OPERATIONS STARTEGY: ASSIGBNMENT 1

SECTION A:

1) WRITE SHORT NOTES ON A) JUST IN TIME INVENTORY MANAGEMENTB) COMPUTER AIDED DESIGN

A) Definition:

Just-in-Time (JIT) inventory management is the process of ordering and receiving inventory for production and customer sales only as it is needed and not before. This means that the company does not hold safety stock and operates with low inventory levels. This strategy helps companies lower their inventory carrying costs.

Just-in-time inventory management is a cost-cutting inventory management strategy though it can lead to stockouts. The goal of JIT is to improve return on investment by reducing non-essential costs.

Examples:

Just-in-time inventory management is used by Toyota Manufacturing as its inventory management system.

B) Computer-aided design (CAD) is a computer technology that designs a product and documents the design's process. CAD may facilitate the manufacturing process by transferring detailed diagrams of a product’s materials, processes, tolerances and dimensions with specific conventions for the product in question. It can be used to produce either two-dimensional or three-dimensional diagrams, which can then when rotated to be viewed from any angle, even from the inside looking out. A special printer or plotter is usually required for printing professional design renderings.

The concept of designing geometric shapes for objects is very similar to CAD. It is called computer-aided geometric design (CAGD).

CAD is also known as computer-aided design and drafting (CADD)

CAD is used as follows:

1. To produce detailed engineering designs through 3-D and 2-D drawings of the physical components of manufactured products.

2. To create conceptual design, product layout, strength and dynamic analysis of assembly and the manufacturing processes themselves.

3. To prepare environmental impact reports, in which computer-aided designs are used in photographs to produce a rendering of the appearance when the new structures are built.

CAD systems exist today for all of the major computer platforms, including Windows, Linux, Unix and Mac OS X. The user interface generally centers around a computer mouse, but a pen and digitizing graphic tablet can also be used. View manipulation can be accomplished with a spacemouse (or

spaceball). Some systems allow stereoscopic glasses for viewing 3-D models.

Most U.S. universities no longer require classes for producing hand drawings using protractors and compasses. Instead, there are many classes on different types of CAD software. Because hardware and software costs are decreasing, universities and manufacturers now train students how to use these high-level tools. These tools have also modified design work flows to make them more efficient, lowering these training costs even further.

2) How does an operation manager get the advantage of quality management in makingBusiness decisions?

Operations management is a multi-disciplinary field that focuses on managing all aspects of an

organization's operations. The typical company carries out various functions as a part of its operation. The

dividing of a company's activities into functional categories occurs very early on, even in a company

formed and operated by a single individual. Most companies make a product of some kind or produce a

salable service. They must also carry out a sales and marketing function, an accounting function, and an

administrative function to manage employees and the business as a whole. Operations management

focuses on the function of providing the product or service. Their job is to assure the production of a

quality good and/or service. They apply ideas and technologies to increase productivity and reduce costs,

improve flexibility to meet rapidly changing customer needs, assure a safe workplace for all employees,

and when possible assist in assuring high-quality customer service.

For the most part, the title "Operations Manager" is used in companies that produce a tangible good—

manufacturers on the whole. In service-oriented businesses, the person responsible for the operations

manager role is often called by another name, one that addresses the service being offered. Examples

include project manager, consultant, lawyer, accountant, office manager, datacenter manager, etc.

KEY ISSUES IN OPERATIONS

As an organization develops plans and strategies to deal with the opportunities and challenges that arise in

its particular operating environment, it should design a system that is capable of producing quality services

and goods in the quantities demanded and in the time frames necessary to meet the businesses

obligations.

Designing the System

Designing the system begins with product development. Product development involves determining the

characteristics and features of the product or service to be sold. It should begin with an assessment of

customer needs and eventually grow into a detailed product design. The facilities and equipment used in

production, as well as the information systems needed to monitor and control performance, are all a part

of this system design process. In fact, manufacturing process decisions are integral to the ultimate success

or failure of the system. Of all the structural decisions that the operations manager makes, the one likely

to have the greatest impact on the operation's success is choice of the process technology. This decision

answers the basic question: How will the product be made?

Product design is a critical task because it helps to determine the characteristics and features of the

product, as well as how the product functions. Product design determines a product's cost and quality, as

well as its features and performance. These are important factors on which customers make purchasing

decisions. In recent years, new design models such as Design for Manufacturing and Assembly (DFMA)

have been implemented to improve product quality and lower costs. DFMA focuses on operating issues

during product design. This can be critical even though design costs are a small part of the total cost of a

product, because, procedures that waste raw materials or duplicate effort can have a substantial negative

impact on a business's operating profitability. Another innovation similar to DFMA in its emphasis on

design is Quality Functional Deployment (QFD). QFD is a set of planning and communication routines that

are used to improve product design by focusing design efforts on customer needs.

