TURNAROUND MANAGEMENT

BUSINESS PHILOSOPHIES

BUSINESS PHILOSOPHIES
Definition by T.Davenport: ―A Business Process is a set of logically related tasks that use the resources of an organization to achieve a defined outcome.‖ INTRODUCTION: Philosophy is the foundation to preventing mediocrity. Most people consider philosophy useful only in the realm of morals. Is an action right or wrong and how will it affect my eternal soul? The dictionary definition of philosophy is a set of beliefs, principles, or aims, underlying somebody's practice or conduct. A philosophy can be a guide to growing your business. By defining what you consider important, you can decide what projects to tackle and which to leave to others. Business decisions are seldom between what is right and what is wrong, but between what is good and what is best. For example, you are in the midst of making a decision that will affect all of your employees, such as acquiring new office space. Should you tell the employees or not? Neither choice is wrong. Providing the information too early in the process will result in useless concern by the employees, while telling the employees only after the new lease is signed prevents any insight and contributions from those most affected. If your philosophy includes "two heads are better than one," you will make sure everyone knows the potential plan as soon as possible. I have a book on vision that shows a few dots on one page. The next page shows a few more dots. Turn the page and more dots appear. Eventually, the dots form the image of a Dalmatian. Every new experience adds a dot to your image of the world. The more dots you have, the more likely your decisions will have the desired outcome. A personal philosophy is built the same way. Aristotle said, "Moral virtue is produced by habit". As you make decisions that produce the desired results, you clarify your basic beliefs. Steps of Business Philosophy: A business philosophy is not just a set of fancy words by which you run your business. It's much more than that. It's actually a deep-rooted system of core beliefs that provide the reason you are in business in the first place. It's not just about making money. Sure, that's a big chunk of life. But when it comes down to what really matters, we don't do it ONLY for the money. Most agents do not have a business philosophy and don't truly understand what it means to have one. Some agents think they have one, but often break or bend their own rules. For example, my business philosophy is, "Be the best I can be to help others, and never stop improving." While this drives my staff completely nuts, it is something that I live by. If it isn't the best it can be, we're going to redo it bigger and better. If I find a flaw, I want it repaired now.

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TURNAROUND MANAGEMENT

BUSINESS PHILOSOPHIES

My business philosophy keeps my standards high - higher than anybody else I know. In my business, it works. My clients expect me to be constantly improving my systems. Without nonstop innovation, I would be out of business. Without constant upgrading, I wouldn't be able to give agents the latest and most advanced advice. Of course, there's good and bad in this. Having the constant improvement model as my business philosophy means that I am constantly moving and changing. While I'm personally fine with that my personality actually thrives on that that may be the worst business philosophy for you. A business philosophy needs to be personal, mean something to you deep inside, and most importantly it has to be something you can live by.

So how do you even begin to think about your business philosophy, there are three steps:
1. Ask yourself, "Why am I in business and what do I want my clients to remember me for?"  For example, my constant improvement model makes clients remember me for the latest tools, techniques, strategies, and systems for building a real estate business. 2. Sit down with a pen and paper and start writing.  Flesh out the core elements of your business. Brainstorm. Just write until you can't write anymore. Describe your ideal client. Describe your ideal transaction. Write out the feelings you get when you help people complete a transaction. Get deep on yourself. 3. Take those core elements and test your business.  Once you've identified the core elements of your business philosophy, ask yourself, "Where am I not living by this philosophy?" In my business, if a new technology tool comes on the market and I ignore it, I'm not following my business philosophy. I need to get that product and test it to see if it's any good. That's what I do. When you take these three steps, you'll learn a lot about yourself and your business. People who live by their business philosophies become the most successful in their field.

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people involved in new product development. and defects and waste eradicated from operations. People in companies that have implemented TQM are more likely to have the basic understanding necessary for implementing EDM/PDM. its customers with products and services that satisfy their needs. Many companies have difficulties in implementing TQM. productivity. attitude and organization of a company that aims to provide. However.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES Total Quality Management (TQM) Total Quality Management is an approach to the art of management that originated in Japanese industry in the 1950's and has become steadily more popular in the West since the early 1980's. and continue to provide. they are more likely to view EDM/PDM as an information and workflow management system supporting the entire product life cycle then as a departmental solution for the management of CAD data 3 . when you look at successful companies you find a much higher percentage of successful TQM implementation. For example. The culture requires quality in all aspects of the company's operations. with things being done right first time. Total Quality is a description of the culture. don't focus on the second-rate companies who can't handle TQM. and people involved with customers  It‘s much easier to introduce EDM/PDM in a company with a TQM culture than in one without TQM. TQM is a set of management practices throughout the organization. TQM places strong focus on process measurement and controls as means of continuous improvement. Some useful messages from results of TQM implementations:  If you want to be a first-rate company. look at the world-class companies that have adopted it  The most effective way to spend TQM introduction funds is by training top management. competitiveness or financial return. Surveys by consulting firms have found that only 20-36% of companies that have undertaken TQM have achieved either significant or even tangible improvements in quality. geared to ensure the organization consistently meets or exceeds customer requirements. As a result many people are skeptical about TQM.

