Nigel Slacks transformation process model - Essay Example

Nigel Slack’s transformation process model Chapter 1 - Introduction The development of business processes has been a significant issue for many companies internationally. In fact, it has been proved that the application of advanced technology within a specific business environment has helped the particular firm to improve its profitability both in the short and the long term. Regarding this issue, Nigel Slack has developed a model which describes the relevant procedure explaining how technology can help businesses to improve the effectiveness, the quality and the speed of their daily activities. Current paper refers to the application of Nigel Slack’s transformation process model in two particular industries; the car manufacturing industry and the advertising industry. Regarding especially the manufacturing industry, it is noticed by Nissen (2000, 31) that “manufacturing enterprises face intensive competitive pressures, and many firms are forced to redesign processes just to stay even with the competition; but process redesign is an expensive, time-consuming, and labour-intensive activity, and first-generation computer-based tools are inadequate for redesign today; alternatively, knowledge-based systems and intelligent tools have the ability to address the key intellectual activities required for effective process redesign”. In other words, the choice of the appropriate system for the improvement of performance of manufacturing firms belongs to the particular firm’s strategic management team. Cost and effectiveness of the system involved will be the primary criteria in the above choice. On the other hand, in the area of services the same rules and criteria could be applied in general. In this context, firms operating in the car manufacturing industry if they try to apply an advanced technology system (under the influence of the Nigel Slack’s transformation process model) will have to face the same difficulties with those firms operating in the advertising industry. Potential different outcomes and the general aspects of this effort are going to be analyzed thoroughly in the chapters that follow. Chapter 2 - Nigel Slack’s transformation process model – description and characteristics Nigel Slack trying to explain the main reasons behind the transformation of business processes (through the implementation of appropriate technology) in firms belonging to all industrial sectors. His model, shown below in Figure 1, presents a series of factors (dimensions) that influence the decision of a business to transform its business processes. Figure 1 – Dimensions of Business Process Technology (Slack et al., 2005, 6) In accordance with the above model, the first issue that should be examined by every firm interested in transforming its process would be whether the technology implemented through this transformation could be related with the current needs of the particular market. If the answer to this question is positive, then the business should proceed to the relevant procedure (transformation of processes). However, this was only the first Dimension of the whole project. In fact, a second Dimension follows in which should answer the following question: what the relevant technology could offer to the transformation of resources in the particular firm. More specifically, the business process technology would improve the firm’s resources mainly offering a framework for the increase of their productivity. If such a target could not be achieved by the above procedure then the firm should avoid the transformation of its processes by first instance. On the other hand, the value of the business process technology for the completion of the business transformation process would be examined thoroughly before the implementation of the relevant technology. Finally, the role of business process technology in the whole procession would be evaluated in terms of its importance for the achievement of the targets set by the firm attempting the transformation of its processes. The effectiveness of the relevant procedure was examined by Slack et al. (2005) with a specific reference to five firms: a fashion clothing retailer, a retail bank, a full-service airline industry, a food company and a company operating in the area of laboratory services. Their research led to the following results: a) the market performance opportunities associated with BPT (business process technology) are far broader than the traditional narrow focus on cost reduction; as a result, any evaluation of BPT must reflect its impact on a range of performance objectives relative to their importance to achieving a particular market position, b) in all cases almost every technology examined had an effect on more than one performance objective and c) as markets evolves the market requirements of their BPT also change” (Slack et al., 2005, 10). In accordance with the above results business process technology is a necessary criterion for the development of firm’s performance. However, an accurate cost and effectiveness control is necessary before the implementation of any relevant system. Particularly in the area of car manufacturing and advertising services (analyzed in next Chapter) the implementation of appropriate business process technology has been found to be related with the improvement of firms’ profitability. Chapter 3 - Nigel Stlack’s transformation process model in the car manufacturing industry and the advertising industry General comments and literature In order to achieve the improvement of their performance firms around the world have developed a series of strategic plans that could help towards the reduction of cost and the increase of quality in their products/ services. In this context and especially for the firms operating in the manufacturing industry it has been supported by Prasad (1995, 123) that “continuous improvement is a cyclic process of product and process optimization over a product life cycle; cycling means that an organization is continually exploring new frontiers in manufacturing technologies; however today, there is no single unique structure or process that defines “continuous improvement”, or, in a larger sense, what is described here as product and process