Complex relations of production and organizational diagnosis. Caroline Gonçalves Universidade Federal de Santa Catarina UFSC

Transcription

1 Complex relations of production and organizational diagnosis Caroline Gonçalves Universidade Federal de Santa Catarina UFSC Centro Sócio-Econômico, Departamento de Ciências da Administração. Campus Universitário Trindade Florianópolis SC Brasil Phone: 55 (48) Janaina Piana Universidade Federal de Santa Catarina UFSC Centro Sócio-Econômico, Departamento de Ciências da Administração. Campus Universitário Trindade Florianópolis SC Brasil Phone: 55 (48) Marcelo de Souza Correia Universidade Federal de Santa Catarina UFSC Centro Sócio-Econômico, Departamento de Ciências da Administração. Campus Universitário Trindade Florianópolis SC Brasil Phone: 55 (48) Rolf Hermann Erdmann Universidade Federal de Santa Catarina UFSC Centro Sócio-Econômico, Departamento de Ciências da Administração. Campus Universitário Trindade Florianópolis SC Brasil Phone: 55 (48) POMS 22 nd Annual Conference Reno, Nevada, U.S.A. April 29 to May 2, 2011

2 Abstract The organizational environment complexity is increasing because of the competitiveness and the many ways of decision making. Considering this fact, this paper proposes the development of an instrument of organizational diagnosis based on the complex relations of production systems and factors of competitiveness. One aim, through this, is assess and improve the performance of industrial organizations. The evaluation and validation of this instrument was made in a meat packing company in southern Brazil. The results point to a consistent set of measures developed that provides global vision of the organization and provides support to decision making and management of results. It was also verified the interdependence of the categories assessed, which produces a positive multiplier effect on the inference of individual improvement. Key Words: Complex relations, Organizational diagnosis, Competitivity, Performance evaluation 1. Introduction The field of studies about the best production pratices has been developed and pursued new ways of organizational management and business performance diagnostics. Benchmarking practices are strengthening these studies opening a way for new ideas and solutions to industrial issues. From the point of view of complexity theory, a new management paradigm has assumed importance in the organizational scenario, when shown to be an alternative to a segmented view of component parts of the company, to give space to a view of the

3 whole, through the interrelation between the sectors and, thus, enable the diagnosis and resolution of conflicts. The methods of diagnosis, for its part, need to demonstrate their importance in competitive scenarios on which is the organization. They should contain indicators really needed, be clear and emphasize important goals to diagnose organizational performance. So, based on factors of competitiveness, on the complex relationships of organizations and on providing support to decision making, this study will demonstrate the construction and validation of a diagnostic method, using the scientific theory and practical application in a meat packing company in southern Brazil, checking relevant items about the organization and the tool developed. 2. Industrial benchmarking: an approach to the analysis categories According to Riccio, Lim and Peters (1995) benchmarking emerged when Europeans and Americans, after starting to lose market share to the Japanese, who had products with lower prices and usually better quality, they found that years before the Japanese came en masse to Western countries to gain knowledge about the technologies that were emerging and finding original ways to use them, resulting in competitive advantage. Camp (1995) considers benchmarking an exercise of a course correction, nothing more than an instrument of quality, one of many ways to improve and increase productivity. But as opposed to many of his predecessors, benchmarking is rooted in fundamental management methods that have been widely practiced for years. In this context, Boxwell (1996) says that benchmarking supports strategic planning and leads strategic analysis to the next level of detail, what is necessary to win on the front lines.

