Every 30 years, since the invention of the Ford factory in the ‘20s, there have been major transformations in business management. Deming in the ‘50s started the revolution in Asian countries with the SPC, followed by JIT and TPM. In the ‘80s, Goldratt brought Westerners back to the top with the Theory of Constraints. Now, it's time to enhance the information system with continuous improvement towards the global optimum.
The sum of local optima almost always takes us away from the global great.
This model presents an Information System organized in layers, which offers an alternative for an ubiquitous language to assist investors and managers from companies of all types and sizes, involved in making business decisions.
Following the original manufacturing concepts introduced by Ford & Deming, process steps should be designed and executed according to the skills and activities required by the Process. A continuous improvement, or Kaizen, should be established with SPC, TPM and TOC assistance. The company management shall establish operational definitions, perform sampling, measurements and charts to reflect the process quality.
Deming's original text is split into the first nine rules shown at table below. But definitely, the Process is not a line, but a circle, with the planet located at the beginning and end of it. For this reason, a tenth rule is added to certify the ciclic nature of the Process.
"The process is divided into steps; the work enters in one step, changes its
state and continues, having as a client the next step. At each stage there is
production, that is, something happens, causing different output, until the
final stage, intended for the consumer."
| Step 1 ► Step 2 ► ... ► Consumer | |
|---|---|
| 1 | The Process should be divided into Steps. |
| 2 | The work enters a Step, changes its state, and proceeds with the next Step as a client. |
| 3 | At each Step, something happens in the assets entering a Step, causing their exit in a different state. |
| 4 | Each Step incorporates continual improvement of methods and procedures to meet subsequent Steps. |
| 5 | Each Step cooperates with the next and the previous, seeking optimization. |
| 6 | The Steps establish long-term trust relationships: this is what I can do for you; here's what you can do for me. |
| 7 | The final Step is for the consumer, purchaser of the product or service. |
| 8 | The Steps work together, aiming at quality and customer satisfaction. |
| 9 | Consumer is the main link of the production. |
| 10 | The Process consumes products from nature and transforms them into other products of nature. |
The company's overall performance has intermediate indices that provide a selective and detailed analysis of the sources of problems. TPM has turned time into a decision support tool that brings together concepts as diverse as stopping machines, wasted labor, and faulty parts.
| TPM | Index | gpi = ati * oti * opi * zti |
|---|---|---|
| gpi | Global Performance | The multiplication of the four partial indices. It corresponds to the overall performance, considering all sort of issues, failures and wastes registered in the Process. |
| ati | Available Time | Equivalent to Available Time divided by Working Time, that is, the amount of time that machines and equipment do not fail and production can occur. |
| oti | Operating Time | Equals Operating Time divided by Available Time. Considers the portion of time without a breakdown in production, due to lack of personnel or failure in operation. |
| opi | Operational Performance | This is equivalent to the multiplication of Operating Speed by the Production Time Index, reflecting operational speed losses. |
| zti | Zero Defect | Equivalent to Zero Defect Time, producing only perfect products, divided by Productive Time. This represents the portion of time free from rework on defective products. |
The Business Amplifier powered by a Cyclo highlights the Plan and Reality, i.e. what you want to do and what is really happening. The plan consists of managing one or more Cyclos to feed company with their respective Gains. In addition to the plan, the Information System captures the naked reality, for example, a bank statement with credits and debits in the company's account.
The Administration should confront plan with reality and promote actions when there are differences. Operating Expenses should be fed into the Company, including Labor and Overhead. Return on Investment flows back to the owner when Net Profit is available.
| Cyclo | Process Cycle that feeds bAmpli with its Gain | |
|---|---|---|
| G | Gain | Difference Between receiving Product Sales and paying Raw Materials |
| + | Investor | Business Owner |
| I | Investment | Money invested by the company |
| ADM | Administration | Company Administration |
| REAL | Reality | Capturing the reality of the facts |
| OE | Operating Expenses | Company operating expenses |
| NP | Net Profit | Company net profit |
The bAmpli Circuit, result of the association of Business Amplifiers powered by their respective Cyclos, helps investors and managers, at every level of the company, at any time, to have access to the global vision of the organization and its role in globalization.
| Indicator | Description | |
|---|---|---|
| RI | Return on Investment | Net Profit divided by Investment |
| I | Investment | It is all the money the system invests by buying things that the system intends to sell |
| NP | Net Profit | Product Sales minus Raw Material, Labor and Overhead costs |
| PS | Product Sales | It is the cash flow received from the sale of products |
| RM | Raw Material | It is the cash flow that remunarates suppliers |
| G | Gain | This is the rate at which the system generates money thru sales |
| WF | Worforce | Company expenses with Labor |
| OH | Overhead | Other fixed costs of the Company |