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Integrated Enterprise Excellence, Challenging times provide leadership an opportunity to determine what can be done to. enhance its current business management system This paper elaborates on the following. enhancement opportunities , he creation of strategies should not be an intuitive exercise but should instead target. T, specific gaps revealed after the business is analytically innovatively assessed and. understood e g step five of the nine step business management system described in. this paper , usinesses need to define and target improvement efforts to their value chain which. B, describes cross functional business functional flow and metrics where the organization.
chart is subordinate to the non siloed value chain . S corecards need to be tied to value chain functions and reported so that the metrics. assess process predictability and provide a prediction statement when appropriate . rganizations need to analyze their value chain as a whole to determine where. O, operational goals should be established so that improvement efforts are made in areas. that have linkage to providing the most benefit to the enterprise financials . A Business Management Governance System, Organizations should be striving to achieve the 3 Rs of business i e everyone doing the. Right things and doing them Right at the Right time To move toward achievement of this. lofty objective in an ever changing complex competitive climate businesses need a frame . work for orchestration of activities and business improvement efforts Integrated Enterprise. Excellence IEE provides such a system as illustrated in Figure 1 . The business governance system graphically described in this figure provides a roadmap for. systematically addressing current management challenges head on Provided is a business. system so that process improvement efforts will positively impact the enterprise as a whole . Most of the nine steps in this business system process are self explanatory however it needs. to be highlighted that the last step feedback loop does not return to step one but instead. step three The implication of this type of feedback is that a long lasting front end manage . ment system is provided which, can remain structurally con . stant over time even through, leadership organizational and. strategy changes , All steps of this 9 step system.
are important however in this, paper I will focus on the cre . ation of organizational metrics, step 2 and strategy creation. step 5 , 2, Integrated Enterprise Excellence Forrest W Breyforgle III Copyright 2012 GOAL QPC All rights reserved H MJ 2012. uality 8E Industrial Way Suite 3 Salem NH 03079 800 643 4316 service goalqpc com goalqpc com MemoryJogger org. uality, Step Two Value Chain Creation, In many businesses today the enterprise is not viewed as a system of non siloed processes. with performance measurements Instead organizations often report metrics in their area of. the business for how things are going every week month or quarter relative to goals This. form of goal setting reporting can lead to much firefighting and in extreme cases a meet . the numbers or else culture that is fatal e g Enron at the turn of the century and many. companies in our current economic crisis These issues can be overcome when organizations. view their enterprise procedures and their metrics from a value chain point of view where. the organizational chart is subordinate to the value chain . Step 2 of the 9 step business man , agement system shown in Figure.
1 states Describe value chain , including satellite level financial . and 30 000 foot level operational , metrics I will now elaborate on the. value chain portion of this step , An organization s value chain as il . lustrated in Figure 2 describes what, the enterprise does rectangles in the. figure and its performance measures, of success ovals in the figure from a.
customer and business point of view , i e cost quality and time In this. value chain the rectangular boxes, provide clickable access to process. steps functional value streams and, procedural documents The center. series of rectangular box specified, functions describe the primary busi . ness flow and the rectangular boxes, that are not in this series describe.
other support functions e g legal, and finance , With this approach to describing the enterprise the organization chart is subordinate to. the value chain The value chain is long lasting even through organization changes where. process functional procedures and their metrics can change over time . Metrics within a value chain are to have alignment to how the business is conducted This. is in contrast to creating metrics around the organization chart or strategic plan objectives . where both can significantly change over time In addition it is important not only to de . termine what should be measured but also to have a reporting methodology that leads to. healthy behavior so that the organization as a whole benefits . 3, Integrated Enterprise Excellence Forrest W Breyforgle III Copyright 2012 GOAL QPC All rights reserved H MJ 2012. uality 8E Industrial Way Suite 3 Salem NH 03079 800 643 4316 service goalqpc com goalqpc com MemoryJogger org. uality, Creating Good Metrics, Good metrics provide decision making insight that leads to the most appropriate conclu . sion and action or non action The objective is the creation of an entity that is measurable . auditable sustainable and consistent Organizations can achieve significant benefits and. reduce much wasted effort when a process for metric creation and improvement addresses. the following , L ong lasting metric creation that originates from an assessment of what measurements. provide the most appropriate quantification of organizational value chain functional. outputs in the area of cost quality and time , etrics that maintain basic continuity over time and are fundamentally independent.
