business management strategies business business management

Business Management

Strategies

Business Business Management Management

StrategiesStrategies

Lecture

1.1

Paolo PRINETTOPolitecnico di Torino (Italy)

University of Illinois at Chicago, IL (USA)[email protected]

[email protected]

www.testgroup.polito.itwww.comitato-girotondo.org

Slide # 1-3.2 © Prinetto - 2008

Goal

• The lecture first introduces the concept of Product Life Cycle and then presents basic concepts related to business management strategies, with peculiar emphasis on

• Quality• Total Quality Management• Concurrent Engineering• Six Sigma.


Homework (cont’d)

• Students are warmly invited to look for additional materials related to the topics.


Prerequisites

• No particular requirement


Further readings

• No particular suggestion

t

The product The product lifelife--cyclecycle

UserUser’’ssrequirementsrequirements

DesignDesign

ProductionProduction

ReRe--cyclingcycling

InIn--fieldfieldoperationoperation

Shared # 1-1.7 © Prinetto - 2008

The length of time it The length of time it takes from a product takes from a product being conceived until being conceived until its being available for its being available for

salesale

Time To Market (TTM)

t

UserUser’’ssrequirementsrequirements

DesignDesign

ProductionProduction

TimeTime--ToTo--MarketMarket( TTM )( TTM )


Time to MarketTime to MarketTTMTTM

Time to VolumeTime to VolumeTTVTTV

Time to MoneyTime to MoneyTT$TT$

RevenuesRevenuesCostsCosts

ProfitsProfits

IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline


The set of properties The set of properties and characteristics of and characteristics of a product (a service) a product (a service)

capable of capable of guaranteeing guaranteeing customercustomer’’s s satisfactionsatisfaction

Quality

[ISO 8402][ISO 8402]

International Organization for Standardization


The quality of any product or service is what the customer

says it is

The The qualityquality of any product or of any product or service is what the customer service is what the customer

says it issays it is


A series of standards A series of standards comprising comprising

ISO 9001:1987ISO 9001:1987ISO 9002:1987 ISO 9002:1987 ISO 9003:1987ISO 9003:1987

QualityManagement

SystemStandards

[ISO][ISO]


•• Are meant to certify the Are meant to certify the processes and the system of processes and the system of an organization and not the an organization and not the product or service itself.product or service itself.

•• Do not certify the quality of the Do not certify the quality of the product or service.product or service.

ISO 9000


A business management strategy aimed at embedding awareness of quality in all organizational

processes

TotalQuality

Management

A 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.

TotalQuality

Management

[

[ISO 8402][ISO 8402]


A set of management processes that create delighted customers

and empowered employees

TotalQuality

Management

[[JuranJuranInstitute ]Institute ]


Why “Total” ?

• Involves the entire organization, supply chain, and product life cycle

• Aimed at satisfying the needs of the shareholders, and the quality of products


TQM backgrounds

• 1900 : Ford Motor Co. • 1920-1940:

− first statistical process control− W. A. Shewhart developed his control

charts, and the plan-do-check-act (PDCA) • 1940-1960:

− reliability engineering − Training and education for everyone in the

organization− failure mode and effects analysis


TQM backgrounds

• 1960-1980 - intensive customer focus:− quality assurance centered− P. Crosby's concept of zero defects − Concurrent Engineering

• 1980-today:− evolution from quality assurance to total

quality management− big focus on teamwork− managing by fact, not guess− TQM, Six Sigma


A systematic approach to the

integrated, concurrent design of

products and their related processes,

including manufacture and

support

Concurrent Engineering

[Institute for Defense Analyses,

USA]


Is intended to cause the developers, from the outset, to consider all

the elements of the product life cycle from

conception through disposal, including

quality, cost, schedule, and user requirements

Concurrent Engineering

[Institute for Defense Analyses,

USA]


Redo until rightRedo until right

First time rightFirst time right




Concurrent EngineeringConcurrent Engineering

TeamworkTeamwork





TeamworkTeamworkTeamworkTeamwork((TigerTeamTigerTeam))


TigerTeam

People from many departments collaborate over the life of a product to ensure that it reflects customers’ needs and desires.


Manufacturability

Diagnosability

Dependability

Integrability

Testability Verifiability

Re-cyclability

Design for Design for ∗∗--abilityability


A business management strategy

to identify and remove the causes

of defects and errors in manufacturing

and business processes

Six Sigma (6σ)

[Motorola]


Six sigma (6σ)

• Developed by Motorola in 1986 • Today enjoys wide-spread application in

many sectors of industry

Six sigma (2)

• It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization (“Black Belts”) who are experts in these methods.

• Each 6σ project carried out within an organization follows a defined sequence of steps and has quantified financial targets (cost reduction or profit increase)

• A 6σ process produces 3.4 DPMO (Defective Parts per Million Opportunities): Six Sigma = 3.4 DPMO = 99.9997% efficiency.

6σ Methodologies

6σ has two key methodologies: • DMAIC :

− Define Measure Analyze Improve Control− used to improve an existing business

process• DMADV :

− Define Measure Analyze Design Verify− used to create new product or process

designs− also known as DFSS (Design For Six

Sigma)


DMAIC

Consists of the following five steps:1. Define process improvement goals that are

consistent with customer demands and the enterprise strategy

2. Measure key aspects of the current process and collect relevant data

3. Analyze the data to verify cause-and-effect relationships. Determine what the relationships are, and attempt to ensure that all factors have been considered


DMAIC (2)

4. Improve or optimize the process based upon data analysis using techniques like Design of Experiments

5. Control to ensure that any deviations from target are corrected before they result in defects. Set up pilot runs to establish process capability, move on to production, set up control mechanisms and continuously monitor the process.


DMADV

Consists of the following five steps:1. Define design goals that are consistent with

customer demands and the enterprise strategy.

2. Measure and identify CTQs (characteristics that are Critical To Quality), product capabilities, production process capability, and risks.

3. Analyze to develop and design alternatives, create a high-level design and evaluate design capability to select the best design.


DMADV (2)

4. Design details, optimize the design, and plan for design verification. This phase may require simulations.

5. Verify the design, set up pilot runs, implement the production process and hand it over to the process owners.

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