SCM 300 Final

What is a Business Process?

- "Any activity or group of activities that takes an input, adds value to it, and provides an output to an internal or external customer. - Processes use an Organization's resources to provide definitive results." Dr. H.J.Harrington - Business Process Improvement • Step-by-step breakdown that aids in providing high quality results on a consistent basis utilizing minimal resources.

Three Benefits of excellent business process

- Consistency - Managing from afar - Ability to grow

Quality Gurus

- Philip Crosby - W. Edwards Deming - Joseph M. Juran

TQM Principles

1. CUSTOMER - Needs of Today, Desires for Tomorrow, Dimensions of Quality 2. INVOLVEMENT (Employees and SC Partners) - Communication, Learning, Teams, Training, Mentoring 3. CONTINUOUS IMPROVEMENT CULTURE- Across the Supply Chain, Quality Tools, Improvement Programs, Rewards, Incentives, Knowledge Management, Benchmarking...

Types of Benchmarking

1. Competitive 2. Functional 3. Internal

Project Priorities Triangle

1. Performance 2. Quality 3. Cost Time

How Services differ from Products

1. Tangible Products vs. Intangible Service 2. Services cannot be inventoried. 3. Location and hours of operation can be very important for some services 4. Services are usually produced and received simultaneously 5. The production of services is often highly visible Quality Management - Dealing with mistakes, How you make it is important Importance of Hiring, Training, Fail-Safes, Customer Relations, etc. 6. Some service have very low barriers to entry/exit Consider these examples: Haircuts, Car wash, Litigation, Teaching, Banking, Healthcare, Grooming, Landscaping, Restaurants, Childcare, Travel Related industries

Keys to designing a system of metrics

1. stakeholders and goals 2. good metrics 3. simplicity 4. completeness 5. redundancy 6. continuous improvement 7. leadership

Milestones

A Specific Event in a Project. - Date of an important decision - Choose location for Factory - Start of a new phase of project, End of a project phase - Begin electrical wiring in the home - A deadline - Date home must be completed and inspected

executive dashboard

A computer-generated visual representation of a company's performance that is often available to executives on nearly any of their digital devices.

System of Metrics

A group of metrics that collectively attempt to provide a multi-dimensional view of a resource or outcome • Basketball example: Points/game, Rebounds/game, Assists/game, Turnovers/game, Turnovers caused/game • Academic example: GPA, Standardized Test Scores, Years to complete degree

Single Vendor Approach

Getting IT software from one vendor for fully integrated experience

LMS

Logistics Management System

SMART metrics

Specific Measurable Attainable Relevant Timely

SRM

Supplier Relationship Management

WMS

Warehouse Management System

Best of Breed Approach

combines modules from various vendors to create an information system that better meets an organization's needs than a standard ERP system.

Three key measurement system attributes

effectiveness efficiency adaptability

Quality Trilogy (Juran)

emphasized three things: quality planning, quality improvement, and quality control

Design - "Keep It Simple Stupid"

- Simplicity in design can be beneficial in a number of areas. - Simple design allows for greater control over reliability. Designing items with fewer parts can potentially help improve quality, specifically reliability.

Being a Good Consultant

1. DATA SKILLS - Are you skilled at Data Collection, Data Analysis? 2. VALUES FEEDBACK - Seek Feedback, Use Feedback 3. CREATIVITY - Be creative in developing solutions 4. UNDERSTANDS PEOPLE - Create solutions that work for humans 5. CHANGE AGENT - Anticipate Learning Curves and Resistance to Change 6. DESIRE TO HELP PEOPLE - Don't get angry. Remember you are there to help. 7. VALUES SIMPLICITY - Easy to Understand Solutions - Explain changes, benefits, metrics...

Four steps in project management

1. DEFINE THE PROJECT Clarity of objectives. Eliminate ambiguities. Avoid Arguments later. 2. ESTABLISH PROJECT PRIORITIES Choose two types of quality: Cost, Time, Performance 3. WORK BREAKDOWN STRUCTURE Break work items into smallest units. Estimate of needs: people, Time, Cost 4. TRACK PROJECT PROGRESS - Are we on-time, ahead of schedule, behind schedule? What happens when different groups need help? Importance of project management software

Business Process Improvement (BPI)

1. DESIRED STATE - Quantifiable Goals 2. PRESENT STATE - Collect Data and Observe 3. GAP ANALYSIS - Compare Present vs Desired State 4. PROJECT SCOPE - You can't fix everything. Stay focused. 5. COLLECT and SHARE DATA, ANALYZE - Investigate. Get Feedback. Consider solutions. 6. DEVELOP SOLUTIONS - Solutions they will buy. Make an impact. Push for creativity. 7. DEVELOP IMPLEMENTATION PLAN - Provide a path to adoption.

