Strategic Management of Resources

Presented By:
Vincent Gaspersz, CMQ/OE, CQE, CQA, CSSBB/MBB, CFPIM, QMS-A
Professor in Total Quality and Operations Management, Program MM Universitas Trisakti Doktor Teknik Sistem dan Manajemen Industri, Institut Teknologi Bandung (ITB) Doctor of Science in Management of Engineering and Technology, SCUPS APICS Certified Fellow in Production and Inventory Management (CFPIM) International Quality Federation (IQF) Six Sigma Master Black Belt (SSMBB) American Society for Quality (ASQ) Certified Six Sigma Black Belt (CSSBB) American Society for Quality (ASQ) Certified Manager of Quality/Organizational Excellence (CMQ/OE) American Society for Quality (ASQ) Certified Quality Engineer (CQE) American Society for Quality (ASQ) Certified Quality Auditor (CQA) RABQSA Quality Management System Auditor (QMS-A)

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Building the CPIM Programme

Strategic Management of Resources
Philosophies
Product Demand

Strategies
Material Plan

Targets

Master Planning of Resources

Internal Resource

Detailed Scheduling & Planning

Capacity Plan

External Resource

Supplier Plan

Execution & Conrol of Operations

BASICS of SUPPLY CHAIN MANAGEMENT

Fundamentals of Operations Management Fundamentals of Manufacturing Control Fundamentals of Planning
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Fundamentals of Inventory Control

THE CPIM PROGRAM

The CPIM program: an overview The CPIM program consists of 5 individual modules: Entry module: Basics of Supply Chain Management: terminology and basic concepts related to managing the complete flow of materials from suppliers to customers. Business process modules: Master Planning of Resources, Detailed Scheduling and Planning, Execution and Control of Operations: available methodologies and techniques to drive processes and the application of these techniques. Capstone module: Strategic Management of Resources: choosing the appropriate methodologies and techniques for specific needs and an appreciation for the integrated nature of operations.
Strategic Management of Resources
Philosophies Strategies Targets

Master Planing of Resources

Detailed Scheduling and Planning

Execution and Control of Operations

Concept

Basics of Supply Chain Management

Terminology Equations

Minimize Production Cost Minimize Inventory Investment Maximize Customer Service

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Module 5: Strategic Management of Resources

Explores the relationship of existing and emerging processes and technologies to manufacturing strategy and the functions related to operations planning and control. For maximum comprehension of course content students should be familiar with the information and concepts presented in the other CPIM modules before taking this course.

Key Concepts
Capability Analysis Communication Configuration Cost Manager Continues improvement Change Manager Information technology ERP / MRP II Information systems Infrastructure decisions Integration Human resources JIT Life cycle Measurement management Market Operations management Product decisions Project Manager QFD SCM SCOR Strategy alignment Taguchi Methods TQM

Aligning the Resources with the Strategic Plan:

Competitive market issues Factors affecting required facilities Structure of the supply chain Choices of information technology Organizational design and human resources policies

Configuring and Integrating the Operating Processes to Support the Strategic Plan:
The priority planning processes The capacity planning processes Design and development processes Cost management processes

Implementing change:
Evaluating and managing projects Measuring organizational performance ManagingPrepared by: Vincent Gaspersz change in an organization

Strategic Mgmt of Resources (SMR)

Major Topics Aligning Resources with the Strategic Plan Configuring and Integrating the Operating Processes to Support the Strategic Plan Implementing Change
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Class Sessions
1. 2. 3. 4. 5. 6. 7. 8. 9. Align Resources w/Strategic Plans Choices Affecting Ops Structure Choices Affecting Ops Infrastructure Configuring & Integrating Op Processes Supply Chain Management Configuring & Integrating Design and Develop & Cost Mgmt Processes Project Management Measurement Management Change Management

