Overall Equipment Effectiveness. Robert Hansen C.

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СКАЧАТЬ of focus, they are also often concerned with other areas. In all cases, you should understand how your area of responsibility fits into the larger picture.

      You can develop skills and a sense of understanding about managing the overall business in many ways. Traditional academic courses in business, whether at undergraduate, graduate, or vocational schools, are a common approach. At some companies, you may be given a series of three-to-six month assignments that take you from one functional area to another. These assignments help you develop an overall understanding for the company. I encourage you to proactively seek various positions in different departments and areas your factory or different factories. Do this with the intent to learn new processes and perspectives each time too gain experience and skills. Cooperative diversity is a strength in factory teams.

      Sometimes a faster way of getting exposure to a company’s complex dynamics is to participate in a simulation. Many business simulations are available. Sometimes you attend a seminar away from the company. These seminars may involve groups of employees from your company or employees from many different companies. In other cases, the person running the simulation may set up an in-house program.

Decide II: A Simulation Experience

      A few years ago, I participated in a helpful simulation exercise run over four days. The seminar, Decide II, was developed by Dr. Thomas Pray, Professor of Decision Science at Rochester Institute of Technology, Rochester, NY. The seminar consisted of several simulation exercises, alternating with short lectures and workshop activities. The class provided an excellent framework for cross-functional thinking and team building with several of my company associates. Among the results was a better understanding of many business reports and marketing approaches.

      Within the simulation, a class of up to two dozen participants is divided into three- or four-person teams. Each team forms a company and starts with the same information and resources. All the companies make an imaginary common product and compete for the same general market. Teams must set company objectives, implement strategies, and compete against each other.

      Teams select their own strategies. For example, one team may decide that its company will produce high volume/low price and pursue a large share of the market. Another team may decide to develop specialty items at high prices, securing a profitable market niche. The teams develop strategies for how their companies will manufacture and sell their products.

      Decide II uses a menu-driven Visual Basic decision-support software package. Teams enter their decisions into the Decide II software. Each team then receives immediate feedback on profits, cash flow, quality, and other measures of the effectiveness of their decisions. This feedback is based not only on the decisions made by the team itself, but also on the other teams’ decisions.

      Over the course of the simulation, teams enter a series of eight sets of decisions, with ongoing results provided each time. Thus, the second set of decisions is based on the results and new market environment from the first set of decisions. The team’s overall score is provided by the stock price, which varies relative to each company’s overall health. According to Decide II, your company is rewarded for “creating economic value by implementing a solid and ‘balanced’ business plan that generates free cash (i.e. cash from operations), economic profit, and earnings from operations.”³

      As part of the Decide II simulation, each team must make decisions covering the full range of functions, including:

      Marketing: Price, Promotion, R&D-Process, R&D-Product, Service, Customer surveys.

      Operations: Production, Labor Scheduled/Overtime, Maintenance, Material Purchases

      Finances: Capital Investment, Dividends, Securities, Market Research

      Human Resources: Headcount Plans, Training Budgets, Pay & Compensation, Employee Surveys

      The simulation also works in many of the key issues facing industry today, including:

      Total Quality Management and Customer Satisfaction

      Total Quality Costs: Prevention, Appraisal and Failure costs

      Competitive Benchmarking

      Customer and Employee satisfaction surveys and impacts

      Commitment to customer service

      Headcount Planning Linked to Production and Capital Plans

      Pay and Compensation Issues

      Personnel Training and Development elements

      Within each round of decision making, the teams use information from a variety of reports generated as part of the simulation, including:

      Operating Income Statements

      Balance Sheets

      Manufacturing Reports

      Total Quality Reports

      Cash Flow Reports

      Economic Forecasts

      Market Research Reports

      Stock Market Reports

      Participants in the simulation quickly build an appreciation of how complex individual businesses can be. They also see the importance of balancing the use of resources, assets, information, inventories, prices, and sales in order to generate net profit. Because the simulation involves several rounds in a competitive setting, participants also see how one set of decisions affects another set of decisions and results later in the process.

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