Process design describes how the product will be made. The process design decision has two major

components: a technical (or engineering) component and a scale economy (or business) component. The

technical component includes selecting equipment and selecting a sequence for various phases of

operational production.

The scale economy or business component involves applying the proper amount of mechanization (tools

and equipment) to make the organization's work force more productive. This includes determining: 1) If

the demand for a product is large enough to justify mass production; 2) If there is sufficient variety in

customer demand so that flexible production systems are required; and 3) If demand for a product is so

small or seasonal that it cannot support a dedicated production facility.

Facility design involves determining the capacity, location, and layout for the production facility. Capacity

is a measure of an company's ability to provide the demanded product in the quantity requested by the

customer in a timely manner. Capacity planning involves estimating demand, determining the capacity of

facilities, and deciding how to change the organization's capacity to respond to demand.

Facility location is the placement of a facility with respect to its customers and suppliers. Facility location is

a strategic decision because it is a long-term commitment of resources that cannot easily or inexpensively

be changed. When evaluating a location, management should consider customer convenience, initial

investment necessary to secure land and facilities, government incentives, and operating transportation

costs. In addition, qualitative factors such as quality of life for employees, transportation infrastructure,

and labor environment should also be taken under consideration.

Facility layout is the arrangement of the workspace within a facility. It considers which departments or

work areas should be adjacent to one another so that the flow of product, information, and people can

move quickly and efficiently through the production system.

Implementation

Once a product is developed and the manufacturing system is designed, it must be implemented, a task

often more easily discussed than carried out. IF the system design function was done thoroughly, it will

have rendered an implementation plan which will guide activities during implementation. Nonetheless,

there will inevitably be changes needed. Decisions will have to be made throughout this implementation

period about tradeoffs. For example, the cost of the originally planned conveyor belt may have risen. This

change will make it necessary to consider changing the specified conveyor belt for another model. This, of

course, will impact upon other systems linked to the conveyor belt and the full implications of all these

changes will have to be assessed and compared to the cost of the price increase on the original conveyor

belt.

Planning and Forecasting

Running an efficient production system requires a great deal of planning. Long-range decisions could

include the number of facilities required to meet customer needs or studying how technological change

might affect the methods used to produce services and goods. The time horizon for long-term planning

varies with the industry and is dependent on both complexity and size of proposed changes. Typically,

however, long-term planning may involve determining work force size, developing training programs,

working with suppliers to improve product quality and improve delivery systems, and determining the

amount of material to order on an aggregate basis. Short-term scheduling, on the other hand, is concerned

with production planning for specific job orders (who will do the work, what equipment will be used,

which materials will be consumed, when the work will begin and end, and what mode of transportation

will be used to deliver the product when the order is completed).

Managing the System

Managing the system involves working with people to encourage participation and improve organizational

performance. Participative management and teamwork are an essential part of successful operations, as

are leadership, training, and culture. In addition, material management and quality are two key areas of

concern.

Material management includes decisions regarding the procurement, control, handling, storage, and

distribution of materials. Material management is becoming more important because, in many

organizations, the costs of purchased materials comprise more than 50 percent of the total production

cost. Questions regarding quantities and timing of material orders need to be addressed here as well when

companies weigh the qualities of various suppliers.

BUILDING SUCCESS WITH OPERATIONS

To understand operations and how they contribute to the success of an organization, it is important to

understand the strategic nature of operations, the value-added nature of operations, the impact

technology can have on performance and the globally competitive market place.

3) Describe the principles of the Maruti Car Production System and how it is a departurefrom traditional production systems.

The Toyota Production System (TPS) is an integrated socio-technical system, developed by Toyota, that comprises its management philosophy and practices. The TPS organizes manufacturing and logistics for the automobile manufacturer, including interaction with suppliers and customers. The system is a major precursor of the more generic "lean manufacturing." Taiichi Ohno, Shigeo Shingo and Eiji Toyoda developed the system between 1948 and 1975.

Originally called "just-in-time production," it builds on the approach created by the founder of Toyota, Sakichi Toyoda, his son Kiichiro Toyoda, and the engineer Taiichi Ohno. The principles underlying the TPS are embodied in The Toyota Way.