M, from changes in leadership strategies and organizational structure . etrics need to be reported in a format so that they can provide predictive statements. M, when there is a recent region of stability , etrics need to have peer to peer comparability That is one person does not provide. M, a process response output using a pie chart while another uses a stacked bar chart . noting that these forms of reporting provide no information about process stability or. the ability to make predictive statements , he organization chart needs to be subordinate to the functional value chain created. T, metrics When there is an organizational change metric ownership can change but the.
basic organizational metric structure and reporting format maintains consistency . Metrics from a corporate value chain can be drilled down throughout the organization . F X i e the output of a process is a function of the process inputs and its steps . Y, Dr Lloyd S Nelson stated If you can improve productivity or sales or quality or. anything else by 5 percent next year without a rational plan for improvement then. why were you not doing it last year The simple setting of goals for metrics does not. make it happen this could be considered management by hope Organizations need. to have a system to analyze their metrics collectively so that they can establish goals for. value chain metrics that benefit the business as a whole . rocess improvement goals for value chain functional metrics are to be established from. P, an analytical enterprise whole business assessment evaluating among other things . business constraints For example such an assessment could lead to a marketing and. sales metric improvement focus rather than manufacturing waste reduction if the. organization has excessive capacity and there is a financial goal to grow the business . I nclude a value chain predictive metrics assessment when blending analytics with. innovation to determine strategies that lead to targeted projects for financial goal. achievement These targeted strategies would then lead to functional value chain metric. improvement goals and improvement design projects that when completed truly. impact the financial goals of the whole business With this system value chain metric. improvement goals pull for projects that are most beneficial for the business in its. entirety , 4, Integrated Enterprise Excellence Forrest W Breyforgle III Copyright 2012 GOAL QPC All rights reserved H MJ 2012. uality 8E Industrial Way Suite 3 Salem NH 03079 800 643 4316 service goalqpc com goalqpc com MemoryJogger org. uality, Predictive Metrics, Organizations often report performance using a table of numbers stack bar chart or red . yellow green report outs where red indicates that a goal specification is not being met . and green indicates that current performance is satisfactory These reporting formats de . scribe what has occurred in the past for some time interval but do not provide predictive. statements and can lead to firefighting behaviors These limitations are overcome with a. 30 000 foot level reporting system , In 30 000 foot level reporting there are no cal .
endar boundaries and a prediction statement, can be made when appropriate For example . one might report that a current metric perfor , mance level is predictable since the process. has been stable for the last 17 weeks and there, is an estimated non conformance rate of 2 2 . For predictable processes we expect that this, same level of non conformance would occur in. the future unless something was done to im , prove either the process inputs or the process .
step by step execution itself , With this form of reporting common cause. variability is separated from special cause, events at a high level With this 30 000 foot . level business perspective typical variability, from process input differences is considered. common cause input variability that should, not be reacted to as though it were special. cause variability e g variation from raw ma , terial lot to lot day of the week people to .
people and machine to machine differences , Often current metric reporting and manage . ment practices of determining what happened, today by sending someone to fix the problem . can lead to much firefighting For this type of situation there are more often than not mini . mal improvements made from these firefighting activities i e common cause variability. issues were treated as though they were special cause Red yellow green scorecards where. there is a tracking to goals throughout an organization can sound attractive but can lead. to much firefighting , To illustrate this point consider the red yellow green scorecard shown at the top of Figure 3 . which is from a corporation s actual scorecard system and its comparison to a 30 000 foot . level scorecard reporting system , This metric reporting system has two steps The first step of this process is to analyze for. predictability The second step is the formulation of a prediction statement when the pro . cess is considered predictable , 5, Integrated Enterprise Excellence Forrest W Breyforgle III Copyright 2012 GOAL QPC All rights reserved H MJ 2012.