Primary Reasons for ERP

1. Integrate Financial Data - One Story vs. Many, One Set of Numbers 2. Integrate Inventory Data - Supply Chain Visibility, Reduce Inventory 3. Standardize Human Resources Data - Tracking Employee Time, Benefits, 4. Manufacturing and Business Process Data - Standardization, Speed, Visibility 5. Integrate Customer Order Information -Supply Chain Coordination

Being a Good Consultant - Things to Avoid

1. MAKING ASSUMPTIONS - Never assume. Investigate. Investigate more. 2. DEVELOPING SOLUTIONS TOO SOON - Long lasting solutions are rarely obvious 3. LISTENING TO CLIENT's PRE-FABRICATED SOLUTIONS - Why now? 4. SCOPE INFLATION - Limited time. Limited Resources. Stay focused. 5. STICKING TO A DEAD-END SCOPE - Is it time to quit? 6. MAINTAINING HAPPINESS - Change is difficult.

Requirements of a good metric

1. Measurable 2. Easily Understood 3. Attainable 4. Strategically Oriented 5. Easy to measure 6. Provides Value 7. Provides Guidance 8. Cheater proof

Consequences of poor metrics

1. Supply chain goals are not met 2. Poor Output 3. Waste 4. Undesirable employee behavior 5. Managers make poor decisions 6. Employee victimization 7. Undeserved winners 8. Lack of contentment

Six Sigma

A business process for improving quality, reducing costs, and increasing customer satisfaction developed by Motorola in 1980s Defect Elimination • Methodologies designed to identify and eliminate process variations that cause defects Program Basics • Black Belt Program - Green, Black, Master Black belt • Training - Methodologies, Statistics, Quality Tools • Incentives Key Methodologies • DMAIC • DMADV

Process Velocity

A measure of how long a unit sits in a process versus the amount of work time that is expended on the unit

Cash-to-cash cycle

A measure of the number days between the time a company pays their supplier for inventory and the time that same company is paid for the same inventory by their customer Amount of days that money related to inventory is out of pocket.

SCOR Model

A measurement tool that enables supply chain partners to track performance, communicate progress, and develop opportunities for improvement five primary supply chain processes: 1. Plan - demand and supply chain planning 2. Source - purchasing process 3. Make - manufacturing process 4. Deliver - logistics and transportation 5. Return - reverse logistics

Shared metrics

A metric that is impacted by two related parties

capacity utilization

A ratio of the amount of product produced by a manufacturing process versus the maximum capacity of that facility

Performance Metric (PM)

A single performance measurement used to evaluate, motivate, and improve performance Basketball example: Points per game Academic example: GPA

Managerial Paralysis

A situation where managers are inundated with data. This overflow of data actually slows decision-making and may even result in managers stalling or avoiding decision-making

What is a Project?

An endeavor in which human, material, and financial resources Are organized, in a novel way, To undertake a unique scope of work, of a given specification, within the constraints of cost and time, so as to achieve a beneficial change defined by quantitative and qualitative objectives

Why do we measure?

As Part of our Daily Lives - Resource Utilization - Decisions - Make them, Judge them - Learn, Understand, and then Predict - Rank - Identify Changes In Business: - Helping us manage from afar - Helping us manage large numbers of resources, outcomes... - Motivating good behavior and good decisions - They also help identify/establish standards - design, performance, unbiased recognition - They might even point to required corrective actions

Quality Certifications and Awards

CERTIFICATIONS and CERTIFICATION PROGRAMS • Evidence of meeting minimal acceptable scores/specifications • Communication and motivation tool for partners • Internally motivates change • Piece of mind AWARD PROGRAMS • Helps increase morale • Recognition of top performers • Opportunity to increase competition and publicize top programs • Criteria help up and coming organizations

Quality is Free (crosby)

Crosby is famous for his book that proclaimed this. Before Crosby, most saw quality as a burden on corporate costs. Crosby argued that a lack of quality may have lower costs, but it would eliminate any value. As a result, the more that was invested in quality, the greater the value of the product or service.

