Deliver Customer Value and Ongoing Organizational Success

Norma Krech, Master Examiner

Criteria 102 – Category 6 - Operations

Deliver Customer Value and Ongoing Organizational

Success Through Operations Management

OBJECTIVES Criteria 102 - Operations

• Understand how organizational operations provides effective and efficient methods to deliver internal and external products and services.

• Gain a better understanding of the alignment between Category 6 - Operations with other Criteria Categories.

• Learn about components of operations that are often overlooked by organizations.

• Understand the difference between processes and Work Systems.

The Organizational Profile sets the context for yourorganization. It serves as the background for all you do.

The Leadership triad (Leadership, Strategy, andCustomers) emphasizes the importance of aleadership focus on strategy and customers.

The Results triad (Workforce, Operations, and Results) includes your workforce focused processes, your key operational processes, and the performance results they yield.

The basis of the Criteria is a set of Core Values and Concepts.

The System Foundation (Measurement, Analysis,and Knowledge Management) is critical to effective management and to fact-based,knowledge-driven, agile system for improvingyour performance and competitiveness.

All actions lead to Results: a composite of product andprocess customer-focused; workforce-focused; leadershipand governance; and financial and market results.

OVERVIEW Criteria 102 - Operations

P1a(1):• What are your main product and service offerings?• What is the relative importance of each to your success?• What mechanisms do you use to deliver your products and

services? P1b(2):• What are your customers and stakeholders key requirements and

expectations for your products and services, customer support services, and operations?

P1b(3):• What role do your suppliers, partners, and collaborators play in

producing and delivering your key products and services and customer support services?

• What role do these organizations play in contributing and implementing innovations in your organization?

• What are your key supply-network requirements?

OVERVIEW Criteria 102 - Operations

6.1 Work Processes

How do you design, manage, and improve your key products, services, and work processes?

The Operations Category, which asks how your organization designs, manages, improves, and innovates its products and services, and work processes; and improves operational effectiveness to deliver customer value and achieve ongoing organizational success.

6.2 Operational Effectiveness

How do you ensure effective managementof your operations?

CRITERIA HIGHLIGHTS Criteria 102 - Operations

6.1 WORK PROCESSES Criteria 102 - Operations

design

determine

manage

improve

WORK PROCESSES

6.1a How do you determine product and service, and work process requirements?


• Customer Groups & Requirements (P.1b)

• Customer Expectations (3.1)

• Strategic Direction (2.1)

• Industry Standards (P.1a)

• Regulatory Requirements (P.1a, 1.2)

• Competitive Position (P.2a)design

determine

manage

improve

WORK PROCESSES

Work Processes versus Support Processes

IBM Hospital SystemInformation Technology

Amazon Procurement Dept.Logistics

Teletech IT Help DeskCall Center


6.1a How do you determine your key work processes?

6.1a(3) How do you design your products, services, and work processes to meetrequirements?


How do you incorporate

• new technology;

• organizational knowledge;

• product and service excellence;

• customer value;

• consideration of risk; and

• the potential need for agility into these products, services and processes?

design

determine

manage

improve

WORK PROCESSES

The Six Process Risks


1. Infrastructure Risk: such as the failure of basic communicationlinkages

2. Information Technology Risk: the risk of technology errors orsecurity incidents that disrupt or invade processes

3. Human Error: errors or oversights can result in low quality or failed processes

4. Workplace Safety: potential threats to human health andsafety such as a physical accident of injury due to repetitive strain.

5. Mechanical Failure: breakdown of equipment

6. Process Quality: the quality of a process itself that leads to failure

6.1b(1) How do your day-to-day operations of work processes ensure they meetkey process requirements?


What key performance measures or indicators, andin-process measures do you use to control andimprove your work processes?

How do these measure relate to end-product qualityand performance measures?

design

determine

manage

improve

WORK PROCESSES


Measures

In-Process measures are predictors of anOutcome measure’s performance.

Outcome measures determine theperformance of the process againstcustomer and organizational requirements.

6.1b(3) How do you improve your work processes and support processes?


How do you improve processes to:

• improve products and services

• improve process performance

• enhance your core competencies, and

• reduce variability?design

determine

manage

improve

WORK PROCESSES

Core Competencies


Core Competencies refers to an organization’s set of skills or experience in some activity, ratherthan physical or financial assets. An organizational Core Competency is an organization’sstrategic strength, and is often a market differentiator as it creates distinct customer value.

PROCESS IMPROVEMENT Criteria 102 - Operations

Improvement Systems

Approaches

Techniques

Analytical Tools

SUPPLY NETWORK Criteria 102 - Operations

6.1c Supply-Network Management

Supply Chain Supply-Network

SUPPLIER SELECTION Criteria 102 - Operations

How do you select suppliers that

• are qualified and positioned to meet your operational needs;

• enhance your performance,

• support your strategic objectives, and

• enhance your customers’ satisfaction?

SUPPLY-NETWORK Criteria 102 - Operations

How do you

• promote alignment and collaboration withinyour supply-network;

• ensure supply-network agility and resilience inresponse to changes in customer, market, andorganizational requirements; (*new*)

• communicate performance expectations;

• measure and evaluate suppliers’ performance;

• provide feedback to help them improve; and

• deal with poorly performing suppliers?

MANAGEMENT OF OPPORTUNITIES FOR INNOVATION Criteria 102 - Operations

6.1d How do you pursue your identified opportunities for innovation?

How do you pursue the strategic opportunitiesthat you determined are intelligent risks?

How do you make financial and other resources available to pursue these opportunities?

How do you decide to discontinue pursuingopportunities at the appropriate time?

