An integrated organizational structure will have a reduced number of management layers, and more decision making at the lower

levels. This type of structure can be threatening to a person who is used to a functional hierarchy. There is certainty in the familiar structure where each person knows what is expected from him/her. Due to the fear of change, there will be a resistance to change causing the integration process to slow down. As throughput times decrease, the supplier base becomes more important. As throughput increases, !" will decrease making it imperative that the raw materials are in place as they are needed. The traditional !" buffers are eliminated. #uppliers can not deliver late, have off $uality, or deliver the wrong parts. The goal of logistics management is to %bring materials from the lowest&tier suppliers through the various conversion processes and into distribution to reach the customer.% 'ogistics can provide a dramatic reduction in cost while lowering inventory and providing improved customer service, yet, most companies do not exploit the potential benefits. ith proper coding and classification of parts and machines, new product designers can use the information to use existing parts and machines to create new products. This keeps new parts to a minimum, thereby reducing costs and complexity over time. (uick response was developed out of the efforts of a number of ma)or retailers and their key suppliers who recognized the need to work together more cooperatively. Their initial efforts were aimed at improving the interchange of vital information to reduce costly, inefficient, redundant steps in the supply chain and to speed replenishment of goods sold. !nfinite *apacity #ystems identify when capacity re$uired exceeds capacity available. +o further analysis is done by the system. "eople must do the analysis. ,enerally, having excess production capacity would produce extra costs not necessary to compete. -aving greater capacity does not mean greater flexibility to compete, which would be an advantage. The voice of the customer is a methodology for taking what the customer wants and translating their wants into products or services. This is done through in&depth interviews and an interview log which keeps breaking down the customers. wants into actionable items. The other way to develop products and services that satisfy the customer is to listen to potential customers wants and break them into actionable items. /ull absorption is an accounting method whereby all fixed costs are applied 0absorbed1 by the product. !t is re$uired for external reporting to shareholders, banks, etc. The drivers for a manufacturing strategy are cost, $uality, performance, delivery, flexibility, innovativeness, and channels. Different drivers will be necessary for the different products or channels. !nterpersonal processes involve tasks within and across small work groups, typically within a function or department. An example of this might be a loan approval process. +etwork systems are able to efficiently support these processes. ,oal alignment is a method of linking everyone to the goals of the organization. 'inkage is reinforced through activity&based budgets, responsibility statements, and other aligning mechanisms.

"ro)ect teams are a group of people working together to reach a common goal. Teams should consist of highly motivated individuals from various functions. To work as a team takes time and training to understand how teams work. The most difficult part of making alliances work are the interpersonal relationships, especially trust. 2ecause many supplier relationships have been adversarial, it is difficult to develop trust between the parties involved. This takes significant time and effort. 3ust because you form an alliance, it does not mean trust immediately begins. *ost leadership4 low cost, standardized, off the shelf products and standard processes "roduct differentiation4 high $uality products and easily adaptable processes /ocus4 cost advantage or responsive delivery and customization in response to targeted market segments *ompanies must differentiate themselves by4

being the low cost producer in their market5 or, they must be most flexible and responsive by developing processes which allow them to react $uickly to marketplace changes5 or, they must be able to provide the high $uality products in the marketplace5 or, make it easy for customers to do business with them. According to a study of 67 firms conducted by #chroeder and *ongden, strategies that re$uire greater flexibility and )udgement will re$uire greater human skills. Those firms that repetitively produced the same parts were able to hire lower skilled personnel to ensure production levels. !n those firms, where the machine center was producing small lots of different parts, the operators needed a greater level of skill. This occurred regardless of the level of technology implemented.

hile it is important in a change process to personify the new approaches, behaviors, and attitudes, it is even more important that new, incoming senior managers bring the new approaches, behaviors and attitudes with them. 8therwise, the changes which were gained will begin to unrave

,enerally, the first step in selecting and implementing a manufacturing planning and control system, 9"*, is to create the system vision. The system vision maps what the system will look like when finished. !t is important to create the system vision so everyone involved will have a common understanding of what the system will accomplish. !t also builds buy&in for the pro)ect. Direct costing applies only the variable cost to products. They are then reviewed for their margin contribution towards the fixed costs. As an internal management tool, it is better than full absorption accounting.

