WCM and IT CMF What can IVI learn? manufacturing... · WCM and IT CMF What can IVI learn? Martin...

© Innovation Value Institute 2013

WCM and IT CMF

What can IVI learn?

Martin Delaney, General Manager & Technology Leader, IVI


Ford Mustang 2015 model


Q : Did manufacturing capability improve and why?Q : Did the availability of frameworks help, and how?Q : Can we compare manufacturing to technology management?Q : Is there an issue and need for TM capability improvement?Q : Can frameworks help and how?

[n] denotes research references


The impact of frameworks within World Class Manufacturing

Ford Mustang introduced by Lee Iacocca at the 1964 World’s Fair


The impact of frameworks within World Class Manufacturing


Manufacturing capabilities improvements


Manufacturing had a huge motivation to improve

1970’s Japanese business success from quality

Manufacturing seen as a capability & competitive variable

Government motivation & stimulation

Manufacturing had not changed since Taylor

It was perceived as urgent


Key proposition and contribution

Dr. Edward Deming (1900 –1993)

Key proposition and contribution includedMajor breakthrough on statistical process quality control

• A believe that the organization is made up of ‘systems’ e.g. Manufacturing, marketing, etc.

• These systems must be understood by management to facilitate improvement, he called this ‘profound knowledge’you must understand how the system works to be able to change it.

• From this came Plan, Do, Study, Act.(PDSA, or more commonly known as PDCA (C = Check)

• He was acknowledged in Japan in the mid 50’s,and in the USA in the late 80’s


Manufacturing Frameworks played a major role in this success

Schonberger was one of the first to introduce the concept of “World Class Manufacturing”, the term was seen to embrace the techniques below.

© Innovation Value Institute 2013 10(2013 De Felice et al.)

Dr. Richard Schonberger created an integrated and flexible system capableof achieving company competitiveness with products of high quality.

Manufacturing Frameworks played major role in this success

Just in Time (JIT)

Total ProductiveMaintenance (TPM)

Total QualityManagement (TQM)

SimplicityEmployee

Involvement

WCM Model bySchonberger


Manufacturing capabilities improvements

11

Typical scenario in the 80’s and 90’s:-Results of a six-sigma implementation by J&A International

Inc. led by Keith Johnson:

© Innovation Value Institute 2013 12

GE, under the leadership of Jack Welch introduced WCM frameworks in mid-1990s and the subsequent success is considered to be one of the greatest success stories in business. [2011 – Mark Micheletti)].

Walsh attributes the improvements in capability, through the implementationof these frameworks, to driving more than $10 billion dollars of benefits at GEand also to driving up operating margins from 14.8 percent to 18.9 percent infour years.

Manufacturing Frameworks played major role in this success


In the 1980s, researchers found that American-made products had significantly more inherent defects than those made in Japan.In response to this unacceptable state, the Department of Commerce established the Malcolm Baldridge National Quality Award in 1987 in an attempt to stimulate Total Quality Management (TQM) in U.S. industry. (Jacobs & Chase, 2008)

The introduction of this type of national award andthe subsequent publicity played a pivotal role inhighlighting the deficiencies in manufacturingcapabilities and highlighted the need to engagewith recognized frameworks to improve capability.

Manufacturing capabilities improvements ‐ Incentives


Leveraging a Framework for capability ImprovementOrganizational Learning Knowledge Management

- Creativity- Retention- Transfer

Capability Improvement Program

Frameworks enables external learning & knowledge growth

Organizations learn3 times faster internallythan externally

Open Innovation key

Capability to bridge boundaries key

Frameworks provide thestarting repository &internal knowledge


Manufacturing capability improvements


Delivered and working


The Successful Model Business Goals

ManufacturingCapability

ImprovementSupportingCulture ofChange &Motivation

The RequiredCapability

A ModelDirection

Frameworks Provide

Commitment to Continuous Improvement

ASequence

DependencyUnderstanding

Comfort&

Confidence

Training&

Tools


What can Technology Managementlearn from Manufacturing’s superbsuccesses ?

Is there even an issue?


Low capabilities/maturity of Technology Management

Technology Management is today where Manufacturing was 20 years ago.

• 75% of IT staff have no or non-relevant qualifications.

In a survey conducted in 2011, one third of those surveyed,stated that their skills did not match the roles they were performing.

[3]

% of IT Employees with relevant qualifications



• Disastrous Project overruns

The cost of IT project failures in business is estimated to be in the region of 4.5 trillion Euros worldwide

% of IT projects that come in on time & on budget



Innovation and outcomesincreases where bridgingboundaries capability existOpen innovation key


• Low % of CIO in influential positions.

