Performance improvement. Part 1. Forget the acronyms
| Date | 01 June 1999 |
| DOI | https://doi.org/10.1108/02635579910274505 |
| Published date | 01 June 1999 |
| Pages | 172-180 |
| Author | Ian Millar |
| Subject Matter | Economics,Information & knowledge management,Management science & operations |
Performance improvement. Part 1. Forget the
acronyms
Ian Millar
Director, Advanced Manufacturing Engineering, Case Corporation, USA
In this the first part of a series of two articles
we will look at behaviour and how correct
behaviour is a prerequisite for the successful
installation of projects or initiatives. In the
second part we will look at a useful model for
the successful installation of a tool that can
enjoy employee participation, cost reduction,
improved quality and improved business
performance. That tool is cost of quality.
Why do people embark upon new initia-
tives? Be it TQM, BPR, IT, CIM, COQ, OPT,
CONC, SQA, MRPII, WCM, PM, TPM, ZBB,
ABM, SPC, GT, EDI, EC, FMS, FMC, CAD,
CAM, CAPP ± or whatever other acronym
you may wish to use. In many companies a
new initiative without an acronym is like a
date without a partner. The business is in
trouble, or can see the lights of a train
approaching through a tunnel therefore let
us use an acronym-based action to help us
correct our deficiencies. It is to be hoped, but
not always the case, not just to be seen to do
the right thing ± that is practise the latest fad
or flavour of the month. Trouble I define as
some departure from a plan, some deviation
from a planned course. The deviation from
plan needs to be corrected. The deviation is
large enough to require some major activity
or surgery. There are many tried and some
proven remedies. Some are ± new manage-
ment is introduced, organisational change is
tried, we move to or from centralisation to
decentralisation, financial controls are im-
proved, a cost reduction programme is in-
stalled, marketing performance is improved,
an asset reduction programme is started, the
company grows through an acquisition pro-
gramme, a new financial strategy is intro-
duced, restructuring takes place or the
product market is changed (Slatter, 1984).
Others have been tried.
In the 1950s, market share and profitability
was the focus or ``flavour of the time''. In the
1960s it was cost reduction. In the 1970s it was
productivity (whatever that meant). In the
1980s it was quality and in the 1990s people
(Joppin, 1991). What initiative or project
should we expect for the new millennium? I
suggest a continuation of the 1990s together
with some other initiative like EVA (eco-
nomic value added) (Stewart, 1990) or max-
imise shareholder value. Quality, delivery,
cost and customer service are likely to be
coterminous with a people initiative. There
is nothing revolutionary about this ap-
proach. As in women's fashion when skirt
lengths go up and go down over the years,
business strategies and management techni-
ques and initiatives come and go. The
economic environment is likely to be a
critical factor in determining what occurs.
Not much changes, except the proliferation of
acronyms that try to justify their existence
and satisfy management thirst for such
programmes. Sometimes it is only the name
that is changed. So, what will change over the
last few years of the twentieth century and
into the new millennium? I put it to you; it
will be a much greater understanding of the
value, relevance and effective installation of
the people factor, the human organisation
(Drucker, 1958). Note that I am talking about
installation not simply implementation. In-
stallation means it becomes a way of life,
practised every day. Implementation means
done once or twice and then ``forgotten''. The
most admired companies (Fortune Magazine,
1997) article identifies how they select and
keep their people.
How will these happen? Through a relent-
less passion to understand and practise all
that maximises the impact people have on the
way we address problems, deviations from
plan, preventive action and corrective action.
In many ways all of the above acronyms feed
and support turnaround strategies, improve-
ment plans, personal objectives and survival
needs. I believe that what is usually missing
is a recognition that no plan, objective or
strategy succeeds without a willingness and
commitment to talk with, appropriately edu-
cate, develop and train employees, our col-
leagues. It is people who make things happen,
not computers or robots. People-related skills
[ 172 ]
Industrial Management &
Data Systems
99/4 [1999] 172±178
#MCB University Press
[ISSN 0263-5577]
Keywords
Cost of quality, Improvement,
Performance management, Teams
Abstract
This two-part article focuses on
the need to ignore the many
acronym-based initiatives and pro-
grammes that tend to drive busi-
ness performance. The author
recommends that people must
play a critical role in any perfor-
mance improvement initiative.
People should work in an effective
team environment and with senior
management visible involvement.
A tool, cost of quality, is described
in some detail. Utilizing people and
cost of quality can reduce cost
and change an organisations' cul-
ture. Part 1 highlights the need to
focus on behaviour for new initia-
tives and projects to be success-
fully installed in a company. Cost
of quality as a performance im-
provement process can be a major
driver of change producing sub-
stantial cost reduction and perfor-
mance improvement within any
business.
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