Operational Excellence

Operational Excellence

AC 1.1

Continuous quality improvement is based on determining sub-optimal processes in a firm and altering them to decrease faults and improve quality (Ruggles & Harrington, 2018). The importance of continuous quality improvement includes error reduction, increased adaptability, empowers employees, optimism and educational. The firm can identify errors in the process and reduce them. The business becomes flexible and can adapt to changing circumstances. The employees are required to come with possible solutions and they feel empowered.  The firm looks at the potential problems with positivity and people feel there is always a better solution to the problem. For example, the production managers requesting plant operators to identify problems in the processing process and fix the errors.

Performance improvement is a method that helps underperforming workers to meet an organization’s standards (Ruggles & Harrington, 2018). Besides, organizational performance improvement occurs at the organization level, team level and departmental level. Managers may use various methods to measure performance improvements such as quality control, peer feedback and time cards. At the organization level, the managers may use sales revenue and customer reviews to measure organization performance improvement. The importance of performance improvement helps the employees increase their performance and meet organization standards.  For instance, the Human Resource department can justifiably terminate an employee if he/she continues to underperform and fails to meet the organization’s requirements.

AC 1.2

A team is set up to manage the activities and put the group in a conducive environment necessary to implement improvements in the firm’s environment and culture. The team’s continuous improvement techniques can be encouraged through incentives, training, involvement, positive role models, suggestion schemes, developing a good relationship with senior management and regular meeting. The team is provided with incentives once they are achieved a specific performance; it increases employee morale and motivation. Training helps the workers to achieve their goals in a better way. The workers should be encouraged to participate in a group in order to achieve team goals. Employees are encouraged to play a positive role in the group; it builds courage in the employees to achieve the team’s goals. The workers are required to suggest a possible solution to achieve the desired goals. The management should provide support to the team to achieve its objectives. The regular meeting will help the team to communicate their current achievement and will provide more clarifications on objectives to be attained. For example, during the meeting, the team leader will communicate and emphasize the importance of achieving the goals for the team and provide directions for the attainment of objectives.

AC 2.1

In a team, a problem will occur when the actual performance less than expected performance. For example, the actual expenditure exceeds the budgeted costs or the time frame exceeds the expected time to accomplish specific objectives. The team leader should develop measures to ensure that the problem is corrected timely manner before more adverse deviations; otherwise, the team will fail to achieve its objectives. The management should provide support to the team to enable it to achieve its goals. A problem can also occur if the actual performance is beyond the expected limits. The team will set the upper and lower limit; any performance exceeding the limit will be considered as a problem.

The problem can be measured with various tools such as control chart, scatter graph, process flow chart and Pareto chart. In the control chart, there is an upper and lower limit. If the figures exceed the lower and upper limit, it will be considered as a problem. A scatter graph indicates the relationship between variables; the variables may have either a positive or negative relationship. If points on the scatter graph, is not according to the expectation, it will be regarded as a problem. The process flow chart indicates the graphical representation of the processes; any deviation or lack of flow will indicate a problem. The Pareto chart helps to categorize items according to their frequency; it is a chart with bars indicating the frequency of occurrence; for example, the number of complaints from customers. An increase in complaints will indicate a problem in an organization.

AC 2.2

The major causes of problems are management setting unrealistic goals and lack of training and development. The management, while setting performance standards, maybe unattainable by employees. Despite the efforts put by the employees, they will fail to achieve the expected performance set by the organization. Failure to achieve the set standards set problems for the employee and organization as well. The employee may be penalized or terminated for underperforming and the organization will fail to attain its overall objectives.

The problem also arises when the company fails to conduct training and development for the employees. Untrained staff lacks the knowledge to achieve certain objectives and tasks will be poorly performed, leading to problems for the firm. The management to enhance career development and improve employee they should conduct training and development for its employees; otherwise, the work will be underperformed or lead to high labour turnover.

AC 2.3

The management may include several tools to solve the problem such as Kaizen, Lean Process Improvement, Benchmarking, Quality Improvement Groups, Quality Circles and Visual Management.  In this section benchmarking will be discussed in detail. In benchmarking, the company compares itself with the best practices and provides the company with a competitive edge. There are four types of benchmarking; generic, functional, competitive and internal. In generic, the company compares its operation with different industries. In functional, the firm compares its operation with a similar industry. In competitive, the business compares its operation with that of its competitors. The firm correlates its operations with another similar function within the organization in internal benchmarking. Benchmarking has the effect of improving the productivity of the firm. Benchmarking has five main stages; determining what to be benchmarked, forming a team, identifying partners, collecting and analyzing data and implementing and monitoring results (Lewis, 2012).

AC 2.4

The improvement tool that a firm may apply to solve the problems is Six Sigma.  The method has five basic steps; define, measure, analyze, improve and control (DMAIC). The firm should identify the problem, measure the problem, analyze it, suggest possible ways to improve the process and lastly, adopt methods to maintain the improvements. The method is an effective way to evaluate a problem and provides a suitable solution for the problem (Stern, 2019).

AC 3.1

Six Sigma provides a better approach to problem-solving. The benefits of using Six Sigma include reduced operational costs, improved efficiency or timeliness, improved accuracy and control, improved cash flow and improved regulatory compliance. The approach has the effects of saving the costs for the company and leads to an increase in cash flows. Besides, the firm can easily monitor and control production.

AC 3.2

The reduction in cost will be reported in the income statement in terms of reduced expenses and increased profitability. The production process will be completed in time will be due to improved efficiency. The management will be able to meet their standards due to improved accuracy and control. The company will report improved cash flow in the statement of cash flow. The firm will report to its stakeholders on compliance with various regulatory authorities.

References

Stern, T. V. (2019). A Brief History of Lean and Six Sigma. Leaner Six Sigma, 7–16. doi: 10.4324/9780429425967-2

Lewis, A. (2012). Benchmarking Best Practice in Maintenance Management20121Terry Wireman. Benchmarking Best Practice in Maintenance Management. New York, NY: Industrial Press 2010. 2nd ed. Benchmarking: An International Journal, 19(1), 126–127. doi: 10.1108/14635771211218407

Ruggles, W. S., & Harrington, H. J. (2018). A Contemporary Framework for Applying Project Management and Continual Improvement for Performance Improvement Teams. Project Management for Performance Improvement Teams, 19–33. doi: 10.4324/9781315117683