BPI Step FIVE: Collect Data, Share Data, Analyze

Deeper Internal and External Investigation - Benchmark, learn from others, success/failure Get Feedback- Share and Discuss Findings Consider possible elements of a solution

Designing a Business Process

Define Goals and Parameters 1. Goals, Values, Stakeholders - What needs to be accomplished? Who is involved? 2. Block Diagram - A process is part of something bigger. Describe the system in which process will lie. 3. Establish the Scope - Define parameters of process. Beginning and End. Define Success 4. Define the Service - Get more specific. Establish exactly what process needs to accomplish 5. Measurement & Management Considerations - Metrics and Data. How will they be used? Build it, Test it, Improve It 6. Primary Steps Detailed - Begin to build the process steps 7. Develop a Process Map - Create a visual representation of the process 8. Evaluation, Testing - Evaluate the process before rolling out.

Deming's 14 points

Deming was a champion of continuous improvement. In an effort to help organizations foster a culture of continuous improvement, he developed a list of quality recommendations

Deliverables

Description of services/products to be delivered - Presentation and/or Documents: Design, Process, Report, Contract - Research (Data or Document) - Physical item or Intangible outputs (Software)

BPI Step FOUR: Develop Project Scope

Develop a focused project. Which GAPS will be addressed on this improvement project? Establish goals and desired outcomes. What will be investigated? What will be developed?

Cow Path Theory

Effective does not mean Efficient Why are most initial processes inefficient? How do typical processes develop? - Who was the developer? Development conditions? - Why weren't inefficiencies addressed? Immediately? Later? - Why are some process inefficiencies sometimes required? Regulations?

ERP

Enterprise resource planning

Common measurement pitfalls

Even in organizations that value performance measurement, there are a number of common errors companies often make

Business Process Design: Value of Flowcharts

General Process Flow Problems - Quality Control Tool Information Technology - What type of software will be used to facilitate the process? - Where will data be collected? Data needs for Marketing, Finance/Accounting, SCM - Database development and IT infrastructure requirements Required Resources, Quality of those Resources - Employees and Managers - Skills, Training, Staffing requirements to meet demand - Materials and Capital Equipment - Money Operational Considerations - What can be learned through Testing? - Potential failure points in process - Average service encounter time, Variability concerns - System Capacity --- Operational difficulties, Bottlenecks, Process flexibility - Waiting Line Management --- Customer Service --- Facility, Infrastructure, and Staffing Requirements Everyone sees the process differently - What is learned in each Department? - Marketing - Customer, Suppliers, Product Line, Forecasting, Branding - Finance - Project Feasibility, Return on Investment - Accounting and IT - Costs and Data Management

AI (artificial intelligence)

Generically, AI refers to a desire to have machines behave more like humans. Cognitive Computing would be the highest form, when machines act like a human that learns and solves problems. A lower level would be machine learning. When a machine, via a basic and very simple algorithm, makes relatively low level decisions. often rooted in fundamental statistics, in particular Bayesian statistics.

Objectives

Goals. Expectations or desired outcomes in the following categories" - Performance and Quality - Improve the design of product - Budget - Reduce the cost of logistics by 10% - Time - Reduce delivery times by 2 days

Three requirements of a good process

Good Intentions - Goal Oriented, Stakeholders considered, Effective and Efficient, Outputs are desired Reproducible Results - Documented and Easily Understood Measurable and Manageable - Entire system considered. Accountability, good metrics, easy to identify problems

Black Belt Program

Green, Black, Master Black belt. Firms awards percentage of savings based on level of belt. E.g. Green gets 0.5%, Black get 1%, Master 1.5%.

BPI Step SEVEN: Develop an Implementation Plan

How should these ideas be put into action? Be Specific! - Timeline - Training and Development - Considerations Outlined Anticipated problems and corrective actions - Metrics, Standards, and Checkpoints

BPI Step THREE: Gap Analysis - Gap between Desired and Present State

Illustrate the GAP - utilize desired metrics and goals Do NOT develop Solutions!!! Share and discuss the "GAP" with clients Why does the gap exist? Consider potential causes. measure and compare the difference between the desired state and the present state

KPIs (Key Performance Indicators)

Individual performance metrics identified by the company as being imperative to achieving the organizations most important goals

BPI Step ONE: DESIRED STATE

Interview Client - Identify Objectives, Goals and Metrics Goals must be quantifiable. Establish a hierarchy. - Quantifiable Goals