4 The benchmarking model of world-class production system developed in the Made In Europe is based on the central hypothesis that the adoption of best practice by a company takes to achieve superior operating performance (HANSON; VOSS, 1995). This model analyzes the company in general from six areas: 1. Organization and Culture: The culture of an organization is its way of thinking and acting, which is reflected in their behavior in different situations and areas. It focuses on the existence of a future vision for the organization and internalized at all levels of the vision and mission and goals derived. Other aspects considered relate to the interaction (participation) of employees, development and harmony with other organizations. The results manifest themselves directly at the level of employee satisfaction and, indirectly, the performance indices of various areas. 2. Logistics: Represents the interface for communication with the market, which assesses understanding of customer expectations and translating into product specifications, responsiveness and design for manufacture. The area has indicators of logistics practice focusing on issues such as relationships with suppliers, implementation of pull production and issuing of production orders for the line. As for the performances of the logistics, the indicators measure the cycle times of production, supplier delivery times and the time of delivery to the customer. 3. Production systems: refers to the automation level of the installed equipment and the integration of information systems at the factory and concern for investments to modernize the industrial park. Its effect on company performance is the speed and efficiency of processing of customer orders needed to respond to the market. 4. Lean Production: Refers to the planning, programming and production control. Their indicators relate to: manufacturing flexibility, supply chain management, pull production, equipment layout, organization and cleanliness of the factory, maintenance and scope of the assessment of company performance. The effects on performance are

5 measured by indicators that assess productivity, cycle times of production, tool change time and levels of material in stock and in moving. 5. Concurrent Engineering: Concurrent engineering is basically the practices used to integrate the process of new product development and engineering with the production itself, as well as evaluating the interface for external communication of the company, ie, customer service and satisfaction of customers and suppliers. The effect on performance is measured by indicators of speed of introducing a new product in production, level of internal defects and defect level in the initial production of a new product. 6. Total Quality: it examines the degree of implementation of the principles of total quality management. Evaluate the implementation of practices concerning the use of benchmarking, documentation and standardization of the production process, formulation of the vision of quality, training of employees in problem-solving tools and guidance from the company to the client. Indicators measuring the performance associated are the capacity of the production process to produce according to the specifications of the product design, product reliability when used by the consumer, the level of internal defects, productivity and customer satisfaction. However, the six items described by Hanson and Voss (1995) were very broad and also other key areas should be taken into account. Thus, were chosen 13 categories of analysis in order to complement the six elements described by Hanson and Voss (1995): It is understood here "categories of analysis" the areas or subsystems that represent a production system. Areas (Hanson and Voss, 1995) Organization and Culture Definition The culture of an organization is its way of thinking and acting, which is reflected in their behavior in different situations and areas. The Category of analysis established Organization and Culture Definition Can be illustrated as a panel of corporate identity, whose values that constitute the profile of the organization take the form of images, legends, rituals, heroes and villains, conflicts of roles,

6 Logistics results manifest themselves directly at the level of employee satisfaction and, indirectly, on the performance indices of various areas. Represents the interface for communication with the market, which assesses understanding of customer expectations and translating into product specifications, responsiveness and design for manufacture. The area has indicators of logistics practice focusing on issues such as relationships with suppliers, implementation of pull production and issuing of production orders for the line. As for the performances of the logistics, the indicators measure the cycle times of production, supplier delivery times and the time of delivery to the customer. Health and Safety Cycle time Environmental Management areas of tension and resistance, behavioral dilemmas, references, sources of leadership, patterns of attitudes, myths and other symbolic dimensions, according to Rocha (1996). It is the relationship between the organization/culture that affects the employees. It is understood as a set of actions of an organization that involves diagnosis and improved deployment and management innovations, technological and structural changes within and outside the workplace in order to provide conditions for full human development and during work (SCHULTZ, 2008 ). It is the amount of time a unit of a product needs to be produced. According to Black (1998), the leveling of quantity consists in the adjustment of lots of production and synchronization of processes with a view to reliability of time periods, allowing greater flexibility in production. Is the set of guidelines and principles that should guide the development and implementation of legal instruments and institutional planning and environmental management. The improvement can be achieved in the company's environmental performance, by decreasing levels of effluent or the best combination of inputs, and always will represent a gain of energy or matter contained in the production process, plus better customer relationship and suppliers (SCHULTZ, 2008). Production Systems Refers to the level of automation of the equipment installed and the integration of information systems at the factory and concern about investments to modernize the industrial park. Its effect on company performance is the speed and efficiency of processing of customer orders, needed to respond to the market. Equipment and Technology Investments It is a careful combination of computer controls, communications, manufacturing processes and related equipment, which allow the productive sector to respond quickly, economically integrated and to significant changes in its operational environment (Greenwood, Hinings 1988). Investments represents all capitalization applied to productive assets of the organization.

