‫وما توفيقي إﻻ با‬

PCEM01 – Strategic Planning

Future

Strategy

How?
Current
.‫التخطيط اﻹستراتيجي هو كيفية تحديد اﻷهداف اﻹستراتيجية لتحسين أداء المؤسسة ووضع خطة لتحقيقها‬

Dr. Attia Gomaa

Prof. & Consultant of Industrial Eng. & Project Management
Faculty of Engineering - Shoubra - Benha University &
ESS - American University in Cairo

Facebook Group: Strategic Planning - Dr Attia Gomaa

TQM December
Strategic Planning Best Practice – Dr. Attia2022
Gomaa - 2022 1

Strategic Planning Best Practice

Contents:
Part I:
1) Operations Management
2) Strategic Management
3) Strategic Planning
4) Focus Group (Teamwork)
5) Vision; Mission and Values
6) Goals & Strategic Objectives
7) Performance Evaluation & KPIs
8) Current Situation Analysis
9) Benchmarking & Competition Analysis
10) SWOT Analysis & GAP Analysis
11) Action Plan & Budget Plan
12) Risk Assessment for Strategic Objectives
13) Change Management for Strategic Objectives
Part II: Case Studies (Projects)
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 Rules of the Course:

This is an Open Discussion Course:

– Share Knowledge ‫– تبادل المعرفة‬

– Share Experiences ‫– تبادل الخبرات‬ Team Approach

– Share Best Practices ‫– تبادل التجارب الجيدة‬

– Share Questions ‫– تبادل اﻷسئلة‬

Remember … You can’t do it alone!

Let us be a teamwork.
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Operations Management

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 Process Description:

Working Environmental

Inputs Process Outputs Outcomes

For example;
Perspective Inputs Process Output Outcomes
• Products • Customer
Production Resources
Machining • Quantity Satisfaction
Process (5Ms)
• Quality • Profitability
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Operation Management “Quality Approach”

Objective:

High
Quality Low
Cost

Improve Optimize
Customer Satisfaction Resource Productivity

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 Resources based on 5 M’s:

4) Method 1) Material

5) Money

3) Manpower 2) Machine

Time
Teamwork
Resources

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Customer Satisfaction based on 5 Rights:

Scope
Cost Customer Quality
Value Focus
Service Delivery

Customer satisfaction is a marketing term that measures how products or

services supplied by a company meet the customer expectations.
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 Management
Management is a systematic approach for analysis,
planning, execution, control and improvement the
activities to achieve certain objectives.

‫ متابعة‬،‫ تنفيذ‬،‫ تخطيط‬،‫اﻹدارة هي أسلوب منظم لتحليل‬

‫وتحسين اﻷنشطة لتحقيق أهداف محددة‬
5 Pillars of Management:
1) Analysis
5) Improvement 2) Planning
Activities

Objectives
4) Control 3) Execution
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Operation Management (OM):

OM is a systematic approach for analysis, planning,
execution, control and improvement the operation
activities to achieve the operation objectives.
‫ متابعة وتحسين‬،‫ تنفيذ‬،‫ تخطيط‬،‫إدارة العملبات هي أسلوب منظم لتحليل‬
.‫أنشطة العمليات لتحقيق أهداف محددة للعمليات‬

5 Pillars of OM:
1) Analysis
5) Improvement 2) Planning
Project Activities

Objectives
4) Control 3) Execution
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 Supply Chain Management:
SCM is a systematic approach for analysis, planning,
execution, control and improvement the supply activities
to increase the customer satisfaction at low cost.
،‫ تنفيذ‬،‫ تخطيط‬،‫إدارة سلسلة اﻹمداد هي أسلوب منظم لتحليل‬
.‫متابعة وتحسين أنشطة اﻹمداد لتحقيق أهداف محددة‬
5 Pillars of SCM:
1) Analysis
5) Improvement 2) Planning
Supply Activities

Objectives
4) Control 3) Execution
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Supply Chain Management (SCM)

(Analysis, Planning, Execution, Control, Improvement)

Financial
Market

Master Plan
Materials
Operation

Integration Management to Optimize Material Flow.

(Right Materials, Right Quality, Right Quantity, Right Time, Right Cost, … etc.)
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 What is Planning:
Planning is a future road map Technical
to achieve certain objectives. Skills

6 Key Elements:
Minimum Documented
1. Why? Information
2. What? • What?

3. When? • When?

4. How? • How?
Planning
5. Where?
6. Who?

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Hierarchy of Plans:
Period Level of Details

Long Term Low

(Strategies
3-10 years & Policies)

Medium
Medium Term (Procedures)
1-2 years

Short Term High

(Execution)
≤ one year

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 Plan
‫الخطة‬
+
Motivation
‫التحفيز‬
+
Action Result
‫الفعل‬ = ‫النتيجة‬
+
Evaluation
‫المتابعة والتقييم‬
+
Improvement
‫التحسين‬
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Process Performance Evaluation

Inputs Process Outputs

Performance
Inputs: Analysis
• Time Outputs:
• Staff • Total Production
Performance Analysis: • Defect Quantity
• … etc. • Net Quantity • … etc.
• Production Rate
• Quality Rate
• Labor Productivity
• … etc.
Inputs Outputs Performance Indicators
Period

Total Defect Net Prod. Labor Quality

Time Staff
Prod. Quantity Quantity Rate Prod. %
hours worker ton ton ton Ton/hr Ton/worker %
… … … … … … … … …
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 Management Tools:

Efficiency Effectiveness Productivity

& &
‫الكفاءة‬ ‫الفاعلية‬ ‫اﻹنتاجية‬

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Management Tools:
Outputs
Efficiency ‫الكفاءة‬
Effectiveness
‫الفاعلية‬
‫اﻹنتاجية‬
Inputs Objectives
Productivity Customer Needs

.‫الكفاءة هي مدي القدرة علي تنفيذ اﻷعمال باﻷسلوب الصحيح‬

Efficiency = Right Things
.‫الفاعلية هي مدي القدرة علي تحقيق اﻹهداف والنتائج المطلوبة‬
Effectiveness = Right Way
.‫اﻹنتاجية هي مدي القدرة علي حسن إستغﻼل الموارد‬
Productivity = Efficiency * Effectiveness
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 Brainstorming:

The information for a process is as follows:

Information Units Crew #1 Crew #2

Targets: Target Output unit 20 20

Outputs: Actual Output units 10 15

Total Time hours 7 12

Inputs:
Running Time hours 5 5

Based on this information, discuss performance evaluation.

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Information Units Crew #1 Crew #2

Targets Target Output unit 20 20
Outputs: Actual Output units 10 15
Total Time hours 7 12
Inputs:
Running Time hours 5 5

Effectiveness = Actual Outputs / Target Outputs

Efficiency = Actual Outputs / Actual Inputs
Productivity = Effectiveness x Efficiency
Indicator Units Crew #1 Crew #2
Effectiveness % 10/20 = 50% 15/20 = 75%
Efficiency Units/hour 10/7 = 1.43 15/12 = 1.25
Productivity Units/hour 50% x 1.43 = 0.71 75% x 1.25 = 0.94
Result:
• Crew#2 is a more effective than crew#1
• Crew#1 is more efficient than crew#2
• Thus, overall, Crew#2 is more productive than crew#1.
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 Management Tools:
Efficiency Effectiveness Productivity
& &
‫الكفاءة‬ ‫الفاعلية‬ ‫اﻹنتاجية‬

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Profit Analysis
Brainstorming:
Monthly Report:
Product: Fan XYZ “Standard Product”

Production Information:
• Total Production Quantity = 11,000 units
• Rejected Quantity = 1,000 units
• Total Production Cost = 1,000,000 LE

Sales Information:
• Total Sales Quantity = 8,000 units
• Total Sales Revenue = 960,000 LE

Profit Ratio = ?
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 Profit Analysis: Base

Operating Profit
= Total Revenue – Total Cost
 (assume; Zero Stock) TC

Total
Operating Profit Cost
= Sales Revenue – Cost of Sales

Price
Stock Types:
• Final products
• Work In Process (WIP)
• Raw Materials
• Spare Parts, etc. Profit

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Monthly Report:
Product: Fan XYZ “Standard Product”
Production Information:
Total Production Quantity = 11,000 units
Rejected Quantity = 1,000 units
Total Production Cost = 1,000,000 LE
Net Production Quantity = 11,000 -1,000 = 10,000 units
Average Unit Cost = 1,000,000 / 10,000 = 100 LE/unit
Sales Information:
Total Sales Quantity = 8,000 units
Total Sales Revenue = 960,000 LE
Average Unit Price = 960,000 / 8,000 = 120 LE/unit

Operating Profit = Sales Revenue – Cost of Sales

960,000 – 8,000 *100 = + 160,000
Profit % = 160,000 / 800,000 = 20% from cost

Unit Cost = 100 LE/unit Unit Price = 120 LE/unit

Profit % = 20 / 100 = 20% from cost
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 Product Cost Analysis
Cost Breakdown Structure: Total Cost
--- LE
100%

Direct Cost Indirect Cost

--- LE --- LE
--- % --- %

Materials Machine Labor Sub-Contractor

--- LE --- LE --- LE --- LE
--- % --- % --- % --- %

Technical Overhead Office Overhead

--- LE --- LE
Price = Cost + Profit --- % --- %

Margin = Overhead + Profit + Risk

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Productivity Analysis

Total Productivity Unit Price / Unit Cost

Material Productivity Unit Price / Mat. Cost Per Unit

Labor Productivity Unit Price / Labor Cost Per Unit

Machine Productivity Unit Price / Machine Cost Per Unit

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 Productivity Indicators:
For example;
# Indicators Units Equation

1 Total Productivity % Total Revenue / Total Cost

$/$ Net Revenue / Labor Cost
$/Man-hour Net Revenue / Standard Man-hours
2 Labor Productivity
Unit/Man-hour Net Quantity / Standard Man-hours
Man-hour/unit Standard Man-hours / Net Quantity
$/$ Net Revenue / Raw Mat. Cost
3 Material Prod. $/ton Net Revenue / Raw Mat. Quantity
Unit / ton Net Quantity / Raw Mat. Quantity
$/$ Net Revenue / Machine Cost
$/Mac-hour Net Revenue / Standard Mac.-hours
4 Machine Prod.
Unit/Mac-hour Net Quantity / Standard Mac.hours
Mac-hour/unit Standard Mac.hours / Net Quantity
5 Energy Prod. kwh/unit Energy kwh / Net Quantity
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 Capacity Analysis: Process Labor
Capacity is a measure of output units/hr (hr/day)
- Design capacity =Maximum capacity = Optimal
maximum output rate or service capacity an 40 8
operation, process, or facility is designed for.

- Effective capacity = Standard = Available

Design capacity minus allowances such as personal 30 7
time, maintenance, and scrap.

- Planned capacity = Target

25 6

- Actual output = Used capacity

rate of output actually achieved--cannot 20 5
exceed effective capacity.

Capacity is a dynamic concept Examples?

