Special Topics in Industrial Engineering - Coursework Example

Name Tutor Course Date Performance Measures Performance measurement refers to the process of quantifying an action so as to establish the quality of its. Performance measures are tools that are used to tell how well an organisation is doing (Neely, 2005). They make an assessment of the service and products that an organisation provides or produces respectively. Performance measures are therefore quantifiable and may be reviewed from time to time. The results that performance measures give are the ones organisations use to make decisions about their future in terms of customer satisfaction, improvement of quality and changes in the processes. (Bourne, 2005). While it’s true that there are various measures that are taken in an organisation not all of them amount to policy measures. According to George (2005) performance measures don’t really have to be perfect. But to some extent they should have some level of accuracy and reliability. This is because they provide information for making informed decision. Most importantly an effective performance measure is characterised by the following; it should be meaningful, be accepted by those within the organisation,, reflect the point of view of stakeholders and customers, cost effective, comprehensive enough to cover all aspects of performance and, be easy o understand and calculate as well(Neely, 2005). Usually performance measures are developed through a process as follows; first of all, collection of baseline data is needed for the measure; secondly an organisation will carry out a benchmarking process with other similar organisations, thirdly targets are sets basing on achievable goals; fourthly data is collected and analysed and the results shared with the necessary people; fifthly, if need be the measures can be reviewed and, lastly start using the analysed to data to make changes in your organisation. Usually performance measurement is meant to improve how a firm functions. However the engineering field faces a challenge because the available performance measurements systems are disjointed hence lacking in coherence (George 2005). Another challenge is that there is no specific performance measure designed for the engineering fields. As such they are normally classified under project management. So the performance is along with common project and productivity measurements as time and costs (Bourne, 2005). No specific literature addresses this gap and so the only two known performance measures that are used in the engineering field are cost and time. As Georgy 2005) posits, the engineering field uses very traditional performance measurements since there are no universal frameworks tailored for this purpose. He further reiterates that the current and common performance measurements in engineering are unable to assess the design and engineering process’ effect on projects as a whole. Malcom Baldridge Quality Award The Malcolm Baldrige National Quality Award was instituted in 1988 and is awarded to American companies that demonstrate excellence in performance as per the awards criteria. Any company from any sector is awarded as long as it qualifies for the award. The main aim of the award is to promote the culture of performance excellence as an important ingredient in competitiveness. Organisations are also encouraged to share strategies for excellent performance with their peers. To get this esteemed award an organisation should demonstrate that it has a role- model organisation management structure that works towards ensuring continuous improvement in the quality of goods and services, works effectively and efficiently and has feedback mechanisms that ensures that customer expectations are met. According to Brown (1999) the Malcom bridge criteria has many inherent benefits. To begin with it provides an excellent basis for organisations to develop a cohesive performance measurement structure. Secondly, the criteria present a good model for the betterment of the organisation as far as its operations are concerned. Thirdly, the criteria serve as a good self-appraisal tool for organisations so that they can identify areas that need to be improved. Lastly, the criteria helps an organisation gain a better understanding of effective approaches and tools that ensure efficiency in an organisation. Benchmarking Benchmarking is simply the practice of evaluating a business performance by making a comparison of key characteristics of its performance with peer organisations (Bogan and English, 1996). Benchmarking is carried out by ally companies irrespective of the sector. Usually an organisation has a department that is mandated with the responsibility of carrying out the benchmarking process. By carrying out benchmarking a company increases its competitiveness. The main aim of benchmarking is to help an organisation identify its weak areas and find ways of improving them. It’s a process that can help an organisation accelerate change in a short while since it has an advantage of learning from other organisations that are already doing better in their field (Goersch and Davis, 2006). Why is Benchmarking used? According to Bogan and English (1996) benchmarking is a valuable business engineering technique and its application not only identifies innovative work processes but also involves discovering the thinking behind innovation. In short, it’s a form of comparative analysis. It is necessary to establish some common ground as the basis for comparison. Usually one identifies one or more functional areas for analysis and selects one or more metrics as a quantitative basis for comparison. These are then compared with agreed benchmarks derived from recognized sources of best practice. Process of Benchmarking According to Bogan and English (1996), the benchmarking process consists of five main phases: 1. Determine the focus of the benchmark- This is the stage where companies plan for the whole exercise. They identify the companies to be involved and the metrics to be used. 2. Research development and planning- During this stage the company approaches the identified companies to seek collaboration; they develop the surveys as well as organise for the resources that will be required during the exercise. 3. Data collection- This is where data is collected as planned and from the identified companies. 4. Data Analysis- The collected data is analysed using statistical technics so as to get meaning from it. 5. Recommendations- Basing on the analysed data, then recommendations can be drawn on which areas that need improvement. 