7 Lean Production Concurrent Engineering Refers to the planning, programming and production control. Their indicators relate to: manufacturing flexibility, supply chain management, pull production, equipment layout, organization and cleanliness of the factory, maintenance and scope of the assessment of company performance. The effects on performance are measured by indicators that assess productivity, cycle times of production, tool change time and levels of material in stock and in moving. Concurrent engineering is basically the practices used to integrate the process of new product development and engineering with the production itself, as well as evaluating the interface for external communication of the company, ie, customer service and satisfaction of customers and suppliers. The effect on performance is measured by indicators of speed of introducing a new product in production, level of internal defects and defect level in the initial Production Planning Production Programming Production Control Operating Performance Factory Development of New Products Plan is to determine action plans for the future, based on the objectives that the organization wants to achieve. These plans will guide all actions of the organization, and will inform managers and employees, supporting their activities (Slack, 1997). Schedule production of services is to establish in advance the activities to be performed during the production process. The act of scheduling the activities of services allows the employees know how and when to act, enabling greater efficiency and higher productivity (Slack, 1997). The control function is designed to ensure that activities occur on schedule, identifying and correcting faults, allowing the service that best suits the needs of customers (Slack, 1997). Consists of an organizational system composed of a complex inter-related parameters or performance criteria, which are the effectiveness, efficiency, productivity, quality, innovation and profitability (for profit centers) or budget (for the centers cost and nonprofit organizations) (SINK, Tuttle, 1993). The organization and accessibility of the work environment is a fundamental requirement in production management. As the organization presents a correct disposition of their machines, tools and workers, a synergy of the parts is created, providing a more responsive and effective performance (SCHULTZ, 2008). It is the study of product development, which in the strategic framework, can be seen as an ongoing attempt to articulate the needs of the market, the possibilities of technology and expertise of the company, allowing the company to continue business (Cooper, Edgett; KLEINSCHMIDT, 1997). It is directly influenced by three objects: cost, time and quality.

8 production of a new product. Total Quality It examines the degree of implementation of the principles of total quality management. Evaluate the implementation of practices concerning the use of benchmarking, documentation and standardization of the production process, formulation of the vision of quality, training of employees in problemsolving tools and guidance from the company to the client. Indicators measuring the performance associated are the capacity of the production process to produce according to the specifications of the product design, product reliability when used by the consumer, the level of internal defects, productivity and customer satisfaction. Quality It is understood as the absence of errors, ie not to make mistakes in forming products (Slack, 1997). In this case means the structure and methods established by the organization in order to obtain better quality results. Table 1 Category of Analisys Therefore, the categories of analysis, Cycle Time, Quality, Factory, Equipment and Technologies, Investment, Operational Performance, Environment management, Health and Safety, Organization and Culture, Planning, Programming and Production Control define the production system to be considered in development of diagnostic tool proposed in this paper. 3. Factors of Competitiveness Competitive priorities can be defined as a consistent set of performance characteristics that will compose the manufacturing, and through this, the organization's competitiveness will increase (Castro et al 2008).

9 This concept, according to Castro et al (2008), became important in the production after the work of Skinner (1969). Skinner and other authors identified, initially, five basic competitive priorities. These were cost, quality, flexibility, speed and reliability. These priorities have become directly on features, which are used to describe various processes by which a company can add value to the product offered. After the work of Skinner, competing priorities have adapted to the new manufacturing environment and have become more numerous. Despite the existing differences between some competitive advantages, some advantages that appear to have different aspects on the basis of its concept, content and / or training process shows characteristics very similar to each other just remodeled by the way the authors conceive of the organization and understands its operation. Lozano et al (2011) in a study which analyzed 486 published articles about competitiveness in the period from 2000 to 2009, identified fifteen factors of competitiveness. They are: Strategic Alliance, Human Capital, Reliability, Knowledge, Cost, Cultural Factors, Flexibility, Innovation, Quality, Speed, Social Responsibility, Customer Relations, Control Systems, Production Techniques and Information Technology and Communication. The Strategic Alliance is based on organizational principles which seek to convey relationships between competitors, distributors and suppliers of raw materials and equipment in order the distribute risk and increase competitive ability. The factor Human Capital seeks to demonstrate that the goals of an organization will be achieved successfully if they are focused on policies enhancing human capital through training and social integration of individuals and motivation. The Reliability relates the relationships with suppliers and equipment efficiency. These follow the principles of keeping the promise of delivery, have a plan to avoid