The main objectives of the TPS are to design out overburden (muri) and inconsistency (mura), and to eliminate waste (muda). The most significant effects on process value delivery are achieved by designing a process capable of delivering the required results smoothly; by designing out "mura" (inconsistency). It is also crucial to ensure that the process is as flexible as necessary without stress or "muri" (overburden) since this generates "muda" (waste). Finally the tactical improvements of waste reduction or the elimination of muda are very valuable. There are seven kinds of muda that are addressed in the TPS.

1. Waste of over production (largest waste)2. Waste of time on hand (waiting)3. Waste of transportation4. Waste of processing itself5. Waste of stock at hand6. Waste of movement7. Waste of making defective products

The elimination of waste has come to dominate the thinking of many when they look at the effects of the TPS because it is the most familiar of the three to implement. In the TPS many initiatives are triggered by inconsistency or over-run reduction which drives out waste without specific focus on its reduction.

The underlying principles, called the Toyota Way, have been outlined by Toyota as follows:

Continuous improvement

Challenge (We form a long-term vision, meeting challenges with courage and creativity to realize our dreams.)

Kaizen (We improve our business operations continuously, always driving for innovation and evolution.)

Genchi Genbutsu (Go to the source to find the facts to make correct decisions.)

Respect for people

Respect (We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust.)

Teamwork (We stimulate personal and professional growth, share the opportunities of development and maximize individual and team performance.)

External observers have summarized the principles of the Toyota Way as:

Long-term philosophy

1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals.

The right process will produce the right results

1. Create continuous process flow to bring problems to the surface.2. Use the "pull" system to avoid overproduction.3. Level out the workload (heijunka). (Work like the tortoise, not the hare.)4. Build a culture of stopping to fix problems, to get quality right from the first.5. Standardized tasks are the foundation for continuous improvement and employee

empowerment.6. Use visual control so no problems are hidden.7. Use only reliable, thoroughly tested technology that serves your people and processes.

Add value to the organization by developing your people and partners

1. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others.2. Develop exceptional people and teams who follow your company's philosophy.3. Respect your extended network of partners and suppliers by challenging them and helping them

improve.

Continuously solving root problems drives organizational learning

1. Go and see for yourself to thoroughly understand the situation 2. Make decisions slowly by consensus, thoroughly considering all options; implement decisions

rapidly;3. Become a learning organization through relentless reflection and continuous improvement .

The Toyota production system has been compared to squeezing water from a dry towel. What this means is that it is a system for thorough waste elimination. Here, waste refers to anything which does

not advance the process, everything that does not increase added value. Many people settle for eliminating the waste that everyone recognizes as waste. But much remains that simply has not yet been recognized as waste or that people are willing to tolerate.

People had resigned themselves to certain problems, had become hostage to routine and abandoned the practice of problem-solving. This going back to basics, exposing the real significance of problems and then making fundamental improvements, can be witnessed throughout the Toyota Production System.

4) Explain the relationship between production rate and cycle time and their interpretationin synchronous production. What does it mean for the workstations in a process to be balanced?

A workstation is a special computer designed for technical or scientific applications. Intended primarily to be used by one person at a time, they are commonly connected to a local area network and run multi-user operating systems. The term workstation has also been used loosely to refer to everything from a mainframe computer terminal to a PC connected to a network, but the most common form refers to the group of hardware offered by several current and defunct companies such as Sun Microsystems, Silicon Graphics, Apollo Computer, DEC, HP and IBM which opened the door for the 3D graphics animation revolution of the late 1990s.

Workstations offered higher performance than mainstream personal computers, especially with respect to CPU and graphics, memory capacity, and multitasking capability. Workstations were optimized for the visualization and manipulation of different types of complex data such as 3D mechanical design, engineering simulation (e.g. computational fluid dynamics), animation and rendering of images, and mathematical plots. Typically, the form factor is that of a desktop computer, consist of a high resolution display, a keyboard and a mouse at a minimum, but also offer multiple displays, graphics tablets, 3D mice (devices for manipulating 3D objects and navigating scenes), etc. Workstations were the first segment of the computer market to present advanced accessories and collaboration tools.

The increasing capabilities of mainstream PCs in the late 1990s have blurred the lines somewhat with technical/scientific workstations. The workstation market previously employed proprietary hardware which made them distinct from PCs; for instance IBM used RISC-based CPUs for its workstations and Intel x86 CPUs for its business/consumer PCs during the 1990s and 2000s. However by the late 2000s this difference disappeared, as workstations now use highly commoditized hardware dominated by large PC vendors, such as Dell and HP, selling Microsoft Windows or GNU/Linux systems running on x86-64 architecture such as Intel Xeon or AMD Opteron CPUs.