Session 1: Aligning Resources with Strategic Plans

Objectives:
1. Recognize the need for integration of the manufacturing process with the company strategy 2. Identify considerations to make in developing strategy 3. Understand organizational strategy selection 4. Explain how resources can be aligned with strategic market objectives 5. Determine the importance of customer requirements in product design and development 6. Describe the strategic importance of Just-in-Time (JIT) and total quality management (TQM)
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A Corporate Strategy Model

VISION MISSION ORGANIZATIONAL OBJECTIVES ENVIRONMENTAL SCANNING INTERNAL STRENGTH AND WEAKNESS ANALYSIS
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Strategic Planning Cycle - PDSA

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VISION, MISSION, GOALS AND OBJECTIVES

CORPORATE STRATEGY
BUSINESS STRATEGY
1. Price leadership (low cost operations, effective SCM, standardized process, etc) 2. Product differentiation (high-quality products, easily adaptable processes)
3. Customer focus (responsive delivery, process flow, customized for targeted market segment)

First Major Level

Second Major Level

FUNCTIONAL STRATEGY
1. 2. 3. 4. Financial strategy Product development strategy Operations strategy Marketing strategy Third Major Strategy

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OPERATIONS STRATEGY Operations Strategy is the content and process of activities, directed toward distinctive operations competence, that evaluate potential impacts of situations and alternatives in structured time dimensions and integrate a pattern of decisions to balance the resource commitments, output requirements, and risk in various focused transformation efforts.
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FOUR ELEMENTS OF OPERATIONS STRATEGY 1. Method for evaluating the impact of activitiesmethods to evaluate the impacts of activities and accommodate higher levels of uncertainty 2. Definition of time dimensions (time horizon and time fences) the clear definition of time dimensions, including the time horizon and time fences, that permit the specification of periods within which actions must be taken 3. A mechanism for integrating decisions regarding other functional area strategies 4. Focused transformation efforts
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FOCUS OF AN OPERATIONS STRATEGY

1. Process-focused strategythis strategy is applied in companies that produce wide-ranging customized products or services at low volumes. This strategy is suited to less complex, less capital-intense technologies. 2. Product- or service-focused strategythis strategy is applied in companies that produce a narrow range of standardized products or services at high volumes. It is concerned with making materials or sequencing value added activities through integrated work centers. 3. Customer-focused strategywith the strong emergence of total quality management (TQM), this strategy is applied when it is important to integrate the voice of the customer throughout the processes in the company. These could include consideration of customer needs from the design stage until after the sale and including after-sale services. These three focuses require different management approaches, Prepared by: Vincent Gaspersz 13 employee skills, and resource intensities!

FINANCIAL STRATEGY
Financial Strategy of the firm is concerned with the planned use of financial resources and their integration with the business plan. Relevant financial strategies must include new scorecards that take into account the changing economy and the global market. Simple, quantitative performance indicators should drive the financial strategy. These performance indicators include: customer service, inventory turns, quality, etc.

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PRODUCT DEVELOPMENT STRATEGY The product development plans are concerned with the dominant technologies employed by the business and the way the evolve over time. If technology trends can be identified, they will drive product and process changes and guide product improvement, cost reduction, and newproduct proposals.
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Waste in Product Development

Waste Category
Defective Products Over Production Excessive Inventories Excessive Motion

Example
drawing or code errors work does not match customer needs working w/ incomplete requirements not using standard parts and subs extra software features projects desired future business work-in-process exceeds capacity partially done work excessive engineering changes requirements change impact design moving info from one person/group to another unnecessary items specified too many approvals required too much paperwork excessive approvals and controls process monuments task switching on multiple projects workload capacity excessive multi-tasking delays due to reviews/approvals/testing deployment/staffing/workload Prepared by: Vincent Gaspersz

Implication
excessive changes, scrap rework, scrap, warranty queue time drives lead-time no re-use of knowledge drives supply chain variation long lead-time, rework investment not realized barriers to adding value capacity consumed by rework ineffective use of skills no decision rules drives rework and inflexibility queue time, work-a rounds batch processing, no flow project sits for next event not cost effective inefficiencies built-in 16