BPI Step TWO: PRESENT STATE

Interview, Observe, and/or Collect Data Utilize the same metrics from "Step One" Process Maps and Data Inspections - Do actions and documentation match? Collect Data and Observe

SCM IT - System Requirements

Low Cost Speed - Efficient Delivery - On time Tracking Quality Shrinkage: Damage, Theft Accuracy Process: Effective, Efficient, Adaptable Data: Collection, Access, and Security Security: Virtual and Physical Legal and Ethical - Sustainability Planning - Communication - Relationship Building

Total Quality Management (TQM)

Management approach for an organization, centered on quality, based on the participation of all its members and aiming at long-term success through customer satisfaction, and benefits to all members of the organization and to society

MES

Manufacturing Execution System

Performance Measurement

Measuring employee performance for the purpose of motivation, improvement, statistical reference, promotion, termination, etc.

Why do Bad Processes Exist?

NEVER WAS GOOD • Ambiguity - Goals are not clearly understood. Laziness, Hubris, Lack of information • Misalignment- Goals and Actions not in alignment • Miscommunication - Employees do not understand goals, process... USED TO BE GOOD • Market Evolution - Customer's needs have changed • Miscommunication - New employees do not understand goals, process... LIMITATIONS • Development of poor or limited processes - May result in limited capacity, inefficiency, confusion... • Lack of appropriate tools, technology...

Dimensions of Quality: Product

Performance - What type of output is provided? As promised? Versus the competition? Reliability - Likelihood item will work Durability - Under normal conditions will the item break? Features - Both expected features and bonus features. Aesthetics - Looks good? Smells good? Feels good? Sounds good? Reputation/Brand - Does it give you that warm feeling inside? Serviceability - Can item be fixed? At what cost? Difficult to find repair personnel? Service Response - Can I find help? What kind of help? Cost?

Balanced Scorecard (BSC)

Performance management tool that focuses on Strategic Activity and strategic Outcomes. While some companies the 4 elements of their balanced scorecard, most companies utilize some form of the traditional scorecard that tracks outputs in four different areas: 1. Financial Results 2. Customer-Related Results 3. Internal Business Process Results 4. Learning and Growth Results

Quality Tools

Process Flowchart, Cause and Effect Diagram, Check Sheet, Pareto Analysis, Histogram, Scatter Diagram, Statistical Process Control Chart

ISO 9000

Quality Certification Quality Management Family of Standards • Documentation of Processes - Supports claims of quality • Assures products and processes of an organization meet quality standards • Certification Only - Compliance does not insure HIGH Quality • Attractive to Customers - Perception of High Quality • International Certification- Very important to any organization competing in international markets

RFID

Radio Frequency Identification

Crashing the Project

Shortening the Time of the Project by increasing the number of resources usually in the most cost effective manner. When Crashing in this class, ALWAYS choose the cheapest solution

Vendor Choices

Single Vendor Approach Best of Breed Approach WHO? - ERP Companies - Modular Approach CONSIDERATIONS - In-house system? - Which modules? Industry specificity? - Standard or Customized System

BPI Step SIX: Develop Solutions and Recommendations

Solutions they will buy. Make an impact. Push for creativity. Does this problem even require change and/or innovation? If a solution is needed, where to start? - Focus on YOUR client - Avoid one-size fits-all solutions - Start with Two Options - Change Nothing, Eliminate Process - Get Innovative: Embrace the Repugnant "Good Ideas" are Useless - Will they actually adopt the idea? Do some issues require further study? Future projects

Internal Benchmarking

Some organizations are so big that they can benchmark one department versus another. Example: GE's energy group benchmarking their healthcare group's higher practices

ERP Systems

Stores our Financial, Operations, and HR Data in Central Database • Focus is on integration of data • Collects and Stores data for Analysis, Forecasts • Facilitates sharing of Data

Relationship between business processes and the supply chain, Importance of business processes

Supply chains are made up of a series of interconnected and interdependent processes. Each process is a mini-supply chain - managing inputs and outputs at a smaller scale. Importance - growth, quality, design and improvement.

