MANAGEMENT MECHANISM FOR IMPLEMENTATION OF « QUICK RESPONSE MANUFACTURING» CONCEPT IN THE ENTERPRISE

308.1 The evolution of production systems` management models

After a fairly long period of domination of Ford`s mass production model, in the 50s of the last century in the Japanese company «TOYOTA» was born and has been successfully implemented the concept of building a lean production, which continues to spread throughout the world. Practically at the same time in the 90s two new concepts emerged: quick response and agile manufacturing. "University" model, indicated in Figure 1, is sometimes mentioned in the scientific community, but its detailed description is not given. Most likely it can be effectively applied to fix the boundary condition of the production system focused on high-end individual science-related orders.

From the standpoint of resource - process approach, Ford model is characterized by technological processes of conveyor type provided with the necessary resources and capacity constraints. Production activity is broken down to the level of simple operations. The "push" scheme of the production process is used. No need for a highly skilled workforce exists. For managing enterprise the linear - functional organizational structure with the leader at the head is applied. The market is not saturated; virtually no competition exists; everything that is produced is being sold. Despite the fact that this model has emerged over a century ago, some of its elements are still used in the industry control systems, not allowing to ensure their competitiveness in a condition of saturated market and production in small volumes.

The concept of "Lean Production" was a response to the emergence of strong competition with scarce resources. Japanese producers, using a variety of techniques and tools, managed to create a production system that provides a significant cost reduction in the production of high quality products. Studying TOYOTA production system, it is easy to notice that it`s based on massive attraction of initiative "from below". This allows the implementation of diverse tools, such as: the system of organization of workplaces; elimination of waste; value stream mapping; balancing of production; "just in time" system; generalization of equipment maintenance; standardized operating procedures; quick changeover of equipment; training in the workplace; involving staff in the process of improvement and others. At the same time there is a change in the organizational structure of management: reducing the amount of management levels; wide using of divisional, matrix and project structures. The concept of "Lean Production" found recognition and practical implementation not only in Japan but also the United States and European Union countries. There is an attempt to introduce the concept of "Lean Production" both in the mass and in small-scale production. At the same time it was observed that the greatest effect is achieved in enterprises with a large production flow, although in a small-scale (Custom) production is also observed a slight increase in efficiency.

The concept of "quick response manufacturing" appeared relatively recently [4]. In the last few years, dozens of companies have implemented QRM strategies with astounding results. Typical results include reduction in lead times of 80-95% (both in manufacturing and in office operations), reduction in product cost of 15-50%, on-time delivery performance improving from 40% to 98%, and reduction in scrap and rework by 80% or more (see the Tables later in this article, as well as the numerous case studies in three conference proceedings (Suri, 2000; Suri et al., 2001; Suri and Rath 2002). However, a close study of this concept from the perspective of resource - process approach to management allows to identify its obvious advantages. Firstly, it does not contradict the concept of "Lean Production" and unites all known tools to improve the processes under the banner of a single resource: TIME. Secondly, this concept leads to the idea of changing the traditional organizational structure - the transition to multi-functional cells. Liker, Jeffery (2004).  Thirdly, a special approach to the planning of logistics and deciding about batch sizes is proposed. Fourthly - it is not a guild strategy, but the strategy for the whole enterprise. It includes research and development, planning, supply chain management, office operations, customer orders ‘fulfillment. The foundation of the concept is the idea that the main thing - it's not reducing costs in certain operations but a decrease in the total lead time. By reducing the time of the order it is possible to increase the volume of work performed. This becomes crucial for companies who are forced to produce more and smaller parties of various products for which minimum duration of order execution becomes a critical importance. The concept contains a number of non-trivial statements. For example, it is assumed that the capacity utilization should not exceed 80% in order to use the remaining resource in the case of need. Quick response manufacturing involves the construction of a flat organizational structure. Organizational changes are made "top down". Furthermore, the concept requires a revision of the traditional method of calculating production costs, including the need to: give up the calculation and use of the 'standard' costs and overhead costs; consider overheads as variable, rather than as fixed; consider the costs associated with time lost for "waiting" both in industrial and office branches. By year 2016 there were several hundred examples of the successful implementation of the concept in companies (mainly in the US) of different size, sector and production profile. All of them have chosen the strategy of development, the increment in market share and the opening of new market niches.