optimization (PPO)”. On the other hand, it seems that the development of common practices (from the aspect of improvement of their products/ services) by the firms of the manufacturing industry and these of the services industry is feasible. For this reason, it has been found by Prasad (1995, 123) that “there are three aspects of life-cycle management applicable to manufacturing and service industries: managing reprocessing, restructuring or re-engineering change; managing continuity; and managing revision change”. In other words, in order to improve their performance through the transformation of their processes firms in both manufacturing and services industry should take into account the needs of the market as well as their ability to respond to them (in financial and structural terms). From a different point of view it is noticed by Moody (2001, 13) that “conventional wisdom holds that the way to build new products better and faster is to integrate design and manufacturing-process concerns early in the development cycle”. However, because of the above assumption need to be proved in practice and after the appropriate research, Moody examined a series of development projects developed by 137 North American manufacturers and came to the conclusion that “the crucial factor in achieving quality and speed, is the extent to which a company's manufacturing processes can deliver what the product designers envision; however, when designers ask for more than a company's manufacturing processes can deliver, the aim of quickly creating and manufacturing new products is not achieved” (Moody, 2001, 13). In order to avoid the above situation firms operating in the car manufacturing industry have followed the strategy of Toyota and choose to implement the ‘3P’ program which refers to specific rules for the development of the firms’ productivity. The above program “calls for five-day structured sessions that bring together manufacturing, engineering, design, procurement and maintenance personnel, as well as shop-floor operators” (Moody, 2001, 13) and has been proved to be particularly effective in all firms in which it was implemented (Moody, 2001, mentions indicatively the following firms: Toyota, Pella, Maytag, Black& Decker and Mercedes-Benz). Moreover, it was found that “companies that use 3P find that they typically reduce late integration problems in manufacturing and design by more than 50%” (Moody, 2001, 13). The above program is just an indicative scheme of the importance of technology in the development of firms’ performance. In fact, each firm can choose from the schemes and the systems available the one that would be more appropriate in accordance its needs, the conditions of the market and the preferences of customers. As for the services industry and particularly the firms operating in the advertising services sector, it would be expected that their activities would be equally influenced by the implementation of a BPT system. As stated above, the terms and rules applied in the relevant procedure (transformation of business processes) are common for firms operating in both the car manufacturing industry and the advertising services industry. Any possible differentiation will be revealed through the cases presented in next Chapter where firms belonging in the above two industries (Toyota and Advertus) are examined and evaluated with a special reference to their efforts to improve their performance by proceeding to the business process transformation procedure. In any case the use of technology is necessary when attempting a business processes transformation. In fact, this intervention could be characterized as ‘cooperation’ as technology has been found to be related with all other industrial sectors. Moreover, it has been found that “the development and maintenance of software components is similar to other engineering endeavours, especially the analysis, design, component warehousing, construction, and maintenance of high-rise buildings; car manufacture, electronics, construction, and many other industries' engineering disciplines have adopted—because of economics, or otherwise adapted to—componentization, and matured into more productive and profitable industries” [3]. In accordance with the above, the use of technology in the business processes transformation should be regarded as a natural consequence of the ‘interactiveness’ of business activities. Under these terms, the effectiveness of a technology system applied on a particular firm would be regarded as expected. The case of Toyota (UK branch, Georgetown - Kentucky, branch) The importance of the business processes transformation for the companies operating in the car manufacturing industry has been highlighted by one of the most significant entrepreneurs in this industry: Henry Ford. In accordance with his statement presented by Slack et al. (2005) the above entrepreneur explained the importance of “the competitive benefits associated with mass manufacturing operations” (Slack et al., 2005, 5) noticing that “Our foundry used to be much like other foundries. When we cast the first ‘Model T’ cylinders … everything … was done by hand … Now we have about five percent of thoroughly skilled moulders and core setters, but the remaining 95 percent are unskilled, or to put it more accurately, must be skilled in exactly one operation which the most stupid man can learn within two days. The moulding is all done by machinery” (Slack et al., 2005, 5). The above statement has been mentioned as an ‘empirical evidence’ related with the BPT systems and their effectiveness in the improvement of the performance of firms’ operating in the car manufacturing industry. In the case of Toyota, the importance of BPT systems for the increase of the firm’s profitability has been proved through the performance of two of its branches, the one of UK and the other of Kentucky (USA). In the first of these branches, the UK Branch, it has been found that “by sharing of real-time data throughout the global Toyota enterprise and going totally digital and concurrent” [1] could lead to the reduction of costs and time in the design and build sectors of the particular branch. In fact, a digital manufacturing software has been implemented in the British branch of Toyota