IoT - Internet of Things

The "Human" internet allows people to learn from each other, communicate, tweet, track people or things, make transactions, etc. attempts to create a similar type of system for "THINGS". Through the use of sensors, electronics, software, etc. "THINGS" can communicate with each other, control each other, and document events. Real-time efficiencies and outcomes. AND via learning: improvements in the future

Critical Path

The Longest Path (in terms of time) in the AON Network Diagram. This path dictates the expected completion time of the Project. Items on this path must be completed in time in order for project to be completed on schedule

SCM IT: Things to consider

The PURCHASE - Knowing your Company and your Supply Chain. Knowing your needs. - Purchase, Lease? From whom? The IMPLEMENTATION - Technical Considerations - Old System vs. New System, Data collection - People - Customers, Employees - Business processes - Testing of system The FUTURE - Upgrades - Constant Changes and Upgrades in Technology - Evolving Businesses and Supply Chains - Mergers, Acquisitions, Partnerships...

quality

The ability of a product or service to consistently meet or exceed customer expectations

Slack

The amount of time an activity or path can be delayed with impacting the length of the critical path

Perfect Order Fulfillment

The percentage of orders that are full, arrive on time, and are damage free

Dimensions of Quality: Service

Time - Waiting time, Time from request to completion Timely - % of time delivered on time, early, late? Complete - Based on expectations. Customer's definition of complete? Accurate - Exactly what was expected? Right the first time? Responsive - Reaction time to problems. Who found the error? Courtesy - How does each customer define courteous? Consistent - Same every time? Consider different customer expectations. Accessible - Location Convenient - Hours of operation, user-friendly, paperwork...

competitive benchmarking

Used when companies want to measure their processes, programs, and outcomes versus those of their direct competitors. Example: Dell benchmarking Apple

Value of Process improvement and Project Management on Careers - In-class examples

Vital to Corporate Careers - No matter what the major - Well-defined goals - Teams and Individuals have responsibilities - Recommendations and Implementation - Measurable Results - Success or Failure? Resume Builder - Little stories about your career - What you have done. Ability to get results. Leadership experience. - How do you deal with adversity and ambiguity... - Good way to document your accomplishments (Grades & Degrees are useless) Corporate Career - Successful Leaders get more responsibility, power, money... - Top Project Managers have the ability to choose projects, teams... - Unskilled, unintelligent, and "control freaks" are easily exposed in a project environment

functional benchmarking

When a company benchmarks an organization that is successful in an area where their processes reflect similar inputs, outputs or values. Example: Southwest Airlines benchmarking nascar pit crew to get plane ready faster

Blockchain

a list of records that are collected among a shared network of computers. It cannot be corrupted. This "distributed ledger" collects and constantly updates transactions. Money, inventory, and nearly anything else can be tracked and recorded in this ledger. aid in eliminating lies, misinformation, IT security scandals, late payments, false transactions, etc.

AS/RS

automated storage and retrieval system

business process flow chart

collection of symbols that illustrates the sequential between all of the different activities and decisions in a particular process

Total Supply Chain Management Costs

cost of every process, material, fee, defect, etc that runs through the supply chain; sometimes also explained as the cost to plan, source and deliver products and services

CRM

customer relationship management

DSS

decision support system

scope

developed to keep consultants focused

Reliability

how often do they actually deliver on their promises? when they can't meet our deadlines what is the typical outcome?

Activity-on-Node (AON)

illustration where each circle represents a single activity in the project. Inside the circles the activity is given a name or symbol. In addition, inside each circle, a number will indicate how much time is required to complete that activity

Swimlane Flowcharts

in the world of process management, these types of flowcharts are effectively the same as standard process maps except that these offer more detail. can see individual group responsible for each activity

block diagram

simple flowchart that provides a business process with a picture view of the entire system

Eprocurement

the business-to-business online purchase and sale of supplies and services

DMAIC

used for existing processes - Design, Measure, Analyze, Improve, Control

DMADV

used in designing NEW processes - Design, Measure, Analyze, Design, Verify

Scope Inflation (scope creep)

when scopes grow too big, the project becomes too difficult to manage and resources are wasted. some of this is likely and possibly healthy but consultants need to constantly manage this

Malcolm Baldrige National Quality Award

• Given to US companies in different categories • Also potentially helpful for companies that don't choose to compete for MBNQA • Based on Core TQM Values, Expensive process for competitors • Lengthy criteria includes these categories: Leadership, Strategic planning, Customer focus, Information and analysis, Human resource focus, Process management, and Business results

DEMING PRIZE

• Similar to Baldrige Award • Available to Japanese firms (and now also to non-Japanese firms and individuals)