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Process Capacity Analysis

Operational Management: Target:
Performance = Actual Capacity / Planned capacity 80 to 100%

Quality Rate = (Total units – Rejected) / Total units 90 to 100%

Middle Management:

Efficiency = Actual output / Effective capacity 70 to 90%

Load ratio = Planned Capacity / Effective capacity 70 to 90%

Top Management:
Utilization = Actual output / Design capacity 60 to 80%

Effectiveness = Effective Capacity / Design capacity 60 to 80 %

Bottleneck Problems
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 Quality Quality Total Quality
Control Assurance Management
Product Quality X X X
Material Quality X X X
Process Quality X X
People Quality X
Service Quality X
Office Quality; … etc. X
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Quality Management System

2) Quality
1) Quality Assurance
Plan

PDCA

3) Quality
Control
4) Quality
Improvement
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 

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TQM

Total Quality Management

Involving the entire Achieving customer Maintaining a high-level
departments of the company satisfaction all the time quality in every sector

Total Quality Management (TQM)

People Quality Process Quality Output Quality
Total Customer Satisfaction
Rent a car; for example TQM
Driver Process Zero Error
Quality Quality Zero Failure
Total Customer Satisfaction
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 TQM & Lean Six Sigma
Total Quality Management (TQM)
People Quality System Quality Output Quality
Total Customer Satisfaction

Lean Six Sigma (L6S) Approach

Kaizen Lean Six Sigma
(Focus on People) (Focus on System) (Focus on Output)
• Improve People Culture • Minimize Wastes • Minimize Defects
• Improve Productivity • Improve Performance • Improve Quality

Total Customer Satisfaction

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Continuous Improvement - (ISO 9001:2015 – Clause #10)

People
Oriented
Lean
System Six
Oriented
Sigma

Customer
Oriented

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 Continuous Improvement Cycles
• Deming, (PDCA) , 1950 • Motorola, (DMAIC) 1986

Customer Process People

Six Sigma Lean KAIZEN
Lean Six Sigma
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DMAIC – Problem Solving Framework

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 Productivity

Profitability
Cost
Quality
+ + =

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Root Cause Analysis (RCA) Problem

Identification

Problem
Problem Analysis
(Defect / Failure / Failure Mode / …)

Root
Causes

Action
Plan

Root Causes

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 Root Cause Analysis (RCA); Ishikawa 1943
Cause-and-Effect Diagram or Fishbone diagram or Ishikawa diagram

RCA is a systematic approach to uncover causes of problems

Fish – Improvement Process

Man Machine
F Focus

I Improve Problem?
Objective?
S Sustain Effect (Y)

Method Material
H Honor
Root Causes (Xi) Y = f (Xi)
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Root Cause Analysis (Fishbone Diagram): (Brainstorming)

Main Objective: Improving Process Performance

Environmental Manpower Method

Motivation Standardization
Customer
culture Performance Machining
Unsafe parameters
Working conditions Skills & Machining
tools Improving
conditions training
Process
Performance
Accuracy of Maintenance Types &
inspection specs Effect
tools Sampling Vibration Dimensions (Y)
size Machine Procurement
Auditing
controls
system

Measurement Machine Materials

Root Causes (Xi) Y = f (Xi)

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 Strategic Management ‫اﻹدارة اﻹستراتيجية‬

Strategy? Management?

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Strategy: :‫اﻹستراتيجية‬
Strategy is a systematic
method to achieve long
term objectives.
Strategy is a high-level plan
to achieve the goals.

Strategy = Long Term Plan

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 Strategic Management
SM is a systematic approach for analysis, planning,
execution, control and improvement the business
activities to achieve certain strategic objectives.

‫ متابعة‬،‫ تنفيذ‬،‫ تخطيط‬،‫اﻹدارة اﻹستراتيجية هي أسلوب منظم لتحليل‬

.‫وتحسين أنشطة المنظمة لتحقيق أهداف إستراتيجية محددة‬
5 Pillars of Management:
1) Analysis
5) Improvement 2) Planning
Activities

Objectives
4) Control 3) Execution
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Strategic Management ‫اﻹدارة اﻹستراتيجية‬

Strategic Thinking

Strategic Strategic Strategic

Control Management Analysis

Strategic Planning

‫اﻹدارة اﻹستراتيجية منهجية متكاملة لتحليل وتخطيط وتنفيذ وتقييم وتطوير‬

.‫اﻹستراتيجيات التي تمكن المؤسسة من تحقيق الرؤية والرسالة واﻷهداف‬
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 ‫التفكير اﻹستراتيجي‬
Strategic Thinking
‫التفكير قبل القول والعمل‬

‫كيفية التميز واﻹبداع والحلول البسيطة للمشكﻼت‬

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What is Strategic Planning ?

Strategic Planning is a systematic methodology
to design the business future.
.‫التخطيط اﻻستراتيجي هو منهجية منظمة لتصميم مستقبل المؤسسة‬
‫منهجية للربط بين الحاضر والمستقبل‬
(2) (1)
Future Future
Situation Situation

How? How?
(3) Road (3) Road
(1) Map (2) Map
Current Current
Situation Situation
Reactive Approach Proactive Approach
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 Management by Objectives: :‫اﻹدارة باﻷهداف‬
How? Vision & Mission
Why?
Objectives

KPIs

Current Target

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Strategic Planning Levels

‫مستويات التخطيط اﻹستراتيجي‬

Individual Department Organization

Level Level Level

Strategic Thinking
Leaders ‫نشر ثقافة التفكير اﻹستراتيجي‬

2 – 3 years 3 – 5 years 5 – 10 years

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 Individual (Personal) Strategic Plan
(‫الخطة اﻹستراتيجية الفردية )الشخصية‬

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Individual Strategic Planning ‫التخطيط اﻻستراتيجي الفردي‬

What are you looking to achieve ‫ماذا تتطلع أن تحقق‬
during 3 years ahead for yourself? ‫ سنوات قادمة لنفسك؟‬3 ‫خﻼل‬
1) Introduce yourself ‫ الوظيفي‬/ ‫ الشركة‬/ ‫( تعريف نفسك‬1
2) Define the most important 4
objectives in your future
‫ أهداف في مستقبلك‬4 ‫( تحديد أهم‬2

3) Define performance indicators for ‫( تحديد مؤشرات قياس اﻷداء لكل هدف‬3
each objective
4) Describe the current status of each ‫( وصف الوضع الحالي لكل مؤشر‬4
indicator

5) Define the target for each indicator ‫( تحديد المستهدف لكل مؤشر‬5
6) Define the gap for each indicator ‫( تحديد الفجوة لكل مؤشر‬6
7) Determine the most important
activities
‫( تحديد أهم اﻷنشطة المطلوبة‬7

8) Preparing the action plan ‫( إعداد الخطة التنفيذية‬8

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 Leader Name:

Strategic Analysis ‫التحليل اﻹستراتيجي‬

1 2 3 4 5 6
Objectives Indicators Unit Current Target Initiatives
‫اﻷهداف‬ ‫مؤشر اﻷداء‬ ‫وحدة المؤشر‬ ‫القيمة الحالية‬ ‫القيمة المستهدفة‬ ‫المبادرات‬

Action Plan for Continuous Improvement ‫الخطة التنفيذية‬

Objective #1:
1 2 3 4 5 6
ID Activity Period Budget Responsible Indicator
‫كود‬ ‫النشاط‬ ‫الفترة الزمنية‬ ‫الميزانية المطلوية‬ ‫المسئول‬ ‫المؤشر‬

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Department Strategic Plan

‫ القسم‬/ ‫الخطة اﻹستراتيجية لﻺدارة‬

Focus on your department

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 Organization Strategic Plan
‫الخطة اﻹستراتيجية للمؤسسة‬

Department Strategic Plan; for example

Quality Market
Strategic Plan Strategic Plan
Safety Maintenance
Strategic Plan Strategic Plan
Materials Energy
Strategic Plan Strategic Plan
HR ….
Strategic Plan Strategic Plan
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Department Strategic Planning ‫ القسم‬/ ‫التخطيط اﻻستراتيجي لﻺدارة‬

What are you looking to achieve ‫ماذا تتطلع أن تحقق‬
during 3 years ahead for department? ‫ سنوات قادمة ﻹدارتك؟‬3 ‫خﻼل‬
1) Introduce the department ‫ القسم‬/ ‫( تعريف اﻹدارة‬1
2) Define the most important 4
objectives in the department
‫ أهداف في إدارتك‬4 ‫( تحديد أهم‬2

3) Define performance indicators for ‫( تحديد مؤشرات قياس اﻷداء لكل هدف‬3
each objective
4) Describe the current status of each ‫( وصف الوضع الحالي لكل مؤشر‬4
indicator

5) Define the target for each indicator ‫( تحديد المستهدف لكل مؤشر‬5
6) Define the gap for each indicator ‫( تحديد الفجوة لكل مؤشر‬6
7) Determine the most important
activities
‫( تحديد أهم اﻷنشطة المطلوبة‬7

8) Preparing the action plan ‫( إعداد الخطة التنفيذية‬8

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 Department:

Strategic Analysis ‫التحليل اﻹستراتيجي‬

1 2 3 4 5 6
Objectives Indicators Unit Current Target Initiatives
‫اﻷهداف‬ ‫مؤشر اﻷداء‬ ‫وحدة المؤشر‬ ‫القيمة الحالية‬ ‫القيمة المستهدفة‬ ‫المبادرات‬

Action Plan for Continuous Improvement ‫الخطة التنفيذية‬

Objective #1:
1 2 3 4 5 6
ID Activity Period Budget Responsible Indicator
‫كود‬ ‫النشاط‬ ‫الفترة الزمنية‬ ‫الميزانية المطلوية‬ ‫المسئول‬ ‫المؤشر‬

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 57

Department Objectives & KPIs

For example:
Plant: Steel XXX Department: Operation
# Objectives KPIs Unit
1 Improve Quality Ratio Quality %
2 Improve Production Rate Production Rate Unit/hour
Labor Man-
3 Improve Labor Productivity
Productivity hour/unit
Energy
4 Improve Energy Productivity kwh/unit
Productivity
5 Minimize Production Cost Average Unit Cost LE/unit

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 Department Objectives & KPIs
For example:
Plant: Steel XXX Department: Maintenance
# Objectives KPIs Unit
MTBF hours
1 Improve Reliability
Reliability %
2 Improve Availability Availability %
3 Improve Maintainability MTTR hours
Improve Planned PM %
4
Maintenance PM Compliance %
Minimize Maintenance Cost Variance %
5
Cost Maintenance Cost Rate LE/hour

MTBF: Mean Time Between Failure PM: Planned Maintenance

MTTR: Mean Time To Repair
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 59

Report #1:

Department Strategic Planning

for example;
Quality Market
Strategic Plan Strategic Plan
Safety Maintenance
Strategic Plan Strategic Plan
Materials Energy
Strategic Plan Strategic Plan
HR ….
Strategic Plan Strategic Plan
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 Organization Strategic Plan
‫الخطة اﻹستراتيجية للمؤسسة‬

How?
Strategy is a high-level plan
to achieve the goals.
Strategy = Long Term Plan
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 61

Organization Strategic Plan

‫الخطة اﻹستراتيجية للمؤسسة‬
Main Outputs

Vision, Mission, Values

Top

Middle Goals & Strategic Objectives

Operational Action Plan & Budget Plan

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 ISO 9001:2015 Strategic direction
High Level Structure (HLS)

International
# Description Planning Level
Standards
Business
1 ISO 9001 Quality Management System
Strategic Plan
Environment Management Environment
2 ISO 14001
Standard Strategic Plan
Safety (HSE)
3 ISO 45001 Safety Management System
Strategic Plan
Energy
4 ISO 50001 Energy Management System
Strategic Plan
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 63

Gap Analysis
Current Future Gap
Improve
State State Analysis

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 Strategic Planning – Enterprise / Business Level
The art and science of strategic planning
‫ نيدو قوبين‬- ‫فن وعلم التخطيط اﻻستراتيجي‬ Nido Qubein, 1995

https://www.youtube.com/watch?v=c0X5acmK75c
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 65

Main 6 Elements of a Strategic Plan

1 2 3
Goals &
Strategic
Objectives

4 5 6

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 Main 3 Steps for Strategic Planning
1) Teamwork (Focus Group)
(Refer to the Organization Structure)

2) Company Overview (Data Gathering):

• Company Description
• Organization Structure
• Product Mix & Main Activities
• Markets, Customers and Competitors
• Company History
• Current Situation Analysis
• Main Objectives & Top Priorities; … etc.

