• Return-On-Investment is a key measure of an Enterprise’s ability to operate in the
business environment and market of its own choosing.
• Efficiency (from a Return-On-Investment standpoint) is the ability of an Enterprise
to produce a product or provide a service with minimum effort, expense,
and waste.
• Effectiveness (from a Return-On-Investment standpoint) is the ability of an Enterprise
to produce a product or provide a service meeting customer requirements
and the demands of other interested parties.
• Return-On-Investment = Effectiveness / Efficiency = Output / Input
•Enterprise Management exerts prime responsibility for organizational leadership in
Return-On-Investment considerations.
Take-Make-Break paradigm:
• Productivity is rejuvenated by taking vast quantities natural resources, making products
to be mass marketed, and replacing (i.e., breaking) products as they are sold.
Realize-Capitalize- Customize paradigm:
• As products or services are realized, they are capitalized through partnerships and
customized to satisfy the wants of customers.
David L. Kellogg (29 July 2003)
BROKERS
PRINT
MEDIA
MUTUAL
FUNDS
LEGAL
EAGLES
GOVT.
DOMINANT
21ST CENTURY
INVESTMENT
MONEY
MEN
STOCK
SWAPS
CPAs
BANKERS
ANALYSTS
ACADEMIA
NEWS
MEDIA
David L. Kellogg (29 July 2003)
Global Competition and 21st Century World Events have changed the way Enterprises
must transact business.
G
•
•
•
Quality Goods and Services are no longer expected, they are DEMANDED.
[Note: Before they are DEMANDED, they must be WANTED.]
Such DEMANDS require ACTION, not TALK.
[Note: Establishing WANT also requires ACTION, not TALK.]
ISO 9000:2000 World-Wide Standards provide guidance and identify Required
Actions for Agile Enterprises of the 21st Century.
1.
ISO 9000:2000 – addresses Quality Management Principles and Fundamentals.
2.
ISO 9001:2000 – addresses Requirements for Quality Management Systems.
3.
ISO 9004:2000 – provides Guidance for establishing a Quality Management System.
4.
ISO 19011 – provides Guidance for Planning and Conducting Quality Management
Audits.
David L. Kellogg (29 July 2003)
ISO GENERAL ASSEMBLY: Principle officers of annual business meeting
COUNCIL
Organizational governance by principle officers and 18 elected members
Brazil
Botswana
Czech Republic
Egypt
Norway
Sri Lanka
France
United Kingdom
Germany
Russia
Singapore
Trinidad/Tobago
USA
China
Malaysia
Japan
South Africa
Italy
Operational Consequences of ISO 75% Ratification Procedure:
1.
Majority votes of 51% - 74% cannot ratify proposed standards.
2.
Minority votes of 26% - 50% can refuse to support the Majority.
End Result: ISO Standards take too long in an Agile Economy and
the ISO Standard for “Agility” was needed yesterday.
David L. Kellogg (29 July 2003)
Continual Improvement of Quality Management System
Customers
(other
interested
parties)
Management
Responsibility
Resource
Management
Customers
(other
interested
parties)
Measurement & Analysis
Improvement
Plan
Act
Do
Check
Requirements
Input
Product
Processes
Process Management
(Product Realization)
Processes
Output
Note1: Under the take it, make it, break it paradigm “Requirements” are the Input and
“Product” is the Output.
Note 2: Under the realize, capitalize, customize paradigm “Wants” are the Input and
“Requirements” are the Output.
David L. Kellogg (29 July 2003)
Enterprise Processes
Project Processes
Technical Processes
Enterprise Environment
Management Process
Project Planning
Process
Stakeholder Requirements
Definition Process
Investment Management
Process
Project Assessment
Process
Requirements Analysis
Process
System Life Cycle
Management Process
Project Control
Process
Architecture Design
Process
Resource Management
Process
Decision Making
Process
Implementation Process
Integration Process
Quality Management
Process
Agreement Processes
Risk Management
Process
Configuration
Management Process
Transition Process
Information
Management Process
Operation Process
Validation Process
Maintenance Process
Acquisition Process
Disposal Process
Supply Process
The System Life Cycle Processes
David L. Kellogg (29 July 2003)
Verification Process
Organization A
Organization C
Enterprise
Processes
Enterprise
Processes
Project
Processes
Technical
Processes
Agreement
Processes
Organization B
Agreement
Processes
Project
Processes
Technical
Processes
Note: Unique applicability to the
Realize-Capitalize-Customize paradigm.
