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Operations Management Principles Db 3

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Operations Management Principles Db 3

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Quality and System/ Process Improvement


In order to be meaningful benchmarks have to be competitive. The idea is to strive for a performance that is better than our competitors. The benchmarks need not be taken only from the operations of our competitors. It is not necessary that our competitors’ performance is the best. Benchmarks can be chosen from other relevant industries. (Stevenson, 2007) It is suggested that the company employs an external expert benchmarking organization to establish benchmarks. Information to create benchmarks is rarely available from the public domain like annual reports or web sites. Experts, who have conducted several studies, not only have accumulated data but also are better placed to make educated estimates where required. (Stevenson, 2007) Another advantage of using an outside agency is that their thinking will not be clouded by perceived limitations of what can be achieved.

Juran stated that quality management begins with knowing what the customer wants (Stevenson, 2007) and that should be the focus of our benchmarking activity. In terms of service supply two important parameters are how soon communication is established with the customer once a call is received and how much time is taken to address the issue. In terms of supply of products the most critical factor is the time taken between receiving an order and effecting delivery, especially for the MTO items. This is a complex task covering the entire supply chain and would need to be broken down. The time taken to commence the execution of the order, the actual manufacturing time and the time for delivery to be effected are suggested components. The manufacturing activity would require benchmarks for idle machine time and in-process inventory. Benchmarks will also be required for our vendors’ performance, such as their adherence to quality and timely performance. Deming has stressed on the reduction in variation through statistical process control and this too should be brought under the ambit of benchmarking. (Stevenson, 2007)

Both Deming and Juran have indicated the importance of continual change. (Stevenson, 2007) The benchmarking exercise does not end with the setting of benchmarks. Our present measures need to be established and time bound plans for achieving the benchmarks need to be devised. If at the end of the proposed time period there should be a study of the reasons for failing to achieve the benchmarks or for pushing the benchmarks higher depending on whether we have failed to or succeeded in achieving them.

Change Management

Change in management is not an objective in itself, but it is a process that is essential to give effect to the larger objectives. Under the new CEO twin objectives of enhancing customer satisfaction and reducing costs have been identified. It is proposed that certain changes in the management are needed if these objectives are to be met. These changes have to work in concert with the other initiatives, like benchmarking, that the company is contemplating.

Changes are needed in both the management structure and outlook. It has been suggested that the customer staff group working from an isolated location is not effective in addressing the customers’ requests. This function can be given to the manufacturing representatives backed by design personnel from the plant. Training both these groups will be required and it is suggested that this task be assigned to a professional organization. Deming has highlighted the need to eliminate internal competition and break down departmental barriers. (Stevenson, 2007) Routing deliveries of finished products through the NAW and procurement through a centralized department is a barrier in the functioning of the division. To make the division more responsive these functions need to be brought

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