The Changing Business Environment

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© The McGraw-Hill Companies, Inc., 2003 McGraw-Hill/Irwin The Changing Business Environment Growth of the internet Just-in-Time production Total Quality Management International competition Business environment changes in the past twenty years

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The Changing Business Environment. Growth of the internet Just-in-Time production Total Quality Management International competition. Business environment changes in the past twenty years. New tools for managers!. The Changing Business Environment. Just-In-Time Total Quality Management - PowerPoint PPT Presentation

Transcript of The Changing Business Environment

Page 1: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

The Changing Business Environment

Growth of the internet

Just-in-Time production

Total Quality Management

International competition

Growth of the internet

Just-in-Time production

Total Quality Management

International competition Business environment changes in the past

twenty years

Page 2: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

The Changing Business Environment

Just-In-Time

Total Quality Management

Process Reengineering

Theory of Constraints

New tools for managers!

Page 3: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

Complete productsjust in time to

ship customers.

Complete productsjust in time to

ship customers.

Complete partsjust in time for

assembly into products.

Complete partsjust in time for

assembly into products.

Scheduleproduction.

Scheduleproduction.

Receive materialsjust in time for

production.

Receive materialsjust in time for

production.

Receivecustomer

orders.

Receivecustomer

orders.

Just-in-Time (JIT) Systems

Page 4: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

Flexibleworkforce

Flexibleworkforce

Reducedsetup time

Reducedsetup time

Zero productiondefects

Zero productiondefects

JIT Consequences

Improvedplant layout

Improvedplant layout

JIT purchasingFewer, but more ultrareliable suppliers.

Frequent JIT deliveries in small lots.Defect-free supplier deliveries.

JIT purchasingFewer, but more ultrareliable suppliers.

Frequent JIT deliveries in small lots.Defect-free supplier deliveries.

Page 5: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

More rapidresponse to

customer orders

More rapidresponse to

customer orders

Freed-up fundsFreed-up fundsReducedinventory

costs

Reducedinventory

costs

Greatercustomer

satisfaction

Greatercustomer

satisfactionHigher qualityproducts

Benefits of a JIT System

Increased throughput

Page 6: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

Do we need to change the plan?

Where are we?

Where do we want to go?

How do we start?

How are we doing?

Check

Plan

Act Dois

Total Quality Management

Benchmarking

ContinuousImprovement

Page 7: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

Process Reengineering

The process isredesigned to include

only those steps that makeour product more valuable.

The process isredesigned to include

only those steps that makeour product more valuable.

Every step inthe businessprocess mustbe justified.

Every step inthe businessprocess mustbe justified.

A business processis diagrammed

in detail.

A business processis diagrammed

in detail.

Anticipated results:Anticipated results: Process is simplified. Process is completed

in less time. Costs are reduced. Opportunities for

errors are reduced.

Anticipated results:Anticipated results: Process is simplified. Process is completed

in less time. Costs are reduced. Opportunities for

errors are reduced.

Page 8: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

A sequential process of identifying and removing constraints in a system.

Restrictions or barriers that impedeprogress toward an objective

Restrictions or barriers that impedeprogress toward an objective

Theory of Constraints

Page 9: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

4. Coordinate processes

4. Coordinate processes

1. Measure process capacity

1. Measure process capacity

2. Identify process

constraints

2. Identify process

constraints

3. Use bottlenecks effectively.

3. Use bottlenecks effectively.

Only actions that strengthen the weakest link in the “chain” improve the process.

Theory of Constraints

Page 10: The Changing Business Environment

© The McGraw-Hill Companies, Inc., 2003McGraw-Hill/Irwin

Theory of Constraints

Process Capacity

Process Capacity

A measure of a process’s ability

to transform resources into value products and services.

A measure of a process’s ability

to transform resources into value products and services.

System Constraint

System Constraint

The point in a system that

limits the overall output of the

system. Often called the

“bottleneck.”

The point in a system that

limits the overall output of the

system. Often called the

“bottleneck.”