6. Implementation- This is where the recommendations are operationalised. Types of benchmarking The various types as noted by Bogan, Boulter and Gatford (1997) include; Collaborative benchmarking: We have organisations that are members of certain groups like we could have an association of engineering companies that produce certain goods. So this kind of benchmarking is carried out as part of the group to which a company belongs. Peer Benchmarking: This kind of benchmarking that is carried out between companies that are more or less similar in status and stage of growth. This kind of benchmarking helps a business to remain competitive among its peers. SWOT: It a type of benchmarking that companies use to gather data about their strengths, weaknesses, opportunities and threats. This helps a company to understand the business climate of the moment. Best Practices: Every business is supposed to have a role model company that it aspires to be like. This kind of benchmarking is done against those companies that are in the lead. This helps identify best practices so as to make improvements where need be. Advantages of Benchmarking The following are benefits of benchmarking to companies and organizations (Bogan and English, 1996). To begin with, it’s a process that helps an organisation identify its weak areas that need to be improved. Again, it’s an important exercise that reveals the true position of a company in relation with its peers thus helping it develop strategies for change. Moreover, it helps measure current company performance. Benchmarking allows a company to accelerate change especially when the get to learn best practices from organisation that are more or less similar to them. Last but not least, benchmarking is a self-appraisal process that examines an organisations performance, processes thus leading to internal improvement. Disadvantages of Benchmarking There are two main disadvantages of benchmarking. First of all there is the question of confidentiality. You are carrying out data collection from other companies and so sometimes such companies may not be willing to give the right details because there is no guarantee of confidentially. Secondly the success of the process is depended on the validity of the collected data. So it’s possible to carry out a benchmark and produce null results because of data invalidity. In short one can never be sure that whatever data collected is reliable. Statistical Process Control Statistical process control is a collection of statistical techniques that are used to monitor critical parameters and reduce variations. These tools serve as fundamental instruments in improving the quality of a product. They analyse the production process, identify any possible problems, control fluctuations in product quality and provide possible solutions to avoid defects in the future (Goestsch and Davis 2006). The seven structural process controls are as follows; Control Charts These charts that are used to study the changes in a process over time (Devor, Chang and Sutherland, 2007). However a control chart cannot be used in isolation. There are other statistical process tools that should be used along the control chart such as the pareto diagram, the cause and effect diagram among others. A control chart gives a picture of the process variable over time and reveals the type of variation you are dealing with s you move forth with improvement. The control chart serves many purposes. For instance it helps monitor a company’s process by checking for any variations and getting them removed so that they don’t reoccur. These charts also make estimates of variations as well as processes (Goestch and Davis, 2006). Most importantly control charts don’t always work in every situation. So it’s important to keep in mind that they may work or not but again it’s not easy to tell unless it’s tried. Check sheet This is a type of document that is used in data collection. Actually it’s a blank form that makes data collection quick easy and efficient. The data collected could either be qualitative or quantitative. This statistical process tools is used to develop the bar chart, histogram, and pareto chart. Pareto Chart The Pareto chart is a very useful tool that helps in sorting important data from the so not important one (Goetsch & Davis, 2006). It contains both a line graph and bars such that the individual values are represented in the bars in a descending order while the cumulative total is represented by the line. Actually the pareto chart representation gives a picture of which situations are more important than others. Histogram Histogram is a special kind of a bar chart that measures data. Moreover, histogram is a graphical representation of numerical data distribution (Goetsch and Davis, 2006). Before data is plotted in a histogram it’s usually grouped into classes. A Histogram plot helps a company realise the frequency distribution of a set of continuous data. This then allows one to make a judgement of whether the plot is normal or skewed. The scatter diagram is a tool that determines a relationship between two variables. Of the seven tools it’s the simplest and the most important. A company is able to tell a relationship between two variables by looking at the shape of the scatter diagram. The Cause-and-Effect diagram is a tool used to show causal factors. Companies use this kind of a diagram to help know the root causes of a particular problem. According to Dover, chang and Sutherland (2007) unlike the Pareto diagram that a company focus on the most pressing need or problem, the Cause-and-Effect diagram that helps identify the pressing need or problem. Usually the Cause-and-Effect diagram analyses data coming from a brainstorming session. The Flow diagram The flow diagram is a toll that shows the step by step of a production process. Its an important tool as it reveals any inconsistences in the process of production Works Cited Bourne, M. Managing through measures: a study of impact on performance. Journal of Manufacturing Technology Management 16(4): 373. 2005 Brown, G, Baldrige Award Winning Quality: How to Interpret the Malcolm Baldrige Award Criteria. Ninth Edition, ASQ Quality Press, 1999 Devor, R. Chang E, T. and Sutherland, J. W. Statistical Quality Design and Control: Contemporary Concepts and Methods, Pearson Prentice Hall, 2nd Edition, 2007 Georgy, M. E. (2005). Utility-function model for engineering performance assessment. Journal of construction Engineering and management 131: 558. 2005 Goetsch, D. L. and Davis S. Quality Management: Introduction to Total Quality Management for Production, Processes, and Services. Pearson Education, 5th Edition, 2006 Neely, A. Performance measurement system design: A literature review and research agenda. International Journal of Operations & Production Management 25(12): 1228.2005 Bogan, E. and English J. Benchmarking for Best Practices: Winning through Innovative Adaptation, New York, NY: The McGraw-Hill Companies, Inc. 1996 Read More