OPERATIONS STARTEGY: ASSIGBNMENT 2

SECTION A:

1) What is a product life cycle (PLC)? Explain each phases with an example of automobile sector in India.

The product life cycle (PLC)The stages (introduction, growth, maturity, decline) that a product may go through over time. It includes the stages the product goes through after development, from introduction to the end of the product. Just as children go through different phases in life (toddler, elementary school, adolescent, young adult, and so on), products and services also age and go through different stages. The PLC is a beneficial tool that helps marketers manage the stages of a product’s acceptance and success in the marketplace, beginning with the product’s introduction, its growth in market share, maturity, and possible decline in market share. Other tools such as the Boston Consulting Group matrix and the General Electric approach may also be used to manage and make decisions about what to do with products. For example, when a market is no longer growing but the product is doing well (cash cow in the BCG approach), the company may decide to use the money from the cash cow to invest in other products they have rather than continuing to invest in the product in a no-growth market.

The product life cycle can vary for different products and different product categories. The following figure illustrates an example of the product life cycle, showing how a product can move through four stages. However, not all products go through all stages and the length of a stage varies. For example, some products never experience market share growth and are withdrawn from the market.

2) Manufacturer is always under the dilemma in producing customized products. Why?

Mass Customization is the new paradigm that replaces mass production, which is no longer suitable for today’s turbulent markets, growing product variety, and opportunities for e-commerce. Mass

customization proactively manages product variety in the environment of rapidly evolving markets and products, many niche markets, and individually customized products sold through stores or over the internet.1

Mass customizers can customize products quickly for individual customers or for niche markets at better than mass production efficiency and speed. Using the same principles, mass customizers can Build-to-Order both customized products and standard products without forecasts, inventory, or purchasing delays.

These practical methodologies are taught through Dr. Anderson's in-house seminars and implemented through his leading-edge consulting.

The M.C. Spectrum

There is a whole spectrum of ways that Mass Customization methodologies can benefit companies. At the most visible end of the spectrum, companies can mass customize products for individual customers. The most well know category of individual customization relates to products that people wear (clothing, shoes, glasses) as well as bicycles and pagers.

Further along the spectrum is niche market customization. For instance, a company that makes telephones has only a few customers (telephone companies) who want several dozen models in many colors all with specific phone company logos. Exporters have to deal with many niche market products, usually a different set of products for each country exported; and even if the differences seem minor, the sheer variety of SKUs (stock keeping units) can have significant cost and flexibility implications. Almost all companies could benefit from expansion into niche markets if they could do it efficiently.

At the other end of the spectrum are companies that have tremendous varieties of "standard" products, for instance, industrial suppliers of valves, switches, instruments, electrical enclosures, or any company with a catalog over a half an inch thick. As with product customization, there is a great contrast between how mass producers and mass customizers manufacture a variety of standard products. The mass-producer has the dilemma of trying to keep large enough inventories to sell a wide variety of products from stock or alternatively using the slow, reactive process of ordering parts and building products in very small batches after receipt of orders.

The mass-customizer can use flow manufacturing and CNC programmable machine tools to quickly and efficiently make different products in a "batch size of one" -- either customized products or any standard product from a large catalog.

The Need for Speed

Mass customized goods compete with standard goods which may be available right now at stores or dealers. The biggest appeals of mass customization are being able to (1) provide customized goods, (2) quickly resupply stores with standard products that have just been sold with built-to-order replacements, and (3), for industrial suppliers, to be able to respond on-demand to assemblers’ pull signals, which may be part of the spontaneous supply chain for the first two cases. For all of these speed is imperative to minimize mass customization’s biggest vulnerability: waiting.

In order to deliver products fast, mass customizers need flow manufacturing to make products fast in small quantities and a spontaneous supply chain which can assure spontaneous availability of materials and make parts on-demand.

Mass Customization Depends on Flow Manufacturing

The trend to smaller batches, approaching one, is what is pushing savvy manufacturers toward flow manufacturing. Mass Customization relies on flow manufacturing to provide the batch-size-of-one capability. Whether manufacturing a wide variety of standard products or individually customized products, mass customizers depend on several elements of flow manufacturing to enable them to build products economically in any order quantity, even as low as one.

