Upton Case Study 1996

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European ManagementJournal Vol. 14, No. 3, pp. 215-228, 1996

~)

Pergamon
S026 3-2 ;373 (96)00002-3

Copyright © 1996 Elsevier Science Ltd Printed in Great Britain. All rights reserved

0263-2373/96$15.00+ 0.00

Mechanisms for Building and Sustaining Operations Improvement DAVID UPTON, Associate Professor of Technology and Operations Management, Harvard

Business School, USA

It is no longer enough, it would seem, to know how to use operations as a competitive weapon, nor is it enough to 'continuously improve' those operations. The spoils of operations-based competition now go to those firms who can improve their operations fastest, and sustain that improvement over time. This fact is unlikely to go away. As the protective tissue separating the world's markets dissolves, firms everywhere have become more and more exposed to the power of those operations which have gone beyond 'world-class' - those who have learned h o w to improve more rapidly than the rest of the pack. The key is to develop a long-term improvement path - rather than glean quick-hits from the latest fad. This article by David Upton aims to provide some insight into the methods that can be deployed to build rapid and sustained improvement, by first looking at the recent history of operations improvement methods, then describing a new framework for mapping improvement paths and using it to characterize the strategies deployed by some of the world's fastest improvers. The first section presents a brief, recent history of operations improvement methods. The second section introduces a framework for describing some common starting points for building improvement. The third section describes key characteristics of successful improvement initiatives. The final section looks at ways in which firms sustain their performance growth, and describes three models of continuous improvement. Copyright © 1996 Elsevier Science Ltd

and techniques. Many of these appeared, at the time, to offer 'the solution' to the continuing problems of ailing manufacturing performance. The faddish nature of such panaceas as Value Engineering, Quality Circles, Flexible

Manufacturing Systems, Total Quality Management and Worker Empowerment often led to wide swings in managers' perception of their value - from 'good' to 'bad' - in just a few years. Each new technique, however, left its mark, and found its way into the operations manager's toolbox. The steady stream and changing nature of these methods and techniques vividly illustrate the evolution of the role of operations in corporations, and provide a window of insight into the general practical problems of building new operational capabilities. During the 1970s and 1980s many Western managers realized that corporate success was inherently transitory if not under-pinned by sound operational abilities at the operating-unit level. Corporations had experimented with a number of management fads, such as collecting firms, like stocks and bonds, into diversified portfolios. Having seen this strategy fail, they embarked on a succession of operational fixes and philosophies, which overlap yet dominate their times.

Structural A p p r o a c h e s to Infrastructural Problems In the 1970s, firms frequently attacked the problem of operations performance by addressing structural aspects of their operations strategy. In particular, a firm's facilities and sourcing strategies were often adjusted, chopped or wrenchingly changed as regimes of new managers stepped in to fix specific operations problems. Sudden, dramatic restructurings led to organizational units being selected for survival on the basis of their cost performance. Under-performing units were closed or sold-off. Components, even whole products, were often 2,15

A Brief Review of Operations Improvement Techniques
The need to improve the effectiveness of operations has, over time, given rise to a series of philosophies, tools European Management Journal Vo114 No 3 June...
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