hen supply chain companies cooperate, they constantly exchange the best information they have regarding demand, market trends, supply problems, etc. This causes the resupply time to be reduced because they all act in concert with each other. The hand&offs are minimized or eliminated and the non&value activities are eliminated. This, in turn, reduces the supply time. hile communication is faster, the communication must be worthwhile. /aster communications will not reduce total inventory if non&value added activities continue to exist. 2ecause the :8! 0return on investment1 measure is a pure financial measure&return on the

capital invested& measures such as $uality, innovation, and manufacturing excellence are not included and may not be invested in for the long term health of the firm. ;conomic value added, ;<A, includes intangible assets as well as tangible assets in the measure. !t may be a better measure for understanding the return on investment the firm is receiving. *ost of hardware is usually the least significant reason not to integrate, as different platforms and software exist to integrate systems. -owever, it does keep companies from integrating. !n addition, upper management does not often understand the technology. n the article, %Aligning "erformance 9easurements with 8rganizational #trategies% by Ann illis, the author provides =7 characteristics for evaluating performance measurement systems. /eedback must be provided in a timely manner to both operators and managers in order for performance to be ad)usted $uickly enough to be useful. 9any times, measures are provided in financial terms after the month has ended. This is not useful because the problem may have occurred early in the month and performance can not be ad)usted. !nnovation is the life blood of most organizations. ithout new products, competitors can make inroads and the product line does not keep up with the technology advances in the marketplace. The product yield percentage is a measure of products in production and the number of good product to total product produced. The other measures are good measures of innovation. *ertain production environments do not lend themselves to a 3!T process. These include manufacturing where the product is custom engineered, the demand pattern is unstable, $uality is unpredictable, and where volumes are low and occur infre$uently. 3!T favors smooth demand at predictable rates. Anything which disrupts this %drumbeat% causes the 3!T operation more difficulty. "eople with a youthful perspective can often bring new ideas to the strategy setting process. They have not been tainted by years in the industry and still have an energetic, % hy not>% attitude. The important aspect is that senior managers can learn something from the youth and must be open to listening and perhaps acting on the information they learn. +ot every aspect of the technology implementation will be known so you should develop a trusting relationship with the vendor. This should become a long&term partnership with both parties committed to making the new technology work. ;xecutives need to communicate the renewed vision of the company, however, the message must be incorporated into their everyday activities. Additionally, their actions will speak volumes more then their verbal communication. This is the most important part of communicating the change in the company. Actions speak louder than words. The team concept is better supported by cross&trained employees. The answer of circumventing the union is contrary to the level of trust necessary to implement 3!T. !f a union is involved, get them involved at the beginning to develop the trust necessary to ensure successful teams. hen a system pro)ect is significantly behind because resources are taken from the pro)ect, the steering committee needs to reschedule the pro)ect with the reduced resources. !f the pro)ect then takes too long to complete, the steering committee needs to make some critical decisions regarding the pro)ect. #ome of these decisions would be to resource the pro)ect, accept the long implementation, or bring in outside help. ,enerally resourcing the pro)ect properly is the best solution with the highest payback. #ystems implementation generally will take longer without strong management commitment. ;ducation and training are necessary for workers to understand why the system is needed and what it will do for the company. e product life cycle has four phases and their strategies4

=. !ntroduction & (uality, features, and flexibility 6. ,rowth & Delivery, reliability, and flexibility ?. 9aturity & "rice and cost @. Decline & /lexibility through added features ,roup technology allows shorter manufacturing time, less work in process inventory, improved process and product design, and the introduction of new technology into the factory. Aeep in mind, however, that without people supporting it, benefits will not be derived from technology alone. "rocess activities can be defined as operational or managerial. 8perational processes involve the day&to&day carrying out of the organization.s basic purpose. 9anagerial processes help to control, plan, or provide resources for operational processes. An example of an operational process would be filling a customer order while an example of a managerial process would be preparing a budget. 'evel = evaluations are conducted by handing out $uestionnaires at the end of the training session. as the trainer knowledgeable> ere ideas presented clearly> hile these evaluations measure the presenters ability to keep the class entertained, as well as the content, they are an initial measure of customer satisfaction with the training. 'evel = evaluations should not be the only evaluation measuring the learning. #imple4 generally less than four levels /unctional4 more formal design for larger complex organizations Divisional4 often called business units. They have all the functional staff necessary to conduct operations. *onglomerate4 like divisional designs, there is little task dependency among the groups -ybrid4 often referred to as a matrix design. This is usually re$uired when several functional areas must be integrated. Developing people is an essential ingredient to a successful pro)ect. The pro)ect manager cannot successfully complete the pro)ect alone. !n fact, the pro)ect manager, if a skilled one, will seldom work directly on the pro)ect. 9anaging a pro)ect is a full time )ob. !n the mature stage of a product.s life cycle, price and consistent delivery are usually order winners. +ot only does delivery need to be consistent, but speed will also aid in winning orders. "rocess benchmarking, %seeks to measure the relative effectiveness of two or more businesses in performing a specific process by comparing both the cost to perform the process and the level of success with which it is executed.% This form of benchmarking serves two purposes4

!t identifies performance weaknesses !t sets performance goals for re&engineering activities !n setting a strategic direction, companies should focus on those operations and functions which are core to their product or service. *ore competencies are those functions which the customer is willing to pay the company for. hile an operation may not be competitive, it does not mean that it should be outsourced. !t may mean that the company must find ways to be more competitive. !f it finds that it cannot, it may re$uire that the function be outsourced. The facilitator in the Aaizen event has a critical role. Their )ob is to ensure success of the event by choosing the right people to form the team, providing education to the team, making sure the team stays on track to the conclusion, and assisting in the management presentation at the end of the event. This person must be experienced in the Aaizen process. All of the answers could be measures of delivery reliability, as well as others. must be compatible with the company goals. hatever measures are chosen, they

