Operations Improvement

May 2011

Objectives

Be able to contrast Quality Management and Scientific Management approaches to organisational improvement Be able to describe Six Sigma and explain its success Be able to describe Nonaka and Takeuchis Knowledge Spiral and apply it to operations improvement in an organisation

EXPERTISE

TACIT KNOWLEDGE: knowledge inarticulatably rooted in an individual's experience and observation FORMAL KNOWLEDGE: knowledge theoretically based knowledge which may be rationally justified (from Polanyi, M. "Personal Knowledge" 1962) Example of tacit knowledge? Example of formal knowledge?

TWO PARADIGMS OF KNOWLEDGE IN IMPROVEMENT

Scientific Management Onlyformal expertiseis valid Expertise residesinthe expert

Quality Management Allexpertiseis potentially valid Aimistopool expertiseand develop consensus

Six Sigma

To achieve Six Sigma quality, a process must produce no more than 3.4 defects per million opportunities. An "opportunity" is defined as a chance for nonconformance, or not meeting the required specifications. This means we need to be nearly flawless in executing our key processes. Six Sigma is a vision we strive toward and a philosophy that is part of our business culture. GE Six Sigma Website Sandra can summarise the content of Six Sigma.

AXA Way

You have been asked by Phillipe Fort, the Group Chief AXA Way Officer, to write a report ahead of his meeting tomorrow, summarising how the AXA Way programme can be redefined to align it with the Ambition 2012 plan. Elizabeth and Tom will lead two group, identifying the options available and proposing a line that he should take in the meeting.

Six Sigmas Success

Also, in your groups spend 5 minutes suggesting why of all similar company improvement approaches it is Six Sigma that is most widely implemented, studied and written about. Yin can relate this to Abrahamssons concept of management fashions.

Knowledge Management: another Japanese Management Fad?

Can knowledge be managed? Three key texts:

The Fifth Discipline: the Art and Practice of the Learning Organisation, P Senge 1990 Communities of Practice, Etienne Wenger, Cambridge Uni Press, 1998. Nonaka, I. & Takeuchi, H. (1995) The Knowledge Creating Company, OUP - draws on examples of innovation in Japanese firms, but related to wider literature on expertise

Knowledge Spiral

Dialogue Socialization Field Building Internalization Combination Externalization Linking Explicit Knowledge

Learning by Doing

Contents of Knowledge

Sympathised Knowledge

Conceptual Knowledge

Operational Knowledge

Systemic Knowledge

Nonaka and Takeuchis Knowledge Spiral

In the knowledge spiral knowledge is initiated in individuals and then grows involving a wider range of actors with knowledge circulating between tacit and explicit. In the knowledge spiral socialisation spreads tacit knowledge, externalisation articulates tacit knowledge as explicit knowledge, combination spreads explicit knowledge and internalisation generates new tacit knowledge through learning by doing . Nonaka, I. & Takeuchi, H. (1995) The Knowledge Creating Company, OUP, Oxford. pp 71 72

Exercise:

In pairs spend 10 minutes identifying three techniques useful for each of:
Socialization Externalisation: Combination Internalisation

Conclusion

Traditional Taylorist model of operations improvement privileged the formal expert Quality Management techniques may be seen as capturing tacit knowledge Knowledge Management goes the further steps of considering the generation of knowledge and its dissemination