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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

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J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar
D

)= CC

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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

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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

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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

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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

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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

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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

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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

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=

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

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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

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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

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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

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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
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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

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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



ToC

Analyse
xxx

Modeling,
Simulation

J. Gramdi – Overall Interactional Effectiveness - Second 4P Factory online Seminar

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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

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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



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

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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



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

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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



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

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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
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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

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Paris : LEXITIS Editions, 2013. 168 p.