When designing, managing, and improving key products, services and work processes; which of the following key stages are followed:

A. DetermineB. DesignC. Manage D. ImproveE. All of the Above

6.1 REFLECTION QUESTION Criteria 102 - Operations

6.1 Work Processes





CRITERIA HIGHLIGHTS Criteria 102 - Operations

6.2a How do you manage cost, efficiency, and effectiveness of your operations?

6.2 OPERATIONAL EFFECTIVENESS Criteria 102 - Operations

How do you

• incorporate cycle time, productivity, and otherefficiency and effectiveness factors into yourwork processes;

• prevent defects, service errors, and rework;

• minimize the costs of inspections, tests, andprocess or performance audits, and

• balance the need for cost control and efficiency with the needs of your customers?

EFFECTIVENESS VS. EFFICIENCY Criteria 102 - Operations

The Battle of the “effs”

Can you be highly efficient and still be ineffective?

Criteria 102 - Operations

Defects + Service Error + Rework =

6.2 OPERATIONAL EFFECTIVENESS


Inspections, Tests, and Process or Performance Audits

• Inspections: a situation where something, a process,building, or organization is checked or examined tomake sure it meets specific standards

• Tests: conducted to validate manual or automatedprocesses will achieve the desired outcomes; ensureprocesses remain within specifications

• Audits: evaluate business controls to help make sure the process remains in compliance with laws and regulations; evaluation of the sequential steps andinteractions of a process within a system to determineefficiency and effectiveness



Balance: Cost Control and Efficiency Needs with Customer Needs

Cost Control is identifyingand reducing businessexpenses to increase

profits.

Efficiency is the reductionof wasted resources inproviding products or

services.

Customer Needs are theproduct or service requirements and

expectations of the customer.


6.2b How do you ensure the security and cybersecurity of sensitive or privileged data and information, and of key assets?


How do you manage physical and digital data, information, and key operational systems to ensure confidentiality and only appropriate physical and digital access?

How do you

• Maintain your awareness of emerging security and cybersecurity threats;

• Ensure your workforce, customer, partners, and suppliers understand and fulfill their securityand cybersecurity roles and responsibilities;

• Identify and prioritize key informational technologyand operational systems to secure, and

• Protect these systems from potential cybersecurity events,detect cybersecurity events, and respond to and recover from cybersecurity incidents?


The Customers’ Role in Security and Cybersecurity


In 2017

• 58% of consumers believe they will be a victim of a breach

• 30% feel they are responsible for protecting their data and information

• Unlikely to do business with an organization that experienced a breach:

− 66% with a financial organization

− 60% with a retailer

− 58% with a bank

− 56% with a social media site

In 2018, 72% of banking customers believe they will be a victim


2017, Thales Digital Identify and Security

2018, Accenture

6.2c(1) How do you provide a safe operating environment for your workforce andother people in your workplace?


How does your safety system addressaccident prevention, inspection, root-causeanalysis of failures, and recoveries?

6.2c(2) How do you ensure that your organization can anticipate, prepare for, andrecover from disasters, emergencies, and other disruptions?


• How do you consider risk, prevention, protection,continuity of operations, and recovery in the event ofdisruptions?

• How do you take into account customer and business needs,and your reliance on workforce, supply-network, partners,and information systems?

Identify one way in which the pandemic changed the way your organization adaptedproduct and service offerings based on changing requirements and

expectations of your customers?

6.2 REFLECTION QUESTION Criteria 102 - Operations

6.1 Work Processes





CRITERIA SUMMARY Criteria 102 - Operations

WORK SYSTEMS Criteria 102 - Operations

The Sterling Framework encompasses four systems:• Leadership System• Work Systems• Performance Improvement System• Governance System

WORK PROCESSES VERSUS WORK SYSTEMS Criteria 102 - Operations

CustomerNeed Process Process Process Product

Requirements Requirements Requirements

FeedbackFeedbackFeedback


The Work System frameworkIdentified nine elements• Customers• Products and Services• Processes and Activities• Participants• Information• Technology

Four of these elements• Processes and Activities• Participants• Information• TechnologyConstitute the core of theWork System itself.


Decisions about work systems are strategic.

Decisions about work systems and work processes affectorganizational design and

structure, profitability, and sustainability.


Examples of Work Systems:• Growth Management Work System, which might include the

processes of − Market Research,− Marketing,− Business Development, and− Sales.


Examples of Work Systems:• Supply-Network Management Work System, which might

include the processes of − Capacity Planning,− Supplier Selection,− Contract Management, and − Supplier Monitoring and Evaluation.


Examples of Work Systems:• Workforce Management Work System, which might include

the processes of − Workforce Planning− Hiring,− Retention Policies,− Compensation,− Rewards,− Recognition,− Benefits,− Volunteer Management, and− Professional Development and Training.


In these examples, the organization's decisions have key staffing, organizational design, liability, customer engagement, and other strategic implications.

Again, this is the domain of strategy and senior leadership.

Once those decisions have been made, work process design and management can be deployed to the organization.

Decisions about work systems and work processes affect organizational design and structure, profitability, and sustainability. Therefore, decisions about Work Systems are Strategic.

A. TrueB. False

WORK SYSTEMS REFLECTION QUESTION Criteria 102 - Operations

• Understand how organizational operations provides effective and efficient methods to deliver internal and external products and services.

• Gain a better understanding of the alignment between Category 6 - Operations with other Criteria Categories.

• Learn about components of operations that are often overlooked by organizations.

• Understand the difference between processes and Work Systems.

OBJECTIVES Criteria 102 - Operations

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Deliver Customer Value and Ongoing Organizational Success