3) Main 6 Elements of a Strategic Plan

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Strategic Plan Outline – (Most Common Elements)

1) Teamwork (Focus Group) 7) SWOT Matrix
2) Company Overview ± 3 to 10 for each discipline
Outputs / Org. Structure 8) Action Plans
3) Vision Main Activities
Ultimate-Goal 9) Financial Plan
4) Mission Budget Plan
Core Purpose 10) Risk Plan
Critical Risk Elements
5) Values
11) Change Management Plan
Behaviour / Culture
6) Goals; Objectives & KPIs 12) Follow-up & Evaluation Policy

SMART Objectives & KPIs Control Elements

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 Teamwork (Focus Group) ‫لجنة تخطيط ومتابعة الخطة اﻹستراتيجية‬

Refer to the Organization Structure

Financial
Market

Business
Materials
Operation

Brainstorming Benchmarking
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 69

Teamwork (Focus Group) ‫لجنة تخطيط ومتابعة الخطة اﻹستراتيجية‬

Refer to the Organization Structure

Department Name Goals / Main Objectives
Quality -
Improve Quality at Low Coat
Assurance -
-
Market Improve Customer Satisfaction
-
-
Financial Improve Profitability
-
-
Operation Improve Operation Efficiency
-
Safety - Improve Safety Conditions
Maintenance - Improve System Reliability
IT - Improve Information Availability
HR - Improve Staff Satisfaction
… … …

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 Company Overview (Data Gathering):
• Company Description
• Organization Structure
• Product Mix & Main Activities
• Markets, Customers and Competitors
• Company History
• Current Situation Analysis
• Main Objectives & Top Priorities; … etc.

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 71

Report #2: A Strategic Plan Evaluation

Title:
Company: Period:
# Elements Yes No N/A Page Comments
1 Teamwork
2 Company Overview
3 Vision
4 Mission
5 Values
6 Goals & Objectives
7 KPIs
Most
8 SWOT Analysis Common
9 Action Plans
10 Financial Plan
11 Risk Analysis & Change Management
12 Follow-up & Evaluation Policy
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 Strategic Direction According to ISO 9001:2015

Public Statement Awareness ‫معلن للجميع‬

Vision, Mission, Values

Top
How?

Why?

Goal & Strategic Objectives

Middle
(Long Terms)

Operational
KPIs & Targets
(Annual Terms)
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 73

Vision ‫الرؤية‬
The ultimate-goal to achieve a ‫الهدف اﻷسمي لتحقيق‬
competitive advantage in the field
‫ميزة تنافسية‬
of organization.
‫في مجال المؤسسة‬
Mission ‫الرسالة‬
The commitments of the
‫إلتزامات المؤسسة‬
organization to ensure the quality
of outputs and customer ‫لضمان جودة المخرجات‬
satisfaction, which helps to ‫ورضا العميل مما يساعد‬
achieve the vision. ‫علي تحقيق الرؤية‬

Values ‫القيم‬
A set of values and principles
‫مجموعة من القيم والمبادئ‬
necessary to control the behavior
of employees and necessary to ‫الﻼزمة لضبط سلوك العاملين‬
achieve the mission. ‫والضرورية لتحقيق الرسالة‬

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 ‫‪Vision:‬‬
‫‪Ultimate-goal for future image‬‬

‫‪Mission:‬‬
‫?‪How to achieve the vision‬‬

‫‪Values:‬‬
‫‪A Guide for good behaviour / Beliefs / Culture‬‬

‫تطلع ‪ /‬تأمل ‪ /‬تهدف ‪) :‬ريادة وتميز(‬ ‫غاية طموحة ممكن تحقيقها‬ ‫الرؤية‬ ‫‪Vision‬‬
‫تعهد ‪ /‬إلتزام ‪ /‬تحقيق ‪) :‬تأهيل وتقديم(‬ ‫أسلوب عمل لكيفية تحقيق الرؤية‬ ‫‪ Mission‬الرسالة‬
‫مبادئ لتحفيز سلوك العاملين لﻺلتزام تتبني ‪ /‬تعتمد ‪) :‬تستند وتلتزام(‬ ‫القيم‬ ‫‪Values‬‬
‫بالرسالة‬
‫‪TQM‬‬ ‫‪Strategic Planning Best Practice – Dr. Attia Gomaa - 2022‬‬ ‫‪75‬‬

‫‪For example:‬‬ ‫عربي ‪English /‬‬

‫‪ABC Construction Company:‬‬

‫‪ (1‬الرؤية‪:‬‬
‫تهدف شركة ‪ ABC‬أن تكون من أفضل شركات المقاوﻻت في‬
‫مصر‪.‬‬
‫?‪How‬‬
‫‪ (2‬الرسالة‪:‬‬
‫تلتزم شركة ‪ ABC‬بإنتاج وتوريد منتجات عالية الجودة طبقا‬
‫للمعايير الدولية في مجال مشاريع التشييد‪.‬‬

‫‪ (3‬القيم‪:‬‬
‫تتبني شركة ‪ ABC‬مجموعة من القيم التي توجه قرارات وسلوكيات العاملين بالشركة‬
‫من أهمها القيادة ‪ ،‬فريق العمل ‪ ،‬تأهيل العمالة ‪ ،‬رضا العميل ‪ ،‬العﻼقة المستمرة مع‬
‫العميل‪.‬‬
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 For example: English / ‫عربي‬

ABC Construction Company:

1) Our Vision is to be one of the best
construction companies in Egypt.
How?

2) Our Mission is to produce and supply the highest

quality products to our customers up to international
standards in construction projects.

3) Our Values: We believe that strong leadership, unified

teamwork, highly skilled manpower, customer satisfaction and
customer relationship are the key to achieve our goals.
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 77

Goals Objectives
‫الغاية‬ ‫اﻷهداف‬

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 Goal Strategic Objectives
‫الغاية‬ ‫اﻷهداف اﻹستراتيجية‬

Define what you

Goal want to achieve?
‫النتيجة النهائية‬ Broad Statement
‫المطلوب تحقيقها‬
.‫في المدي البعيد‬

Objectives
(SMART) Action objectives to
achieve certain goal
‫وسائل ومعايير‬
Specific & Measurable
‫المستوي التسغيلي التي‬
Statement
.‫تؤدي الي تحقيق الغاية‬
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 79

Goals Strategic Objectives

‫الغاية‬ ‫اﻷهداف اﻹستراتيجية‬

Vision
Mission
How?

Why?

Financial Marketing Operation …

Goal Goal Goal …

Objective Objective
#1 #2

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 For example:

Define what you want to achieve?

Goal: Improving Profit Margin
Broad Statement

How?
Profit Margin = Revenue – Cost

Improve Profit = Improve Revenue + Reduce Cost

Improve Revenue  Improve Quality Ratio 1

 Improve Market Share 2

Reduce Cost  Reduce Fixed Cost Rate 3

 Improve Capacity Utilization
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 81

For example:

Define what you want to achieve?

Goal: Improving Profit Margin
Broad Statement
How?
Action objectives to achieve certain goal
Perspective Strategic Objectives
Improving the market share
Market
from 20% to 30% over 3 years
Improving the capacity utilization
Process
from 50% to 80% over 3 years
Improving the quality ratio
Quality
from 90% to 95% over 3 years
Specific Statement
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 For example:

Define what you want to achieve?

Goal: Achieving High Quality at Low Cost
Broad Statement
How? Action objectives to achieve certain goal
Perspective Strategic Objectives (SMART)
Improving the operation efficiency
Capacity
from 64% to 80% over 5 years
Improving the quality ratio
Quality
from 94% to 98% over 5 years
Improving the labor productivity
Resources
from 157 to 200 Kg/man.hour over 5 years
Improving the machine availability
Maintenance
from 95% to 98% over 5 years
Reducing the unit cost
Cost
from 8502 to 8000 LE/ton over 5 years
Specific Statement
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 83

For example:

Define what you want to achieve?

Goal: Increasing Revenue by 10% Annually
Broad Statement
How?
Action objectives to achieve certain goal
Perspective Strategic Objectives
Market Acquire 10 new customers annually
Improve the capacity utilization
Operation
By 10% annually
R&D Develop a new product annually
Specific Statement

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 Awareness
Strategic Directions; for example ‫معلن للجميع‬
XXX Steel Company 2022
Our Vision is to be one of the best steel companies
in Egypt & Middle East.

Our Mission is to produce and supply the highest quality

products to our customers up to international standards in
steel industry.

Strong leadership, unified teamwork, highly skilled

manpower, customer satisfaction and customer relationship.

Improve the customer satisfaction and market share.

Improve the customer satisfaction to more than 95%.

Market

Improve the local market share to more than 20%.

Improve the production capacity to 2.3 million tons yearly.