10 surprises, check the occupation of the resources and monitor the activities of production (Slack, 1997). The factor Knowledge is also a critical success factor in the dynamic and borderless society today. The availability of knowledge to the right people at the right time is crucial for the construction and maintenance skills of an organization (ALAZMI, 2003). The factor Cost is related to actions taken to modify processes or product in search of the final price reduction through the manufacturing of products with few details on the finish and greater functionality, simpler forms and standardized and made with cheaper material (Slack, 1997). The Cultural Factors are related to organizational culture, ie, it refers to ideologies, values, laws and verifiable daily rituals in an organization. Flexibility, also considered a factor, aims to develop rapid response of the organization to environmental changes (Slack, 1997). As for Innovation, it justifies the organizational strategies that aim to develop new ways to act to solve problems and to raise the level of results. The Quality based principles seek to meet the expectations of customers regarding products and services and technical needs of the organization, reducing errors and costs. The Speed is based on work fast. The proposal is to do the time interval between the onset of the manufacturing process and product delivery to the customer be small, smaller than that offered by competitors. The factor that tries to meet and satisfy the needs and expectations of customers and generate the loyalty of relationship with them is the Relationship with Customers. Corporate Social Responsibility is related to social concern in manufacturing processes, as these are gaining prominence in texts which discuss ways to promote

11 competitiveness. The adoption of social accountability measures can improve the performance of manufacturing processes and organizational productivity through the use of resources appropriately, and also by strengthening the company's image in the perception of the market. Control Systems are based on control and standardization of operations and seek to establish mechanisms to ensure that the final product contains the specifications predetermined by the company. Production Techniques are related to the adoption of practices of waste reduction, resource efficiency, continuous improvement and value-added on the production stages. Information Technology and Communication refers to the technological resources available that provide capture, storage, processing and dissemination of corporate information. It is mainly characterized by the disappearance of barriers between companies and between sectors. Moreover, it is responsible for the provision of means of communication with your organization's internal and external actors with respect to information relevant to the operational environment. From these competitive factors identified by Lozano et al (2011), they were classified into factors of practical and factors of results. The factors of practice represent the patterns or profiles of good organizational practices, ie, attitudes, skills or efforts that the organization should have and which reflect the company's results. Thus, factors of practice are the follow ones: Strategic Alliance, Human Capital, Knowledge, Cultural Factors, Flexibility, Innovation, Social Responsibility, Customer Relations, Control Systems, Production Techniques and Information Technology and Communication. In turn, factors of result are understood by able to provide competitive features directly to the organization: the costs (low), flexibility (product and process, if high),

12 reliability (the product in use, delivery, is high), speed (delivery, service provision, if high) and quality (product and process, if high). Finally, the development tool is based on the use of categories of analysis and the competitive factors in order to establish relations that will serve to analyze the current situation of the company. 4. Complexity Theory The aim is to use complexity theory to support the understanding and use of the diagnosis of this company, seeking to consider the interactions and interrelationships that occur in an organization and around it. The objective is to understand that in an organization there are many interactions both within the organization itself as in its external environment. In this way we see that the complexity is concerned to analyze the interactions that occur. Thus, according to Morin (1982), it is always necessary to consider that behind the order and organization, there is a disorder marked by uncertainties, ie, the organization cannot be reduced in order to comprehend its behave and its produce. (Morin, 1982, p. 73). Considering all the nuances that may be at the environment of organizations is necessary for a closer look, see what happens in the many relationships in organizations, seeking to avoid determinism. For Serva (2010) understanding of the world necessarily involves the concept of event or occurrence, confirming the fundamental principle of the paradigm of complexity, which is the removal of the determinism and its relationship to the chance. The complexity consists of the continuous self-production, self-organization and autonomy of systems. Corroborating this idea Serva (2010) says:

13 Thus, the studies of Morin leads the principles and characteristics of the paradigm of complexity, always referring to the notions of order, disorder, organizational integration and disintegration. According to the author, while the old one-dimensional science provided a single method for all sciences, the new interdisciplinary science is structured through the communication of knowledge physical, biological cultural. It may be noted that the complexity of Morin (1982), at first glance is an heterogeneous tissue of constitutions that are inseparably linked. It puts the paradox of one and multiple. In a second moment it is the fabric of events, actions, interactions, feedbacks, determinations and chances, which constitute our phenomenal world. Science for many years lived a static state, in the sense that everything tends to balance, ie, whether sought to quantify and create mathematical formulas to explain the phenomena occurring. It was thought that one could elucidate all problems through science and this with equations that would explain the workings of everything: from the environmental phenomena such as storms up to the reaction of a living cell. For some time it was believed that there was a certain linearity of natural factors, considering that there was an explanation and causal logic to everything. However, what is the complexity shows is that this linearity is not necessarily, or better speaking, in most cases it is an exception. Moreover, it is important to consider that the internal and external factors have an influence in an organization's performance and that the interactions that occur between them should be considered and cannot be forgotten. With this, look at the processes involved in the light of the complexity is of great value to try to understand these interrelationships. 5. Methodological Procedures

14 The first stage of the research has an exploratory nature. We performed a bibliographic survey for each information required for the constitution of the tool. For the development of categories of analysis, ie, the areas that constitute a production system that the tool should provide, we used the ideas of Benchmarking Industrial proposed by Hanson and Voss (1995). In addition, we used the theme of competitiveness factors to define the objectives that companies must follow to achieve good results. Finally, we used the Complexity Theory as a contribution to thinking the production system, where any action taken by its members are reflected in the entire system. The second stage sought to develop a diagnostic tool. The logic of building this tool is to evaluate each category of analysis in relation to factors of competitiveness (the result), using tables which consisting of statements that should be examined by members of the organization. The relationship between each category and factor of competitiveness has generated a result of assertion, which is based on factors of competitiveness in practice. Thus, the relationship between the thirteen categories and the five factors result originated sixty-five assertions that seek to evaluate how each category contributes to the achievement of competitive factors in organizations. Each assertion has two explanatory scenarios, one bad and one good, which are designed to facilitate understanding of the respondents and help their ratings on a Likert scale (one to five). That is, if the company's situation, as perceived by respondents, is most conducive to the optimal scenario, the note should be closer to five. On the other hand, if in the opinion of respondents, the company's situation is similar to the terrible scene, the note should be low, close to one. In the third step, the tool developed was applied in a meat packing company to see their potential and validate the final analysis.

15 The company, headquartered in Jaragua do Sul, Santa Catarina, southern Brazil, is specialized in slaughter and commercialization of mallard, ducks and rabbits. The filling of the tool was made by the Financial Advisor of the company along with the Industrial Manager and then performed the analysis. After data collection, tabulation was done in Excel. At this point, we calculated the average of the categories and factors of competitiveness, which served to point out which categories and what factors had the highest and lowest performance. 6. Results Given the set of measures developed, the results can be analyzed as a whole as well as grouped by category of analysis and by factor of competitiveness. Observing the results obtained by applying in the organization, the following considerations can be done: Figure 1 Ranking by Category of Analysis

16 The results indicate a low performance in new product development, equipment and technology investments, categories of analysis that had a mean score of 3.2 points at scale 1-5. We can see the close relationship between these categories and it is inferred that the improvement on each of the positive effects it could transmit to others. There is also the high performance of the category "Health & Safety" with a score of 4.2, expected for a company in the food industry, and even more in "Production Scheduling", with a score of 4.6, which reflects the reliability observed at chart below. Figure 2 Ranking by Factors of Competitiveness It is perceived that although are reduced the efforts on "new product development", "equipment and technology" and "investments ", the "cost" is in a good scenario, an average of 3.8 in overall score. Was detected a high standard of "reliability" of the company, with an average score 4.0 and the needs of improvement in "quality" and "speed", which yielded the lowest among the factors of competitiveness. In addition to viewing the global scenario of the organization and establishing the existence of complex relationships between all areas of a production system, the method

