12- Improvement Flashcards
Why is improvement so important?
It is the ultimate objective of operations and processes
What is the Red Queen effect?
That all businesses struggle to survive, regardless of how long they have existed.
What is the starting point of improvement?
the performance objectives (quality, speed, cost, dependability, flexibility).
moreover, they can be aggregated to “composite” measures:
-customer satisfaction
-overall service level
-operations agility
-Aggregate even more–> greater strategic relevance
What improvement tools do we have?
-balanced scorecard:good as continuous process of comparison, provides w/ideas & info that can lead to solutions, process learning and adaptation, cannot be done without investment.
-benchmarking: comparing performances
-importance-performance matrix: assess the gap between actual-targeted performance
-sandcone theory: gives the best generic way to make improvement long lasting.
Explain the balanced scorecard
it is an approach for measuring performance and presents an overall picture of the organization’s performance to achieve strategic impact.
It measure factors behind financial performance key to future success, and adresses following perspectives:
-financial perspective: how do we look to our stakeholders
-customer perspective: how do we look to out customers
-process perspective: what can we excel
-building capabilities: what can we improve
Explain the different performance targets
performance measures only have meaning when compared with performance targets.
-historically based targets: current vs. previous performance
-strategic targets: proper levels of performance to achieve strategic objectives
-external performance-based targets: compare w/ external organizations.
-absolute targets: theoretical upper limit of performance
What does benchmarking consists in?
It aims to compare one’s own performance against other comparable operations.
Explain the different types of benchmarking
the different types are not mutually exclusive.
-internal benchmarking: compare operations within same org.
-external benchmarking: compare operations between different org.
-competitive benchmarking: comparison between competitors in the same market.
-performance benchmarking: comparison of achieved performance in different operations.
-practice benchmarking: comparison between practices adopted in an operation and those adopted by other operations.
“strategic” types of imitators to deploy external ideas
-pioneer importer: export idea from abroad and be the first one to implement it.
-fast second: copy idea of a competitor before it is settled down and profits can be high. Kind of risky.
-the come from behind: copy idea from competitor after seeing that it worked well. Less risky but less profits can be obtained.
Explain the importance-performance matrix
it positions relative importance of performance and currently achieved performance. GRAPHIC
it has 4 different zones:
-excess zone: high performance but not important. May be wasting resources.
-appropriate zone: Appropriate performance-importance relation
-improve zone: it would be nice to improve performance
-urgent action zone: unnacceptable performance + important. Need to take urgent action.
What is the Sandcone theory?
it is a generic best approach to make improvements last over time.
accumulable relative priorities of performance objectives:
1- quality
2- dependability
3- speed
4- flexibility
5- cost
GRAPHIC!
What is the best improvement approach/path?
2 types:
-Breakthrough improvement: BPR(Business Process Reengineering). Redesign all system w/o constraints. Creative ideas. Based on exploration of new models.
-Continuous improvement: PDCA cycles - DMAIC-stress adaptability, teamwork and attention to detail. it is based on exploitation of existing models.
What does organizational ambidexterity mean?
It is when a company follows both breakthrough + continuous improvement approach, by both explorating & exploiting.
Eg: Six-Sigma
Explain the techniques that facilitate improvement
-Cause-effect diagrams: search root causes of problems. 5-M
-Scatter diagrams: study correlation between 2 variables
-Paretto diagrams: distinguish between what is important and what is not.
-Why-why analysis:asking why a problem has arrised subsequently.
How can we make improvement to stick arround?
-avoid improvement “fashion”
-avoid jumping from 1 fad to another
-adopt new ideas that make sense. 1 size fit all don’t work.
-carefully thought plans are better
