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.