and has to treat these internal customers with the same sensitivity and responsiveness as it would external customers. As a result. Each part of the company is involved in Total Quality. operating as a customer to some functions and as a supplier to others. to customer requirements and satisfaction. but also those that enhance and differentiate them for competitive advantage. Continuous Improvement (QUALITY): Continuous improvement of all operations and activities is at the heart of TQM. TQM Leadership from Top Management: TQM is a way of life for a company. The concept of requirements is expanded to take in not only product and service attributes that meet basic requirements. methods and performance measures for achieving those goals. The company believes it will only be successful if customers are satisfied. This is a key point. directly or indirectly. and a TQM culture. `being sensitive to customer requirements' goes beyond defect and error reduction. and to an increase in customer satisfaction. actions based on facts. The Engineering Department is a supplier to downstream functions such as Manufacturing and Field Service. comes first. In the TQM context. This will lead to an improvement in process quality. The development and use of performance indicators is linked. and in creating and deploying well defined systems. there is a focus on continuous improvement of the company's processes. The customer. not internal activities and constraints. and merely meeting specifications or reducing customer complaints. In turn this will lead to an improvement in product quality. Customer satisfaction is seen as the company's highest priority. fast response. top management leadership and commitment. It has to be introduced and led by top management. continuous improvement. These systems and methods guide all quality activities and encourage participation by all employees. As well as recognizing the link between product quality and customer satisfaction.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES Important aspects of TQM include customer-driven quality.instead it delegates and pays lip service. and to management and employee remuneration. The TQM Company is sensitive to customer requirements and responds rapidly to them. Attempts to implement TQM often fail because top management doesn't lead and get committed . continuous improvement of the quality of the product is seen as the only way to maintain a high level of customer satisfaction. Once it is recognized that customer satisfaction can only be obtained by providing a high-quality product. TQM also recognizes that product quality is the result of process quality. employee participation. Customer-Driven Quality: TQM has a customer-first orientation. 4 . Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company.

the company has to respond rapidly to customer needs. The statistical approach to process management in both engineering and manufacturing recognizes that most problems are system-related. The result is a dramatic improvement in the elapsed time from product concept to first shipment. improvement of operations. If the right information is not available. and comparison of performance with competitors. Employees are encouraged to take more responsibility. and so errors can't be corrected. 5 . Facts and analysis provide the basis for planning. Ongoing education and training of all employees supports the drive for quality. data is collected and put in the hands of the people who are in the best position to analyze it and then take the appropriate action to reduce costs and prevent non-conformance. whether it be of shop floor data. In practice. communicate more effectively. The TQM approach is based on the use of objective data. then the analysis.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES Elimination of waste is a major component of the continuous improvement approach. Usually these people are not managers but workers in the process. This implies short product and service introduction cycles. Such participation is reinforced by reward and recognition systems which emphasize the achievement of quality objectives. There is also a strong emphasis on prevention rather than detection. As people behave the way they are measured and remunerated. can't take place. Fast Response: To achieve customer satisfaction. When problems do occur within the product development process. Simplicity is gained through concurrent product and process development. errors can't be identified. Employee Participation: A successful TQM environment requires a committed and well-trained work force that participates fully in quality improvement activities. These can be achieved with customer-driven and process-oriented product development because the resulting simplicity and efficiency greatly reduce the time involved. Efficiencies are realized from the elimination of nonvalue-adding effort such as re-design. act creatively. Actions Based On Facts: The statistical analysis of engineering and manufacturing facts is an important part of TQM. and an emphasis on quality at the design stage. or engineering test results. TQM links remuneration to customer satisfaction metrics. they are generally discovered and resolved before they can get to the next internal customer. and are not caused by particular employees. review and performance tracking. The customer-driven approach helps to prevent errors and achieve defectfree production. and innovate. and provides a rational rather than an emotional basis for decision making.

They are not going to feel this if they are excluded from the development of visions. and rewarding teamwork. Since 1988 a similar award (the Malcolm Baldrige National Quality Award) has been awarded in the US.e. and fire-fighting is necessary and rewarded. Early winners of the Baldrige Award include AT&T (1992). Short-term results drive behavior so scrap. work-around. systematic and structured approach to enhancing customer's satisfaction  Process improvement methods that reduce or eliminate problems i. It's important they participate in these activities. Product development in a TQM environment is customer-driven and focused on quality. changes. product development is usually carried on in a conflictual atmosphere where each department acts independently.prevention orientated  Enhanced communication 6 . Milliken (1989). Texas Instruments (1992) and Xerox (1989). strategies. and rework are normal practice. and interact with their internal customers to deliver the required results. waste. non conformance costs  Tools and techniques for improvement . They are unlikely to behave in a responsible way if they see management behaving irresponsibly saying one thing and doing the opposite. BENEFITS OF TQM  A philosophy that improves business from top to bottom  A focused. product and the whole experience  Intrinsic motivation and improved attitudes throughout the workforce  Workforce is proactive .quality operating system  Delivering what the customer wants in terms of service. Motorola (1988). Management focuses on supervising individuals.TURNAROUND MANAGEMENT A TQM Culture: BUSINESS PHILOSOPHIES It's not easy to introduce TQM. Management's focus is on controlling the overall process. Employees have to be made to feel that they are responsible for customer satisfaction. IBM (1990). Awards for Quality Achievement: The Deming Prize has been awarded annually since 1951 by the Japanese Union of Scientists and Engineers (JUSE) in recognition of outstanding achievement in quality strategy. management and execution. cooperative culture has to be created by management. Teams are process-oriented. Without a TQM approach. Product Development in A TQM Environment: Product development in a TQM environment is very different to product development in a non-TQM environment. and plans. An open.

