.
Overall Interactional
Effectiveness
Second 4P Factory online Seminar
Wednesday 16th March 2016
José Gramdi
Jean Vieille
Agenda
Complex enterprise system
Quantification of enterprise effectiveness
Enterprise model for OIE
Continuous improvement and transformation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
2
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
(
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
D
)= CC
3
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
BILLING
SHIPPING
MANUFACTURING
QUALITY
RECEPTION
PURCHASING
DESIGN
SALES
OFFERS
PROSPECTION
PROMOTION
MARKETING
« Silos » approach
A
B
C
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
4
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Individual achievement vs global survival
System view
Identity / Strategy- Perennity
Enteprise System
A
MARKETING
DESIGN
MANUFACTURING
RECEPTION
PURCHASING
PROMOTION
PROSPECTION
B
SHIPPING
SALES
C
QUALITY
BILLING
System
Set of elements in dynamic interaction, structured toward
one objective (J. De Rosnay)
Silos do not take the system nature into account
The whole is more than the sum of its parts
The sum of local optimas is not necessarily a global optima
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
5
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
D
Agenda
Complex enterprise system
Quantification of enterprise effectiveness
Enterprise model for OIE
Continuous improvement and transformation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
6
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
OIE justification
Enterprise identity management
Need for actionable KPIs
Related to qualitative statements and objectives
Throughout the decision hierarchy and time
horizons
Need for homogeneous measurement
Handled at the highest management level
Mission statement, strategic objectives
Same measure for all enterprise managed entities
Need for addressing complexity, interactions
Mutual impact assessment
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
7
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Survival conditions
Revenues
Cash
The enterprise must hold enough cash to sustain its
operations (Working capital needs)
Market relevance, Customer satisfaction
The enterprise must generate revenues
The enterprise must keep existing customers happy and
attract new ones
Social responsibility, Sustainability
The enterprise must fulfil employees, partners, Society,
State expectations
Wrongdoing organisms are eliminated
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
8
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Overall Interactional Efficiency: the Pipe analogy
Speed: Cash-out – Cash-in Leadtime
OOE €
COMPANY SYSTEM
COMPANY SYSTEM
TVE €
DSR €
OIE = R x S x Q x OVA / OOE
Variable
Expenses
Direct
Sales
Revenues
OVA € = DSR € – TVE €
OVA
OOE
S*
Q*
R*
Pipe
Section
Thickness
1/Length
1/Leaks
Greenness?
Value
Direct sales revenues – Truly variable expenses
Overall operational expenses = all expenses – TVE
Speed
Quality, Customer satisfaction
Social Responsibility, Environment fitness
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
9
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Suppliers
Outputs
Customers
Quality
Inputs
OIE : short to long term survival
Time horizon
Decision
Identity
Timeless
Strategy / Goals
Long term
Tactics / Objectives
Short term
R x Q x S x OVA /OOE
Sustainability
Perennity
Health
Operations / Action
Day to day
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
Be alive
10
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
=
Agenda
Complex enterprise system
Quantification of enterprise effectiveness
Enterprise model for OIE
Continuous improvement and transformation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
11
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Enterprise simple model for OIE
OIE sets 4 dimensionless KPIs addressing
the whole enterprise system
The whole decision span
OIE uses a 5 main processes model
First level filter for focusing improvement efforts
Subsequently matched with enterprise actual
organization
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
12
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
How to analyse the overall system ?
€ OVA = DSR – TVE €
DESIGN
MAKE
€ TVE €
€ DSR €
DELIVER
PURCHASE
€ OOE €
The SELL process
The DESIGN process
Transforms an internal request into an available item
The MAKE process
Transforms a customer requirement into an operational solution
The PURCHASE process
Transforms a market demand into an order for the company
Transforms raw materials into finished goods
The DELIVER process
Transforms an order into a delivered product
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
13
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Suppliers
SELL
Customers
SOE
PIE
How to analyse the overall system ?