Excessive Processing

Transportation

Waiting

Design For Six Sigma Application

Product Development Process

Phase 1 Pre-concept

Phase 2 Concept

Phase 3 Product Definition

Phase 4 Detailed Design

Phase 5 Integration & Test Validation

Phase 6 Production & Operation

CustomersNeed

Cycle Time and Cost Reduction

Business Objectives
TECHNICAL REQUIREMENTS LIST

Lean Product Development

Supplier Rationalization

Design for Six Sigma Manufacturing Process Control

Quality Improvement
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MARKETING STRATEGY
Marketing strategy, like all functional strategies, is derived from the corporate strategy. Four of the most important issues dealt with in marketing strategy are: 1. Determining the market segment plan (Select the product market area, Identify the needs of potential customers, Match needs with market segment characteristics, Profile each segment) 2. Developing market niches (Niches are based on a common set of customers with a common set of preferencesin todays environment, marketing strategy is focused on market niches) 3. Completing a competitive analysis (look at three forces: The existing competitive rivalry, The bargaining power of both suppliers and buyers, The threat of new entrants or substitutes in the product or service market) 4. Increasing the market share (Often the larger the market share, the greater Prepared by: Vincent Gaspersz 18 the profitability of the firm)

CHARACTERISTICS THAT CREATE A COMPETITIVE ADVANTAGE

A firm can compete on one or a combination of the following, although an organization can effectively focus on only one or two at a time. Price (lowest price) Quality Delivery speed Delivery reliability Flexibility Product designtechnology, features/option, range Serviceafter-sale and internal Note: for the strategic advantages listed here, superiority is determined in comparison to competitors in the same market niche.
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THE WAY TO ACHIEVE COMPETITIVE ADVANTAGE

TOTAL QUALITY MANAGEMENT (TQM) LEAN ENTERPRISE (LEAN MANUFACTURING) SIX SIGMA LEAN SIX-SIGMA (LEAN-SIGMA) ETC

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Quality Initiatives
?????? Lean Sigma Six Sigma Quality Lean Manufacturing ISO 9000:2000 ISO 9000:2000 Supply Chain Management Total Productive Maintenance
Malcolm Baldrige National Quality Award

Theory of Constraints Reengineering Continuous Improvement/Kaizen ISO 9000 Standards Quality Circles Prepared by: Vincent Gaspersz Statistical Quality Control

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Contact:
Vincent Gaspersz Phone: 0251-332933 or 0813-1940-6433
E-mail: [email protected]

The End

SMARTER
Specific Goals Measurable Achievable Result-oriented Timely Empowerment Reward & Recognition

Smarter: Shorter Cycle Time

Smoother processes Simpler rules or procedures

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BIODATA
Prof. Dr. Vincent Gaspersz, CQE, CQA, CMQ/OE, CSSBB/MBB, CFPIM, QMS-A Professor (Guru Besar) Total Quality and Operations Management pada Program Magister Manajemen (S2) dan Doktor (S3) Universitas Trisakti, Juli 2002-sekarang Magister Sains Statistika Terapan IPB, Sep 1983- June 1985 Doktor Teknik Sistem dan Manajemen Industri ITB, Jan 1988- Sep 1991 Doctor of Science in Management of Engineering and Technology, Southern California University for Professional Studies, 1998-2000 American Society for Quality (ASQ) Certified Manager of Quality and Organizational Excellence (CMQOE), USA, March 2006 American Society for Quality (ASQ) Certified Quality Engineer, June 2006 International Quality Federation (IQF) Six Sigma Master Black Belt, USA, August 2005 ASQ Certified Six Sigma Black Belt, Certified Quality Auditor, RABQSA QMS Audior Certified Quality Auditor (CIQA), Novo Quality Services (NQS) Singapore, Sep 1994 Certified Fellow in Production and Inventory Management (CFPIM), the American Production and Inventory Control Society (APICS) USA, April 1998 Anggota Senior dari the American Society for Quality No. 00749775 sejak Feb 1994 sekarang Anggota Senior dari the American Production and Inventory Control Society No. 1023620 sejak June 1995-sekarang
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BIODATA
Pengalaman dalam Bidang Konsultasi dan Pelatihan di Industri (Perusahaan)

