Comments on These Eight Strategies

These eight strategies can be broken down into two major groups. The first six focus on reducing lead times and eliminating waste by chang­ing the appropriate underlying processes. As such, they are basic strat­egies. How they are applied will vary from firm to firm. Since they focus on the processes, they take longer to implement and their impact is much more significant. Their use can and does generate increased value and competitive advantage. In contrast, the last two are best de­scribed as enhancers. Their use alone does not generate a long-term competitive advantage. Instead, they are best used when combined with one of the other six basic strategies.

Second, critical to the successful application of these strategies are the three major implementation traits of focus, urgency, and time com­pression (traits found in abundance in kaizen event programs). Focus means that from the outset we have clearly delineated the task to be studied. We have bounded the task in terms of span (how much of the system we will study) and conditions (under what specific conditions we are to study the problem). Once we have established a bound, we do not go beyond it. If we see a problem or cause that lies outside of the bounds, we do not ignore it. Rather, we use the vehicle of the "ac­tion list" to record the problem. That is, we write down the problem, the reason that it is important, the implications of not dealing with it, and the type of actions that must be considered to deal with it. We leave the items on this action list for others to focus bn. For ourselves, we deal only with those items within the bounds previously set down.

Third, there is the issue of urgency. Urgency is the notion that people feel that the problem or task that they dealing with is important and that they must address it immediately. To establish urgency, you must demand that the participants work on the project full time for a period of time. Finally, there is time compression. To reduce lead times, you have to set a specific deadline. Here are two radical aspects of time compression. The first is that the deadline should not be too far into the future. For most projects, where people are assigned to them on a full-time basis, the tasks can be completed with a high degree of success within two to five days. Second, the deadline should be a drop-dead one. That is, management should be prepared not to offer any extensions. These three attributes enhance management's ability to re­duce lead times and to do so effectively and efficiently.

PROCESS VIEW OF DELIVERY

Everything that takes place in the operations management system can be viewed as the result of a process. It is the process that determines what the integrated enterprise can and cannot do. It is the design pro­cess at a firm such as Daimler-Chrysler that enables it to quickly bring to market new products and ideas. If we want to change the outcomes, then we must change the process. Stated alternatively, processes are the heart of every operations management and at the heart of the CIRM view of the integrated enterprise. An operations manager is really a process manager. Then, what is this concept of a process?

A process is the sequence and organization (either formal or infor­mal) of all activities it needs to convert inputs into outputs. A process draws together inputs, transformation activities, and outputs into a uni­fied system. It identifies the resources that activities need (e.g., ma­chines, material, labor, and information) and specifies stages at which the resources are needed and in what quantities. A process also de­scribes the activities needed to convert inputs into outputs. For ex­ample, we use a stove and heat to convert a raw hamburger patty (an input) into a cooked hamburger (an output). Other activities transport or move items from one area to another. Still other activities store raw materials, work-in-process (begun but unfinished outputs), or completed work. Finally, some activities check or inspect work to make sure that it meets standards for quality, quantity, lead time, or timing.

How operations managers structure processes influences the abil­ity of the firm to serve its customers. We have all experienced organi­zations with complex, bureaucratic processes that seem incapable of providing a desired service in a timely manner. The design of a process should reflect what the customer wants. If the customer prizes quick response, then the process should be designed to respond quickly. Managers must identify and eliminate unnecessary or redundant steps, reduce distances between steps or activities, and diminish the time needed to complete each step. This need for a fit between the process and the customer has important effects. It implies that if the customer changes, then the process might also have to change.

However, underlying process thinking, the orientation of thinking in terms of processes, are certain important premises:

• Every firm is defined in terms of its various processes. These pro­cesses determine the type of product (goods or services) that the firm can provide its customers.
• Processes determine the traits and the specific type of value deliv­ered by the firm. When viewed in this light, products can be seen as "residuals"—outputs of the process.
• To change the traits of the products, we must identify the appropri­ate processes and act on them.
• People work within processes; managers work on processes.
• Capacity and processes are linked. Processes use capacity; chang­ing processes can change the amount of capacity needed.
• Since processes are linked, we must manage the entire network of processes. This task requires being aware of bottlenecks or con­straints.

As a result, the DP&S module of CIRM now emphasizes a shift from managing activities to managing processes. Underlying this shift is the notion that by managing processes, we enhance the ability of our function and our firm to better deliver superior value to our targeted customers faster than our competitors. That orientation is a sure pre­scription for corporate survival and success.

CONCLUDING COMMENTS

Manufacturing and the enterprise continue to evolve, transform, and change. These changes are not only affecting how activities within the enterprise are being carried out; they are also influencing the structure of the CIRM program. In this presentation, we have focused on six developments that every manager interested in delivering products and services should be aware of. It is hoped that this presentation will cause managers to explore these developments in greater detail. Within these six developments, we can find the seeds of a radical transformation of the delivery process.

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