Page 482 - Fundamentals of Management Myths Debunked (2017)_Flat

CHAPTER 15 • Operations Management 481
◂ ◂ ◂ From the Past to the Present ▸ ▸ ▸

William Edwards Deming was an American statistician, • Deal with the best and fewest number of suppliers.
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professor, author, lecturer, and consultant. He is widely • Find out whether your problems are confined to particular
credited with improving production in the United States parts of the production process or stem from the overall
during World War II, although he’s probably best known for process itself.
his work in Japan. From 1950 onward, he taught Japanese • Train workers for the job that you are asking them to
top managers how to improve product design and product perform.
quality, testing, and sales, primarily through applying statis-
tical methods. Dr. Deming’s philosophy was quite simple: • Raise the quality of your line supervisors.
Focus on increasing quality and reducing costs through • Drive out fear.
continually improving how employees’ work is done and by • Encourage departments to work closely together
approaching manufacturing in an orderly, systematic, and rather than to concentrate on departmental or divisional
logical way. distinctions.
• Do not adopt strictly numerical goals.
Deming: • Require your workers to do quality work.

Improving Managers’ • Train your employees to understand statistical methods.
• Train your employees in new skills as the need arises.
Productivity • Make top managers responsible for implementing these
principles.
These principles have withstood the test of time and are
Putting that philosophy into practice required following still applicable for managers looking to improve productivity.
Deming’s 14 points for improving management’s productiv- If your professor has assigned this, go to the Assignments
ity. These suggestions are as follows: section of mymanagementlab.com to complete these dis-
cussion questions.
• Plan for the long-term future.
Talk About It 1: Why are (1) continual improvement
• Never be complacent concerning the quality of your and (2) thinking of manufacturing as a system so important to
product. managing operations?
• Establish statistical control over your production pro- Talk About It 2: Explain why these 14 principles are still
cesses and require your suppliers to do so as well. appropriate today.

How Is Value Chain Management Done?

The dynamic, competitive environment facing contem-
15-3 Describe how porary global organizations demands new solutions.
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value chain Understanding how and why value is determined by
management the marketplace has led some organizations to experi-
ment with a new business model—that is, a strategic
is done. design for how a company intends to profit from its
broad array of strategies, processes, and activities. For
example, IKEA, the home furnishings manufacturer,
transformed itself from a small, Swedish mail-order furniture operation into the world’s
largest retailer of home furnishings by reinventing the value chain in the home furnishings
industry. The company offers customers well-designed products at substantially lower
prices in return for the customers’ willingness to take on certain key tasks traditionally
done by manufacturers and retailers—such as getting the furniture home and assembling business model
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it. The company’s adoption of a unique business model and willingness to abandon old A strategic design for how a company intends to
methods and processes have worked well. It also helped that IKEA recognized the impor- profit from its broad array of strategies, processes,
tance of managing its value chain. and activities