Intro To Management Hubbard: Final

Performance Management

ongoing assessment and improvement to drive results

Improve faster and better than the competition

3 Elements of Performance Management

Business Process Management
Businessines Assessment
Business Improvement

Business process

set of repeatable, value adding activities performed to achieve business goal

Value Chain Process

Operational process that make, sell , or deliver a product

Support Processes

enable value chain process

management of, financials, humans, IT

Management Processes

Controls
Planning
Administrations

Right Work

Ensure processes are aligned to organization's vision, mission, and strategic objectives

Right work, done well

Maximize efficiency and effectiveness of a firm relative to its resources

Efficiency

minimize time and resources for target output

Effectiveness

maximizing the degree to which we satisfy our objectives

DMAIC

method for business process improvement

Uses added analytical tools

DMAIC (Defintion)

Define
Measure
Analyze
Improve/Innovate
Control

VOC

Voice of Customer

VOC Examples

Discussions
Surveys
Focus Groups
Warranty Data

Process Maps

Visual representaton of process

2 Process Maps

SIPOC Chart
Swimlane Diagram

Sipoc Chart

High-Level Flow Chart

Swimlane Diagram

Flowchart with landes for each functional organization that participates

SIPOC

Suppliers
Inputs
Processes
Outputs

SIPOC Starts with

determining what customer behavior you want

Swimlane

Greater detail than SIPOC
Each lane is a functional unit

Each lane

(Finance, Manufacturing, Purchasing ect...)

Cost Measures

minimize resources required

Variation measures

minimize waste

Cycle Time Measures

Reduce production time

3 Efficiency Measures

Cost Measures
Variation Measures
Cycle Time Measures

Effectiveness Measures

capability of process to deliver products

Outcome Measures

how well product performs

Well Dressed Measure

% of special orders shipped within 10 days of order

Compare against historical data

Benchmarking

Your best practices against someone else

Innovate Phase

how a firms resources can be used more efficiency

DMAIC Innovate Phase (Tools)

Six Sigma
Lean
Kaizen
TQM

DMAIC Control Phase

We have a process we want to keep

DMADV

Used for new processes

DMAIC v DMADV

existing processes v new processes

DMADV Means

Define
Measure
Analyze
Design
Verify

Six Sigma

Data Driven: Eliminate wastes, defects, variability

DFSS

Design For Six Sigma

Create new processes

Lean Principlies

Maximize customer value while minimizing waste

Waste

anything that does not create value for the customer

5 Lean Principles

Define Value
Map Value Stream
Create Flow
Establish Pull
Pursuit Perfection

Lean: 8 Wastes

WORMPIT

Waiting
Overproduction
Rework
Motion
Processing
Inventory
Intellect
Transportation

WORMPIT

6 Sigma V Lean

6 Sigma is a deeper dive (Overhaul)

Lean (Faster Results... Remove Waste)

Lean

Process

6

Product

Kaizen

"Change For Better"

Total Quality Management

Improvements at every value chain

Business Process Reengineering

Radical redesign of process

(TQM & 6 Sigma focus incremental)

Baldridge Program

Public Private Partnership

Improve competitiveness of US firms

How business is managed as a unified whole

Green Belt

1 succesful project

Black Belt

multiple sucessful projects

Master blackbelt

The best...trains green and black belts

Economies of scale

Make more with less input

Spread fixed cost over greater volume of sales

Market power

influence market level of prices

Disadvantages of Growth

Increasing revenue does not always increase profitability

Diseconomies of scale

Increase in cost per unit

Greater revenue

Penetration Strategies

Encourage customers to buy more of a firm's existing products

Product development strategies

Developing and selling new products to current customers

Market development Strategies

Selling existing products to new groups of customers

Diversification Strategies

Selling new products to new groups of customers

New Product Use

Finding new ways for customers to use an existing product

Diversification depends on firms

New product development
Marketing

Related diversification

expansion into new markets similar to firm's core business

Unrelated Diversification

Refers to expansion into dissimilar markets or products

Related diversification associated

with restructuring firm's value chain

Backward Integration

adding capabilites further back in the value chain towards sourcing of inputs

(Becoming own supplier)

Forward Integration

adding capabilities closer to the customer

(Sell directly to customer opposed to wholesaler)

Resources

Coke product patent

Capability

marketing
R&D

Organic Growth

grow business by increasing output using internally generated resources

Cooperative Strategy

Firms collaborate with others to grow

Strategic Alliance

Firms combine some resources to create competitive advantage

Equity strategic allowance

2 or more firms own different percentages of company they formed

Nonequity Strategic Alliance

Contractual agreement between two firms to create competitive advantage


Licensing agreements, distribution agreements, supply contracts

Franchisor

McDonald's

Franchisee

Me

Disadvantage Franchisor

maintaining quality and control

Disadvantage Franchisee

assums all risk

2 Way Minimize Cooperative Strategies

Cost Minimization
Opportunity Maximiation

Cost Minimization

Minimize costs and prevent opportunistic behavior by the partner

Opportunity Maximization

Based on trust and transparency

Maximize value creating opportunity

Invention

creation of a novel and useful idea

Innovation

Introducing novel and useful ideas for value creation

Commercialize

manage in a way to achieve profit

Creativity

ability to produce work that is useful and novel

Development

growing, increasing, or improving something

Development Strategies

Fit to customer
Cycle Time
Cost Reduction

Timing Strategies

First to market
Fast Follower
Niche
Reactive

Level of Focus Strategies

advanced R&D
Breakthrough
Platform
Derivative

Maximize fit to the new product with customer

Superior Value Proposition

Minimize cycle time

Minimize start to completion

ROIC

Return on Invested Capital

Sequential Process

each step must be completed before the next

Parallel Process

Overlap
The next step starts before the prior is completed

Stage Gate Process

Insert decision points (Gates) to decide to continue the project

First to market

introduce product before competitiors

Kindle

Fast Follower Strategy

Follow competitors

Apple Ipod

Niche Strategy

Specific market segment
Highly differentiated
Close connection with customers

Solar City

Reactive Strategy

Wait to see approach
Risk Averse

Ryanair