An ;:" pro)ect champion should be the most senior executive at the site. This person must be the one who continuously supports the pro)ect, ensures resources are available, and eliminates barriers when the pro)ect hits them. This senior executive also ensures that the other executives rally around the pro)ect to maintain support. The four categories of cost drivers are4

=. /actory sustaining activities represent fixed and variable expenses that are unidentifiable by product. ;xamples would be plant management, facilities and grounds, etc. 6. "roduct sustaining activities are those that develop and update product and manufacturing information. ;xamples include engineering, bills of material, routings and standards. ?. 2atch level activities are those that match the supply of materials, labor and capacity with demand. ;xamples include purchasing, receiving, material planning, etc. @. Bnit level activities are costs traditionally associated with individual production units. ;xamples include materials, direct labor, tooling, etc. Any successful change process will take a series of phases that take considerable time. This has caused many change efforts to fail as many companies are very short term oriented. They do not have the patience to %stay the course.% !n their article, %-ow to !ntegrate ;ngineering and 9anufacturing through *oncurrent 9anufacturing%, ,illen and :obidoux write that %traditional methods ade$uately determine the task se$uence needed to accomplish engineering work. -owever, there is universally poor performance among engineering companies in estimating the resources re$uired to accomplish these tasks.% Traditional rule of thumb methods overlook issues such as technical risk, level of analysis re$uired to support designs and software re$uirements. The business plan will define the sales and profit ob)ectives as well as the capital necessary to achieve the ob)ectives. 2usiness process is a set of logically related tasks performed to achieve a defined business outcome. A set of processes forms a business system & the way a business unit or collection of units carries out its business. According to 9ichael -ammer, the seven principles of reengineering are4 =. 8rganize around outcomes, not tasks. 6. -ave those who use the output of the process perform the process. ?. #ubsume information processing work into the real work that produces information. @. Treat geographically dispersed resources as though they were centralized. C. 'ink parallel activities instead of integrating their results. D. "ut the decision point where the work is performed, and build control into the process. E. *apture information once and at the source. According to hitney, businesses lose focus on strategic planning and don.t refocus for three reasons4

=. They are preoccupied with the past and present. 6. They misunderstand the future. ?. They have no formal procedure for pruning, only for planting. *ompanies will rest on their laurels which can be dangerous. They focus on the present and ignore the future. 8ften, they misunderstand the future and the vision of the future will get ahead of reality. *ompanies also have very little resource devoted to cutting back on products and services because people are generally rewarded for growth.

3!T is a philosophy which encompasses all functions of a company & %!f it doesn.t add value, it is waste4 eliminate it%. Aanban is a pull production techni$ue and is not synonymous with 3!T. 3ust&in&Time implementations should not be completed by converting every area of the plant to 3!T. This is an invitation for disaster. !nstead, a pilot area should be identified in which the organization can learn as it begins to apply the various techni$ues. hile incentives can help reinforce change, alone they are not strong contributors to change, as the effects are not lasting. ;ducation and success are strong contributors since people need to understand why change is important and people like to be part of a winner. *orporate strategy must change with the business because internal and external forces constantly cause the company to change. As part of the overall strategy, ob)ectives are developed by ma)or functional areas to support the overall strategy. ;:" systems compliment *!9 pro)ects because it is the information base which feeds the automation with data. -owever, data inaccuracies cannot be tolerated with automation because humans no longer filter the bad data. The voice of the customer is a methodology for taking what the customer wants and translating their wants into products or services. This is done through in&depth interviews and an interview log which keeps breaking down the customers. wants into actionable items. The other way to develop products and services that satisfy the customer is to listen to potential customers wants and break them into actionable items. !nfrastructure decisions are centered around three ma)or categories4

orkforce involvement4 number and types of people, skill set, and level of empowerment 8rganizational design4 number of levels, centralized or decentralized, matrix or not 9a)or organizational systems4 $uality, information and manufacturing planning and control systems (uality of orklife 0( '1 programs can be defined as %processes by which an organization attempts to unlock the creative potential of its people by involving them in discussions affecting their work lives.% 0,uest, =FEF1. The three common elements are4

"articipative 9anagement4 employees participate in the problem solving and decision making aspects of their )ob !nnovative :eward #ystems4 contributions to improvement are measured and the team or individual is rewarded ;nhanced orkplace Democracy4 empowered workplace, self management, and company ownership all contribute to a sharing of power ;ffectiveness can be defined as doing the right )ob. !t involves directing the right resources towards the appropriate operations goals. A strategy would re$uire that the information needs to be more general. That is, the information would be high level and less specific than a tactical need for information. /or example, a strategy would re$uire a general knowledge of new markets to enter. A tactic would need to have specific products with which to enter the market.