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Literature Review Of Operations Improvement

3776 words - 16 pages

Portsmouth Business School

Principles Of Operations & Marketing Management
(U20590)

Student number 671740

Table of Contents
Part One: Literature Review 3
Performance Measurement 3
Performance Objectives 3
Performance Standards 4
Benchmarking 4
Four Pitfalls In Performance Measurement 5
Approaches to improvement 6
PDCA Cycle 6
DMAIC cycle 8
Part Two: Case Study --- Toyota 12
Continuous Improvement 12
TPS --- Toyota Production System 13
Kaizen 14
Kaizen And PDCA Cycle 15
Failure Of TPS 17
Appendix 17
Lean Operations And Just-In-Time 17
What is just-in-time? 18
The impact of JIT 18
JIT in services 19
Reference 19

Part One: Literature ...view middle of the document...

As time goes by, the situation will vary. Any company must understand how its different products and services require different objectives and how to react in different situations. (Dutta, s. & Manzoni, J., 1999)

Performance Standards

After an operation has measured its performance, it needs to make a judgement as to whether its performance is good, bad or indifferent.
 
There are four ways of comparing current performance to some kind of performance standard: Historical Standard, Target performance standard, Competitor performance standards and Absolute performance standards. These lead to the four pitfalls in performance measurement. (Brown, S., 2001)

Benchmarking

At its simplest benchmarking merely means finding out how someone else does something similar to what you are doing and how good they are at doing it. An operation can then compare its own methods and performance against this benchmark.

Performance measurement plays a pivotal role. When used properly, it can greatly improve organizational performance. While one the other hand, improper use will become the stumbling block of organizational change and performance improvement.

Effective use of performance measurement will give a timely feedback on the state of the business operations. Based on such feedback, one can determine whether the enterprises are moving forward to their own organizational goals and how to optimize and reorganize training of employees. As a reflection of the results of business operations, performance measurement provides the enterprise with the direction of improvement in a practical basis. (Brown, S., 2001)

At the same time, the performance measured used improperly may cause a blow to the morale of the organization, reduce team efficiency, and lead to preventing the improvement such as quality improvement. The four most common pitfalls presented in performance measurement are listed below. ( Thomas, M. 1994)

Four Pitfalls In Performance Measurement

I. Empiricism: focus on history, and ignore the presence

It results in analysing management based on historical information. This means that results achieved today are based on management decisions from yesterday. However, one the other hand, today's decisions do not affect future results very much and often do not have the value of reference and prediction.

II. Range dislocation: focus on the internal, and ignore external

Performance indicators designed by many companies focus on meeting the needs of the internal. This performance measurement approach ignores the needs of customers. This requires first clearly understanding what is most important to customers, and then considering how to provide customers with products and services. Measurement of the performance of managers and departments should be designed from the "customers - service - producer" chain.

III. Improper object to improve: focus on individual, and ignore structure

A lot of evidence shows that 85% to 90%...

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