As such they are normally classified under project management. So the performance is along with common project and productivity measurements as time and costs (Bourne, 2005). No specific literature addresses this gap and so the only two known performance measures that are used in the engineering field are cost and time. As Georgy 2005) posits, the engineering field uses very traditional performance measurements since there are no universal frameworks tailored for this purpose. He further reiterates that the current and common performance measurements in engineering are unable to assess the design and engineering process’ effect on projects as a whole.

Malcom Baldridge Quality Award The Malcolm Baldrige National Quality Award was instituted in 1988 and is awarded to American companies that demonstrate excellence in performance as per the awards criteria. Any company from any sector is awarded as long as it qualifies for the award. The main aim of the award is to promote the culture of performance excellence as an important ingredient in competitiveness. Organisations are also encouraged to share strategies for excellent performance with their peers.

To get this esteemed award an organisation should demonstrate that it has a role- model organisation management structure that works towards ensuring continuous improvement in the quality of goods and services, works effectively and efficiently and has feedback mechanisms that ensures that customer expectations are met. According to Brown (1999) the Malcom bridge criteria has many inherent benefits. To begin with it provides an excellent basis for organisations to develop a cohesive performance measurement structure.

Secondly, the criteria present a good model for the betterment of the organisation as far as its operations are concerned. Thirdly, the criteria serve as a good self-appraisal tool for organisations so that they can identify areas that need to be improved. Lastly, the criteria helps an organisation gain a better understanding of effective approaches and tools that ensure efficiency in an organisation. Benchmarking Benchmarking is simply the practice of evaluating a business performance by making a comparison of key characteristics of its performance with peer organisations (Bogan and English, 1996).

Benchmarking is carried out by ally companies irrespective of the sector. Usually an organisation has a department that is mandated with the responsibility of carrying out the benchmarking process. By carrying out benchmarking a company increases its competitiveness. The main aim of benchmarking is to help an organisation identify its weak areas and find ways of improving them. It’s a process that can help an organisation accelerate change in a short while since it has an advantage of learning from other organisations that are already doing better in their field (Goersch and Davis, 2006).

Why is Benchmarking used? According to Bogan and English (1996) benchmarking is a valuable business engineering technique and its application not only identifies innovative work processes but also involves discovering the thinking behind innovation. In short, it’s a form of comparative analysis. It is necessary to establish some common ground as the basis for comparison. Usually one identifies one or more functional areas for analysis and selects one or more metrics as a quantitative basis for comparison.

These are then compared with agreed benchmarks derived from recognized sources of best practice. Process of Benchmarking According to Bogan and English (1996), the benchmarking process consists of five main phases: 1. Determine the focus of the benchmark- This is the stage where companies plan for the whole exercise. They identify the companies to be involved and the metrics to be used. 2. Research development and planning- During this stage the company approaches the identified companies to seek collaboration; they develop the surveys as well as organise for the resources that will be required during the exercise. 3.

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