uality 8E Industrial Way Suite 3 Salem NH 03079 800 643 4316 service goalqpc com goalqpc com MemoryJogger org. uality, To determine predictability the process is assessed for statistical stability using a. 30 000 foot level individuals control chart which can detect if the process response has. changed over time and or if it is stable , When there is a current region of stability data from this last region can be considered a. random sample of the future For this example note how the 30 000 foot level control chart. in Figure 3 indicates that nothing fundamental in the process has changed even though a. traditional red yellow green scorecard showed the metric frequently transitioned among. red yellow and green For the traditional scorecard the performance level was red 5 out of. the 13 recorded times , Included in this figure is a probability plot that can be used to make a prediction statement . Much can be learned about a process through a probability plot Let s next examine some. of these probability plot benefit characteristics . The x axis in this probability plot is the magnitude of a process response over the region. of stability while the y axis is percent less than A very important advantage of probability. plotting is that data do not need to be normally distributed for a prediction statement to be. made The y axis scale is dependent upon the distribution type e g normal or log normal. distribution , If the data on a probability closely follow a straight line we act as though the data are from. the distribution that is represented by the probability plot coordinate system Estimated. population percentages below a specification limit can be made by simply examining the. y axis percentage value as shown in Figure 3 For this case we estimate that about 33 of. the time now and in the future we will be below our 2 2. specified criterion or goal , There is a certain amount of technical training needed to.
I don t know where we would be right now, create 30 000 foot level metrics4 however the interpreta . because of the economy if we had not in , tion of the chart is quite simple In this reporting format . vested time and energy into our efficiencies a box should be included below the chart that makes a. and learning to look at our business at a much statement about the process For this chart we can say. higher level that the process is predictable with an approximate non . conformance rate of 32 8 That is using the current. Dawn DeArmond process the metric response will be below the goal of 2 2. CEO Kansas Big Brothers Big Sisters about 1 3 of the time . Regarding business management policy red yellow , green versus this form of reporting can lead to very dif . ferent behaviors For this example a red yellow green. reporting policy would lead to fighting fires about 33 of the time because every time the. metric turned red management would ask the questions What just occurred Why is our. performance level now red while in actuality the process was performing within its predict . able bounds Red yellow green scorecards can result in counter productive initiatives 24 7. firefighting the blame game and proliferation of fanciful stories about why goals were not. met In addition these scorecards convey nothing about the future . With this form of performance metric reporting we gain the understanding that the variation. in this example is from common cause process variability and that the only way to improve. 6, Integrated Enterprise Excellence Forrest W Breyforgle III Copyright 2012 GOAL QPC All rights reserved H MJ 2012. uality 8E Industrial Way Suite 3 Salem NH 03079 800 643 4316 service goalqpc com goalqpc com MemoryJogger org. uality, performance is through improving the process itself With this system someone would be.
assigned to work on improving the process that is associated with this metric This assumes. that this metric improvement need is where efforts should be made to improve business. performance as a whole , In organizations the value chain functions and metrics should maintain basic continuity. through acquisitions and leadership change The value chain with its 30 000 foot level met . ric reporting can become the long lasting front end of a system and baseline assessment. from which strategies can be created and improvements made . With the Integrated Enterprise Excellence approach strategies are analytically innovatively. determined in step five of the 9 step business management system as shown in Figure 1 . The well defined strategies created with this enhanced management system lead to targeted. improvement or design projects that benefit the enterprise as a whole . Strategic Planning and Business Improvement, Consider how with a traditional approach organization wide communicated developed. strategic statements can be very difficult to translate into specific employee actions There. was one organization which communicated an expansion of production capacity strategy . Should this strategy be applied to all produced products For most situations this would. not be the case , In addition annually developed executive retreat created strategies can significantly. change over time and with leadership changes It is important to have strategies however . is it best to have strategy building as step one from which organizational metrics and op . erational goals are determined , With the Integrated Enterprise Excellence approach strategies are analytically innovatively. determined in step five of the 9 step business management system as shown in Figure 1 . The well defined strategies created with this enhanced management system lead to targeted. improvement or design projects that benefit the enterprise as a whole . References, 1 Breyfogle F W 2008 The Integrated Enterprise Excellence System An Enhanced Unified Approach to Balanced Scorecards Strategic Planning .
