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Nobody Ever Gets Credit for Fixing Problems That Never Happened: Creating and Sustaining Process Improvement
Abstract
Today's managers face a paradox. On the one hand, the number of tools, techniques, and technologies available to improve operational performance is growing rapidly. On the other hand, despite dramatic success in a few companies, most efforts to use them fail to produce significant results. To understand and resolve this paradox, this article investigates the difficulties organizations face in implementing processes and techniques such as lean production, TQM, computer-aided design and development tools, stage-gate product development processes, and improved customer service systems. The inability of most organizations to reap the full benefit of these innovations has little to do with the specific technique. Instead, the problem has its roots in how the introduction of a new improvement effort interacts with the physical, economic, social, and psychological structures in which implementation takes place. This article presents a framework to understand how these failures arise and illustrates strategies for overcoming the pathological behaviors through case studies of successful improvement.
... Not only the identification of sources but also the strength of the evidence behind individual causal links can be indicated visually by the width of arrows as done by Hu et al. (2011) in a qualitative system map. In another example, Repenning and Sterman (2001) rigorously explain the details and sources of information that went into the development of their CLD with a stock-and-flow structure for a model based on various ethnographic analyses and iterative model building. They present each feedback loop in a stepwise fashion and, while presenting each loop, further integrate the sources in the text by often referring back to these sources within the explanations. ...
Transparency is a critical aspect of systems science. While transparency of quantitative models has been assessed, transparency of their qualitative structures has been less scrutinized. We assess the transparency of causal loop diagrams (CLDs), a key qualitative visualization tool in system dynamics. We evaluate System Dynamics Review ( SDR ) publications and a sample of most‐cited comparable articles in other journals. We assess the inclusion of a plain‐language methods statement, overall discernibility of the methods, and identification of causal link sources. Reviewing 72 articles ( SDR : 36; other journals: 36), only 44%, 38%, and 25% fully satisfy each criterion, respectively. SDR articles are characterized by higher transparency in the clarity of CLD development method and communication of causal link sources, yet the potential for enhancement is evident. We provide specific recommendations to increase the transparency of CLDs. Transparent reporting benefits original research authors, future expansion of CLDs, and the systems science community. © 2023 The Authors. System Dynamics Review published by John Wiley & Sons Ltd on behalf of System Dynamics Society.
... With this map, we do not intend to prove causality with scientific precision, any more than the 5-why analysis on which it is based. A rigorous model of causality can be attempted following commercial precedents (see, e.g., Repenning and Sterman, 2001). Since the size and complexity of such a model will impose high costs on the organization, we advise against it, in favor of what Rosenhead called "very limited technical apparatus . . . ...
This position paper reframes the ongoing relevance versus rigor debate in operations research (OR) as a Kuhnian epistemological crisis, in which the dominant paradigm of quantitative modeling shows signs of exhaustion. Humanitarian fleet management is presented as an empirical case of extensive operations theory, which has not been implemented by the stakeholders who paid for its production. We propose a possible way out of the crisis by combining “hard” and “soft” OR, illustrating the potential with a selected problem structuring method. Optimization solutions can become more productive by first surfacing the organizational context of decision-making. The illustration emphasizes that hard and soft OR are not binary opposites but interlocking, mutually empowering components which expand the evidence base. Shifting the current paradigm toward more engaged scholarship could counteract the ongoing theoretical drift, for more strategic impact on the pressing problems of today.
... As the world keeps on changing, chemical industries nowadays faces challenges that never happened few decades ago. (Repenning & Sterman, 2001) Some of these challenges are due to diminishing raw materials and resources, stricter regulations, new products' requirements, issues on sustainability, and competing process technologies. (Kemp & Soete, 1992) These challenges cannot be solved by using the old methods of simply trial and error. ...
Process route evaluation is a part of research and development (R&D) works in an industrial chemical project life cycle. In this early phase, good process evaluation, including process synthesis and designs, provide guidance's on the R&D project. The paper aimed to collect practical methods used in this early phase process route evaluation from author's 10 years of industrial experiences. The collected methods range from forward-backward process synthesis, functional process design, use of cost estimation, and applications of Monte Carlo simulation. Led by a good project management (e.g. via a stage-gate approach) use of these methods have shown beneficial results. Some important results are strong arguments on whether or not the project will continue, as well as relevant technical and economic issues identified during this early phase process synthesis and design. Later on, these issues become guidance's to the follow-up project, if it is continued.
