaching that we do. The technique is only commonsense but the way in which it is structured seems to enable students to understand the nature of prioritization in operations improvement.
• Exercise – An alternative way of demonstrating the importance–performance matrix where students have some industrial experience is to devise an exercise around that experience. For example, see below.
• Step 1 – Choose an operation with which at least one of your groups is familiar. The operation should have a relatively clear customer group and also direct competitors.
The person or people who know about the chosen operation should act as the source of information, and the rest of the group as consultants.
• Step 2 – Identify the set of competitive factors that have some relevance to this operation. One can use the list of generic performance objective as a starting point in doing this. So, use quality, speed, dependability, flexibility and cost and expand each of them if necessary.
• Step 3 – Rate each of these on the 9-point importance scale.
• Step 4 – Now judge each of these against the 9-point performance scale
• Step 5 – Position each aspect of performance on the importance–performance matrix in a similar way to the example shown in Figure 18.6.
• Step 6 – Discuss how you might improve the objectives with the highest priority.
The following case study is also useful for demonstrating the importance–performance matrix and several other issues within operations improvement.
Case study teaching notes Geneva Construction and Risk
Geneva Construction and Risk (GCR) is an insurance company that specializes in providing insurance for construction projects, especially complex, high-risk projects, where contractual and other legal issues, physical exposure and design uncertainty need ‘customized’ insurance responses. It is part of the larger Wichita Mutual Insurance Group. The case describes the company’s intention to adopt a Six Sigma improvement methodology.
Unfortunately, the company’s experience with ‘quality initiatives’ is not good. Some years ago Wichita Mutual had instructed all companies in its group to adopt a total quality management (TQM) initiative. It had done this in a very prescriptive way by issuing a handbook with detailed instructions of how TQM was to be implemented throughout the group. Although the TQM initiative had never been formally pronounced a failure, it had faded over the years without having the overall impact that once was hoped of it. This time, Tyko Mattson, the Six Sigma champion at GCR, is convinced that an improvement initiative based on Six Sigma principles will be more of a success. The case describes the previous TQM initiative and why it is hoped that the Six Sigma initiative will prove to be more effective. Extracts from a document prepared by Tyko Mattson are included in the case. This describes his views of some of the advantages and disadvantages of Six Sigma as an improvement approach and makes recommendations as to how it can be applied at GCR.
This is a rich and complex case that can be used in a number of ways in class. How it is used will depend on whether the topics of TQM and Six Sigma have been taught prior to running the case or not. If this case is used as an introduction to improvement and improvement initiatives, then the debrief should provide an opportunity for presenting the key points of both TQM and Six Sigma. If the case is used after these topics have been treated in class, then the case can be used to develop some of the issues concerning the differences between the two approaches, the similarities between the two approaches and the difficulty in implementing initiatives of this type. It is recommended that when the class contains relatively inexperienced students with little knowledge of the realities of improvement initiatives such as these, the case is used to introduce some of the main characteristics of TQM and Six Sigma. Where most of the students will have experience of this type of initiative, it can be used to treat some of the more organizational problems of implementing improvement initiatives.
Notes on questions