Setup and its elimination. Being able to build in a batch (or lot) size of one depends on the elimination of setup, for instance, to get parts, change dies and fixtures, download programs, find instructions, or any kind of manual measurement, adjustment, or positioning of parts or fixtures. Mass producers are forced to make products in batches to spread setup costs among as many products as possible. If setup can be eliminated, then products could be made to-order as orders came in. This is the essence of Spontaneous Build-to-Order. Setup elimination is also an essential prerequisite for mass customization since every product could be different.

Setup and batches can be eliminated by (1) distributing parts at all the points of use to eliminate the kitting, or the batching of parts, (2) eliminating tooling setup with versatile tool plates or tooling that can be changed very quickly, (3) consolidating inflexible parts into very versatile standard parts, for instance, for castings, plastic parts, stampings, extrusions, and bare printed circuit boards, (4) using CNC machine tools to programmably make a wide variety of parts from standard shapes of raw material, and (5) eliminating all setup from manual assembly, such as finding and understanding work instructions by displaying instruction on monitors that instantly and clearly show what is to be done at that workstation to any product being worked on.2

Spontaneous Supply Chains

In order to build products on-demand, mass customizers must be able to build parts on-demand from materials that are always available. This will require a spontaneous supply chain. The first steps in supply chain management must be supply chain simplification.

Supply Chain Simplification. The simplification steps for supply chain management are standardization, Automatic resupply techniques, and rationalization of the product line to eliminate or outsource the unusual, low-volume products that contribute to part variety way out of proportion to their profit generation ability. The goal of supply chain simplification is to drastically reduce the variety of parts and raw materials to the point where these materials can be procured spontaneously by automatic and pull-based resupply techniques. Reducing the part and material variety will also shrink the vendor base, further simplifying the supply chain.

Standardization. Most products are designed around too many different parts and materials for mass customization. Ironically, a rampant proliferation of parts is quite unnecessary, but occurs simply because standardization is not emphasized. Part and material variety can be easily reduced with standardization techniques by one or two orders of magnitude!3

Automatic, spontaneous resupply. A key part of the spontaneous supply chain is automatic resupply techniques such as kanban, "min-max," or breadtruck (free-stock). The simplest version of kanban uses two bins for each part. After parts are depleted from the first bin, it goes back to its source to be filled, and could be made in a batch mode if the combination of setup time, run time, and delivery time is short enough to return the new bin of parts before the other bin runs out. Min-max is a similar concept usually applied to stacks of raw material like sheet metal; when the "min" level is reached, this triggers the resupply of enough material to reach the "max" level. Breadtruck or free-stock makes small inexpensive parts like fasteners freely available at all points of use; these are resupplied automatically by a supplier who simply keeps the bins full and bills the company monthly. This is much more efficient than issuing expensive purchase orders for parts that may cost pennies. Parts that qualify can be made in batches as long as the response time and bin (or delivery) size is adequate.

Spontaneous build-to-order of parts. For parts that do not qualify for kanban, suppliers or in-house sources would need to implement spontaneous BTO so that they could actually build on-demand to the pull signals from assembly. Spontaneous BTO of parts may require the development of vendor-partner relationships for suppliers to establish the ability to build parts in any quantity on-demand.

Designing products for Mass Customization

For fast and easy production, mass customization products should be designed for manufacturability.4 A key element of DFM is designing for lean production, build-to-order, and mass customization. Products should be developed in synergistic product families and be designed around aggressively standardized parts and materials, designed for no setup, and designed for CNC programmable machine tools.

How Products are Customized

There are three ways to customize products: modular, adjustable, and dimensional customization.5

Modular Customization. Modules are "building blocks." Usually modules are literally building blocks that can customize a product by assembling various combinations of modules. Examples of modules would include many components in automobiles: engines, transmissions, audio equipment, tire/wheel options, etc. In electronics, modules would include processor boards, power supplies, plug-in integrated circuits, daughter-boards, and disk drives. In software, code could be written in modules (objects) that can be combined into various combinations.