Item
Request
Product
Request
Order
Demand
Item
PURCHASE
Product
MAKE
Product
DELIVER
Functional
Requirement
Operational
Solution
Order
DESIGN
5 interactional control loops
Combined effect of processes onto OIP
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
14
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
SELL
First level (global) analysis
Make
1
2 1
2
1
2
1
1
1
2 2
4
1
3
2
2
2
4
Price
1 2
TVE
2 1
1
2
Qty
1
4
2 2
1
2
1
1 2
4
2 3
3 2
1
1 2
2
2 2
3
2 4
OOE
1
1
Speed
2 2
Quality
Social
Responsibility
7 2 9 5
23
5 2 5 9
21
5
5 8
18
14 4 6 11
35
5 1 7 6
19
Total
Assessment by all parties working together
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
15
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
4
1
2 2
OIE
1
3
OVA
2
DSR
3
Deliver
R
OVA
OOE
S
Q
R
Purchase
OOE
S
Q
Sell
OVA
OOE
S
Q
R
OVA
OOE
S
Q
R
OVA
OOE
S
Q
R
OVA
Design
Interactional analysis
3
2
2
1
2
1
2
2
2
2
3
3
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
16
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
2
Sell
2
Purchas
e
3
Make
2
1
Deliver
1
OVA
OOE
S
Q
OVA
OOE
S
Q
OVA
OOE
S
Q
OVA
OOE
S
Q
OVA
OOE
S
Q
Design
Q
S
OOE
OVA
Deliver
Q
S
OOE
OVA
Make
Q
S
OOE
OVA
Purchase
Q
S
OOE
OVA
Sell
Q
S
OOE
OVA
Design
Agenda
Complex enterprise system
Quantification of enterprise effectiveness
Enterprise model for OIE
Continuous improvement and transformation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
17
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
The Virtuous Loop of Excellence
Define
Update enterprise
model and
interactions
Measure
Control
OIE valuation,
Results
Improve
Lean
6σ
ToC
Analyse
xxx
Modeling,
Simulation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
18
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
OIE
characterisation,
Data collection, OIE
valuation
How to leverage the overall system ?
Item
Request
Product
Request
Order
Demand
Item
PURCHASE
Product
MAKE
Product
DELIVER
Functional
Requirement
Operational
Solution
Order
DESIGN
OIP
t
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
19
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
SELL
How to leverage the overall system ?
Item
Request
Product
Request
Order
Demand
6σ
Item
PURCHASE
Produit
Product
Product
MAKE
DELIVER
Functional
Requirement
Operational
Solution
Order
DESIGN
OIP
t
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
20
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
SELL
How to leverage the overall system ?
Item
Request
Product
Request
Order
Demand
6σ
Item
PURCHASE
Product
MAKE
DELIVER
Operational
Solution
Order
Product
Lean
DESIGN
DESIGN
Functional
Requirement
OIP
t
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
21
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
SELL
How to leverage the overall system ?
Item
Request
ToC
Product
Request
Order
Demand
6σ
Item
PURCHASE
MAKE
DELIVER
Operational
Solution
Order
Produit
Product
Product
Lean
DESIGN
Functional
Requirement
OIP
t
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
22
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
VENTE
SELL
Example of decision-making support
Operations
Market strategy
What is the optimal resources allocation?
What are the optimal batch size and sequencing?
How to optimaly dispatch productions on different plants?
How to drive business with cash limitation?
What is the optimal sales mix?
What are optimal selling prices?
How to priorise and manage sales according to the manufacturing capacities?
Transformation
Bow to balance finance resources between operations, investment, reward
How to dispatch financial resources among investment projects
How to priorize IT development
How to decide on the relevance of an innovation?
Common criteria: shall increase OIE
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
23
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
24
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
References
GRAMDI, J.
La Boucle Vertueuse de l'Excellence
ISBN 978-2-36233-115-2
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
25
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Paris : LEXITIS Editions, 2013. 168 p.