... Estimates in project monitoring are prone to errors due to the inherent uncertainties and risks associated with project activities (Thamhain 2013;Hamzeh et al. 2020;Ulusoy and Hazır 2021). To manage these risks, project teams employ various risk management approaches, categorized as proactive, neutral, or reactive RMSs (Pich et al. 2002;Repenning and Sterman 2002;Kerzner 2017). Ford (2002) categorized RMSs into two behaviours: aggressive (proactive) and passive (reactive). ...
The Earned Value Management (EVM) methodology provides an index-based Estimate at Completion (EAC) formula to forecast the final cost of an ongoing project. However, neither the EVM methodology nor the literature in cost forecasting considers the occurrence of risks and how the cost contingency reserve (CC) is used to mitigate them. This study proposes a risk-adjusted cost EAC methodology based on nonlinear regression that captures the CC spending profile and exploits it to improve the EAC forecasting performance. The CC spending profile reflects the preventive, neutral, or reactive risk management strategy (RMS) adopted, which dictates how the CC reserve is depleted throughout the project execution. The framework was tested on a dataset comprising 79 constructions and engineering projects to evaluate its performance across the projects’ early, mid, and late stages. Results show that the proposed methodology provides timely forecasts—mean absolute percentage error (MAPE) improves as the project progresses—and that a proactive RMS is the most reliable one in all stages, with MAPE values of 14.57%, 12.28%, and 11.42%, respectively.
... Several articles examine the challenge to maintain the momentum of a continuous improvement program or initiative (Dale, 1996;Kaye and Anderson, 1999;Bateman, 2005;Glover et al., 2011;Holweg et al., 2018b). Repenning and Sterman (2001) build a systems dynamics model to explain why organizations fail to sustain process improvement. In their model, capability grows through improvement effort and decays by capability erosion (synonymous to process degradation). ...
Purpose
This research fills a gap in process science by defining and explaining entropy and the increase of entropy in processes.
Design/methodology/approach
This is a theoretical treatment that begins with a conceptual understanding of entropy in thermodynamics and information theory and extends it to the study of degradation and improvement in a transformation process.
Findings
A transformation process with three inputs: demand volume, throughput and product design, utilizes a system composed of processors, stores, configuration, human actors, stored data and controllers to provide a product. Elements of the system are aligned with the inputs and each other with a purpose to raise standard of living. Lack of alignment is entropy. Primary causes of increased entropy are changes in inputs and disordering of the system components. Secondary causes result from changes made to cope with the primary causes. Improvement and innovation reduce entropy by providing better alignments and new ways of aligning resources.
Originality/value
This is the first detailed theoretical treatment of entropy in a process science context.
... Although the projects provide cost savings, they bring about conflicts between the companies' short and long-term goals (Maalouf and Gammelgaard, 2016;Repenning and Sterman, 2001). In one of the interviews, a buyer said that there is a clear preference for implementing several small and easy projects instead of more significant projects that require more time to be executed: ...
Purpose
This paper seeks to understand kaizen in practice as it travels through time and space in the organisational setting.
Design/methodology/approach
A qualitative case study was carried out at a multinational company using mainly interviews for the data collection that were analysed from an actor-network theory (ANT) perspective.
Findings
This paper finds that the company deals with a series of paradoxes while managing the kaizen process. Efficiency and quality paradoxes are the basis for starting kaizen projects. Furthermore, intrinsic, and extrinsic motivation, emerge in these processes, and paradoxes relate to how spontaneous ideas emerge in a deliberated context of cost-saving objectives. The supply chain finance team coordinates kaizen projects with the collaboration of plant managers, promoting the paradox of autonomy and control. In addition, as kaizen mobilises and enrols the actors, some trials of strength emerge, showing actors who oppose the kaizen network and create competing networks that mutually exist in the firm.
Practical implications
This study presents valuable insights for professionals to successfully implement kaizen methodologies that take advantage of developing a network for problem-solving in organizations.
Originality/value
This study highlights the supply chain finance team's role in enrolling the actors within a network built by practitioners engaged in kaizen projects. Usually, engineers, quality, or manufacturing teams lead kaizen projects, and only occasionally, accounting and financial teams participate, including multidisciplinary teams.
