Performance Measures

1
Operational Assessment

Joseph Mike Pat Alissa
2
Operations Defined

• Process of transforming inputs into services and
  products for internal and external customers

3
Non-Financial Indicators

• Manufacturing Production
• Sales Marketing
• People
• Research Development
• The Environment

4
Management Concerns

• Products Move Smoothly Swiftly Through the
  Production Cycle
• Warranty Repairs are Kept to a Minimum and Turned
  Round Quickly
• Suppliers Delivery Performance
• Quality Standards Are Continually Raised
• Sales Orders, Shipments Backlog are Kept to a
  Minimum

5
Management Concerns

• There is Overall Customer Satisfaction
• Labor Turnover Statistics Are Produced In Such A
  Way as to Identify Managerial Weakness
• R D Costs do not Escalate
• The Accounting and Finance Departments Really
  Understood the Business

6
Operational Assessment

• Four steps of operational assessment
• 1. Set the objective
• Clear objective
• Consistent with the competitive strategy
• relevant data

7
Operational Assessment

• 2. Identify scope
• Functional area
• Time, money, and resources spending

8
Operational Assessment

• 3. Plan
• Decide who will perform assessment
• Choose method
• 4. Assess the operation

9
GE Elements of Quality

• Old Business Models Need Revising
• Six Sigma Seen by Companies as a Response to
  Environmental Changes
• Highly Disciplined Process that Measures Quality
• Describes Quantitatively How a Product is
  Performing
• Creates focus on near perfect product service
  delivery
• 3.4 defective products or less per 1 million
  opportunities is the goal

10
Six Sigma Users Dates of Implementation

• Motorola (NYSEMOT)
• Incorporated Six Sigma in 1986
• Allied Signal (Merged With Honeywell in 1999)
• Incorporated Six Sigma in 1994
• GE (NYSEGE)
• Incorporated Six Sigma in 1995
• Ford (NYSEF)
• Incorporated Six Sigma in 2000

11
Six Sigma Key Concepts

• Critical to Quality
• Defect
• Process Capability
• Variation
• Stable Operations
• Design for Six Sigma

12
GE Elements of Quality

• Client
• Expectations include performance, competitive
  prices, on-time delivery correct transaction
  processing.
• Process
• Outside In Thinking
• Employee
• People Create Results

13
Six Sigma Organizational Architecture

• Roles and Responsibilities
• Quality Leader/Manager (QL/QM)
• On the staff of President or CEO
• Master Black Belt (MBB)
• Work with Process Owners to ensure Quality
  Objectives are Set
• Process Owners (PO)
• Can be head of department or operate at Lower
  Organizational Levels
• Black Belt (BB)
• An important part of Quality Initiatives through
  Leadership Coaching
• Green Belt (GB)
• Coached by Black Belts. Usually employees who
  continue their regular workloads while working on
  Six Sigma Projects

14
Examples of Six Sigma Success

• Manufacturing Industry Examples
• Lead Time Reduced for Matching Colors of Resins
  to Customer Requirements by 85
• On Time Delivery Improved Productivity
  Increased by changing a Repair Process in
  Refrigeration Industry
• Service Industry Example
• Defects in the Workout Process of a Mortgage
  Insurance Company cut by 96