The concepts of "active manufacturing"(Suri, 2013) and "university" are currently the least developed. For "Active manufacturing" is typical to have a scenic strategy and constant readiness to change in the conditions of high uncertainty; maximum intellectual and least tangible assets; high flexibility of material resources; the presence of a limited number of permanent key members of staff and a large number of salaried support staff; an extensive network of partners; flat organizational structure; the predominance of project-based work organization. For "Active production" is common to have an implemented ability to quickly rebuild the human and material resources in the shortest possible time and with minimal cost to use the unexpected opportunities. The concept of "Active production" is focused on the production in small quantities according to orders. "University" model is more typical for high-tech unit production - knowledge production or the production of unique products and services. It is characterized by the following features: strategic management of innovation projects; an integrated infrastructure that supports the implementation of projects; the formation of highly qualified cross-functional teams, aimed at the implementation of innovative projects included in the register of prospective business directions for the enterprise.

Described above, features of production systems` management concepts are structured and presented in Table 1.

Table 1: Features of management concepts for production systems

Factor	Ford Model	Lean Production	Quick response manufacturing	Active production	University model
Type of production	Mass	Large-scale	Small-scale	Custom	Individual
Strategic orientation	Profit	Costs	Time	Change time	Innovations
Processes	Normalized	Improving	Generalized	Adaptive	Hi-tech
Resources	Fixed	Limited	With reserve	Minimum of tangible resources	Knowledge-intensive
Organizational structure	Linearly functional	Matrix	Cells	Project	Network

In terms of competition and existing technological structure there is a steady trend of transition from mass to small scale and custom production. According to the content of the above table, the most suitable for the formation of a better enterprise management system at the present stage is the concept of "quick response manufacturing."

309.2 Management mechanism for QRM concept implementation

The European model of quality management of business processes is carried out to assess the achievements, including those in manufacturing, through the self-assessment process, comparing them with international best practices, to bring all the procedures in a single framework, conceptualize them. The main advantages of the EFQM model lie in the fact that the system provides a look at the quality of management in the enterprise, identifies strengths and areas for improvement, emphasize "growth points". However, application of the model requires great effort on the understanding of its substance, causing resistance on the initial stage of use, and system itself is not a panacea for all management and organizational pathologies. The other two tools: SWOT and STEP - analyses are common instruments applied in the phase of diagnostic of the production systems. SWOT - analysis can be applied to internal audit: identifying strengths and weaknesses of the enterprise, potential opportunities and threats. The use of STEP - analysis allows to make an external audit of the company and its production system, taking into account technical, economic, political and social factors. SWOT and STEP analyses are advisable to carry out using the forces of key personnel.

The development of the enterprise through changing the concept of production system is a radical organizational change and may meet strong resistance from the staff of the enterprise. (Cameron, 2002). It is known that the hope for the success of the reforms can only exist when the "critical mass" of involved people is reached: 30 or more percent of like-minded people. Determining the presence of a "critical mass" can be done using the data collection procedure of Derek Pugh matrix. The point is that the information is collected on the basis of an anonymous questionnaire according to following range of topics: a) how the staff assesses the present situation in the company (in production); b) how the staff assesses the future of the company; how people relate to the proposed strategic changes; what people think and feel; what they intend to do when the reforms begin; what new challenges they see for themselves and how they are going to interact with the environment. If there is no "critical mass" involved it is possible to use the approach of Kurt Lewin, which is about consistent use of the three types of operations: "unfreezing" of the situation; making changes; "Freezing" the situation. For the diagnosis phase of fundamental importance is the operation of "unfreezing", which means choosing and implementing a number of activities aimed at achieving the "critical mass" participation. These activities may be seminars and workshops, study the experience of leading companies, etc.

During the dphase of designing the system for controlling the process of development of production system on the basis of QRM concept it is necessary to solve four fundamentally important tasks: define the vision, strategy and implementation policy of the production system; determine the infrastructure that supports the development of PS; determine the shape of the personnel training system at the stage of implementation of PS; develop a system of personnel motivation to support the development program of PS.

