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]
www.testgroup.polito.itwww.comitato-girotondo.org
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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.
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Homework (cont’d)
• Students are warmly invited to look for additional materials related to the topics.
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Prerequisites
• No particular requirement
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Further readings
• No particular suggestion
t
The product The product lifelife--cyclecycle
UserUser’’ssrequirementsrequirements
DesignDesign
ProductionProduction
ReRe--cyclingcycling
InIn--fieldfieldoperationoperation
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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 )
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Time to MarketTime to MarketTTMTTM
Time to VolumeTime to VolumeTTVTTV
Time to MoneyTime to MoneyTT$TT$
RevenuesRevenuesCostsCosts
ProfitsProfits
IntroductionIntroduction GrowthGrowth MaturityMaturity DeclineDecline
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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
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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
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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]
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•• 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
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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]
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A set of management processes that create delighted customers
and empowered employees
TotalQuality
Management
[[JuranJuranInstitute ]Institute ]
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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
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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
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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
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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]
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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]
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Redo until rightRedo until right
First time rightFirst time right
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Redo until rightRedo until right
First time rightFirst time right
Concurrent EngineeringConcurrent Engineering
TeamworkTeamwork
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Redo until rightRedo until right
First time rightFirst time right
Concurrent EngineeringConcurrent Engineering
TeamworkTeamworkTeamworkTeamwork((TigerTeamTigerTeam))
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TigerTeam
People from many departments collaborate over the life of a product to ensure that it reflects customers’ needs and desires.
Concurrent EngineeringConcurrent Engineering
Manufacturability
Diagnosability
Dependability
Integrability
Testability Verifiability
Re-cyclability
Design for Design for ∗∗--abilityability
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A business management strategy
to identify and remove the causes
of defects and errors in manufacturing
and business processes
Six Sigma (6σ)
[Motorola]
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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)
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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
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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.
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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.
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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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