Unit 1: Ops Performance & Improvement

a) Process & Product improvement (improving the quality) can Reduce

Costs (eliminating defects, improve efficiency) & Improve Revenue
(higher quality, differentiation command higher prices & therefore
profitability).
b) Incremental vs Radical improvement
c) Types of Operations: Variety vs Volume: (usually trade off between
efficiency and flexibility) Project-Batch Ops-Line Ops (Flexibility in
Products & Volume) (Competition based on Design-Quality-Price)
d) Manufacturing vs Services: Tangibility & Perceptions (Responsiveness,
Competence, Emphathy), Customer Contact, Location, immediate
consumption, storage
e) SPOTS framework – to analyse and improve operations:
f) Strategy:
1. Porter: Cost and Differentiation
2. RRR: Rapid, Re-iterative, Re-development)
g) Processes:
1. Performance Measurement (Unit 2)
2. Process Mapping (Unit 3)
3. Quality Management and Continuous Improvement (Unit 4)
4. Benchmarking (Unit 5)
5. Project Review (Unit 7)
h) Organisation: support process and org change: X-functional team, Role of
PM, Supplier and Customer Involvement
i) Tools / Technology: support process and org change: KM, PM s/w
j) System: integrating SPOT

Unit 2: Measuring Performance

a) Benefits: identify improvement areas, link with rewards
b) Common measurement problems: wrong measurements, wrong targets,
control vs. improvement (e.g. SLAs, budget), fear of management control
c) Performance measures:
1. Financial (most linked to rewards, Lagging) vs Non-Financial (e.g.
customer , processes, learning)
2. Non-Financial: Customer satisfaction, Processes, Innovation
d) How to: 1. Choose measures 2. Define performance goals 3. Benchmark
goals 4. Link to Training and Rewards
e) Balanced Scorecard Kaplan & Norton (small basket of measures,
balanced & integrated)
- Financial: ROI, Value Add
- Customer: satisfaction, responsiveness
- Internal Processes: Cost, Quality, Efficiency, Flexibility
- Learning & Innovation: Training, New Products
f) PIMS (Profit Impact of Market Strategy) database:
- to help choose most impactfull Measures: utilization, productivity, gross
margin, investments, number of patents, quality
- shows a strong relationship between quality & product profitability
Unit 3: Managing Business Processes

a) Process Analysis – identify process improvement opportunities

b) Deductive (bottom up) & Inductive (Top Down) Process Analysis
- Incremental vs Radical
- Long vs Short Timetable
- Low vs High Resources
- As Is vs To Be Processes. Inductive: start with customer requirements &
to be processes required
c) Process Improvement Techniques:
1. Activity analysis (Activity / Time – process chart)
2. Flow Charting (Includes Decision Points)
3. Process Simulation (Software modeling for complex processes)
4. BPR (Inductive) – Radical Design of Core Processes, Investment in IT
- Limitations: prescriptive, uses little tools, analysis, excuse for staff
reduction, high investment in IT may not show returns

Unit 4: Quality Management & Improvement

a) Benefits:reduce costs & increase revenue (ee Unit 1)

b) Types of Quality: Specifications, Reliability, Durability, Perception
c) Affected by: Equipment, Employee Service, Competency
d) PIMS calculation Relative Perceived Quality: add / subtract customer
weighting %s
e) Basic Tools (to improve existing processes)
1. Histogram: display quality data
2. Pareto Analysis: 80/20 rule – identify main issues impacting quality
3. Cause & Effect Analysis – Fishbone / Ishikawa Diagram – identify root
causes
4. Scatter Diagrams – identify correlation between 2 sets of data – from
cause & effect analysis
5. SPC (Statistical Process Control) – just understand its use not how to
apply
– take samples, upper and lower control limits (+/- standard deviation): 2
standard deviations = 95% error free; 6 Sigma +/- 6 standard deviations =
99.99%
- Type 1 Error (Producers Risk – within limits): Common causes – cannot
get Zero Defect
- Type 2 Error: (Consumers Risk – exceeds limits but no action taken)
f) Advanced Tools (to design& develop new processes)
1. Quality Function Deployment (QFD) – translate customer reqts to
development requirements, promotes X-functional communication
(marketing, production), identify problems at Design stage (70% of costs
determined at design stage)
Relationship matrix:
Requirements Engine Suspension Body Competitor
A
Brand M W M +
Performance S M S _
Space M M S +
 Strong, medium, weak relationship between customer requirents &
development requiremebts; superior, similar, inferior competitor
benchmarks