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 85

Goal Strategic Objectives

‫الغاية‬ ‫اﻷهداف اﻹستراتيجية‬

• Increasing … • Increasing the market share

• Decreasing … • Decreasing the defect ratio
• Reducing … • Reducing the production cost
• Maintaining … • Maintaining the high-trust customer relationship

Objectives Should Be SMART

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 Case Study: Strategic Objectives Evaluation
Briefly discuss the following strategic objectives
for ABC Company and rewrite it as SMART objectives:

Perspective Strategic Objectives

Product Improving product specification
Financial Improving financial position
Market Increasing market share
Process Improving process utilization
Human
Increasing labor productivity
Resource

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 87

Strategic Objectives Evaluation

Perspective Current Objectives SMART Objectives
Increasing quality ratio
Improving product
Product from 90% to 98%
specification
over the next 5 years
Improving profit ratio
Improving financial
Financial from 15% to 25%
position
over the next 5 years
Increasing market share
Market Increasing market share from 10% to 20%
over the next 5 years
Improving process utilization
Improving process
Process from 50% to 70%
utilization
over the next 5 years
Increasing labor productivity
Human Increasing labor
from 30% to 40%
Resource productivity
over the next 5 years

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 88

Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 44

 Case Study: SMART Objectives Analysis:
Briefly discuss the following strategic objectives for a
construction project and rewrite it as SMART objectives:

# Perspective Strategic Objectives

1 Scope Meet scope of work
2 Quality Improving project quality
3 Safety Improving safety conditions
4 Time Decreasing project duration
5 Equipment Improving equipment utilization
6 Human Resource Increasing labor productivity
7 Cost Decreasing cost

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 89

SMART Objectives Analysis; for example: Project Type: Construction

# Perspective Objectives SMART Objectives
Meet scope of work
1 Scope Meet scope of work
from 90 to 100% over the next 3 years
Improving project Increasing project quality ratio
2 Quality
quality from 90% to 98% over the next 3 years
Improving safety Improve safety training
3 Safety
conditions from 75% to 100% over the next 3 years
Decreasing project Reducing project schedule variance
4 Time
duration from 20% to 5% over the next 3 years
Improving equipment Improving equipment utilization
5 Equipment
utilization from 70% to 85% over the next 3 years
Human Increasing labor Increasing labor productivity
6
Resource productivity from 70% to 85% over the next 3 years
Reducing project cost variance
7 Cost Decreasing cost
from 20% to 5% over the next 3 years
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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 45

 Report #3: Strategic Objectives Evaluation
Company: Period:
# Perspective Objectives SMART Objectives

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 91

Performance Evaluation- (ISO 9001:2015 – Clause #9)

Key Performance Indicators (KPIs)
‫مؤشرات اﻷداء الرئيسية‬
Brainstorming Benchmarking

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 Key Performance Indicators (KPIs)
You Can’t Manage; What You Don’t Measure. (Deming)
.‫ وبالتالي ﻻ يمكن تحسينه‬،‫ ﻻ يمكن إدارته‬،‫ما ﻻ يمكن قياسه‬

A set of indicators to support the decision maker to

measure the achievement of certain objectives.
.‫مجموعة من المؤشرات لدعم متخذ القرار لقياس مدي إنجاز أهداف محددة‬

Dashboard:

‫لوحة قيادة السيارة‬ Good Indicators, Good Decision

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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 47

 Management by Objectives: :‫اﻹدارة باﻷهداف‬
How? Vision & Mission
Why?
Objectives

KPIs

Current Target

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 95

Key Performance Indicators (KPIs)

Top
Vision
KPIs Design
KPIs Calculations

Middle
Objectives

KPIs & Targets

Operational
Standard Information
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 Key Performance Indicators (KPIs)

Vision
Mission
Target

How?

Why?
KPIs Department
Actual Objectives

Target
KPIs Section
Actual Objectives
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 97

KPIs Design:
Department

Objectives

KPIs

. ‫ وسيلة لقياس مدى إنجاز أهداف محددة‬KPIs

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 Key Performance Indicators (KPIs)

(2) (1)
Objectives Objectives
& KPIs & KPIs

How? How?
(3) Road (3) Road
(1) Map (2) Map
Current Current
Situation Situation
Reactive Approach Proactive Approach

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 99

Process Description:

Working Environmental

Inputs Process Outputs Outcomes

For example;
Perspective Inputs Process Output Outcomes
• Products • Customer
Production Resources
Machining • Quantity Satisfaction
Process (5Ms)
• Quality • Profitability
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 Process Performance Analysis (Process KPIs)

Inputs Process Outputs

Performance
Analysis
Inputs: Outputs:
• Time • Total Production
• Staff • Defect Quantity
• … etc. • … etc.

Performance Analysis:
• Net Quantity
• Production Rate
• Quality Rate
• Labor Productivity
• … etc.
TQM Quality Management Best Practice - Dr. Attia Gomaa - 2022 101

Case Study: Process Performance Analysis

Production information for a machining process is as follows:

Inputs Outputs
Period

Running Total Defect

Staff
Time Prod. Quantity
hours worker ton ton
--- --- --- --- --- Standard
Template
# KPIs Unit Target
1 Quality Ratio % --
2 Production Rate ton/hour --
3 Labor Productivity ton/man-hour --

Based on this information, discuss KPIs & Strategic Objectives.

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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 51

 Case Study: Process Performance Analysis

Production information for a machining process is as follows:

Period Inputs Outputs

Running Total Defect
Staff
Time Prod. Quantity
hours worker ton ton
2019 1,600 3 1,000 59

# KPIs Unit Target

1 Quality Ratio % 98%
2 Production Rate ton/hour 0.75
3 Labor Productivity ton/man-hour 0.220

Based on this information, discuss KPIs & Strategic Objectives.

TQM Quality Management Best Practice - Dr. Attia Gomaa - 2022 103

Current Performance Evaluation – Period 2019:

Inputs Outputs Performance Indicators
Period

Total Defect Net Prod. Labor Quality

Time Staff
Prod. Quantity Quantity Rate Prod. %
Ton/man-
hours worker ton ton ton Ton/hr hour
%

2019 1,600 3 1,000 59 941 0.625 0.196 94.1

Main Objectives, KPIs and Targets:

Perspective Objectives KPIs Unit Current Target
Process Improving quality
Quality % 94.1% 98.0%
Quality ratio
System Improving Production
ton/hour 0.625 0.750
Performance production rate Rate
People Improving Labor Labor ton/man-
0.196 0.220
Culture Productivity Productivity hour

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 KPIs Presentation (KPIs Dashboard); for example:
KPIs Unit Current Target
Quality % 94.1% 98.0%
Production
ton/hour 0.625 0.750
Rate
Labor ton/man-
0.196 0.220
Productivity hour
Scaling (10):
KPIs Current Target
Quality 9.6 10
Production Rate 8.3 10
Labor Productivity 8.9 10

Improvement Recommendations:
• Check Raw Materials Quality & Check Machining Parameters
• Update Process QA/QC Check List
• Work Standardization & Motivation Program

TQM Quality Management Best Practice - Dr. Attia Gomaa - 2022 105

Process Performance Evaluation

For example;

Production Process KPIs

Production Customer
KPIs KPIs

Quality Cost
KPIs KPIs

Resources Safety Maintenance

KPIs KPIs KPIs
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 Assignment:
√
Process Performance Analysis
Production information for a machining process is as follows:
Period Inputs Outputs
Standard Running Total Defect
Staff Cost
Time Time Prod. Quantity
hours hours worker ton ton M.LE
2018 2,000 1,600 3 1,100 70 9.0
2019 2,000 1,600 3 1,000 59 8.0

# KPIs Unit Target

1 Quality Ratio % 98.0%
2 Production Rate ton/hour 0.750
3 Labor Productivity ton/man-hour 0.220
4 Time Utilization % 85.0%
5 Average Unit Cost LE/ton 8,000

Based on this information, discuss KPIs & Strategic Objectives.

TQM Quality Management Best Practice - Dr. Attia Gomaa - 2022 107

# KPIs Unit Target 2018 2019

1 Quality Ratio % 98.0% 93.6 94.1
2 Production Rate ton/hour 0.750 0.688 0.625
3 Labor Productivity ton/man-hour 0.220 0.161 0.196
4 Time Utilization % 85.0% 80 80
5 Average Unit Cost LE/ton 8,000 8,737 8,502

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 Case Study: The weekly information for a process is as follows:
Information Units Week #1 Week #2
Targets: Target Output units 12 20
Total Quantity units 12 18
Outputs: Defect Quantity units 2 3
1) Quantity
Sales Quantity units 10 15
2) Revenue
3) Customer Total Revenue; LE LE 220,000 350,000
Customer Claims Units 1 2
Standard Working Days days 6 6
Inputs: Standard Daily Hours hours 8 8
1) Time Running Time hours 36 15
2) Manpower # of Workers man 2 3
3) Machines # of Machines M/c 1 1
4) Materials Raw Materials ton 12 17
5) Energy
6) Cost Energy kwh 1000 1200
Total Cost LE 200,000 330,000

Based on this information, discuss performance evaluation.

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 109

Performance Analysis:
# Indicators Units Equation
1 Net Quantity Units Total Quantity – Defect Quantity
2 Quality % Net Quantity / Total Quantity
3 Sigma Level factor Table
4 Average Unit Cost LE/unit Total Cost / Net Quantity
5 Average Unit Price LE/unit Total Revenue / Net Quantity
6 Profit % (Unit Price– Unit Cost) / Unit Cost
7 Customer Sat. % (Sales Quantity – Claims) / Sales Q.
8 Effectiveness % Net Quantity / Target Quantity
9 Total Productivity % Total Revenue / Total Cost
10 Time Efficiency % Running Time / Standard Time
11 Production Rate Unit / hour Net Quantity / Standard Time
12 Labor Productivity Man-hour/unit # workers * Total St. hours / Net Q.
13 Material Prod. Unit / ton Net Quantity / Raw Mat. Quantity
14 Energy Prod. kwh/unit Energy / Net. Quantity
15 Machine Prod. Mach-hour/unit # M/c * Total R. hours / Net Q.
16 Material Scrap % ?

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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 55

 Sigma Level:
Sigma Six Sigma Table
Performance
Level DPPM Yield %
1 691,462 30.8538 F

2 308,537 69.1463 D

3 66,807 93.3193 C

4 6,210 99.3790 B

5 233 99.9767 A

6 3.4 99.99966 A+
Excel File
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 111

KPIs Selection:
# Indicators Units Week #1 Week #2 KPIs
1 Net Quantity Units 10 15
2 Quality % 83.3% 83.3% x
3 Sigma Level factor 2.47 2.47
4 Average Unit Cost LE/unit 20,000 22,000
5 Average Unit Price LE/unit 22.000 23,333
6 Profit % 10% 6% x
7 Customer Sat. % 90% 86.6% x
8 Effectiveness % 83.3% 75.0% x
9 Total Productivity % 110% 106%
10 Time Efficiency % 75.0% 31.25%
11 Production Rate Unit / hour 0.208 0.313 x
12 Labor Productivity Man-hour/unit 9.6 9.6 x
13 Material Prod. Unit / ton 0.833 0.882
14 Energy Prod. kwh/unit 100 80
15 Machine Prod. Mach-hour/unit 3.6 1.0

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 Balanced Scorecard (BSC): ‫بطاقة اﻷداء المتوازن‬
Perspective / Actual
KPIs Unit Target Status
Objective Week#2
1) Customer / Customer
% 86.6% 92%
Improve Customer Satisfaction Satisfaction
2) Financial /
Profit Ratio % 6.0% 12%
Improve Profit Ratio
3) Product Quality /
Quality Ratio % 83.3% 85%
Improve Quality Ratio
4) Target Quantity / Effectiveness
% 75.0% 85%
Improve Effectiveness Ratio Ratio
5) Production Capacity / Production
Unit/hour 0.313 0.350
Improve Production Rate Rate
6) Resources Utilization / Labor Man-
9.6% 9.0
Improve Labor Productivity Productivity hour/unit

Conclusion & Recommendations:

•
•
•
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 113

The weekly information for a process is as follows:

Information Units Week Week .. . Week
#1 #2 . #52
Targets: Target Output units
Total Quantity units Standard
Defect Quantity units Template
Outputs: Sales Quantity units
Total Revenue; LE LE
Customer Claims Units
Standard Working Days days
Standard Daily Hours hours
Inputs: Running Time hours
# of Workers man
Total Cost LE

Perspective Objective / KPIs Unit Target

Customer Improve Customer Satisfaction % 92%
Financial Improve Profit Ratio % 12%
Production Quality Improve Quality Ratio % 85%
Target Quantity Improve Effectiveness Ratio % 85%
Production Capacity Improve Production Rate Unit/hour 0.350
Resources Utilization Improve Labor Productivity Man-hour/unit 9.0
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 Assignment: The weekly information for a process is as follows:
Information Units Week #1 Week #2
Targets: Target Quantity units 20 22
Total Quantity units 18 21
Defect Quantity units 3 3
Outputs: Sales Quantity units 15 16
Total Revenue; LE LE 350,000 432,000
Customer Claims Units 2 2
Standard Working Days days 6 6
Standard Daily Hours hours 8 8
Inputs: Running Time hours 15 35
# of Workers man 3 4
Total Cost LE 330,000 360,000
Perspective Objective / KPIs Unit Target
Customer Improve Customer Satisfaction % 92%
Financial Improve Profit Ratio % 12%
Production Quality Improve Quality Ratio % 85%
Target Quantity Improve Effectiveness Ratio % 85%
Production Capacity Improve Production Rate Unit/hour 0.350
Resources Utilization Improve Labor Productivity Man-hour/unit 9.0

Based on this information, discuss performance evaluation.

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 115

Key Performance Indicators (KPIs)

Lagging indicators are the results.

Leading indicators lead to results.

Leading Lagging

Cause Effect
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 Safety Lagging and Leading Indicators; for example

Lagging Fatality ‫مؤشرات لقياس‬

Indicators Injure Rate .‫النتائج المحققة‬
Accident Rate
Lost Time Days
‫مؤشرات لقياس العوامل‬
Leading Safety Training ‫الموثرة علي النتائج‬
Indicators ‫المحققة والمهمة للتحسين‬
Near-Miss Analysis .‫المستمر مستقبﻼ‬
At-Risk Behavior Analysis
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 117

Objectives & KPIs; for example

Objectives:
• Improve Customer Satisfaction
‫هدف محدد قابل للقياس‬ • Improve Profitability

Lagging Indicators:
‫مؤشرات لقياس النتائج‬ • Improve Production Quantity
.‫المحققة ﻹنجاز الهدف‬ • Improve Quality %
• Reduce Unit Cost

Leading Indicators:
‫مؤشرات لقياس العوامل‬
• Improve Compost Quality %
‫الموثرة علي النتائج‬
• Improve Labor Training %
‫المحققة والمهمة للتحسين‬
• Improve Labor Productivity
.‫المستمر للنتائج‬
• Improve Labor Motivation %
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 KPIs Design:
XXX Department; for example
Main
Objective
‫هدف محدد قابل للقياس‬ SMART

RCA

‫مؤشرات لقياس النتائج المحققة‬

Lagging
Results .‫ﻹنجاز الهدف‬ Indicators
Indicators
(Results / Managers / Effect)
RCA

‫مؤشرات لقياس العوامل الموثرة علي‬

‫النتائج المحققة والمهمة للتحسين‬ Leading
Actions
Indicators
.‫المستمر للنتائج‬ Indicators
(Factors / Leaders / Causes)
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 119

Production Performance Indicators:

Lagging Indicators: Leading Indicators:
• Total Production Quantity , Defects • Material Availability%
• Defect % , Rework %, Scrap% • Material Quality%
• Quantity; Quality% , Sigma Level • Material Productivity
• Net Production Quantity • Machine Downtime
• Running Time, Uptime, Lead Time • Machine Productivity
• Cycle Time, Production Rate • Labor Productivity
• Performance%, Availability%, • Labor Training
• Overall Equipment Effectiveness • Planned Work%
• Capacity Utilization % • Failure Investigation%
• Overdue %, Backlog % •
• Average Unit Cost; … etc. •

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 KPIs Design:
Production; for example
Main Continuous Improvement In
SMART
Objective Overall Operation Effectiveness.
RCA
• Maximize Availability%
Sub-
• Maximize Performance% Lagging
Objectives
• Maximize Quality% Indicators
RCA
• Improve Planned Work%
• Improve Failure Investigation%
• Improve Material Availability% Leading
Main • Improve Material Quality%
Actions Indicators
• Improve Machine Productivity
• Improve Labor Productivity
• Improve Staff Training
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 121

Maintenance Performance Indicators:

Lagging Indicators: Leading Indicators:
• PM Downtime, CM Downtime • Planned Work%
• Reliability%, Availability% • PM Compliance%
• # Failures, MTBF, Failure Rate • Failure Investigation%
• MTTR , MTTM; Overtime% • Failure Finding W/o %
• Overdue%, Backlog%; Rework% • Maintenance Training%
• PM Cost%, Repair Cost% • Spare Parts Availability%
• Maintenance Cost Rate •
• •

• •

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 KPIs Design: Maintenance; for example
Main Continuous Improvement In SMART
Objective System Reliability.
RCA

Sub- • Maximize Equipment Availability

Lagging
Objectives • Maximize Equipment Reliability
Indicators
• Maximize Equipment Utilization

RCA
• Improve Planned Work%
Leading
Main • Improve PM Compliance%
Indicators
Actions • Maximize MTBF
• Minimize MTTR
• Improve Failure Investigation%
• Improve Maintenance Training%
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 123

Safety Performance Indicators:

Lagging Indicators: Leading Indicators:
• Fatality Rate • HSE Training
• Accident Frequency Rate • JHA Reports
• Injury Frequency Rate • Near Miss Reports
• Accident Severity • Number of Safety Audits
• Lost Time Injury & Inspections
Frequency Rate (LTIFR) • Employee Satisfaction
• First Aid Rate • Safety Prevention Cost
• Accident Cost •
• •

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 KPIs Design:
Safety; for example

Main Continuous Improvement In SMART

Objective Accident Frequency Rate.
RCA

• Minimize Accident Severity Lagging

Sub-
• Minimize Lost Time Injury (LTI)
Objectives • Minimize Injury Frequency Rate Indicators

RCA

• Improve HSE Training

Main • Improve Near Miss Reports Leading
Actions • Improve Number of Inspection Indicators
• Improve JHA Reports
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 125

KPIs Design:
Leading
Indicators
Lagging
Indicators

Objective
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 126

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 Report #4: KPIs Evaluation
Company: Period:

Lagging /
Perspective Objectives KPIs
Leading

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What is Benchmarking?
Best of the best Practice for
continuous improvement
A tool for identifying and measuring best
practice in order to improve performance

Benchmarking means learn from the best practice

Current Gap Benchmarking

Situation Analysis

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 Benchmarking Analysis
Comparing your business performance
against certain reference points.

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 129

Benchmarking
Best of the best
Practice
External
Benchmarking

Internal
Benchmarking Goal

Target

Current
“Until you take the first step, it will not be possible to see the next step”
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 Targets for KPIs:
Targets should be defined
relative to:
• Internal benchmarks:
“Surpass last year’s results.”

• External benchmarks:
“Surpass competitor X.”

• Global best practice:

“Become as good as X.”

Targets should have a clear

time frame:
Achieve target X by
December 2022.
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 131

KPI Frequency ‫تكرار متابعة المؤشر‬

Daily Weekly Monthly … Annually

Trend is good When ‫قطبية المؤشر‬

Increasing Decreasing Within Limits …

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 KPI Limits (Performance Thresholds): ‫حدود اﻷداء‬
For example;
Thresholds

Color
Codes

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 133

KPIs Tree: Required Data

Profit KPI Tree; for example
---
---
Sales ---
Quantity
Revenue * ---
Objective; Unit ---
Price ---

Profit - Material Cost

---
Variable
---
Cost
Cost + Insurance
Fixed Rent
Cost
---
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 KPIs Tree: Required Data
---
Cost ---
---

Objective; Product ---

Quality ---
Customer ---
Satisfaction Service ---
Quality ---
---
Time
---
Delivery
---
---

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 135

For example; KPI Card

1 Perspective
2 Objective … …
3 KPI
4 Unit
5 Frequency
6 Actual Result
Thresholds
7 Target

Thresholds
8
‫حدود اﻷداء‬

9 Status
Initiatives •
10 ‫المبادرات‬ •
(‫)برامج التحسين‬ •
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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 68

 Assignment #1: The annual information for a machining process is as follows:
Perspective Item unit 2020
Standard Working Hour hours/day
Standard Standard Working Days day/year
Performance
Standard Performance Rate unit / hour Standard
Actual Working Time hours Template
Actual Total Production ton
Performance
Defect Quantity ton
Total Revenue $
Financial
Total Cost $
Sales Quantity Units
Sales & Customer
Customer Claims Units
Total Training Hours Man.hours
Staff
Total # of Staff Man
Perspective KPIs Equation Unit Target
Customer Customer Satisfaction (Sales Quantity – Claims) % 80%
/ Sales Quantity
Financial Total Revenue Total Revenue $ 100,000
Process Cycle Time Actual Working Time Min./ 30
/ Net Production unit
People Training Hours Total Training Hours Hour/ 24
/ # of staff man
Based
TQM on this information, discuss
Strategic Planning Strategic
Best Practice – Dr.Objectives
Attia Gomaa& KPIs.
- 2022 137

Assignment: The annual information for a machining process is as follows:

Perspective Item unit 2020
Standard Working Hour hours/day 8
Standard Standard Working Days day/year 250
Performance
Standard Performance Rate unit / hour 2
Actual Working Time hours 1500
Actual Total Production ton 4,800
Performance
Defect Quantity ton 300
Total Revenue $ 105,000
Financial
Total Cost $ 90,000
Sales Quantity Units 4000
Sales & Customer
Customer Claims Units 1400
Total Training Hours Man.hours 300
Staff
Total # of Staff Man 10
Perspective KPIs Equation Unit Target
Customer Customer Satisfaction (Sales Quantity – Claims) % ≥ 80%
/ Sales Quantity
Financial Total Revenue Total Revenue $ ≥ 100,000
Process Cycle Time Actual Working Time Min./ ≤ 30
/ Net Production unit
People Training Hours Total Training Hours Hour/ 24 to 28
/ # of staff man
Based
TQM on this information, discuss
Strategic Planning Strategic
Best Practice – Dr.Objectives
Attia Gomaa&- 2022
KPIs. 138

Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 69

 For example; KPI Card
1 Perspective Customer
2 Objective Improve Customer Satisfaction … …
3 KPI Customer Satisfaction
4 Unit %
5 Frequency Annually / Quarter
6 Actual Result 65%
7 Target 80% Thresholds
> 80
Thresholds
8 70 – 80
‫حدود اﻷداء‬
< 70
9 Status
Initiatives •
10 ‫المبادرات‬ •
(‫)برامج التحسين‬ •
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 139