 Methodology and Tools – Use of appropriate methodology and tools ensures that nonconformances are identified.  Company Culture – The culture of the company should aim at developing employees ability to work together to improve quality.employee involvement and empowerment  Everyone from top to bottom educated  Improved customer/supplier relationships (internally & externally)  Market competitiveness PRINCIPLES OF TQM TQM can be defined as the management of initiatives and procedures that are aimed at achieving the delivery of quality products and services. including:  Executive Management – Top management should act as the main driver for TQM and create an environment that ensures its success.  Training – Employees should receive regular training on the methods and concepts of quality. 7 .  Decision Making – Quality decisions should be made based on measurements.  Customer Focus – Improvements in quality should improve customer satisfaction.  Employee Involvement – Employees should be encouraged to be pro-active in identifying and addressing quality related problems.TURNAROUND MANAGEMENT  Reduction in waste and rework BUSINESS PHILOSOPHIES  Increase in process ownership. measured and responded to consistently.  Continuous Improvement – Companies should continuously work towards improving manufacturing and quality procedures. A number of key principles can be identified in defining TQM.

TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES NEED OF TQM IN BANKING SECTOR Most bankers would like to believe that banks are in the finance industry. Good service is planned and managed. reputation. They find it hard to accept that banks are in the service industry in the same league as McDonalds. like insurance companies and investment houses. Dr. Customers decide sales based on their perception of product and service quality. and a customer alone defines and determines what that quality is and should be. hotels. supermarkets and other service sectors have started to embrace quality as their raison. and not in the service industry. Banks have to maintain image. bad service is the natural state of affairs. and Marks & Spencer. A big bank may have as many as three vice presidents responsible for guarding its assets. with little or no training in customer service. Historically. Fast-food chains. banks could not appreciate the excellent and valuable lessons in customer service and people management which these world-class service institutions could offer for free. Because of this antiquated paradigm. Customer service will not improve if banks just learn and copy from other banks: the world class bank in terms of service does not exist yet. The banking industry. Federal Express. The lifeblood of any business is its customers. Few or none of the bank's elaborate systems and structures is designed to monitor and maintain customer loyalty. Profit comes from sales minus cost. 8 . Sales must be realized first before cost becomes relevant. airlines. but ironically. and credibility in order to do their job as custodians of other people's money. W. Banks usually give customer service and satisfaction very low priority. known as Total Quality Management (TQM) in the manufacturing sector. Without planning. People. very few really pay much attention to the plight of their clients before. Banks and other financial institutions. following the success of the quality movement. banks were conceived as sophisticated control systems since it does business with the most liquid of assets: cash. the complex systems and bureaucracy were set up and added in the name of control while sacrificing and neglecting customer service in the process. but no one to take care of customer service and complaints. are relatively slow in shifting into this customer-first paradigm. if not lowly-paid. For one basic reason: banks depend on customer satisfaction and loyalty for their survival. In short. Many banks are managed by finance people. and systems are devoted more in managing assets and cash rather than managing customers and service. In fact most bank systems are designed to control customers rather than satisfy customers. and accordingly assign it to a low level. Domino Pizza. one has to have profound knowledge of the service delivery system. quality determines profits. manager. and after sales. time. to improve service quality. Products and procedures are set up for the convenience of the bank rather than that of the customer. Bankers tend to think that money not the customer matters. Good service does not happen naturally or by accident. often the biggest service industry in any country stands to benefit from TQM. Thus they tend to compete in terms of financial prowess rather than service quality. Edwards Deming put it. Singapore Airlines. But over the years. resources. during. As the quality guru.