2. Taguchi Methods – just know the principles

- design of eexperiments to produce a more robust design less sensitive to
variations in environment e.g. washing powder
g) Standards:
1. Quality Standards ISO 9000: Customers expect accreditation, catalyst
for Quality improvement. Does not cover tools, culture, training Process
analysis and measurement prior to ISO 9000 is beneficial. Criticism:
Bureaucratic & too much documentation
2. quality awards e.g. Malcolm balridge awards to motivate & recognize
achievements. Main awards tend to focus on strategic planning, process
improvement as main quality factors
h) Continuous Improvement (CI) – sustained incremental innovation –
Kaizen includes new product development
different to Quality Management – looks for improvement
contributes to knowledge management
i) Implementing CI:
1. Performance measurement (Unit 2)
2. Process mapping & analysis (Unit 3)
3. Quality management (Unit 4)

Unit 5: Benchmarking Processes & Performance

a) Product & Process Benchmarking- systematic comparison against best

practice
b) Benefits (sets realistic performance goals, best practice, improves
performance). Limitations: does not reveal how they are better
c) Problems (wrong measure, wrong organisation, no implementation,
senior management support, resources) & Resistance (we the best,
unique- products & services may be but not processes)
d) Benchmarking process:
1. Top management support - critical
2. What to benchmark: product, process or service
3. Relevant benchmarks: Customer satisfaction & Ops Improvement
- Price / Cost, Quality, Turnaround time, Product range, Product Features,
Service
Performance-Importance Matrix to identify what to benchmark
(performance relative to competition) (importance to customers)

Superior Review Benchmark and

Performance resources maintain
CI Benchmark & Improve
processes
Inferior/Low High Importance
 4. Profile performance benchmarks against competition and market
requirement <diagram>

5. do not rely too much on internal staff on benchmarking- perceptions –

sales people overemphasize price & features not reliability .. design
people too much on design

get input from customers and competition

e) Identify Potential Benchmarking Partners
- Department, Competitors, Parallel Industries, Different Sectors – similar
processes e.g. Southwest Airlines benchmark against F1
f) Key considerations: compatibility & availability of data; reciprocity
g) Collecting & analyzing the data using techniques in unit 3 and 4.
Important to look at context of processes: e.g. tools, training, culture
h) Action plan to implement
i) Benchmarking Frameworks:
1. SPOTS
2. PIMS DB

Unit 6: Managing Knowledge & Solving Problems

a) Explicit vs Tacit
b) 5 Critical Tasks Managing Knowledge (share existing knowledge):
- Identify, Acquire, Share (most difficult), Store, Embed in Process
c) Key Success Factors Implementing Knowledge Management:
- Management Support
- Community of Champions
- Incentive
- Culture
- KM systems
d) Problem Solving and Creativity (Generate new knowledge)
e) Differences: Creativity
- No clear goal, individual, radical step change BUT cannot characterize;
have similar traits but different emphasis
f) Tools for Creativity
1. MPIA – Mapping (Mind Maps), Perspectives (Lateral Thinking), Ideas
(Brainstorming) in Actions
2. Spider Diagrams and Mind Maps
3. De Bono Lateral Thinking
4. Brainstorming
5. 6 Thinking Hats

Unit 7: Project Management Implementation

a) Different types of projects: degree of Uncertainty x Complexity will

determine how project is planned and managed
 b) Problems with Project Management
- Did not meet requirements, delay, costs overrun, did not complete

c) How to Manage Projects Better: 7 Steps

1. Define goals clearly: Objectives, scope, boundaries, responsibilities,
outcome
2. Appoint competent PM: Experience, competency, detail, management,
comms, political, issues and risk management
3. Build committed project team: Forming, Storming, Norming,
Performing. Composition, conflict resolution, team work
4. Provide sufficient resources. Tools:
- Gantt chart
- Network Analysis (critical path) – if delayed will affect the entire
project
5. Create clear communication and feedback channels, involve users
6. Monitor & measure progress. Brooke’s law- adding resources to late
project makes it later
7. Document & learn - training

d) Methods: Select & Evaluate Projects (no one best technique, involves
human judgement, management responsibility). Issue: cheat the system

1. Financial Assessment: NPV through DCF (issue discount rate used,

forecasts of sales, costs e.g. 10% decrease in sales, 10% increase in costs)
2. Qualitative Methods: Checklists, SWOT, Weighted Factors e.g. size of
market, cost savings, profitability
Most common criteria used: 1. probability of commercial & technical success 2.
Market share, payback period for low novelty projects 3. Fit to competences for
high novelty projects

e) Implementing Projects: Top Causes of Failure

1. Lack of Top Management Support
2. Changes in Company Structure
3. Changes in Key Personnel
4. Lack of Control
5. Resistance – Cultural or Vested interests
6. Inappropriate motivation & reward systems