The starting point of the program for PS development based on the QRM is the definition of Vision - the public statement of the Customer (the Sponsor) of the project, which should present his/her views on how the production system will look like in a few years. There should be target reference points; methods, tools and technologies that will be applied in the development of PS; key stages of transformation; principles of involvement of staff in the change process. The development strategy of PS determines the objectives and deployment plan. The deployment plan should reflect how to start individual subprograms, and program management policies should reflect the fundamental principles on which the development of the PS will be based. With the introduction of the QRM concept these principles should be minimizing the time of execution of orders and the creation of multifunctional cells.

The infrastructure that supports the development of PS based on QRM, should have two - three-tiered structure of the network. At the top level of management general corporate development issues must be solved, and on the lower level - the issues of continuous improvement of departments. Regular operation of the upper-level management infrastructure will largely determine the success of the reform of the production system. The infrastructure of the second and third level should provide project management of the production system development.

The system of training the personnel of methods for developing the PS should facilitate the participation of a significant number of people, form the expert knowledge and skills of employees. It is assumed that at least 3-5% of average headcount should be prepared at the level of experts. Experts should have deep knowledge about instruments applied in the development program of PS; carry out projects; perform workers-oriented training on the job with the maximum ease. Personnel training system`s work will largely help to reduce the level of resistance to change.

The system of personnel motivation to support PS development programs should ensure the promotion of various initiatives of employees aimed at achieving development goals of the production system. The amount of remuneration shall depend directly on the complexity and importance of the project. It should be noted that the problem of formation of effective motivation system cannot be solved quickly and requires several iterations. In addition to monetary compensation, there can also be applied elements of competition that reduce resistance and increase staff motivation.

The phase of designing at the initial stage of work should be carried out with the participation of top - management and key staff of the enterprise. A convenient form of realization of the design phase is to carry out strategic sessions. On the strategic sessions there should be a generation of ideas, simulation of options and the selection of areas for practical implementation. The phase of designing at the level of departments will be happening during a long time, since the enterprise reform process may take 3-5 years. Design at the level of departments will be covering a very wide range of issues such as the definition of target market segment; roles and functions of the members of the staff; mapping and changing the value stream and others.

A fundamentally important question that must be answered when planning options for the implementation of planned activities is the nature of the implementation process. There are three approaches: the "big bang"; the parallel functioning and trial implementation. The production concept changes simultaneously in case of "big bang”. This approach is fraught with great risks. In case of parallel functioning new PS`s shoots appear and develop concurrently with the operation of the old PS. In case of very high risks a trial implementation is applied. It is when the concept of the original QRM is being checked on one, especially dedicated process (branch). Generally, both parallel functioning and trial implementation are used in the development of PS.

The main management technology that permits the implementation of planned activities is project management. Effective project management is crucial to achieving the goals of the PS. Project Management - is activity of planning, organization, coordination and control of resources and tasks aimed at achieving these goals. As a rule, international standards for project management give a description of environment and project life cycle, provide recommendations on construction of project management organizational structure, describe the groups of project management processes, concretize fields of knowledge in project management (PMBOK@GUIDE).

Generally accepted documents identifying the project are the Statute (passport) and the Project Management Plan. For example, when implementing the concept of "quick response manufacturing" at the level of creation of a production cell in these documents should be reflected:

• 
  objectives and content of the work to change the production process, the composition of the equipment, layouts;
  
• 
  deadlines for separate stages of the planned activities;
  
• 
  the budget of the planned actions; the conditions under which the required quality parameters are ensured;
  
• 
  composition of the production cell and procedure for development of related professions;
  
• 
  project risks and methods of dealing with them;
  
• 
  contact groups and methods of work with the stakeholders and others.
  

• 
  It is necessary to ensure the rational combination of centralized and decentralized actions in the implementation of reforms;
  
• 
  It is necessary to minimize the control of the staff, maximizing their powers;
  
• 
  Executives of created multi-functional cells should not only be leaders, but also "playing coaches";
  
• 
  Reforms should be performed “top-down”;
  
• 
  The resources should not be excessively spread towards individual projects;
  
• 
  The reforms should not be unnecessarily prolonged. Getting the main results should be planned in a year after the start of reforms
  

310.3 Practical Testing the Change Management Mechanism

The effectiveness of the proposed change management mechanism when implementing QRM concept is tested in three enterprises engaged in various types of industrial activity:

• 
  the enterprise "1", that provides telecommunications services: long-distance and international telecommunication, satellite, broadband internet access, interactive TV;
  
• 
  the enterprise "2", that develops and manufactures sensors and systems for navigation
  
• 
  the enterprise "3", which does the development and production of new machinery objects
  

The main characteristics of enterprises and features of the use of change management mechanism described above are shown in Table 2.