 Waiting times like downtime and queuing time.  Lost customers and accounts Friendliness is just as important as efficiency to customers. with so much to be desired in customer service quality. no Eye Contact with the customer.  Effective interest rates. Depositors. new accounts. no Thank You's after any and every transaction. In Japanese banks. inquirers. written or verbal. in fact. these huge sums are obviously wasted in training the wrong people in the wrong things. the first to welcome customers in many banks in Asia are heavily armed security guards. next to the airline. The banking industry has probably the largest training budget in the private sector. check encashment. like loans. credit cards. the more inferior the service because of complacency and bureaucracy which stifle both innovation and efficiency in customer service. including their own customers. 9 .  Customer complaints. Management thinks that the only way to intimidate thieves is to intimidate everybody else. A Bank applying TQM should track as goals & benchmarks that matter to customer:  Processing times of key products and services.  Friendliness and efficiency of staff. no Apologies for having kept you waiting. the bigger the bank. thus hiding the service problem.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES In general. tellers are trained to thank the customer all the time even if he withdraws money.  Accuracy and timeliness of statements of accounts and records.  promptness in responding to customer inquiries such as in answering the phone. borrowers. ATM cards. The big bank can lose customers because of bad or slow service but can easily replace them with new and even bigger customers. Many banks have neglected the basics in salesmanship and service: no Greetings when meeting customers. In contrast. the number of rings before phone is picked up. and to apologize if he was kept waiting longer than the standard time. anybody who enters the bank are all treated as customers with immediate and thorough attention. What are the consequences of bad service? According to the TARP report on Consumer Affairs submitted to the White House:  96% of unhappy customers never complain about rude or discourteous treatment  90% or more who are dissatisfied with the service they receive will not buy again or come back each of those unhappy customers will tell his or her story to at least nine other people  13% of those unhappy former customers will tell their stories to more than 20 people. inclusive of all service and hidden charges.

tellers. then the bank is on its way to becoming a truly world-class bank -a bank of service excellence. A number of manufacturing and a smaller number of service companies have started on the path of Total Quality Management. 10 . Taguchi. Lessons from attempts at implementation are drawn. Since the Department of Defense (DoD) is a service organization. In this way total quality is indeed an international imperative. Dr. quality planning and loss to society concepts. Top executives could regularly pose as customers. The Department of Defense in its initiative has identified this as Total Quality Management (TQM) and is pursuing the implementation of TQM in an active way. this strategy represents a radical departure from DoD's former methodology. Using the 14 points for management. If a bank CEO who could come down from his executive suite at least once a year and stay in the ground floor for one whole day observing and noting how customers are being served.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES TQM starts with leadership committed to quality. Deming. For instance. The implementation model used by the DoD for TQM is discussed. Juran and Dr. the basic problem facing all attempts at implementing service quality: what and how can one measure service functions. or security guards to get a feel of the situation. Total Quality Management in the Service Industry: "Total Quality an International Imperative" can only be obtained through appropriate management. their implementation presents an interesting study from which other service organizations can learn. is discussed with a proposed solution that has been successfully applied in the service environment. More firms will have to adopt these methods if the United States is to solve its balance of payments problems and once more become competitive in international markets. The basic strategy of the DoD is based on the teaching of Dr. If top management can perform this feat and institute meaningful changes and systems based on its observation and hands-on experience.

This group is often guided through the kaizen process by a line supervisor. This philosophy differs from the "command and control" improvement programs of the mid-twentieth century. It also applies to processes. and involves all employees from the CEO to the assembly line workers.TOYOTA People at all levels of an organization can participate in kaizen. 11 . Kaizen on a broad. or large group. the culture of continual aligned small improvements and standardization yields large results in the form of compound productivity improvement. kaizen refers to activities that continually improve all functions. In all. which can be rapidly adapted as new improvements are suggested. It has been applied in healthcare. and many other industries." Successful implementation requires "the participation of workers in the improvement. from the CEO down. INTRODUCTION: Kaizen is a daily activity. when done correctly. sometimes this is the line supervisor's key role. By improving standardized activities and processes. suggestion system. supporting business processes. crossdepartmental scale in companies. banking. as well as external stakeholders when applicable. it is usually a local improvement within a workstation or local area and involves a small group in improving their own work environment and productivity. the purpose of which goes beyond simple productivity improvement. engineering. generates total quality management. and management. The format for kaizen can be individual. then adjusting. It is also a process that. While kaizen (at Toyota) usually delivers small improvements. When used in the business sense and applied to the workplace.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES KAIZEN HISTORY: Kaizen (Japanese for "improvement" or "change for the better") refers to a philosophy or practices that focus upon continuous improvement of processes in manufacturing. influenced in part by American business and quality management teachers who visited the country. such as purchasing and logistics. which cross organizational boundaries into the supply chain. humanizes the workplace. It has since spread throughout the world. Kaizen was first implemented in several Japanese businesses after the Second World War. small group." EXAMPLE. the process suggests a humanized approach to workers and to increasing productivity: "The idea is to nurture the company's human resources as much as it is to praise and encourage participation in kaizen activities. and frees human efforts through improving productivity using machines and computing power. government. eliminates overly hard work ("muri"). At Toyota. and teaches people how to perform experiments on their work using the scientific method and how to learn to spot and eliminate waste in business processes. Large-scale pre-planning and extensive project scheduling are replaced by smaller experiments. kaizen aims to eliminate waste. Kaizen methodology includes making changes and monitoring results.

suggest an improvement to resolve the abnormality which may initiate a kaizen. where all line personnel are expected to stop their moving production line in case of any abnormality and. These are limited in scope. The PDCA cycles The cycle of kaizen activity can be defined as:  Standardize an operation  Measure the standardized operation (find cycle time and amount of in-process inventory)  Gauge measurements against requirements  Innovate to meet requirements and increase productivity  Standardize the new. along with their supervisor. and issues that arise from them are typically used in later blitzes. IMPLEMENTATION: The Toyota Production System is known for kaizen. a focused kaizen that is designed to address a particular issue over the course of a week is referred to as a "kaizen blitz" or "kaizen event".TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES In modern usage. improved operations  Continue cycle ad infinitum 12 .