in order for the whole procedure (of design and build) to be improved both in terms of quality and in terms of time required. In accordance with a statement of the firm’s project specialist (Production Planning and Control Division), John Grainger “Teams of engineers and team leaders would travel to Japan and spend several weeks understanding the designs for a new model and how to build it” [1]. After the implementation of the new software the relevant costs and the time required have been reduced. More specifically, Mr. Grainger notices that “Now, through development of a tailored manufacturing environment involving software from X, Y [sic] and Delmia, design data is stored in a common repository and accessible throughout the enterprise; as a result Toyota UK engineers can now optimise assembly manufacturing processes concurrently during the design phase ” [1]. In accordance with the above, the implementation of a business processes transformation system has helped to the significant reduction of costs and time required in many production stages of Toyota’s branch in UK. In another Toyota's branch in Georgetown, Kentucky (the largest outside of Japan) the implementation of a business transformation processes system also helped to the increase of production and the relevant improvement of profitability. More specifically, in the specific branch half-million cars are ‘produced’ each year. Since the application of the BPT system, the firm’s profits were increased by 34% comparing its profits 3 years before. The BPT system implemented in the particular assembly centre referred especially to the painting procedure. More specifically, “as recently as 2004, a car body spent 10 hours in painting; Robots did much of the work, then as now, but they were supplied with paint through long hoses from storage tanks” [2]. After the implementation of the new system “each painting robot, eight per car, selects a paint cylinder the size of a large water bottle. A whirling disk at the end of the robot arm flings out a mist of top-coat paint; when a car is painted--it takes just seconds--the paint cartridge is set back down, and a freshly filled cartridge is selected by each robot” [2]. Through the application of BPT system, the painting procedure has been improved in terms of time required while the costs involved has been also reduced – there is no paint wasted when using the specific procedure. The case of Advertus Advertus is an advertising agency based in Slovenia. The firm’s activities are expanded in many business areas like “direct marketing, public relations, event organizing, telesales and telemarketing” [4]. Despite its financial growth the company faced problems in the area of customer services and the administration of customer information. For this reason, the implementation of a BPT system was considered as necessary. In fact the solution was given by Microsoft which provided to the firm the CRM solution which first appeared in the market in April 2005. The main sector that was expected to be improved by the implementation of this system was the account management. Indeed, after implementing the above system, the firm’s customer services improved a lot with the following benefits to be observed throughout the firm: “fast access to accurate customer information, improved customer service, reduced and improved reporting and ability to identify and realize growth opportunities” [4]. In other words, the new system achieved all required targets improving the firm’s productivity and as a result its profitability in the long term. It should be noticed that the system chosen by the firm in the particular case (in fact proposed by Microsoft regarding the firm’s needs) its just and indicative example of the technology available in the commercial sector. In fact there are many systems available to the firms operating in the various industrial sectors. The choice of the most appropriate system (in accordance with the Slack’s model) will be based primarily on the firm’s needs and the market demands. Chapter 4 - Conclusion In accordance with the above aspects of the application of Slack’s model in commercial activities and particularly in the car manufacturing industry and the advertising services industry proves that theory can help towards the development of commerce and the improvement of firms’ profitability. In fact, specifically in business sector, theoretical models have been proved valuable in the improvement of business performance (either in the short or in the long term). On the other hand, BPT systems have been found to play a similar role in firms operating in car manufacturing industry and those operating in the services advertising industry. In both the above industries, the implementation of the appropriate BPT system is decided in accordance with the firm’s needs, its potentials to respond to the relevant costs, the time required and the actual demands and trends of the market. The examples presented above proved the credibility of the above assumption supporting the need for constant technological development in all industrial sectors in order for the firms to survive in extremely competitive modern commercial market. References Ford, H. and Crowther, S. (1922) My Life and Work (Revised Edition), Heinemann. Moody, P. (2001) The Path to More, Better, Faster. MIT Sloan Management Review, 42(3): 13 Nissen, M. (2000) An Intelligent Tool for Process Redesign: Manufacturing Supply-Chain Applications. International Journal of Flexible Manufacturing Systems, 12(4): 321-339 Prasad, B. (1995) A structured approach to product and process optimization for manufacturing and service industries. International Journal of Quality & Reliability Management, 12(9): 123-138 Slack, N., Lewis, M. (2005) Towards a definitional model of business process technology. International Journal of Process Management and Benchmarking, 1(1): 3-24 Websites http://www.mcsolutions.co.uk/article/3309/Toyota-Manufacturing-UK-rethinks-car-design-and-build-strategy-on-simulation-systems-.aspx [1] http://www.fastcompany.com/magazine/111/open_no-satisfaction.html [2] http://www.awprofessional.com/articles/article.asp?p=167919&seqNum=5&rl=1 [3] http://download.microsoft.com/documents/customerevidence/8393_Advertus.doc [5] Read More