Manufacturing Systems Foundations of World-Class Practice (1992) / Chapter Skim
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Organizing Manufacturing Enterprises for Customer Satisfaction
Organizing Manufacturing Enterprises for Customer Satisfaction
Pages 116-127
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From page 116... ...
It could control costs by having design engineers measure their results against a design cost standard based on a process unlike the one that would actually be used to make the part. In searching for an organizational structure that better suits today's highly competitive environment, it is useful to have a means of forecasting the effectiveness of a structure under consideration.
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From page 117... ...
The purpose of this chapter is to identify the key criteria for diagnosing the administrative situation posed by a manufacturing enterprise and to use them to arrive at an organizational structure that should overcome the problems of the functional organization. CRITERIA RELEVANT TO ORGANIZATIONAL STRUCTURE The traditional bottom-line metrics for rating the effectiveness of a manufacturing enterprise are return on investment and market share.
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From page 118... ...
It follows, therefore, in competitive markets, that a manufacturing enterprise should focus its energies not directly on the dependent bottom-line metrics but instead on goals that challenge the enterprise to score highly on a set of fundamental metrics that the enterprise can directly influence and which, in turn, drive the bottom line. These goals represent important criteria to be considered in arriving at an organizational structure.
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From page 119... ...
The initiative criterion supports modern ideas of employee involvement such as quality circles and participative management. The continuity criterion's call for"systematic improvement" is no less than today's call for "continuous improvement." Thus, Urwick's administrative criteria are very much with the times!
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From page 120... ...
Moreover, starting with a given baseline process and product, application of Taguchi methods often simultaneously improves quality and reduce costs (American Supplier Institute, 1989~. APPLICATION OF THE CRITERIA The statement of our problem then is as follows: "Find the organizational structure that best satisfies the administrative criteria when the enterprise, using Taguchi's paradigm as a work plan, desires to score highly in terms of the fundamental metrics." The first administrative criterion listed (functionalization)
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From page 121... ...
Based on our evaluation of this structure using the classical administrative criteria, we are able to give a more insightful description of its shortcomings: Simply stated, the functional organization is unable to administer the metrics and the work plan required to face off against world-class manufacturers in highly competitive TABLE 1 Pass/Fail Analysis of the Correspondence and Coordination Administrative Criteria for the Functional Organization versus the Three Metrics and Taguchi's Paradigm Taguchi's Paradigm The Three Metrics For Robust Design Value Cost Pace System Parameter Tolerance Correspondence F F P/F F F F Coordination F F PtF F F F
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From page 122... ...
architectural breakdown of a product as the proposed organizational structure for developing and manufacturing the product. We will staff the organization and place authority and responsibility in a manner that satisfies the administrative criteria when tested against the fundamental metrics and Taguchi's paradigm.
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From page 123... ...
The controls should represent the truly minimal number of specifications needed to generate the desired level of customer satisfaction while leaving the subsystem units considerable lati
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From page 124... ...
When the SYS/SS structure is staffed in the fully self-contained manner described above, this organizational structure passes (at the coarse-grained level shown) all the correspondence and coordination criteria for Taguchi's paradigm and for all the metrics except for, perhaps, the "quantum leap" form of innovation.
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From page 125... ...
The SYS/SS architecture shown in Figures 3 and 4 creates a waterfall of self-contained teams, minimizing the need for transactions between units, whereas the functional organization requires many more interdivisional transactions for successful product realization. Moreover, divisions in functional organizations are different culturally, which makes interdivisional transactions difficult.
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From page 126... ...
Although the emerging practice of simultaneous engineering should improve the performance of functional organizations, the results will likely be suboptimal because team members will often have divided loyalties between their parent functional divisions and the team. It is also difficult to transfer responsibility fully for the value, cost, and the pace of innovation
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From page 127... ...
The SYS/SS architecture, however, is a much more robust formulation of the team concept than simultaneous engineering by creating teams at every level and by coupling more strongly actual production plants to the design process. In total, these actions should bring the organizational structure into better harmony with the requirements of the Taguchi paradigm and classical administrative criteria for value, cost, and the pace of innovation.
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