For example; KPI Card

1 Perspective Financial
2 Objective Improve Revenue … …
3 KPI Revenue
4 Unit $
5 Frequency Annually / Monthly
6 Actual Result 105,000
7 Target 100,000
> 100,000
Thresholds
8 90,000 – 100,000
‫حدود اﻷداء‬
< 90,000
9 Status
Initiatives •
10 ‫المبادرات‬ •
(‫)برامج التحسين‬ •
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 For example; KPI Card
1 Perspective Internal Process
2 Objective Improve Production Efficiency … …
3 KPI Production Cycle Time
4 Unit Min. / unit
5 Frequency Annually / Monthly
6 Actual Result 20
7 Target 30
< 30
Thresholds
8 30 – 35
‫حدود اﻷداء‬
> 35
9 Status
Initiatives •
10 ‫المبادرات‬ •
(‫)برامج التحسين‬ •
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 141

For example; KPI Card

1 Perspective Human Resources
2 Objective Improve Staff Training & Skills … …
3 KPI Training Hours
4 Measure Unit Average Training Hours / Employee
5 Frequency Annual / Quarter
6 Actual Result 30
7 Target 24
24-28
Thresholds
8 20 – 24 & 28-32
‫حدود اﻷداء‬
< 20 & >32
9 Status
Initiatives •
10 ‫المبادرات‬ •
(‫)برامج التحسين‬ •
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 Balanced Scorecard (BSC): ‫بطاقة اﻷداء المتوازن‬
Perspective /
KPIs Actual Target Status
Objective
Customer / Customer
65% 80%
Improve Customer Satisfaction Satisfaction %
Financial /
Revenue 105,000 100,000
Improve Revenue
Internal Process /
Cycle Time 20 30
Improve Production Effiency
Average
Human Resources /
Training Hours 30 24
Improve Staff Training & Skills
/ Employee

Conclusion & Recommendations:

•
•
•
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 143

Balanced Scorecard (BSC): ‫بطاقة اﻷداء المتوازن‬

Organization Performance

Staff
Financial Internal
Process
Customer
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 Balanced Scorecard (BSC): ‫بطاقة اﻷداء المتوازن‬
Kaplan &
Norton (1992)

BSC is a strategic planning system that organizations

use to focus on strategy and improve performance.
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 145

Balanced Scorecard (BSC): ‫بطاقة اﻷداء المتوازن‬

Best Practice:
(4-6) Perspectives / Organization
(1-4) Objectives / Perspective
(1-4) KPIs / Objective

Perspective Weight
Customer 25-30%
Financial 20-25%
Internal Process 20-25%
Human Resources 15-20%
Others 10-15%
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 Assignment: The annual information for a machining process is as follows:
Perspective Item unit 2020 2021
Standard Working Hour hours/day 8 8
Standard Standard Working Days day/year 250 250
Performance
Standard Performance Rate unit / hour 2 2
Actual Working Time hours 1500 1700
Actual Total Production ton 4,800 5,100
Performance
Defect Quantity ton 300 350
Total Revenue $ 105,000 140,000
Financial
Total Cost $ 90,000 115,000
Sales & Sales Quantity Units 4000 4500
Customer Customer Claims Units 1400 1600
Total Training Hours Man.hours 300 250
Staff
Total # of Staff Man 10 12
Perspective KPIs Equation Unit Target
Customer Customer Satisfaction (Sales Quantity – Claims) % 80%
/ Sales Quantity
Financial Total Revenue Total Revenue $ 100,000
Process Cycle Time Actual Working Time Min./ 30
/ Net Production unit
People Training Hours Total Training Hours Hour/ 24
/ # of staff man
Based
TQM on this information, discuss
Strategic Planning Strategic
Best Practice – Dr.Objectives
Attia Gomaa& KPIs.
- 2022 147

Assignment: Process Performance Analysis

The annual operation information for a machining process is as follows:
Perspective Item unit 2018 2019
Standard Working Hour hours/day 8
Standard
Performance Standard Working Days day/year 250
Performance Rate ton / hour 0.75
Main Productive Workers workers 4 3
Resources
Actual Working Time hours 1,600 1,600
Actual Total Production ton 1,100 1,000
Performance Defect Quantity ton 70 59
Total Process Cost M.LE 9 8

Perspective Indicators Equation Target 2019

Capacity Operation Efficiency Net Production / Standard Production 80 %
Quality Quality Ratio Net Production / Total Production 98 %
Net Production Quantity / 200 Kg /
Resources Labor Productivity (# Labor * Actual Time) man.hour
Cost Unit Cost Total Cost / Net Production Quantity 8000 LE/ton
Based on this information, discuss KPIs & Strategic Objectives.
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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 74

 Operational Availability & Reliability & Utilization Analysis
Standard Operating time (TT)
A
Planned (target) time (PT) PM
R
Available time (AT) CM
U2
Operating (used) time (OP) Waiting / Downtime
U1 Delay /
S/B

PM = Planned downtime A= Equipment Availability = AT/TT

CM = Corrective downtime = Available time / Total Time
S/B =Standby time = (Total Time – Downtime) / Total Time
OP = Operating time = (OP + S/B) / (OP+S/B+PM+CM)
AT = Available Time R= Equipment Reliability = AT / PT
PT = Planned Time = (OP+S/B) (OP + S/B + CM)
= Running / (Running + CM)
U= Equipment Utilization
= OP / AT or = OP / TT

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 149

Brainstorming:
Key Performance Indicators (KPIs)

Given:
Levels:
1) Standard Operating Time = 8,760 hours/y
• Facility
• System 2) Planned (PM) Downtime = 37 hours
• Equipment
3) Unplanned (CM) Downtime = 190 hours
4) Actual Operating Time = 5,532 hours

KPIs:

PM% R% A% U% ---
16.3% 97.8% 97.4% 64.8% ---
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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 75

 Given:
Levels:
1) Standard Operating Time = 8,760 hours/year
• Facility
2) Planned (PM) Downtime = 37 hours
• System
3) Unplanned (CM) Downtime = 190 hours
• Equipment
4) Actual Operating Time = 5,532 hours

A 97.4% Standard Operating time (TT) = 8,760

R 97.8% Planned (target) time (PT) = 8,723 PM

37
Available time (AT) = 8,533 CM
U 64.8% 190
Actual Operating time (OP) = 5,532 Waiting Downtime
3,001 227
KPIs for 2020: Target KPIs for 2021: Recommendations:
A = Availability = 97.4 % A ≥ 99% How?
R = Reliability = 97.8 % R ≥ 99% • …
U = Utilization = 64.8 % U ≥ 70%
• ….
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 151

Assignment: Given:
Levels: 1) Standard Operating Time = 8,760 hours/year
• Facility 2) Planned (PM) Downtime = 274 hours
• System 3) Unplanned (CM) Downtime = 182 hours
• Equipment 4) Actual Operating Time = 8,030 hours

A-% Standard Operating time (TT) = -

Planned (target) time (PT) = - PM

R-%
-
Available time (AT) = - CM
U -% -
Actual Operating time (OP) = - Waiting Downtime
- -

KPIs for 2021: Target KPIs for 2022: Recommendations:

A = Availability = - % A ≥ 99% How?
R = Reliability = - % R ≥ 99% • …
U = Utilization = - % U ≥ 70% • ….
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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 76

 Production & Maintenance:
KPIs Design:
Level Objectives KPI
Main Continuous Improvement In Overall Equipment
Objective Overall Operation Effectiveness. Effectiveness (OEE)%

Maximize Availability% Availability%

Sub-
Maximize Performance% Performance%
Objectives
Maximize Quality% Quality%
Improve Planned Work% Planned Work%
Improve Failure Investigation% Failure Investigation%
Improve Material Availability% Material Availability%
Actions Improve Material Quality% Material Quality%
Improve Machine Productivity Machine Productivity
Improve Labor Productivity Labor Productivity
Improve Staff Training Staff Training Hours

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 153

Production & Maintenance:

Process: Period:
Performance Required Data Unit Values
Standard Standard Time hours
Performance Standard Production Rate ton / hour
Actual Working Time hours
Actual Actual Production Quantity ton Standard
Performance Template
Defect Quantity ton
Net Material Quantity ton
Material Rejected Material Quantity ton
Performance
Stock Out Quantity ton
Labor Total Man-hours Man-hours
Performance
Machine Machine-
Total Machine-hours hours
Performance
PM Downtime hours
Maintenance CM Downtime hours
Performance Number of CM Work Orders #
Number of RCFA Sheets #
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 # KPI Equation
Overall Equipment
1 A* P* Q
Effectiveness (OEE%)
2 Availability (A%) (Standard Time – Downtime) / Standard Time
3 Performance (P%) Actual Production / Standard Production
4 Quality (Q%) (Actual – Defect) / Actual
5 Planned Work (PM%) PM / (PM + CM)
6 Failure Investigation (FI%) # RCFA / # CM
7 Material Availability (MA%) Net Material / (Net Material + Stock Out )
8 Material Quality (MQ%) Net Materials / (Net Materials + Defected Materials)

9 Machine Productivity (MP) Net Production / Total Machine-hours

10 Labor Productivity (LP) Net Production / Total Man-hours

11 Staff Training Hours Total Training Hours / # of staff

TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 155

Assignment:
Process: ABC Process Period: 2019
Performance Required Data Unit Values
Standard Standard Time hours 2,000
Performance Standard Production Rate ton / hour 0.75
Actual Working Time hours 1,600
Actual Actual Production Quantity ton 1,000
Performance
Defect Quantity ton 59
Net Material Quantity ton 1,200
Material Rejected Material Quantity ton 29
Performance
Stock Out Quantity ton 100
Labor
Total Man-hours Man-hours 6,000
Performance
Machine
Total Machine-hours Machine-hours 1,600
Performance
PM Downtime hours 60
Maintenance CM Downtime hours 40
Performance Number of CM Work Orders # 8
Number of RCFA Sheets # 4
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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 78

 # KPI Unit Target Actual
Overall Equipment
1 % 85 59.6
Effectiveness (OEE)
2 Availability (A) % 97 95.0
3 Performance (P) % 90 66.7
4 Quality (Q) % 98 94.1
5 Planned Work (PM) % 70 60.0
6 Failure Investigation (FI) % 70 50.0
7 Material Availability (MA) % 98 92.3
8 Labor Productivity (LP) Kg/ man-hour 200 166
9 Machine Productivity (MP) Kg/ M/c-hour 500 625
10 Material Quality (MQ) % 98 97.6

Conclusion & Recommendations:

•
•
•
•
TQM Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 157

Achieve Maintenance/Operations Integration.