The objective of cleaning is to identify abnormalities and areas for improvement. This is an ACTION to identify and eliminate all unnecessary items from your workplace. This is also an ACTION to clean your workplace thoroughly. Seiri . This could focus on the elimination of excess inventory affecting. Also too much quantity or unrequired quantity should not be kept. A checklist is maintained for the operator indicating how and what he should check on a daily. This is achieved through locating a specific place for specific items of a specific quantity. The objective of organization is to get rid of unwanted items by focusing on the core items that are needed to fulfill the requirements of the job and discard items that are not needed. Further 2 points Seiketsu and Shitsuke indicate to sustain and support the first three. color codes. They provide support through visual management. Here symbols. transportation. There are 5 principles which can be low cost implementation of ‗the changes in the organization. Seiton is an ACTION to put every necessary item in good order.TURNAROUND MANAGEMENT 5 S PRINCIPLES BUSINESS PHILOSOPHIES From Japanese management theory 5 common-sense techniques are used to enhance the performance of organization. and maximum/minimum order quantity marking on racks is used to check inventories. Seiso indicates all the items should be kept clean and in perfectly working condition. charts. 1. These are famous ―5S principles‖. with the main objective being on how quickly one can get the things needed and how quickly those things can be put away. where needed. The difference in target and actual achievement. monthly basis. 13 . labor costs. 3. This is to focus on efficiency. 2. All the items to be labeled or containers painted and racked so that no searching is required. Seiton indicates that the articles should be well organized and stored so as to allow quick access. This is achieved through a combination of cleaning the workplace and at the same time focusing on the identification of abnormalities or out of control condition. pictures.stands for Organization. nature and frequency of use. warehouse space. needed items. and redundant parts. weekly. Seiton stands for Neatness. Seiri indicates that all articles should be segregated according to necessity. No place should be left untouched daily. Seiso stands for Cleaning. between the standard and the actual are controlled. It should have clear indication of quantity to he kept usually.

If you have to work. This is achieved through strict adherence to current improvements and the development of an environment for future improvements. your workflow will always be very smooth. Seiketsu stands for Standardization. you have to clean the workplace together with your colleagues. you have to discuss and agree what to put where for efficient use by everyone. too. This is a condition where all members practice the above 4S‘s spontaneously and. it is better if you can enjoy it. it is a CULTURE. Accordingly. you are wasting your energy and morale. 5S is not only a matter of good housekeeping. It is a creation of a strong corporate culture filled with spirit of high productivity. Then you will enjoy your work more. you will see favourable changes in the working environment as 5S progresses. This is a CONDITION where high standard of good housekeeping is maintained so that there is no dust and rust anywhere. Such process will foster better human relations among you. In addition. That is the reason why 5S is gaining grounds rapidly. BENEFITS OF 5 S IMPLEMENTATION: Practicing of 5s brings benefit not only to the company‘s business but also to the people who practice it. The objective of discipline is to sustain improvements and make further improvements by encouraging effective use of the ‗Check-Act-PlanDo‘ cycles. if everything at your workplace is arranged in good order and easily available for use. willingly as a way of life. Shitsuke stands for Discipline. 5. (1) Makes the Workplace More Pleasant: In practicing 5S. On the other hand. education and practice of 5S. 14 . you have to start from discussing and agreeing with your colleagues what items are necessary and unnecessary then. (2) Makes the Work More Efficient: If you have to look for something and if you have to spend so much time finding it. Accordingly. This activity is carried out to determine the best work practices and find ways of ensuring that everyone carries out an individual activity the same ‗best‘ way. Improved human relations and working environment will make your workplace more pleasant. And.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES 4. It is a process to create more productive people and more productive companies through motivation. The objective of standardization is to consolidate the first 3 S‘s by establishing standard procedures. you are not only wasting your time. It not only improves your efficiency but also improves the rhythm of your work.

the environment also affects people. 15 . Therefore. clear instructions are readily available and no one throws anything in a safer place to work in. Employee empowerment through ownership. Single-point tooling. Channels of communication. you can develop your sensitivity so that you can feel and identify any defect in work. Set point locations for needed items. Point-of-Use Communications resulting in reduced scrap & rework. If you are accustomed to work in a clean and tidy environment. You can enjoy your work more with less risk. (5) 5 S technique will have other major benefits as follows:            Focus on needed items and the elimination/disposal of unneeded items. good environment will improve quality of your work. messy and untidy environment will adversely affect your sensitivity. It is quite natural that quality products come only from clean and well-organized workplaces. Practice of 5S improves your own safety.TURNAROUND MANAGEMENT (3) Improves Safety: BUSINESS PHILOSOPHIES A clean and tidy working environment where everything is properly placed. On the other hand. On the contrary. one of everything. Cleaner workplace and brighter working environment. (4) Improves Quality of Work and Products: People affect environment. Complete visual order & minimum waste of motion in the work area Maximum value adding work Safety and improved Quality of Work Life Increased productivity A basis for Continuous Improvement.