Effectiveness
Second 4P Factory online Seminar
Wednesday 16th March 2016
José Gramdi
Jean Vieille
Agenda
Complex enterprise system
Quantification of enterprise effectiveness
Enterprise model for OIE
Continuous improvement and transformation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
2
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
(
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
D
)= CC
3
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
BILLING
SHIPPING
MANUFACTURING
QUALITY
RECEPTION
PURCHASING
DESIGN
SALES
OFFERS
PROSPECTION
PROMOTION
MARKETING
« Silos » approach
A
B
C
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
4
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Individual achievement vs global survival
System view
Identity / Strategy- Perennity
Enteprise System
A
MARKETING
DESIGN
MANUFACTURING
RECEPTION
PURCHASING
PROMOTION
PROSPECTION
B
SHIPPING
SALES
C
QUALITY
BILLING
System
Set of elements in dynamic interaction, structured toward
one objective (J. De Rosnay)
Silos do not take the system nature into account
The whole is more than the sum of its parts
The sum of local optimas is not necessarily a global optima
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
5
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
D
Agenda
Complex enterprise system
Quantification of enterprise effectiveness
Enterprise model for OIE
Continuous improvement and transformation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
6
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
OIE justification
Enterprise identity management
Need for actionable KPIs
Related to qualitative statements and objectives
Throughout the decision hierarchy and time
horizons
Need for homogeneous measurement
Handled at the highest management level
Mission statement, strategic objectives
Same measure for all enterprise managed entities
Need for addressing complexity, interactions
Mutual impact assessment
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
7
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Survival conditions
Revenues
Cash
The enterprise must hold enough cash to sustain its
operations (Working capital needs)
Market relevance, Customer satisfaction
The enterprise must generate revenues
The enterprise must keep existing customers happy and
attract new ones
Social responsibility, Sustainability
The enterprise must fulfil employees, partners, Society,
State expectations
Wrongdoing organisms are eliminated
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
8
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Overall Interactional Efficiency: the Pipe analogy
Speed: Cash-out – Cash-in Leadtime
OOE €
COMPANY SYSTEM
COMPANY SYSTEM
TVE €
DSR €
OIE = R x S x Q x OVA / OOE
Variable
Expenses
Direct
Sales
Revenues
OVA € = DSR € – TVE €
OVA
OOE
S*
Q*
R*
Pipe
Section
Thickness
1/Length
1/Leaks
Greenness?
Value
Direct sales revenues – Truly variable expenses
Overall operational expenses = all expenses – TVE
Speed
Quality, Customer satisfaction
Social Responsibility, Environment fitness
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
9
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Suppliers
Outputs
Customers
Quality
Inputs
OIE : short to long term survival
Time horizon
Decision
Identity
Timeless
Strategy / Goals
Long term
Tactics / Objectives
Short term
R x Q x S x OVA /OOE
Sustainability
Perennity
Health
Operations / Action
Day to day
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
Be alive
10
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
=
Agenda
Complex enterprise system
Quantification of enterprise effectiveness
Enterprise model for OIE
Continuous improvement and transformation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
11
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Enterprise simple model for OIE
OIE sets 4 dimensionless KPIs addressing
the whole enterprise system
The whole decision span
OIE uses a 5 main processes model
First level filter for focusing improvement efforts
Subsequently matched with enterprise actual
organization
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
12
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
How to analyse the overall system ?
€ OVA = DSR – TVE €
DESIGN
MAKE
€ TVE €
€ DSR €
DELIVER
PURCHASE
€ OOE €
The SELL process
The DESIGN process
Transforms an internal request into an available item
The MAKE process
Transforms a customer requirement into an operational solution
The PURCHASE process
Transforms a market demand into an order for the company
Transforms raw materials into finished goods
The DELIVER process
Transforms an order into a delivered product
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
13
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Suppliers
SELL
Customers
SOE
PIE
How to analyse the overall system ?