Overall Equipment Effectiveness (OEE)
= Availability * Performance * Quality
Benchmarking:

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Strategic Planning Best Practice – Dr. Attia Gomaa - 2022 79

 Brainstorming: Process Performance Analysis (OEE Analysis)

The annual operation information for a machining process is as follows:

Standard (Target) Performance:
 Standard Working Hour = 8 hours/day
 Standard Working Days = 250 day/year
 Standard Performance Rate = 0.75 ton / hour

Actual (Current) Performance:

 Actual Working Time = 1,600 hours
 Total Production Quantity = 1,000 ton
 Rejected Quantity = 29 ton

Annual Downtime:
 Planned Maintenance Downtime = 60 hours
 Unplanned Maintenance Downtime = 40 hours

Overall Equipment Effectiveness (OEE)

= Availability * Performance * Quality
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Standard (Target) Performance:

 Standard Working Hour = 8 hours/day
 Standard Working Days = 250 day/year
 Standard Performance Rate = 0.75 ton / hour
Actual (Current) Performance:
 Actual Working Time = 1,600 hours
 Total Production Quantity = 1,000 ton
 Rejected Quantity = 29 ton
Annual Downtime:
 Planned Maintenance Downtime = 60 hours
 Unplanned Maintenance Downtime = 40 hours

• Availability = (Standard Time – Total Downtime) / Standard Time

= (2000 – 100) / 2000 = 95.0 %
• Performance = Total Production / Standard = 1,000 / (1,600*0.75) = 83.3%
• Quality = Net Quantity / Total Quantity = (1,000 – 29) / 1,000 = 97.1%

OEE = Availability * Performance * Quality = 76.76 %

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 Lean Approach – Value Added Flow Analysis
Non-Productive Time
(Non Value Added Time)

Planned Quality
downtime losses
(t1) Unplanned Speed (t5)
downtime losses
Waiting
(t2) (t4)
time
(t3)

Availability & Quality

Reliability Rate
Utilization Performance
Ratios
Ratio Efficiency
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A% Standard time (T0)

Planned (target) time (T1) PM

R%

Available time (T2) CM

U%
Actual Operating time (T3) Waiting Downtime
losses

P%
Uptime (T4) Speed
losses
Q%
Productive time (T5) Defect
losses
OEE %
Non-productive time (TL)
Value Added Time
Non-value Added

A - Availability R – Reliability U – Utilization

P – Performance Q – Quality OEE - Overall Equipment Effectiveness
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 Brainstorming: Process Performance Analysis (OEE Analysis)

The annual operation information for a machining process is as follows:

Standard (Target) Performance:
 Standard Working Hour = 8 hours/day
 Standard Working Days = 250 day/year
 Standard Performance Rate = 0.75 ton / hour

Actual (Current) Performance:

 Actual Working Time = 1,600 hours
 Total Production Quantity = 1,000 ton
 Rejected Quantity = 29 ton

Annual Downtime:
 Planned Maintenance Downtime = 60 hours
 Unplanned Maintenance Downtime = 40 hours

Based on this information, discuss KPIs & Current Situation Analysis.

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A 95.0% Standard time (T0) = 2,000

Planned (target) time (T1) = 1,940 PM

R 97.9%
60
Available time (T2) = 1,900 CM
40
U 84.2%
Operating time (T3) = 1,600 Waiting
Downtime
300 100
P 83.3%
Uptime (T4) =1,000/0.75= 1,333 Speed
267
Q 97.1% Productive time (T5)=
(1,000-29)/0.75 = 1,295 Defect
38
OEE Non-productive time (TL)
64.75% 705
Value Added Time
Non-value Added
1,295 (64.75%)
705 (35.25%)
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 Standard (Target) Performance:
 Standard Working Hour = 8 hours/day
 Standard Working Days = 250 day/year
 Standard Performance Rate = 0.75 ton / hour
Actual (Current) Performance:
 Actual Working Time = 1,600 hours
 Total Production Quantity = 1,000 ton
 Rejected Quantity = 29 ton
Annual Downtime:
 Planned Maintenance Downtime = 60 hours
 Unplanned Maintenance Downtime = 40 hours

• Availability = (Standard Time – Downtime) / Standard Time

= (2000 – 100) / 2000 = 95.0 %
• Utilization = Operating Time / Available Time = 1,600 / (2000-100) = 84.2%
• Performance = Total / Standard = 1,000 / (1,600*0.75) = 83.3%
• Quality = Net / Total = (1,000 – 29) / 1,000 = 97.1%

OEE = Availability*Utilization*Performance*Quality = 64.7%

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Process Performance Indicators - II

Current Target Business
# Indicators Unit
2019 2020 Level
1 Availability % 95.0% 98% KPI

2 Reliability % 97.9% 99%

3 Utilization % 84.2% 90%

4 Performance % 83.3% 90% KPI

5 Quality % 97.1% 98% KPI

6 OEE (= A*U*P*Q) % 64.75% 78% KPI

Brainstorming

KPIs Analysis
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 Overall Equipment Effectiveness (OEE)

Assume; Utilization = 100%

Total Effective Equipment Performance (TEEP)

A = Availability U= Utilization
P = Performance Q= Quality
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Case Study: Process Performance Analysis (OEE Analysis)

System: Operation and Maintenance for Petrochemical Company XXX
Key Objective: Improve Overall Equipment Effectiveness (OEE) at low cost
Dept. Item Units 2017 2018
Daily Working Hours hour/day 24 24
Annual Working Days days 365 365
Operation

Standard Performance Rate units/hour 15 15

Actual Operating Time hours 8,000 8,200
Total Production Quantity units 105,000 126,000
Reject/Scrap Quantity units 5,000 6,000
Maintenance

Planned Downtime (PM) hours 72 72

Unplanned Downtime (CM) hours 48 24
Annual Maintenance Cost 1000 LE 10,000 11,000

Based on this information, discuss KPIs & Strategic Objectives.

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 2017
OEE
76.1% Total time (T0) = 8760 Hours

A=98.6%
Planned (target) time (T1) = 8688 72
PM
R=99.4%
Available time (T2) = 8640 48 Planned
CM N
U=92.6% Unplanned
Operating time (T3) = 8000 640
Delay / U
P= 87.5% Waiting
Uptime (T4) =105,000/15= 7000 1000
Speed U N
Q=95.2% Productive time (T5)= U
100,000/15 =6,666 333
Defect
(Value Added Time) = 76.1%
U
Non-productive time (TL)
N Necessary
2,094  23.9%
U Unnecessary (Non-value Added)
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2018
OEE
91.3% Total time (T0) = 8760 Hours

A=98.9%
Planned (target) time (T1) = 8688 72
PM
R=99.7%
Available time (T2) = 8664 24 Planned
CM N
U=94.6% Unplanned
Operating time (T3) = 8200 464
Delay / U
P= 102.4%
Waiting
Uptime (T4) =126,000/15= 8400 -200
Over U N
Q=95.2% Speed
Productive time (T5)=
120,000/15 =8,000 400
Defect
(Value Added Time) = 91.3%
U
Non-productive time (TL)
N Necessary
760  8.7%
U Unnecessary (Non-value Added)
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 KPIs Report
Evaluation Target
KPIs 2017 2018 Responsibility
2018 / 2017 2019
OEE % 76.1 91.3 + 15.2% 93% Facility
Availability % 98.6 98.9 + 0.3% 99.5
Reliability % 99.4 99.7 + 0.3% 99.99 Maintenance
Maintenance Cost
100 91.7 - 9.2 % 80
Rate ; LE/unit
Utilization % 92.6 94.6 + 2.0% 96% Logistics
Performance % 87.5 102.4 + 14.9% 100% Operation
Quality % 95.2 95.2 - 97% Quality
Graph
Comments & Recommendations for the next period 2019:
1- Advanced Training Program
2- Performance Motivation Program
3- Standard Documentation System
4- Update Maintenance Program
5- Root Cause Failure Analysis (RCFA)
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Brainstorming: Process Performance Analysis (OEE Analysis)

System: Operation and Maintenance for Generators Power Plant
Key Objective: Improve Overall Equipment Effectiveness (OEE) at low cost

Dept. Item Units Q1 Q2

Daily Working Hours hour/day 24 24
Standard Working Days days 90 90
Operation

Standard Performance Rate Kw 350 350

Actual Operating Time hours 1,200 1,500
Total Production Quantity Kwh 300,000 400,000
Reject/Scrap Quantity Kwh 0 0
Maintenance

Planned Downtime (PM) hours 20 20

Unplanned Downtime (CM) hours 15 10

Maintenance Cost 1000 LE 100 120

Based on this information, discuss KPIs & Strategic Objectives.

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 Assignment: Process Performance Analysis (OEE Analysis)
The annual information for operation and maintenance is as follows:
Perspective Item unit 2018 2019
Standard Working Hour hours/day 8
Standard Standard Working Days day/year 250
Performance
Performance Rate ton / hour 0.75
Actual Working Time hours 1,600 1,600
Actual Total Production ton 1,100 1,000
Performance
Defect Quantity ton 70 59
Total Planned Maintenance Downtime hours 60 70
Downtime Unplanned Maintenance Downtime hours 50 60
Perspective Indicators Equation Target 2019
Facility OEE Productive Time / Standard Time 70%
Availability Available Time / Standard Time 97%
Maintenance
Reliability Available Time / Planned Time 99%
Utilization Operating Time / Available Time 90%
Operation
Performance Up Time / Operating Time 90%
Quality Quality Rate Productive Time / Up Time 98%
Based on this information, discuss KPIs & Strategic Objectives.
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Safety KPIs

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 Safety KPIs
Fatality Frequency Rate = (# Fatals) x 1,000,000
1
(Fatality / 1,000,000 hours) Employee hours worked

Accidents Frequency Rate = (# Accidents) x 1,000,000

2
(Accident / 1,000,000 hours) Employee hours worked

Accidents Severity Rate = (# Lost Man-days) x 1,000,000

3
(Lost Man-days / 1,000,000 hours) Employee hours worked

Injury Frequency Rate = (# injuries) x 1,000,000

4
(Injury / 1,000,000 hours) Employee hours worked

Minor Injury Frequency Rate = (# minor injuries) x 1,000,000

5
(Minor Injury / 1,000,000 hours) Employee hours worked
(First aid = minor injury)

6 Lost Time Injury Frequency Rate (# Total lost time injuries) x 1,000,000
(LTIFR) Employee hours worked
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Assignment: Process Performance Analysis (Safety Analysis)

A company has the following safety information for the last two years:
# Item 2018 2019 ‫البيانات‬
1 Total Number of Workers 22 25 ‫عدد العاملين بالورشة‬
2 Annual Working Hours / Worker 2000 2000 ‫ساعات العمل السنوية‬
3 Number of Accidents 8 6 ‫عدد الحوادث‬
4 Number of Injuries 15 12 ‫عدد اﻹصابات‬
5 Total Days Lost 50 40 ‫أيام اﻻنقطاع نتيجة اﻹصابات‬
6 Number of Minor Injuries 70 60 ‫عدد اﻹصابات البسيطة‬
7 Number of Near-Miss 25 40 ‫عدد ظروف العمل الغير آمنة‬
8 Number of Safety meetings 24 40 ‫إجتماعات السﻼمة‬
9 Hazard Analysis Reported 5 10 ‫تقارير تحليل المخاطر‬
10 Safety Training; man-hours 100 150 ‫تدريب السﻼمة‬
Perspective Indicators Equation Target 2019
Accidents Frequency Rate (# Accidents) x 1,000,000 0
Reactive (Accident/1,000,000 hours) Employee hours worked
(Lagging) Accidents Severity Rate (# Total days lost) x 1,000,000 0
(Lost days/1,000,000 hours) Employee hours worked
Near-Miss Frequency Rate (# Near-Miss) x 1,000,000 1000
Proactive (Near-Miss/1,000,000 hours) Employee hours worked
(Leading)
Safety Training Rate (Hours/man) Training Hours / Number of workers 10
Based on this information, discuss KPIs & Strategic Objectives.
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 Assignment: Safety KPIs
A company has the following safety information for the last two years:
# Item 2019 2020 ‫البيانات‬

1 Total Number of Workers 25 30 ‫عدد العاملين بالورشة‬

2 Annual Working Hours / Worker 2,000 2,000 ‫ساعات العمل السنوية‬

3 Number of Accidents 6 2 ‫عدد الحوادث‬

4 Number of Injuries 12 4 ‫عدد اﻹصابات‬

5 Total Days Lost 40 20 ‫أيام اﻻنقطاع نتيجة اﻹصابات‬

6 Number of Minor Injuries 60 50 ‫عدد اﻹصابات البسيطة‬

7 Number of Near-Miss Reports 40 80 ‫عدد ظروف العمل الغير آمنة‬

8 Number of Safety meetings 40 80 ‫إجتماعات السﻼمة‬

9 Hazard Analysis Reported 10 20 ‫تقارير تحليل المخاطر‬

10 Safety Training; man-hours 150 300 ‫تدريب السﻼمة‬

Based on this information, discuss the safety KPIs report.