Enterprise
Processes
Project
Processes
Technical
Processes
Agreement, Enterprise, Project, and Technical Processes
in Cooperating Organizations
David L. Kellogg (29 July 2003)
Enterprise Infrastructure Services
Strategic
Planning
Market
Selection
and
Business
Planning
Business
Pursuit
and
Capture
Product
Realization
Customers
Product
Realization
Program
Planning
and
Resource
Allocation
Product
Development
Wants
Development
Needs
Development
Product
Manufacture
and
Delivery
Generic 21st Century Enterprise Process
David L. Kellogg (29 July 2003)
Product
Support
Project and Technical Management
Develop
and
Validate
Requirements
Develop
the
Product
Concept
• Determine
Customer
Requirements
• Analyze
Customer
Requirements
• Validate
Requirements
• Document
Requirements
• Develop
Alternative
Product and
Mfg. Concepts
• Model and
Validate
Product
Concepts
• Select
Preferred
Concept
• Refine and
Verify
Product and
Mfg. Concept
• Document
Product and
Mfg. Concept
• Determine
Potential
Suppliers
David L. Kellogg (29 July 2003)
Develop
the
Preliminary
Product
Description
• Develop
Alternate
Preliminary
Product and
Mfg. Design
• Model
Product
Preliminary
Designs
• Select
Preferred
Preliminary
Design
• Refine and
Verify
Preliminary
Product and
Mfg. Design
• Document
Preliminary
Design
Develop
the
Detailed
Product
Description
• Develop
Detailed
Product and
Mfg. Design
• Analyze
Product and
Mfg. Design
• Verify Design
Details
• Release
Detailed
Product and
Mfg. Design
for
Prototypes
• Select
Suppliers
Verify
and
Certify
Product
• Build
Product and
Mfg.
Prototypes
• Verify
Product
• Verify Mfg.
Processes
• Certify
Product
Release
to
Production
• Release Final
Definition of
Product and
Mfg.
Generic
Product
Development
Process
Maturity
Level
Performance
Level
1
No formal
approach
No systematic approach evident, no results,
poor results, or unpredictable results.
2
Reactive
approach
Problem-based or corrective-based
systematic approach, minimum data on
improvement results available.
3
Stable formal
system approach
Systematic process-based approach, early
stage of systematic improvements; data
available on conformance to objectives and
existence of improvement trends.
4
Continual
improvement
emphasized
Improvement process in use; good results
and sustained improvement trends
5
Best-in-class
performance
Strongly integrated improvement process;
Best-in-class benchmarked results
demonstrated.
Guidance
ISO 9004:2000 Performance Maturity Levels
David L. Kellogg (29 July 2003)
Malfeasance
Level
Performance
Level
Description
5
No formal
approach
Total discretion of executive
management on case-by-case basis.
4
Reactive
approach
Executive management somewhat
constrained by past decisions on
case-by-case basis.
3
Stable formal
system approach
Executive management constrained
by past decisions across all cases.
2
Continual
improvement
emphasized
Executive management no longer
exercises discretion on case-by-case
basis.
1
Best-in-class
performance
Executive management no longer
directly involved.
Levels of Executive Malfeasance
David L. Kellogg (29 July 2003)
•
Before Status Quo can be overcome, it must be defined.
•
Simply characterizing Status Quo as the way things are will not do.
•
THERE IS A REASON FOR THINGS TO BE THE WAY THEY ARE. FIND IT!
•
The Reason must be understood.
•
Not knowing the Reason has consequences.
1. You cannot quantify Effectiveness.
2. You cannot quantify Efficiency.
3. You cannot determine the Return-On-Investment.
•
Knowing Why you do What you do is the new 21st century requirement.
•
“Just Do It!” – Nike Shoe Company
David L. Kellogg (29 July 2003)