"In recent years manufacturers have continued to try to hone forecasting methods (such as applying a trailing 13 week average as a better predictor for JIT planning). its effective application cannot be independent of other key components of a lean manufacturing system or it can ". JIT inventory systems expose hidden causes of inventory keeping.. contrary to traditional accounting. without the safety net of inventory. quality.end up with the opposite of the desired result. This way of working encourages businesses to eliminate inventory that does not compensate for manufacturing process issues.. This saves warehouse space and costs. Management may be tempted to keep stock to hide production problems. The company must follow an array of new methods to manage the consequences of the change. the just-in-time inventory system focus is having “the right material.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES JUST-IN-TIME (JIT) Introduction: Just-in-time (JIT) is an inventory strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs. instead of adding and storing value. JIT can improve a manufacturing organization's return on investment. production management. Philosophy of JIT: The philosophy of JIT is simple: inventory is waste. at the right place. such as the presence or absence of a part on a shelf. and are therefore not a simple solution for a company to adopt. To meet JIT objectives. Secondly. However. The ideas in this way of working come from many different disciplines including statistics. which tell production when to make the next part. at the right time. 16 . industrial engineering. and efficiency. Quick notice that stock depletion requires personnel to order new stock is critical to the inventory reduction at the center of JIT. however some research demonstrates that basing JIT on the presumption of stability is inherently flawed. the complete mechanism for making this work is often misunderstood. Implemented correctly. machine reliability. The JIT inventory philosophy defines how inventory is viewed and how it relates to management. the process relies on signals or Kanban between different points in the process. and process variability. and behavioral science. or waste. In short. and inadequate capacity. and to constantly improve those processes to require less inventory. These problems include backups at work centers. For instance. and in the exact amount”. lack of flexibility of employees and equipment. This does not mean to say JIT is implemented without awareness that removing inventory exposes pre-existing manufacturing issues. Kanban are usually 'tickets' but can be simple visual signals. Inventory is seen as incurring costs. allowing any stock habituates management to stock keeping.

and take up candidates. Now. Nevertheless. Small or individual piece lot sizes reduce lot delay inventories."Business environment has completely changed in the last 15 months. The new strategy is quite different than the previous year's hiring strategy. from December-January.  The flow of goods from warehouse to shelves improves. either by not having to pay workers overtime or by having them focus on other work or participate in training. which simplifies inventory flow and its management. India's leading tech firms are now changing to a just-in-time (JIT) model for hiring freshers. Just-in-time model for human resources is generally followed in manufacturing sector for stocking inventory. "We will visit the campuses. computer giant Dell follows this model.  Employees with multiple skills are used more efficiently. Going forward we want to be flexible and may increase the range of offer from six to twelve months.  Increased emphasis on supplier relationships.Tata Consultancy Services and Wipro Technologies have said that they would recruit freshers following the model. They were utilized only when a project came.S. These new recruits were kept on bench for many months till they were allocated projects. It effectively means that there would be a harder scramble for offers. beginning January 2010. in the coming job placement season. we have honored every offer letter we issued. The move may reduce the costs required for maintaining human resource inventory. Two leading software companies . A company without inventory does not want a supply system problem that creates a part shortage. next year.TURNAROUND MANAGEMENT Main benefits of JIT include: BUSINESS PHILOSOPHIES  Reduced setup time. Wipro's Joint CEO for IT Business Suresh Vaswani said that the company plans to hire on JIT basis. called as 'bench' in IT parlance. only when we get committed business or see deals closing. Earlier companies used to grab a large number of good resources. 17 . This saves the company money. as per our need. Having employees trained to work on different parts of the process allows companies to move workers where they are needed. Tata Consultancy Services & Wipro Tech to Apply Just-In-Time Model for Hiring Learning from last year's turmoil. Cutting setup time allows the company to reduce or eliminate inventory for "changeover" time. Indian car maker Maruti and U." said a TCS spokeswoman. when firms hired software engineers in hordes from campuses. we used to give offer letters almost a year in advance. This makes supplier relationships extremely important.  Production scheduling and work hour consistency synchronized with demand. in the eighth semester of BTech/BE students. we plan to dole out offers." "We will start hiring from campuses. If there is no demand for a product at the time." said Vaswani. The following of JIT model by IT companies will mean that job offers will be made over a period of time. and put them on bench. it is not made. Earlier.