Table 2: Using the change management mechanism in enterprises

Factors	Enterprise «1»	Enterprise «2»	Enterprise «3»
The total number of employees.	400	2000	7000
The boundaries for implementation of the QRM concept	Troughout the whole company	Troughout the whole company	Core business-process
Applied instruments during the diagnostic stage	SWOT, STEP – analyses, Derek Pugh matrix	EFQM Excellence Model	SWOT, STEP – analyses
The approach to implementation	Trial implementation	Parallel functioning	Trial implementation
Features of the change management mechanism	Top down management	Timely spread creation of production cells	Network management and control

Despite the peculiarities and different industrial branches, project management technologies are widely used when controlling organizational changes in all considered companies. Achieved initial results are well described by the rule "the sixth degree." For example, the reduction of the critical path of the main production process at the enterprise "1" by 60% (the execution of the order on laying fiber-optic cable) resulted in a reduction of total costs of the process by approximately 15%.

311.Conclusion

A change management mechanism that can be used in the construction of program for the development of production systems is proposed. The mechanism is based on the use of a sufficiently broad range of methods and tools, and covers all stages of the process of implementing innovations. Considering the characteristics of the reengineering process this mechanism is recommended for use when implementing QRM concept.

312.References

Adizes IK Management of Change.- SPb .: Peter, 2008. - 224 p.

Management of Change(. from English. - M .: Alpina Business Books, 2007. - 227 p. - ( "Classical Harvard Business Review» series).

P. Womack, James, Daniel T. Jones Lean Manufacturing: How to get rid of the waste and to achieve the prosperity of your company / Trans. with angl.- M .: Alpina Business Books, 2005. - 473 p.

R. Suri Time is money. Competitive Advantage of more responsive production. - M .: Binom. Knowledge Laboratory, 2013. - 326 p.

Luzin AE, Babanov V. post-Fordism - three key industrial paradigm of the new century [electronic resource] // http://qrmrussia.ru/index.php/publications/22-postfordizm-tri-klyuchevye-proizvodstvennye-paradigmy-novogo-stoletiya. 14.01.2016 Date of treatment

Popov V., Ostapenko G. INTEGRATED MANAGEMENT MODEL OF «LEAN PRODUCTION» CONCEPT IMPLEMENTATION IN ENTERPRISE // Innovation Management and Corporate Sustainability Conference. - 21-22 may, 2015. - Prague, University of Economics, - p. 239 - 250.

van Assen, M Key Ideas Management. 60 models that everyone should know the manager / M. van Assen, G. van den Berg, P. Pitersma; per. from English. - Agency «Berenschot". - 2011. - 319 p.

Kim Cameron. Diagnosing and changing organizational culture / K. Cameron, R. Quinn - Ed. Peter, 2002. - 320 p.

Guide to the Body of Knowledge Project Management (PMBOK® Guide) /

Хаммер М., Чампи Дж. Реинжиниринг корпорации. Манифест революции в бизнесе. – Пер. с англ. – СПб.: Изд-во СПбУ, 2008. – 332 с.

CHRISTOPHER, Martin. Logistics and supply chain management: strategies for reducing cost and improving service., 2nd edition, London, UK: Financial Times Pitman. 1998. 26

CHRISTOPHER, Martin; TOWILL, Denis R. Supply chain migration from lean to agile and customised. Supply Chain Management: An International Journal, UK, Volume 5, Number 4, p. 206-213. 2000.

13.GUNASEKARAN, A. (Ed.) , Agile Manufacturing: The 21st Century Competitive Strategy. Oxford,UK: Elsevier, 2001. Chapter 2.

WOMACK, James P.; JONES, Daniel T.; ROSS, Daniel., The Machine that changed the world. New York, NY:Rawson Associates, 1990. 323p.

Contacts

Popov Victor,

Perm National Research Polytechnic University,

Komsomolsky prospect 29, build. 1, room No. 432, Perm 614990 Russia

pku06@mail.ru;

Ostapenko Galina,

Perm National Research Polytechnic University,

Komsomolsky prospect 29,

waygs@mail.ru

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