17 allows to identify, through the presentation of findings in the field, the competitive factors that stand out most in each category analysis and identify where are the weaknesses of the organization, as well as opportunities for improvement. It is possible that the decision-making be oriented with bases in organizational studies from the perspective of the complex relationships (instead of the paradigm of segmented view of the problems of the organization) and the results be managed with awareness and consistency, through the strengthening of relations between categories and factors of competitiveness of the diagnostic performance of the organization. 7. Concluding Remarks Organizational studies from the perspective of the complex relationships have proved a convenient change of paradigm, from a segmented view of the organization's problems to an interconnected approach to it. This research allowed us to develop a method of organizational diagnosis, based on the complex relationships of a production system in order to glimpse possibilities for the organization meet its performance in different areas: Cycle Time, Quality, Factory, Equipment and Technologies; Operating Performance ; New Product Development, Environmental Management, Health and Safety, Organization and Culture, Investments, Planning, Programming and Production Control, and the result of factors: quality, cost, flexibility, reliability and speed through tables formed by statements based on practical factors, factors that are essential for organizational success. The application of the instrument in a meat packing company verified that it has good standards in reliability and cost factors and in the follow categories: Health and Safety, Planning and Production Control. And worst performing in the other results. Thus, we conclude that besides the global view of the scenarios of the organization and establishing the existence of complex relationships between all areas

18 of a production system, the method allows to identify, before the presentation of findings in the field, the points where the company stands out more and its weaknesses. 8. References ALAZMI, M.; ZAIRI, M.. Knowledge Management Critical Success Factors. Total Quality Management. Vol.14. Nº BLACK, J. T. O Projeto de Fábrica com Futuro. Porto alegre: Artes Médicas, 1998 BOXWELL, R. J. Vantagem competitiva através do benchmarking. São Paulo: Makron Books, CAMP, R.C. Folha Management. Procure nas outras empresas a melhor solução para seu negócio. n. 07, São Paulo, 25 set CASTRO, M. de; SANTOS, F. C. A.; SILVA, E. M. Da. A relação entre prioridades competitivas e indicadores de desempenho: survey em empresas moveleiras. SIMPÓSIO DE ADMINISTRAÇÃO DA PRODUÇÃO, LOGÍSTICA E OPERAÇÕES INTERNACIONAIS, 11., 2008, São Paulo. COOPER, R. G.; EDGETT, S. J.; KLEINSCHMIDT, E. J. Portfolio Management in New Product Development: lessons from the leaders. Research Technology Management, v. 40(5). pp GREENWOOD, R.; HININGS, C. R. Organizational design types, tracks and the dynamics of strategic change. Organization Studies, v. 9, n. 3, pp , HANSON, P.; VOSS, C.. Benchmarking best practice in European manufacturing sites. Business Process Re-engineering & Management Journal, v. 1 n. 1, 1995, pp LOZZANO, M. L. et al. Fatores de competitividade organizacional. Brazilian Business Review, 2011 (no prelo). MORIN, E. Ciência com consciência. Lisboa: Europa-América, 1982.

19 RICCIO, E.L., LOPES, A.B., PETERS, M.R.S. Revista brasileira de administração contemporânea. Controladoria e benchmarking; aplicação em uma empresa de classe mundial, v.1, n.4, ROCHA, E.. Como mapear as culturas organizacionais. Jornal do Brasil, 21 abr SERVA, M.; DIAS, T,; ALPERSTEDT G. (2010). Paradigma da Complexidade e Teoria das Organizações uma Reflexão Epistemológica. Revista de Administração Pública. Rio de Janeiro FGV SCHULZ, A. A.. Relações complexas na administração da produção. Dissertação (mestrado). Universidade Federal de Santa Catarina. Programa de pós-graduação em Administração. Florianópolis, SINK, D. S; TUTTLE, T. C.. Planejamento e Medição para a Performance. Tradução de Elenice Mazzili e Lúcia Faria Silva. Rio de Janeiro: Qualitymark, SKINNER, W.. Manufacturing: the missing link in corporate strategy. Harvard Business Review, v.47, n.3, p , SLACK, N. et al. Administração da produção. São Paulo: Atlas, 1997.