1. Menjadi Koordinator Pelatihan merangkap Instruktur dan Konsultan dalam Bidang Manajemen Industri dan Kualitas pada Pusat Pelatihan Salim Group, 1991 - 1992. 2. Menjadi Manajer merangkap Instruktur dan Konsultan dalam Bidang Manajemen Industri dan Kualitas pada Pusat Pelatihan Gajah Tunggal Group, 1992 - 1996. 3. Menjadi Instruktur dan Konsultan Utama dari Gramedia Pro-Q, Lembaga Pelatihan dan Konsultasi Kelompok GRAMEDIA, Jakarta, Sejak 1997 - 2003 4. Bekerja sebagai Instruktur dan Konsultan Profesional Mandiri (Independent Instructor and Consultant) dalam Bidang Manajemen Industri dan Kualitas sejak Juni 1996 2003 di Indonesia 5. Principal Consultant & Senior Coach dalam bidang Strategic Planning, Lean Enterprise, Quality Management System, and Integrated Performance Management System of MBNQA, Lean, Six Sigma and Balanced Scorecard, yang bertempat tinggal di Vancouver, Canada, 2003 2005.
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BIODATA
Pengalaman Keterlibatan dalam Industri:
Sebagai Anggota Tim ISO 9000 pada Perusahaan-Perusahaan dalam Lingkup Gajah Tunggal Group 1994 1996 Untuk Membantu: PT Gajah Tunggal, PT Filamendo Sakti, dan PT Gajah Tunggal Prakarsa. Perusahaanperusahaan ini telah memperoleh sertifikat ISO 9002. 2. Membantu Mengintegrasikan Total Quality Management (TQM) dengan ISO 9002 pada PT Erna Djuliawati Plymill, Kalimantan Barat, 1997. 3. Membantu Pembenahan Sistem Produksi pada PT Intinusa Rimbasari, 1998. 4. Membantu Meningkatkan Efisiensi Industri Melalui Pembenahan Standard Operating Procedures (SOP) pada PT Indah Kiat Pulp & Paper Tbk, 1998. 5. Membantu menetapkan sistem manajemen industri dan kualitas pada PT Citra Serayu Mas Woodworking Industries, 1999-2000 6. Membantu Perumusan Metode Pengukuran dan Evaluasi Teknologi Pertamina, 2001; dan Penyusunan Buku Pengukuran Indeks Produktivitas Pertamina, 2002. 7. Menjadi Instruktur dalam Berbagai Topik Manajemen Kualitas dan Strategik pada Pusat Pelatihan Pertamina, Jakarta sejak: 2000-sekarang. 8. Sebagai Pembicara (Instruktur) Tamu pada Lembaga-lembaga: LPPM, Kursus Kader Pimpinan PertaminaYayasan Patra Cendekia, Pusdiklat Pemda DKI Jaya, PT Astra International Tbk, PT Showa Indonesia Manufacturing, PT Asuransi Astra Buana, PT PLN UBS P3B Jawa-Bali, PT Telkom, PT Pertamina (Korporat), Badan Pendidikan dan Pelatihan PT Pertamina, PT Indah Kiat Pulp and Paper, PT BRI (Bank Rakyat Indonesia), PT Semen Gresik, dan berbagai seminar publik maupun in-house (dalam perusahaan) sejak 1996 sekarang. 9. Menjadi Direktur Lean Enterprise dan TQM pada Garibaldi Industries, Inc., Canada, 2003 2004. 10. Principal Consultant dari Penaga Consult, Perusahaan Training dan Konsultansi di Canada, Malaysia dan Indonesia, 2005-sekarang
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1.