Unit 8: Developing New Products & Services

Successful new product & service development (innovation) – differentiation

rewarded by increased market share, revenue, margin BUT high failure rates
50%: ignorance & failure to apply good development practices. Product &
process innovation core principles the same – difference is between tangible and
intangible outcomes.
a) New Product / Service Development Process:
Stage-Gate Process:
 - Stage1 (concept dev) – Gate 1 (Go/No Go based on market & tech
profile) – Stage 2 (Business case Dev) – Gate 2 (Go/No Go Dev review
based on Financials)
- # of stage / gate depends on project size & complexity
- iterative process

b) 4-Stage Model and key issues

1. Concept Generation – identify opp for new product / service
Useful Techniques (Tidd)
- Assess market trends and customer needs (segmentation) – low novelty
- survey and focus groups – high novelty
- lead-users - high novelty
- customer-developers – high novelty
b) R&D – for (novel) products / services – customer unaware of needs

2. Project Selection – evaluate & select project based on criteria

2 levels: Aggregate Product Plan: align new product development
portfolio + resources required for various projects
Specific Product Concepts – review concepts based on criteria:
matched-pair methodology – compare similar new products – one
successful, one not
Criteria:
a) Product superiority – customer perception
b) Market Knowledge – competitive analysis; customer needs
c) Clear Product Definition – concept, positioning, features
d) Risk Assessment – market, technology, manufacturing, design risks
e) Project Organisation – Cross functional, multi-disciplinary teams
f) Project Resources – Financial, Skills
g) Execution – development, commercialization activities
h) Top Management support

3. Product Development
– translate concept to product / service
- 70% of product costs determined at design stage
a) Product developed and produced – R&D, designers, manufacturing,
marketing staff work together
b) Iterative Design-Test-Build process
c) Continuous problem solving & prototyping

Tools & Methods

a) Quality Function Deployment (QFD): customer requirements, design
parameters
b) Design for Manufacture (DFM): optimum manufacturing costs and
quality e.g. placement of screw looks good in design but problem in
manufacturing
c) Rapid Prototyping- core element of design-build-test cycle, iterations
to learn and develop final solution – most useful for high novelty projects

Organisation
 Concurrent Engineering is the best organization to support new product
development. Stages are in overlapped and in parallel – require teamwork
and collaboration – to reduce time to market. Early identification of
problems.
4 main Organization structure
a) Functional – traditional hierarchy led by function managers (weakest
structure)
b) Lightweight product manager – hierarchy with product manager co-
ordinating inter-functional work
c) Heavyweight product manager – matrix structure led by product
manager with strategic input – high novelty projects
d) Project Execution Teams – full time with seconded functional team
members and project team leader (strongest structure, high novelty
projects)

4. Product Commercialisation – testing, launching, marketing new

product

Tools
a) Customer Testing – users test prototypes – get useful info like pricing,
advertising strategy
b) Test Marketing – test the marketing strategy e.g. shopping simulation
using coupons, trial sale of new product to controlled group
c) Alpha, Beta, Gamma Testing – different releases of product under
development to controlled group – e.g. application software
d) Develop Marketing Strategy – marketing mix – product, promotion,
pricing & distribution
e) Develop Marketing Plan
f) Develop Support Organisation – internal functions & external
agencies

c) Develop New Services: SPOTS to enhance the process above

Unit 9: Managing Innovation – create and maintain an innovative organization

Innovation improves performance through cost reduction, quality improvement

& differentiating products & services
a) Types & Degree of Innovation:
1. Product & Process Innovation
2. Incremental vs. Radical (degree of novelty)

Degree of Innovation / Type of Innovation Matrix

to balance the composition and match resources and capabilities

Transform
Radical
Incremental/Process Service Product
b) Integrated Approach to Managing Innovation
e.g. R&D needs to be linked with marketing
1) Scanning – Benchmarking, brainstorming techniques
2) Strategy / selection – Matrix analysis; project assessment
3) Resourcing – knowledge management & creativity
4) Implementing – project management & product development
5) Learning – Continuous Improvement

c) Innovative Organisation characteristics:

1) Shared Vision, Leadership, Will to innovate
2) Appropriate Structure (decentralized, non-bureaucratic)
3) Key Individuals
4) Effective Team working
5) High involvement
6) Creative Climate
7) External focus

d) 5 Components of Innovation Audit Framework

a) Does the organization take Strategic Approach to Innovation
b) Has organization established effective external linkages
c) Does organization have effective implementation mechanisms
d) Does innovation take place in an supportive organization context
e) Is this a learning organisation