Implementing ERP software is typically too complex for "in-house" skill. the extent of customization. non-profit organizations and governments. and the scope of the change and the willingness of the customer to take ownership for the project. later manufacturing resource planning) and CIM (Computer Integrated Manufacturing). Users should be able to access any information in the system without needed integration work on the part of the IS department.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES ENTERPRISE RESOURCE PLANNING (ERP) Introduction: Enterprise Resource Planning (ERP) is an integrated computer-based system used to manage internal and external resources including tangible assets. Implementation: Businesses have a wide scope of applications and processes throughout their functional units. All applications should access one database to prevent redundant data and multiple data definitions. An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on a local area network. regardless of the organization's business or charter. and while not supplanting these terms. Customization. This is typically the most cost effective way. It came into use as makers of MRP software started to develop software applications beyond the manufacturing arena. financial resources. The distributed design allows a business to assemble modules from different vendors without the need for the placement of multiple copies of complex. producing ERP software systems that are typically complex and usually impose significant changes on staff work practices. Origin of the Term: The initials ERP was first employed by research and analysis firm Gartner Group in 1990 as an extension of MRP (Material Requirements Planning. the number of modules. so it is desirable and highly advised to hire outside consultants who are professionally trained to implement these systems. To be considered an ERP system. ERP systems consolidate all business operations into a uniform and enterprise wide system environment. materials.ERP systems now attempt to cover all core functions of an enterprise. Support. it has come to represent a larger whole. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. There are three types of services that may be employed for Consulting. expensive computer systems in areas which will not use their full capacity. The length of time to implement an ERP system depends on the size of the business. 18 . All modules should have the same look and feel. and human resources. a software package should have the following traits: It should be integrated and operate in real-time with no periodic batch updates. These systems can now be found in non-manufacturing businesses. Built on a centralized database and normally utilizing a common computing platform.

companies often seek the help of an ERP vendor or of thirdparty consulting companies.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES ERP systems are modular. Data migration is one of the most important activities in determining the success of an ERP implementation. and support. however.  Integration among different functional areas to ensure proper communication. It can be divided into various stages. This allows inventory levels to be kept at maximum efficiency and the company to be more profitable. The typical project is about 14 months and requires around 150 consultants. a large. a company of less than 100 staff) can be planned and delivered within 3–9 months. The client organization can also employ independent program management. business analysis.  ERP systems connect the necessary software in order for accurate forecasting to be done. a large manufacturer may find itself with many software applications that cannot communicate or interface effectively with one another. productivity and efficiency  Design engineering (how to best make the product)  Order tracking. change management. and UAT specialists to ensure their business requirements remain a priority during implementation. multi-site or multi-country implementation can take years. so they don't all need be implemented at once. and therefore receives minimal attention due to time constraints.. a significant amount of planning must occur. or phase-ins. To implement ERP systems. Tasks that need to interface with one another may involve. customization. The following are steps of a data migration strategy that can help with the success of an ERP implementation: a) Identifying the data to be migrated b) Determining the timing of data migration c) Generating the data templates d) Freezing the tools for data migration e) Deciding on migration related setups f) Deciding on data archiving Advantages: In the absence of an ERP system. These firms typically provide three areas of professional services: consulting. data migration is the last activity before the production phase of an ERP implementation. from acceptance through fulfillment 19 .g. The length of the implementations is closely tied to the amount of customization desired. Unfortunately. A small project (e. Since many decisions must be made before migration.

 Customization of the ERP software is limited.  Once a system is established. and costing (what the vendor invoiced)  The accounting for all of these tasks: tracking the revenue. cost and profit at a granular level.  ERP systems can be very expensive (This has led to a new category of "ERP light" solutions)  ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies—this is cited as one of the main causes of their failure. A company can achieve minimum standards.  Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software. switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level).including those implementing and testing changes as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and the ways in which it is used. Disadvantages: Problems with ERP systems are mainly due to inadequate investment in ongoing training for the involved IT personnel . independent resources. inventory receipts (what arrived). and consolidation into a single enterprise may yield limited benefits. 20 . etc.  Many of the integrated links need high accuracy in other applications to work effectively. from invoice through cash receipt BUSINESS PHILOSOPHIES  Managing inter-dependencies of complex processes bill of materials  Tracking the three-way match between purchase orders (what was ordered). chains-of-command.  Some large organizations may have multiple departments with separate. and then over time "dirty data" will reduce the reliability of some applications.  The blurring of company boundaries can cause problems in accountability. lines of responsibility. missions.TURNAROUND MANAGEMENT  The revenue cycle. and employee morale.  Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage.

safer and cleaner.TURNAROUND MANAGEMENT ISO STANDARDS Introduction: BUSINESS PHILOSOPHIES Standards make an enormous contribution to most aspects of our lives – although very often. They aid in transferring technology to developing countries ISO standards also serve to safeguard consumers and users in general. They provide governments with a technical base for health. For example. as purchasers or users of products. are incompatible with equipment we already have. And the organization responsible for many thousands of the standards. is ISO. efficiency and interchangeability – as well as in providing such benefits at an economical cost. We are usually unaware of the role played by standards in raising levels of equality. ISO standards also have important economic and social repercussions. to trade officials. but to society as a whole. which ISO develops. The International Standards. ISO standards contribute to the development. to conformity assessment professionals. safety. not just to engineers and manufactures for which they solve basic problems in production and distribution. ultimately. we tend to take this for granted. are unreliable or dangerous. reliability. ISO standards make a positive difference. and. machinery and devices work well and safely then it is because they conform to standards. to governments and other regulatory bodies. which benefit society worldwide. It is when there is an absence of standards that their importance is felt. manufacturing and supply of products and services more efficient. safety and environmental legislation. we not fit. When products meet our expectations. They are useful to industrial and business organization of all types. are very useful. They make trade between countries easier and fairer. Although ISO‘s principal activity is the development of technical standards. When things go well for example.The ISO Strategic plan 2005-2010 outlines the global vision of the Organization in 2010. of products and services as well as to make their lives simpler. ISO (International Organization Standardization) is the world‘s largest developer of standards. that contribution is invisible. 21 . to people in general in their roles as consumers and end users. together with the seven strategic objectives set out to meet the expectations of the ISO members and stakeholders. to suppliers and customers of products and services in both public and private sectors. when systems.

final inspection and testing. The ISO. In fact.ISO 14000 environmental management systems are helping organizations of all types to improve their environmental performance at the same time as making a positive impact on business results. the International Organization for Standardization set 3 quality management standards to assure vendor quality. has evolved thousands of elaborate technical standards for products. motivation and empowerment. ISO Certification: It is a term that has been compared to ―The Good Housekeeping Seal of Approval. it is fast becoming a requirement of doing business. which will be vital components and facilitating factors while implementing ‗kaizen‘ programmes. The ISO‘s systems certification process similarly embodies the wisdom of the adage. and 3) ISO 9003 affects companies that handle final inspection and testing. marketing and sales managers are beginning to view ISO certification as an important element in their sales success. product manufacturing.‖ It assures that products are produced by meeting well-defined standards of quality and consistency. In light of this. marketing and salespeople of small to mid-size manufacturing and supply companies are being asked by their customers to demonstrate that they are International Standards Organization (ISO) certified. 2) ISO 9002 covers companies doing production and installation. for many companies and industries. 1) ISO 9001 certifies those companies that do design and development. In 1987. representation. The ISO-9000 and ISO-14000 series both involve a culture of practices. The system certification process of the ISO. as well as supplying and maintaining software. ―the largest room in the world is the room for improvement‖. More than half a million organizations in more than 149 countries are implementing ISO 9000 which provides a framework for quality management throughout the processes of producing and delivering products and services for the customer. more and more. 22 . And. especially employee involvement.TURNAROUND MANAGEMENT ISO System: BUSINESS PHILOSOPHIES The ISO‘s systems certification is different from product standards of the organization. founded by the national Institutes of Standards of about 140 countries. and ISO-14000 series for environmental management systems (EMS). with the objective of facilitating international trade and infusing consumer confidence in matters of safety and quality. business and service sector standards. is a further step towards a global improvement in industrial. installation.

The company has to create a team of internal auditors. Today. who are authorized by the ISO organization to conduct an audit in the organization. The persons involved in the procedures are interviewed. The documents and the reports are seen and verified for matching. When the procedures are found to be matching with documents. The team of the auditors visits the organization with regular interval with plan. aims of organization. This written matter is called as company‘s ―Quality manual‖. Then they visit the organization and conduct an audit of the procedures. If there is no matching the NCR (Non Conformance Report) is given. They may be designing. These NCRs are to be resolved and then the concerned auditing agency awards the ISO certificate to the organization. Originally. the manufacture and delivery of products. The team of auditor checks the quality manual of the company and indicates the needful changes. Generally the goal is satisfying the customer. ISO certification helps organization to improvise the methods that are decided by company. Then they note down the procedures in the organization to meet the goals and aims. inspecting. businesses that supply those companies are being asked to meet ISO certification. who conduct audit with regular intervals. and selling the specific product or services to the customer. Unless the adequacy is approved the quality manual does not get approval. They check the procedures from the point of view of adequacy. It contains the procedures in the concerned departments. Procedures of each department are written down in systematic manner. This certifying agent appoints a team of auditors who have passed the auditor examination conducted by ISO body. Methodology to get ISO certification: The company interested in taking the ISO certification decides the vision and mission. the certification is renewed. however. providing needful quality goods and services. They conduct the audit. 23 . To generate this company appoints a body in the organization headed by a senior person who is called as MR (Management Representative). employee training and customer support. Thus. The external auditors check the audit reports of the internal auditors and suggest some areas for improvement. This is important stage. producing.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES ISO certification requires that a company must set up and document all of its procedures including the procurement and storage of materials. It generally indicates the intentions. ISO involved only those companies doing business in Europe. The company then appoints the certifying agents like BVQI.

but between what is good and what is best. "Moral virtue is produced by habit". manufacturing. Indian Business sector are not following these Business Philosophy as they should be. there is gradual and not so. Philosophy is the foundation to preventing mediocrity. From this topic. and Just in Time. Hence.effective progress of the business. banking. Enterprise Resource Planning for the benefit and success of Business in every aspects of it. Kaizen. 24 . we came to know that various fields such as service. Most people consider philosophy useful only in the realm of morals. you clarify your basic beliefs. People who live by their business philosophies become the most successful in their field. etc have to make use of different business philosophies such as Total Quality Management. As Aristotle said. As you make decisions that produce the desired results. It is a creation of a strong corporate culture filled with spirit of high productivity.TURNAROUND MANAGEMENT BUSINESS PHILOSOPHIES CONCLUSION Business decisions are seldom between what is right and what is wrong.

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