Adjustable Customization. Adjustments are a reversible way to customize a product, such as mechanical or electrical adjustments. Adjustments could be infinitely variable. Discrete adjustments, or configurations, would represent few choices, such as those provided by electronic switches, jumpers, cables, or discrete software controlled configurations. These adjustments and configurations make the product customizable by the factory, by dealers, or by customer. Software can be customized by user-defined settings or by table driven programming in which the software is specifically written to accommodate variables that can be customized by entering customer data into a table. The result is customized software that does not does not have to be debugged.6

Dimensional Customization. Dimensional customization involves a permanent cutting-to-fit, mixing, or tailoring. Dimensional customization could be infinite or have a selection of discrete choices. Examples

of infinite dimensional customization would include the tailoring of clothing, drilling holes in bowling balls, grinding eyeglasses, mixing of paints or chemicals, machining metal parts, and the cutting of sheet metal, wire, or tubing. Examples of discrete dimensional customization would be hole punching, and soldering selected electronic components onto a printed circuit board. Dimensionally customized parts can be made automatically on CNC equipment running program instructions that are generated on demand from data that originates in parametric CAD (see discussion below).

How Mass Customization Works

The following examples were created to show mass customization principles for electronic products (Figure 1) and fabricated parts or products (Figure 2). The author creates perspective illustrations, like these, for each mass customization client because they show, on one page, the flow of materials and information through easily recognizable machinery. Further, three-dimensional drawings showing the actual equipment are more meaningful than two-dimensional block representations to a broad audience. These can be drawn in 3D CAD solid model software. In the following discussions, bold words refer to labels on the illustration.

The process starts with a dialog with the customer in which customer queries are quickly answered. This rapid dialog is the only one (the only two-way arrows in Figure 1) in mass customization, as opposed to the traditional practice of many length inquires back and forth with Engineering, Procurement, and Manufacturing departments. Various "what if" scenarios can be explored instantly, complete with price and availability quotes, using configuration software (called "configurators"), which could be on a salesperson’s laptop computer or on the company web-site.

When the customer has optimized the configuration and approves the order, the order information is sent by modem input to the factory where it enters the order entry database, which accepts the information and converts it into various data packets that go (1) to on-line assembly instruction monitors, which tell workers how to assemble each product, and (2) to the parametric CAD/CAM work station. This is an automatic or semi-automatic computer that accepts customer order data into parametric CAD drawings, which are drawn with "floating" dimensions that accept the customer’s data and then stretch all the part drawings, which also stretches the assembly drawings. Finally, this station automatically translates these drawings into CNC Programs for the CNC equipment.

Write short notes on:

ERP and Applications

Enterprise resource planning (ERP) is a business management software—usually a suite of integrated applications—that a company can use to collect, store, manage and interpret data from many business activities, including:-

Product planning, cost and development Manufacturing or service delivery Marketing and sales Inventory management

Shipping and payment

ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across the various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data. ]ERP facilitates information flow between all business functions, and manages connections to outside stakeholders.

Enterprise system software is a multi-billion dollar industry that produces components that support a variety of business functions. IT investments have become the largest category of capital expenditure in United States-based businesses over the past decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems.

Organizations consider the ERP system a vital organizational tool because it integrates varied organizational systems and facilitates error-free transactions and production. However, ERP system development is different from traditional systems development. ERP systems run on a variety of computer hardware and network configurations, typically using a database as an information repository.

Quality is a never ending quest and Continuous Process Improvement (CPI) is a never ending effort to

discover and eliminate the main causes of problems. It accomplishes this by using small-steps

improvements, rather than implementing one huge improvement. The Japanese have a term for this

called kaizen which involves everyone, from the hourly workers to top-management.

CPI means making things better. It is NOT fighting fires. Its goal is NOT to blame people for problems or

failures. . . it is simply a way of looking at how we can do our work better. When we take a problem

solving approach, we often never get to the root causes because our main goal is to put out the fire. But

when we engage in process improvement, we seek to learn what causes things to happen and then use

this knowledge to:

o Reduce variation.

o Remove activities that have no value to the organization.

o Improve customer satisfaction.

Process improvement is important as Rummler & Brache's research (1995) showed that process account

for about 80% of all problems while people account for the remaining 20%.

CPI Procedure

CPI has been described using a number of models. This manual will use the system approach or ADDIE (Analysis, Design, Development, Implement, Evaluate) model. There are five phases in this model:

o Analysis Phase — Identify areas of opportunity and target specific problems. These areas and

problems are based on team brain-storming sessions, process definition sessions,

recommendations forwarded to the team by organizational members, and other various analysis

techniques.

o Design Phase — Generate solutions through brain-storming sessions. Identify the required

resources to implement the chosen solution and identify baselines to measure.

o Development Phase — Formulate a detailed procedure for implementing the approved solution.

o Implementation Phase — Execute the solution.

o Evaluation Phase — Build measurement tools, monitor implementation, and evaluate

measurements to baseline. Please note that this phase is performed throughout the entire

process. The chart below shows that this is a dynamic, not a static model: