HND/HNC BUSINESS MANAGEMENT UNIT NUMBER 7 - FEBRUARY 2016 MANAGING ACTIVITIES FOR RESULTS Jean-Louis Akichi STUDENT NUMBER: E10283 CONTENTS Pages TASK1 The importance of business processes in delivering outcomes based upon business goals and objectives 3 TASK2 Be able to develop plans for own area of responsibility to 7 implement Operational plans TASK3 Be able to monitor appropriate systems to improve organisational performance 9 TASK4 Be able to manage health and safety in the workplace. 12 TASK1 1. a) Interrelationship between Structure & Culture, Functions and process of Triple S Triple S Operational structure (Insert chart) Triple S structure presently operates through four main line functional departments each having a Head of Department (HOD) who is also a company director, with an additional software department located off site. There is a small administration department located on site in porta cabins. Triple S culture. Triple S has so far been dominated by Power Culture where the entrepreneurial founders established the company based around a single product, aimed at capturing a specific niche market and operated to meet their own individual interests. The software arm commissioned by the CEO to support the hardware arm employs specialist designers who have been allowed to their own independent Task culture. Interrelationships between structure and culture The company’s culture determined its structure which evolved ad hoc and is market driven. The separate software arm focuses on design, creativity and innovation with little personal interaction with the rest of the company. The software functions brainstorming culture has developed a separate task orientated structure isolated from the hardware arm. Evaluation of the Interrelationships between the different functions and processes involved in the company . Triple S Line functions are its activities that make money and are ‘Marketing and Sales, Design, Engineering and Manufacturing’. Each line function contributes to the overall success of the process execution, consisting of a series of steps comprising: • Input: Marketing and sales functions responsible for ensuring the design department are fully informed of the client’s requirements. • Transformation: Design needs to liaise with engineering to ensure they are designing a product that is practical and can be manufactured. • Output: Manufacturing needs resources and skilled manpower on schedule to deliver the finished product. Growth has produced challenges effectively leading to the breakdown of processes and a drop in quality. The company’s rapid growth indicates that input via the marketing and sales function is performing well. The current problems must therefore lie in the “transformation” and support functions. Advantages: The present company’s structure originally met Triple S start up needs, with their entrepreneurial culture producing a high quality product tailored to meet individual client requirements. Being run by owner managers has the advantage of short lines of communication between the principals providing a quick decision making process. Establishing a new software arm to support the main hardware product was a natural development of the companies aims. Triple S line functions have operated satisfactory in the past and should be continue to do so in future, if competently managed. Disadvantages: Both hardware and software have different aims and objectives so are handling things differently with different structures and cultures, different functions and processes. Lack of communication, co-ordination and no integration resulted in incompatible products, threatening their customer base and their reputation. The functions and processes within Triple S are dysfunctional as they lack a defined organisational structure Growth has outstripped the ability of the present structure to respond to the changing needs of a fast growing company. In particular there are problems with co-ordination, quality control and internal communications. Conclusion: The present company structure is dysfunctional; is failing to meet the owner’s aims and is better suited to a small to medium size firm operating in a stable and predictable business environment. The isolationist approach adopted by the software function is disconnected from the hardware and should connect with the primary line function. The company culture must adapt to the challenges of success, current market conditions and reform its structure to meet those challenges. 1.b) For the benefit of the senior management team it is necessary to link the company’s processes to its aims and objectives Triple S objectives and aims: Triple S aims to provide a high quality product tailored to suit individual customer’s requirements. The company has developed a new software arm to continuing to achieve a creative and innovative approach in the product and service portfolio offered by Triple S”. Processes: It is important that the company’s processes are linked to the owner’s aims and objectives to bring a successful outcome. The line functions need to work in unison towards a common goal and avoid a mismatch between aims and outcome. The First step is for the owners to decide their aims and communicate them through to CEO. These will determine if revenue is to be generated via a high quality low volume product aimed at a specific niche market or a high volume low cost product aimed at the mass market. The processes to deliver these outcomes are different and incompatible. Triple S Processes: Triple S senior management has made a strategic choice to play to its strengths and market a quality hardware product supported by dedicated software, to provide individually tailor made data storage solutions for the small business market. This will therefore be a project orientated process to meet a variety of customer requirements. The processes need to link such that each is supportive of a variety process with relatively low volume. The company’s marketing function is therefore crucial in locating and developing this niche market. However the sales section needs to schedule its sales targets to avoid overloading the succeeding processes. The strengthening of the link between design and software must be formalised and strengthened by bringing software into the mainstream line functions. The next most important link is the design process that in conjunction with the software function needs to employ specialists using creativity and innovation to provide the variety of solutions their clients require. Engineering and manufacturing functions need to be flexible enough to anticipate fluctuating demand and differing solutions to deliver the final product. The finance link is crucial to ensuring the individual products can be produced at a price clients are prepared to pay. Justification: A high quality link is required operating throughout each process to justify high development costs. The design function is under staffed to meet the present workload generated by sales, therefore operational links between sales, design and human resources require strengthening. 1.c) Evaluation of how the processes will be of benefit and suggest how quality systems can be incorporated. The reformed processes will benefit the company by channelling the sales acquisitions through a well structured chain of processes, fully costed, designed and manufactured to a high standard to meet individual customer requirements. Careful planning will ensure the material and personnel requirements of each function are matched to a programmed workload but without over manning. Quality and cost will be monitored at every stage and target dates are met. Triple S does not specifically operate a quality control system, it evolved out of the pride and dedication the owners had put into designing and producing their product. To protect the Triple S brand and sustain it in the long run, the establishment of Total Quality Management (TQM) program to ISO 9000 will have many benefits and make permanent a climate in which Triple S continuously improves its ability to deliver high-quality products and services to customers. A Quality Assurance (QA) component will be a safeguard, able to identify deficiencies or bottlenecks in the flow of information between all processes and functions through Input to Output. Quality assurance monitoring will establish good practice in all departments prior to manufacture by focussing on quality of procedural and administrative processes from input to output by the systematic measurement, comparison with a standard, monitoring of processes and an associated feedback loop that confers error prevention. Quality control applies a series of checks and standards to the manufacturing process producing the hardware end product. Advantages: Growth and increased turnover has highlighted increased concerns over quality control and increasing customer dissatisfaction. A QTM properly administered should show immediate dividends by raising quality awareness and helping promote a culture throughout the company of pride in producing a high quality value for money product. Customer satisfaction is the best form of advertising. Disadvantages: Implementing a Total Quality Management system in a company requires extensive training of employees. The employee training includes instruction in problem solving techniques and the tools to evaluate a process and identify weaknesses such as statistical process control, Pareto diagrams and brainstorming techniques. During the initial training period, productivity can decline. Meetings for quality improvement teams also take workers away from their duties, which also reduce productivity. Task 2 To develop plans for my own area of responsibility to implement the operational plan 2a Senior management’s ‘Goals and Objectives. To deliver a quality value for money hardware product, supported by unique software, on time and tailored to meet individual client’s needs. • To establish a Quality Management • To integrate the software department into the new management structure. • To meet the time constraint of 6 months to develop a proposal to reform the management structure and processes. The problem The success of the company’s made to measure product has highlighted deficiencies in its ability to respond to its expanding customer base and rapidly to changing customer needs. Lacking intermediate Operations Management to bring together the requirements of the CEO and the needs of the line departments has resulted in loss of customer confidence. Project scope will have an impact on the Gannt Chart Project scope: The function of operations management is essentially management of the supply chain and flow and of information between all processes from initial input, through transformation and output stages to delivery of the finished product, adding value at each stage. In the case of Triple S the dominant flow is information sourced from customer requirements, through design and engineering the product, leading to material acquisition to feed the manufacturing process. Operations Manager (OM) As Operational Manager my role will be to address and improve the primary performance objectives of: • cost, • quality, • speed, • Flexibility, • Dependability. To address the Senior Managements Goals and Objectives I will apply the primary performance objectives accordingly: Value for money: Ensure the estimating and cost control department is equipped with the latest software suitable for producing comparative price options and fully cost the individual processes from input to output, whilst remaining responsive to market forces. Quality: A Total Quality Management (TQM) system will be introduced. Tailored to clients needs: Ensure flexibility together with the free flow of information and responses from Sales, Design, Engineering and Manufacturing factors. Integrating soft and hardware sections: The senior management should appoint a HOD for Software with similar reporting duties to the CEO as other HOD’s. Consideration should be given to bringing a line, operations and support service departments together on one site. On time: Introduce suitable planning programmes to monitor each process and detect possible bottle necks, non- availability of components and introduce flexibility to incorporate changes as necessary to keep to schedule. Gantt Chart MONTH 1 2 3 4 5 6 TASK 1 Agree objectives with CEO Meet and prepare schedule of CEO objectives. Milestone 1 2 Schedule Departments (line) Confirm line processes 3 Schedule Departments (support) Propose support departments & lines of communication 4 Agree with CEO Present proposed operational Milestone 2 structure charts. 5 Review existing staff complement Interview all staff below HOD level. 6 Agree with CEO Milestone 3 7 Prepare Draft report with costs 8 Prepare Final Report and submit to CEO Milestone 4, 2b SMART OBJECTIVES: To determine the validity of the proposed changes to process they have been tested against SMART objectives (Specific, Measurable, Attainable, Realistic and Time bound) with the following outcome: • Specific – The desired outcome is to introduce a new Department of Operations (DO) to interface and manage communication with each of the line processes. • Measurable – The measure of success will be achieving stated objectives and the smooth flow of information between main line operations, support services, from input to output including procurement, marketing and sales. • Attainable – With the co-operation from the HOD’s and the CEO the objective is obtainable. • Realistic – The bones of the Triple S production line are already in place, all proposed changes are below senior management level but need to be incorporated into a streamlining system of process management which is the object of this exercise. • Time bound – The time scale for the transition is 6 months which is demonstrably achievable (Fig?). Proposals: The software department operates at arm’s length from the main operation however it is proposed to appoint a formal HOD having the same responsibilities, lines of communication and quality control measures as the other line departments. Transformation Process: The process of adding value commences with input from Marketing and Sales identifying: • Anticipated sales demand. • Price customers are willing to pay for the product. • Individual customer’s requirements. • Timescale for individual orders from input to output. I will receive and redirect the information between the appropriate line and support operations, collect and collate the responses, and provide feedback to the appropriate departments for action. For example Hardware Design (HD) may request more detailed information to prepare a product specification, prior to forwarding same through DO to Engineering. I will liaise with Marketing to meet HD needs and provide feedback. Manufacturing may anticipate a need for additional manpower support and materials to meet high demand. I will liaise with Human Resources, Procurement and Finance to provide these resources on time. Finance will need to respond to variations in cash flow requirements to meet operational requirements and co-ordinate these with the bank. Transport will need to forecast delivery requirements and make provision accordingly. I will be at the centre of these activities with responsibility it is to co-ordinate logistics and the flow of information throughout the transformation process and report regularly to the CEO. Each process adds value and will be monitored at every stage to ensure the desired margin remains achievable. Where necessary changes in processes may be required to avoid overspend. Quality will be monitored at each stage in the process to ensure the brand name is protected. Justification: Companies often lack the right balance within the supply chain with high inventories, high costs, dissatisfied customers and discouraged employees. Prerequisite for high performance within all functions of the supply chain is a perfect interaction between the remaining company divisions and functions. The value chain is far more than a supply chain. As a service chain it is strongly influenced by diverse activities and functions within supply chain operations and other companies' core businesses. Therefore, it is essential to integrate these functions and processes in terms of a seamless supply chain to achieve supply chain excellence.   Hills Framework: The flow of communication between the CEO, the OM and the HOD’s is demonstrated using Hills Framework. The CEO establishes senior management’s goals and objectives directly to me (OM) and I will evaluate and liaise with each HOD to assess and agree their own operational requirements to meet the CEO’s directives. I will be responsible for ensuring the various support processes are aligned with an operational plan designed to process information from receipt of the client’s requirements (Input) adding value at each stage to completion (Output). Information has to undergo a series of support processes at macro and micro levels to Mezzo level. The transformation process includes the added value gained from the contributions of the various processes. Information flows in both directions between CEO, OM and H’s OD to ensure the operational plan is flexible and accommodates any changes to processes necessary to meet the desired outcome. I will use Hills to achieve a process that is cost efficient, high quality and dependable. Growth Revenue Market Share SMART: ROI Share price Profit Growth Operations Manager: 1. Cost 2.Efficiency 3. Quality 4.Speed 5. Flexibility 6. Dependability FIG 3 Hills Framework highlights the objectives of CEO and the elements the OM needs to concentrate on to meet the CEO’s requirements and lines of communication. 2c) How I will manage time budget and quality: The GANNT chart identifies a series of time related milestones each based on the WATERFALL MODEL where each task is progressive in response to a previous task.. Weekly reviews will identify any slippages allowing corrective action to be taken. I will introduce a control mechanism in the form of a POLAR DIAGRAM to identify any gaps between intended and realised objectives, using 5 performance objectives: cost quality speed, flexibility dependability. For subjective components such as quality and dependability where there is no measurable scale I will use the LIKERT SCALE . My budget to complete the project will be agreed with the CEO. It will be linked to achieving the milestones identified on the GANNT chart, when the costs incurred will be checked against those milestones and if necessary adjustments made within the overall budget sum. 2d Appropriate systems to monitor and control departments: Polar Diagram will be employed to monitor individuals and departments to detect any deviation for the plan. Targets will be set for each department and monitored regularly. The Polar diagram will highlight areas where additional support is required. In particular it will be applied to cost control to identify any variance and how to correct it. The Gannt chart is also a basic but useful tool to monitor overall progress but only identifies the wherefore and not the why and identifies tasks rather than departments. A 6 month program is short and therefore any variance will be difficult to recover ,hence the high priority attached to monitoring and control Task 3. 3a. Quality Control / Assurance Systems. Triple S has built a reputation for delivering a high quality product however recent in house difficulties have resulted in a drop in quality and growing customer dissatisfaction. It is therefore proposed to introduce a ‘Total Quality Management’ (TQM) programme introducing strategy, data, and effective communications to integrate quality discipline into the culture and activities of Triple S. The TQM programme will focus on customer satisfaction as they ultimately determine desired quality and will comprise an integrated system complying with ISO 9000 standards whereby the processes interconnecting all line functions and support services are constantly monitored. (Ref) The system will: • Promote total employee involvement. • Be process centred whereby steps required to carry out the process from input to final product are defined and performance measures are continuously monitored in order to detect unexpected variations. • Adopt a Strategic and Systematic approach including the formulation of a strategic plan that integrates quality as a core component. • Employ fact based decision making continually collecting and analysing data in order to improve decision making accuracy, achieve consensus, and allow prediction based on past history. • Employ effective Communications. Especially during times of organizational change. Developing a "culture of quality" can have a number of positive effects including: • Building employees moral. • Developing organizational and individual competence. • Continually increased performance levels and improvements in service delivery, Quality control will be divided into six sequential steps (Slack et al., 2001) which are: • Defining the quality characteristics of the product or service. • Deciding how to measure each quality characteristic. • Setting quality standards for each quality characteristic. • Monitor quality against those set standards. • Finding and correcting causes of poor quality. • Continuing to make improvements. 3b Establishing a Quality Control Culture: The Quality Assurance (QA) component of the TQM program applies to administrative and procedural activities implemented in a quality system so that requirements and goals for a product, service or activity will be fulfilled. QA focuses on enhancing and improving the process that is used to create the end result, rather than focusing on the result itself. It is the systematic measurement, comparison with a standard, monitoring of processes and an associated feedback loop that confers error prevention which can be contrasted with quality control, which is focused on process output. The program is document based whereby each process is monitored step by step by a dedicated party independent of any other process. Each procedure has to be fully documented thereby fostering a quality control culture throughout the company. Among the parts of the process that are considered in QA are planning, design, development, production and service. In the case of triple S it applies to processes performed by marketing and design functions in addition to finance, administration and all support operations. In the case of engineering and manufacture these functions are monitored by the Quality Control element of the TQM program. 3c Proposed improvements to Triple S structure. The senior management team will remain unchanged however the CEO will act as the link between senior management and the operations manager (OM) who will be heading up a new Operations Department. If is proposed to bring the software function into the central management structure comprising of 5 line functions: • Marketing and sales. • Design. • Software. • Engineering. • Manufacturing Each will be managed by a Head of Department (HOD). Each HOD will be directly responsible to the CEO however all lines of communication related to the processes will pass through the office of the OM. The OM will have a direct link with each HOD in all matters relating to the process and production. The New Operations Department headed by the OM will comprise of the followong support functions: • Administration. • Finance and Cost Management. • Procurement. • Human Recourses. • Dispatch & Delivery. • Quality Control. • Programming. • Health & Safety. 3d Justification: The reorganisation is intended to pre-empt the problems currently affecting the company by closely monitoring its line functions, establishing direct lines of individual responsibility for each HOD to the CEO, while all lines of communication pass through the OM. The intention is to ensure that the DO is responsible for ensuring free flow of the line functions and that the support services are directly involved in all aspects of the Business Plan enabling them to anticipate and respond to the changing needs of various departments as they arise To ensure the Software function provides support to the company’s hardware product it will move into the mainstream structure as a line function with a designated HOD. All process links will be channeled through the Operations Department which will ensure that all are compliant with the TQM program and be responsible for programming procedures, compliance, TQM and health & safety matters. Task 4. 4a Memo to CEO from OM. Topic: Health and Safety. It is essential that health and safety matters are established on a formal footing in view of the company’s current exposure following accidents in the workplace. I will prepare a risk assessment for your attention in compliance with current health and safety legislation. Pending completion of the risk assessment report I wish to highlight the following urgent issues for your attention: • All processes involved in the manufacturing shop and material handling are classified medium to high risk to our employees. • We need to review the policy relating to protective clothing, footwear and headgear in these departments. • We need to ensure hazard warning notices are posted throughout these areas. • Attention must be given to avoiding and reporting spillages in these areas. • All moving machinery must be fitted with safety guards. • Push button emergency electrical isolators must be installed within 1 metre of all electrical equipment and motors. • Smoke and fire alarms must be tested regularly and all fire exits remain unlocked and unimpeded. These are issues that we need to prioritise pending the completion of the risk assessment report and to ensure Triple S minimises its risk to compensation claims. 4b The Workplace (Health, Safety and Welfare) Regulations 1992 cover a wide range of basic health, safety and welfare issues and apply to most workplaces. The operation of electrical equipment in the workplace falls within the scope of the Electrical Equipment (Safety) Regulations 1994 and exposes the company to compensation claims in the instance of the recent accident of electric shock from an overheated drilling machine. The other recent accident when an employee suffered a fall on a slippery floor is covered by the Health & Safety at Work Act 1974 whereby employees must be protected from the risk of slippery floors among many other risks and again the company is exposed to a compensation claim. In the interests of compliance I suggest the trip ratings on all electrical equipment be checked forthwith to ensure the trips correctly rated are functional. Cosideration should be given to applying non-slip finishes to all floors subject to the risk of spillage. 4c It is recommended that following the Risk Assessment Review a schedule of H & S policies and procedures is agreed and implemented over a 6 month period. Warning notices should be posted in plain sight in all areas subject to medium and high risk exposure. All moving parts of plant and equipment in the manufacturing department be fitted with appropriate guards. The wearing of protective clothing, footwear and headgear be enforced as appropriate. The company H & S function should hold regular awareness meetings in all departments and regular fire drills be carried out. All computer workstations should be provided with suitable chairs having lumber support and regular time out periods introduced to help reduce the risk of eye strain and neck pain. . 4d The operations department should appoint a H & S monitor to undertake regular reviews of the company’s H & S policies, taking account of new legislation and make recommendations where appropriate. A H & S brochure should be available to each HOD and regular fire safety inspections should be the norm. Assembly points should be established outside of the premises for each department in the case of evacuation in response to a fire alarm so that role calls can identify that all personds have evacuated the premises.