and Business Improvement Citius Publishing Austin TX . 2 Breyfogle F W 2008 Integrated Enterprise Excellence Volume I The Basics Golfing Buddies Go Beyond Lean Six Sigma and the Balanced. Scorecard Citius Publishing Austin TX , 3 Breyfogle F W 2008 Integrated Enterprise Excellence Volume II Business Deployment A Leaders Guide for Going Beyond Lean Six Sigma. and the Balanced Scorecard Citius Publishing Austin TX . 4 Breyfogle F W 2008 Integrated Enterprise Excellence Volume III Improvement Project Execution A Management and Black Belt Guide for. Going Beyond Lean Six Sigma and the Balanced Scorecard Citius Publishing Austin TX . 5 Breyfogle F W 2010 Lean Six Sigma Project Execution Guide The Integrated Enterprise Excellence IEE Process Improvement Project Roadmap . Citius Publishing Austin TX , 7, Integrated Enterprise Excellence Forrest W Breyforgle III Copyright 2012 GOAL QPC All rights reserved H MJ 2012. uality 8E Industrial Way Suite 3 Salem NH 03079 800 643 4316 service goalqpc com goalqpc com MemoryJogger org. uality, Forrest W Breyfogle III, President and CEO Smarter Solutions Inc . Forrest W Breyfogle III born 1946 is the author of eleven books and over 90 articles on the. topic of quality improvement He is the President and CEO of Smarter Solutions Inc and. the winner of the 2005 American Society for Quality Crosby Medal for his book Implement . ing Six Sigma 2nd edition ISS2 The Crosby Medal is presented to the individual who has. authored a distinguished book contributing significantly to the extension of the philosophy. and application of the principles methods or techniques of quality management . A professional engineer Breyfogle is also a member of the board of advisors for the Univer . sity of Texas Center for Performing Excellence Smarter Solutions Inc provides business. measurement and improvement consultation and education for organizations worldwide . His latest work 2008 is the Integrated Enterprise Excellence IEE suite a set of four books. that document an enhanced system for effective enterprise management in the 21st century . based on the integration of best practices from previous tools and techniques and the ap . plication of innovative analytical methodology The introductory book provides an overview. of IEE methods tools and techniques and how they creatively integrate the best practices. of established business measurement and improvement systems . 8, Integrated Enterprise Excellence Forrest W Breyforgle III Copyright 2012 GOAL QPC All rights reserved H MJ 2012. uality 8E Industrial Way Suite 3 Salem NH 03079 800 643 4316 service goalqpc com goalqpc com MemoryJogger org. uality, GOAL QPC Helping industry flourish with greater quality efficiency and a stronger.
workforce , Our basic to critical tools for continuous improvement quality and organizational excel . lence are brought to you through our on site training workshops Our on site training. programs use a combination of lecture case studies and hands on activities to teach key. concepts and provide practical experience with improvement tools . During the training you receive one or more books of our Memory Jogger series of Pocket. Guides The Memory Joggers are designed for anyone to use as a convenient and quick refer . ence guide on the job or on the go Our What is it Why use it and How do I do it format . is crucial for understanding and retention of the tools Put your finger on any individual. tool within seconds , TM, Pantone 669 Eggplant Pantone 383 Deep Green Apple. uality, uality, uality uality, 9, Integrated Enterprise Excellence Forrest W Breyforgle III Copyright 2012 GOAL QPC All rights reserved H MJ 2012. uality 8E Industrial Way Suite 3 Salem NH 03079 800 643 4316 service goalqpc com goalqpc com MemoryJogger org. uality, TM, Pantone 669 Eggplant Pantone 383 Deep Green Apple. uality, goalqpc com, uality, MemoryJogger org, TM.
We remember the tools for you, uality uality, om, p c c. alq, go, om, l q pc c, H 03079 800 643 4316 603 go. a, 3 S alem N 890 880, 0 service, Suite Fax 603 870 9122 .


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