Item
Request
Product
Request
Order
Demand
Item
PURCHASE
Product
MAKE
Product
DELIVER
Functional
Requirement
Operational
Solution
Order
DESIGN
5 interactional control loops
Combined effect of processes onto OIP
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
14
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
SELL
First level (global) analysis
Make
1
2 1
2
1
2
1
1
1
2 2
4
1
3
2
2
2
4
Price
1 2
TVE
2 1
1
2
Qty
1
4
2 2
1
2
1
1 2
4
2 3
3 2
1
1 2
2
2 2
3
2 4
OOE
1
1
Speed
2 2
Quality
Social
Responsibility
7 2 9 5
23
5 2 5 9
21
5
5 8
18
14 4 6 11
35
5 1 7 6
19
Total
Assessment by all parties working together
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
15
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
4
1
2 2
OIE
1
3
OVA
2
DSR
3
Deliver
R
OVA
OOE
S
Q
R
Purchase
OOE
S
Q
Sell
OVA
OOE
S
Q
R
OVA
OOE
S
Q
R
OVA
OOE
S
Q
R
OVA
Design
Interactional analysis
3
2
2
1
2
1
2
2
2
2
3
3
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
16
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
2
Sell
2
Purchas
e
3
Make
2
1
Deliver
1
OVA
OOE
S
Q
OVA
OOE
S
Q
OVA
OOE
S
Q
OVA
OOE
S
Q
OVA
OOE
S
Q
Design
Q
S
OOE
OVA
Deliver
Q
S
OOE
OVA
Make
Q
S
OOE
OVA
Purchase
Q
S
OOE
OVA
Sell
Q
S
OOE
OVA
Design
Agenda
Complex enterprise system
Quantification of enterprise effectiveness
Enterprise model for OIE
Continuous improvement and transformation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
17
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
The Virtuous Loop of Excellence
Define
Update enterprise
model and
interactions
Measure
Control
OIE valuation,
Results
Improve
Lean
6σ
ToC
Analyse
xxx
Modeling,
Simulation
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
18
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
OIE
characterisation,
Data collection, OIE
valuation
How to leverage the overall system ?
Item
Request
Product
Request
Order
Demand
Item
PURCHASE
Product
MAKE
Product
DELIVER
Functional
Requirement
Operational
Solution
Order
DESIGN
OIP
t
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
19
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
SELL
How to leverage the overall system ?
Item
Request
Product
Request
Order
Demand
6σ
Item
PURCHASE
Produit
Product
Product
MAKE
DELIVER
Functional
Requirement
Operational
Solution
Order
DESIGN
OIP
t
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
20
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
SELL
How to leverage the overall system ?
Item
Request
Product
Request
Order
Demand
6σ
Item
PURCHASE
Product
MAKE
DELIVER
Operational
Solution
Order
Product
Lean
DESIGN
DESIGN
Functional
Requirement
OIP
t
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
21
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
SELL
How to leverage the overall system ?
Item
Request
ToC
Product
Request
Order
Demand
6σ
Item
PURCHASE
MAKE
DELIVER
Operational
Solution
Order
Produit
Product
Product
Lean
DESIGN
Functional
Requirement
OIP
t
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
22
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Item
Customers
Suppliers
VENTE
SELL
Example of decision-making support
Operations
Market strategy
What is the optimal resources allocation?
What are the optimal batch size and sequencing?
How to optimaly dispatch productions on different plants?
How to drive business with cash limitation?
What is the optimal sales mix?
What are optimal selling prices?
How to priorise and manage sales according to the manufacturing capacities?
Transformation
Bow to balance finance resources between operations, investment, reward
How to dispatch financial resources among investment projects
How to priorize IT development
How to decide on the relevance of an innovation?
Common criteria: shall increase OIE
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
23
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
24
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
References
GRAMDI, J.
La Boucle Vertueuse de l'Excellence
ISBN 978-2-36233-115-2
J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
25
Copyright José GRAMDI - Tous droits réservés – jose.gramdi@utt.fr
Paris : LEXITIS Editions, 2013. 168 p.
Johann Sebastian Bach. the music closest to silence, closest, in spite of its being so highly organized, to pure, one-hundred-degree proof Spirit" (Aldous Huxley, Island)