Keywords Actor-network theory, Trials of strength, Paradoxes, Competing networks, Kaizen, Management control
Revista electrónica de Computación, Informática, Biomédica y Electrónica es una publicación periódica de la División de Electrónica y Computación del CUCEI (Centro Universitario de Ciencias Exactas e Ingenierías) de la Universidad de Guadalajara que publica artículos de interés para la comunidad científica en las áreas de las Ciencias de la Computación e Informática, Biomédica y Electrónica. ReCIBE es semestral y publica artículos inéditos, arbitrados, en inglés y español, que abordan resultados, análisis reflexivos y revisiones del estado del arte de áreas específicas de investigación y desarrollo de tecnología. Nuestra audiencia principal son maestros, investigadores, estudiantes y profesionales de la industria de las áreas de: Computación, Informática, Biomédica, Electrónica y Comunicaciones.
Technological innovation can disrupt the competitive landscape of an industry and the performance differential of incumbents and their challengers. The challenge for both is to adapt to their changing competitive conditions and environmental dynamics. Adaptation necessitates timely responses, rapid and flexible product innovation, and ambidexterity i.e. managing over time the tension between exploitation for short term gains and exploration for long term improvement in performance. This paper develops a model of innovation and competition in Formula 1 racing where technology development, new team entry, organizational and supplier changes, and annual regulation changes place a premium on ambidexterity as a dynamic capability for firm adaptation. Simulation results show how firm level and environmental changes such as organizational changes and resource acquisition, influence team capability development and erosion and can alter the intra industry performance differential in favour of incumbents or their challengers.
Recent evidence suggests the connection between quality improvement and financial results may be weak. Consider the case of Analog Devices, Inc., a leading manufacturer of integrated circuits. Analog's TQM program was a dramatic success. Yield doubled, cycle time was cut in half, and product defects fell by a factor of ten. However, financial performance worsened. To explore the apparent paradox we develop a detailed simulation model of Analog, including operations, financial and cost accounting, product development, human resources, the competitive environment, and the financial markets. We used econometric estimation, interviews, observation, and archival data to specify and estimate the model. We find that improvement programs like TQM can present firms with a tradeoff between short and long run effects. In the long run TQM can increase productivity, raise quality, and lower costs. In the short run, these improvements can interact with prevailing accounting systems and organizational routines to create excess capacity, financial stress, and pressure for layoffs that undercut commitment to continuous improvement. We explore policies to promote sustained improvement in financial as well as nonfinancial measures of performance.
Managers and scholars have increasingly come to recognize the central role that design and engineering play in the overall process of delivering products to the final customer. Although significant progress has been made in the design of effective product development processes, many firms still struggle with the execution of their desired development process. In this paper a model is developed to study one hypothesis to explain why firms experience such difficulties. The analysis of the model leads to a number of new insights not present in the existing literature. First, the analysis shows that under a plausible set of assumptions product development systems have multiple steady-state modes of execution (or equilibria). This insight suggests that it is possible for product development systems to get “;trapped” in a state of low performance. Second, the analysis highlights that, for multiple equilibria to exist, a positive loop must dominate the system. The conditions required for such dominance are also provided. Third, the analysis demonstrates that the sensitivity of the system to undesirable self-reinforcing dynamics is determined by the utilization of resources. Fourth, simulation experiments show that testing delays also play a critical role in determining the system's dynamics. Finally, one extension to the model is considered, the introduction of new development tools, and policies for performance improvement are discussed. Copyright © 2000 John Wiley & Sons, Ltd.
Understanding the wide range of outcomes achieved by firms trying to implement Total Quality Management (TQM) and similar process improvement initiatives presents a challenge to management theory: A few firms reap sustained benefits from their programs, but most efforts fail and are abandoned. In this paper I study one dimension of this phenomenon: the role of impending layoffs in determining employee commitment to process improvement. Currently, the literature provides two opposing theories concerning the effect of job security on the ability of firms to implement change initiatives. The "Drive Out Fear" school argues that firms must commit to job security, while the "Drive In Fear" school emphasizes the positive role that insecurity plays in motivating change. In this study a contract theoretic model is developed to analyze the role of agency in process improvement. The main insight of the study is that there are two types of job security, internal and external, that have opposing impacts on the firm's ability to implement improvement initiatives. The distinction is useful in explaining the results of different case studies and can reconcile the two change theories.
Successful development projects are critical to success in many industries. To improve project performance managers must understand the dynamic concurrence relationships that constrain the sequencing of tasks as well as the effects of and interactions with resources (such as labor), project scope and targets (such as delivery dates). This article describes a multiple-phase project model which explicitly models process, resources, scope, and targets. The model explicitly portrays iteration, four distinct development activities and available work constraints to describe development processes. The model is calibrated to a semiconductor chip development project. Impacts of the dynamics of development process structures on research and practice are discussed.