A recent McKinsey report identified that a high percentage of CIOs do not play an influential role at senior level in their organisations.

Only 30% of CIOs involved inshaping the overall businessstrategy and agenda.





• IVI assessments indicate low Technology Management Maturity.

Average maturity from IT-CMF ExecutiveAssessments of 140 companies.

Only six percent of assessed organizations average Intermediate maturity



The Urgency to Improve Technology Management Capability

The Business

SupportingCulture ofChange &Motivation

The RequiredCapability

Everything that'sRequired

Risk

Agility

Cost & Reliability InformationTechnology Core

Governance

Lines ofBusiness

Business

Technology

A B C D



The power of Frameworks

Working with frameworks allows executives to seethings from new viewpoints, assimilate complexconcepts, and address real-world problems andopportunities.[11]

Frameworks bring clarity to situations.They focus thinking, allowing organisations todrown out the noise and hone in on the capabilities that matter.

Frameworks present a tremendous opportunity for those who understand their power …

Framework thinkers make more progress. Frameworks can clear logjams andfacilitate faster solutions. There are rarely perfect answers in business, and the abilityto make faster decisions can often mean the difference between success and failure.[12]



Embarking on a journey towards WCM without precise roadmapis very risky. According to Sharma and Kodali (2008, p. 51), lack of“practical and detailed model to follow is an issue of concern tothose interested in the pursuit of excellence”. [13]

The use of frameworks is extremely powerful, however, you must use the correct frameworks and embrace them fully. [14]




The Holistic element of Frameworks.

Why have so many organizations failedto implement it successfully?

The Toyota Production System (TPS)

Because they implemented elements of the system without understanding the power and holistic nature of the complete framework. [16]





Interdependency & Balance

RAM – Relationship Asset Management (IT-CMF)



Open innovation key

Capability to bridge boundaries key

Providing a holistic repository from a coordinated source increases effectiveness.




Getting the framework ‘out’ to create ‘more’ is fundamental.

This stimulates the eco-system.

However, it is necessary to facilitate individual professionals participationin a growing community.


Conclusion

Organizational Learning Build a KnowledgeManagement Model

FrameworkPresentedmust have

Variablesthat impact

Effectiveness

StructureCapability to absorb change & knowledgeCompetency of peopleCulture & DeterminationLeadership Effectiveness

Clarity and ease of understanding,Adoption and integrationLink to establish roles - ownershipAcceptance of value & credibility


References:[1] Source: Brian Wesbury – First Trust Portfolios

[2] Source: Dr. Mark J Perry, University of Michigan. (BEA & BLS)

[3] Council of European Professional Informatics Societies (CEPIS 2011)

[4] McKinsey & Company - Pedja Arandjelovic, Libby Bulin, Naufal Khan.

[5] Innovation Value Institute (2015)

[6] Fabio De Felice, Antonella Petrillo and Stanislao Monfreda (2013). Improving Operations Performance with World Class Manufacturing Technique: A Case in Automotive Industry.

[7] National Institute of Standards and Technology • U.S. Department of Commerce Baldrige National Quality Program.

[8] http://www.acrobatplanet.com/non-fictions-ebook/pdf-ebook-applications-and-examples-six-sigma-systems-joe-yanci.html

[9] Mark Micheletti, (2013). Why GE’s Six Sigma Success Story Is Still Relevant.

[10] Brian Cazzell, Jeffrey M. Ulmer (2014). JOURNAL OF TECHNOLOGY MANAGEMENT & INNOVATION © JOTMI Research Group.

[11] David J. Snowden, Mary E. Boone (2012). Haervard Business Review. https://hbr.org/2007/11/a-leaders-framework-for-decision-making

[12 ]Sean Johnson (2014). The Power of Framework Thinking | Sean Johnson @intentionally


References:

[13] Mohammad Amin Okhovat1, Mohd Khairol Anuar Mohd Ariffin1*, Taravatsadat Nehzati2 and Seyed Ali Hosseini (2012) Development of world class manufacturing framework by using six-sigma, total productive maintenance and lean.

[14] Scientific Research and Essays Vol. 7(50), pp. 4230 -4241, 24 December, 2012

[15] www.iheardmrktg.com 1286 x 800

[16] Steven Spear, H. Kent Bowen (1999). Harvard Business Review. Decoding the DNA of the Toyota Production System.

[17] forestpolicypub.com 1093 x 797

[18] www.animated-gifts.eu – 2237 x 1520

[19] Criticalfinancial.com – 400 x 299

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