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‫د رشاد بارودي‬

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 SWOT Analysis; 1960
(Environmental Assessment)
It is just a brainstorming tool.
(Good In Good Out)

Internal Factors External Factors

.‫ العوامل الداخلية والخارجية المؤثرة علي اﻷهداف اﻹستراتيجية للمؤسسة‬SWOT
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Strategic Direction:

Vision Mission Values

Current Situation Analysis:

• Surveys Goal, Objectives, KPIs
• Questionnaires
• Focus Groups
SWOT Matrix
Positive (Beneficial) Negative (Harmful)
Current Strengths Weaknesses
External Internal

Performance (3-10) (3-10)

Analysis

Opportunities Threats
Competition (2-5) (2-5)
Analysis Direction

.‫ العوامل الداخلية والخارجية المؤثرة علي اﻷهداف اﻹستراتيجية للمؤسسة‬SWOT

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 SWOT Matrix; for example
Strengths: Weaknesses:
• High product quality • Low profit
• Good experience • High labor cost
• Low fixed cost • Low production capacity
• Low material scrape • High overdue work orders
• Low customer claims • High employee turnover
Opportunities: Threats:
• High customer satisfaction • Strong competition
• New customers • Low market share
• Growing market demand • High inflation rate
• High supplier availability
Brainstorming
1) How to use maximum "Strengths"?
2) How to eliminate all "Weaknesses" ?
3) How to quickly act on "Opportunities"?
4) How to minimize the "Threats"?
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Root Cause Analysis (RCA): :‫تحليل ﻷسباب الجوهرية‬

1 2 3 4
Problem Root Causes Impact Solution
‫المشكلة‬ ‫أسباب المشكلة‬ ‫أثار المشكلة‬ ‫مقترحات العﻼج‬

Root Cause Analysis (RCA); for example;

- - -
- - -
-
-
-
-
-
- High
- -
Cost
-
- - -
- - -
- - -
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 SWOT Matrix
1 4
Specific (+) or (-)

2 5
Measurable Critical

3 6
Benchmarking Integration

Quantitative Parameters ≥ 80% & Qualitative ≤ 20%

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Assignment: SWOT Analysis:

The following information describes a SWOT brainstorming

session for a manufacturing company:
1 Good experience of staff 12 High changes in technology
2 Good location of business 13 High loan interest rate
3 Growing market demand 14 Lack of Information
4 High customer satisfaction 15 Low customer claims
5 High employee turnover 16 Low fixed cost
6 High inflation rate 17 Low market share
7 High labor cost 18 Low material scrape
8 High overdue work orders 19 Low production capacity
9 High product quality 20 Low profit ratio
10 High supplier availability 21 New customers
11 High market price 22 Strong competition

Based on this information, construct SWOT matrix.

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 1 Good experience of staff S 12 High changes in technology T

2 Good location of business S 13 High loan interest rate T

3 Growing market demand O 14 Lack of Information W

4 High customer satisfaction S 15 Low customer claims S

5 High employee turnover W 16 Low fixed cost S

6 High inflation rate T 17 Low market share T

7 High labor cost W 18 Low material scrape S

8 High overdue work orders W 19 Low production capacity W

9 High product quality S 20 Low profit ratio W

10 High supplier availability O 21 New customers O

11 High market price O 22 Strong competition T

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SWOT Matrix for X Company

Strengths: Weaknesses:
Internal Factors

• •
Sorting

Sorting

• •
• •
• •
• •
• •
Opportunities: Threats:
External Factors

• •
Sorting
Sorting

• •
• •
• •
• •
• •

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 SWOT Matrix for X Manufacturing Company
Internal Factors Strengths: Weaknesses:
• High product quality • Low profit ratio
• Good experience of staff • High labor cost
• Low fixed cost • Low production capacity
• Low material scrape • High overdue work orders
• Low customer claims • High employee turnover
• Good location of business • Lack of Information
Opportunities: Threats:
External Factors

• High customer satisfaction • Strong competition

• New customers • Low market share
• Growing market demand • High inflation rate
• High supplier availability • High Loan Interest Rate
• High Market Price • High changes in technology
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Assignment: SWOT Analysis:

The annual information for a manufacturing company is as follows:
I) Current Situation Analysis – Internal Parameters
Perspective Parameter 2020 2021 Benchmarking
Customer claims 9% 8% 5 to 10%
Marketing
Overdue work orders 22% 20% 5 to 10%
Fixed cost ratio 38% 40% 35 to 45%
Financial Profit ratio 18% 15% 20 to 25%
Labor cost ratio 32% 30% 15 to 20%
Product quality ratio 93% 95% 94 to 98%
Operation Material scrape ratio 16% 15% 12 to 18%
Production capacity ratio 59% 60% 70 to 80%
Experience years 19 y 20 y 15 to 25 y
Resources
Employee turnover ratio 14% 12% 5 to 10%

II) Current Situation Analysis – External Parameters

Perspective Parameter 2020 2021 Benchmarking
Customer satisfaction ratio 82% 85% 80 to 90%
New customers ratio +8% / y +10% / y +5 to 15%
Market Growing market demand +8% / y +10% / y +5 to 15%
Competition level; # 2 Comp. 3 Comp. 1 to 2 Comp.
Market share 14% 15% 20 to 25%
Financial Inflation rate 12% 13% 7 to 9%

Based on this information, construct SWOT matrix.

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 I) Current Situation Analysis – Internal Parameters
Perspective Parameter 2020 2021 Benchmarking S/W
Customer claims 9% 8% 5 to 10% S
Marketing
Overdue work orders 22% 20% 5 to 10% W
Fixed cost ratio 38% 40% 35 to 45% S
Financial Profit ratio 18% 15% 20 to 25% W
Labor cost ratio 32% 30% 15 to 20% W
Product quality ratio 93% 95% 94 to 98% S
Operation Material scrape ratio 16% 15% 12 to 18% S
Production capacity ratio 59% 60% 70 to 80% W
Experience years 19 y 20 y 15 to 25 y S
Resources
Employee turnover ratio 14% 12% 5 to 10% W

II) Current Situation Analysis – External Parameters

Perspective Parameter 2020 2021 Benchmarking O/T
Customer satisfaction ratio 82% 85% 80 to 90% O
New customers ratio +8% / y +10% / y +5 to 15% O
Market Growing market demand +8% / y +10% / y +5 to 15% O
Competition level; # 2 Comp. 3 Comp. 1 to 2 Comp. T
Market share 14% 15% 20 to 25% T
Financial Inflation rate 12% 13% 7 to 9% T
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SWOT Matrix for X Manufacturing Company

Strengths: Weaknesses:
Internal Factors

• Low customer claims • High overdue work orders

• Low fixed cost ratio • Low profit ratio
• High product quality ratio • High labor cost ratio
• Low material scrape ratio • Low production capacity
• Good experience years • High employee turnover
• •
Opportunities: Threats:
External Factors

• High customer satisfaction • Strong competition

• High new customers ratio • Low market share
• Growing market demand • High inflation rate
• •
• •
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 SWOT Parameters; for example

Internal Factors External Factors

1. Business 1. Customers
2. Marketing & Sales 2. Competition

3. Operations 3. Market
4. Financial 4. Suppliers

5. Resources 5. Economical
6. … etc. 6. Environmental

Strengths / Weaknesses Opportunities / Threats

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SWOT Analysis – Internal Parameters Dr. Attia Gomaa ; 2008

Item Weaknesses Normal Strengths
Business Experience & History
Business Brand & Knowhow
Business Culture
1) Business

Business Location and Space

Business Product Range
Business Website
Business MIS & QMS
Leadership & Management
Organization Structure
Continuous Improvement

Customer Service
Speed of Service
Customer Satisfaction
2) Marketing

Customer Loyalty
Customer Relationship
Customer Claims %
Product Lead Time
Product Price
Distribution Channels
Marketing & Advertising

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 SWOT Analysis – Internal Parameters
Item Weaknesses Normal Strengths
Product Quality
Quality Standards
Production Scale
Production Rate
Capacity Utilization %
Material Scrape %
Process Quality
3) Operations

Research & Development R&D

Product Design
Product Development
New Products
Value Engineering
HSE Awareness
Inventory Systems
Maintenance Programs
Logistics Programs

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SWOT Analysis – Internal Parameters

Item Weaknesses Normal Strengths
Fixed Cost %
Labor Cost %
Raw Material Cost %
4) Financial

Technical Overhead Cost %

Office Overhead Cost %
Value Added %
Profit Margin %
CAPEX & OPEX %
Inventory Turnover
Cash Flow & Financial Position
Labor Productivity
Staff Motivation
Staff Training
5) Resources

Staff Workforce
Staff Turnover
Material Productivity
Machines Productivity
Energy Productivity
Area & Layout
Infrastructure
Technology

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 SWOT Analysis – External Parameters
Item Threats Normal Opportunities
Customer Awareness

1) Customer
New Customers
Old Customers
Customer Retention
Customer Needs
Local Competition Level
2) Competition

Int. Competition Level

Product Development
New Products
Technology Development
New Technology
New Competitors
Market Gap
New Markets
Market Demand
3) Market

Market Share
Market Price
Market Development
Distribution Channels
New Services
Market Culture

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SWOT Analysis – External Parameters

Item Threats Normal Opportunities
Supplier Availability
Supplier Reliability
4) Suppliers

Supplier Relations
Material Availability
Raw Material Cost
Payment Conditions

Inflation Rate
6) Environmental 5) Economical

Currency Stability
Price Fluctuation
Taxes %
Financial Resources

Environmental Issues
Social Issues
Political Issues

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 Dr. Attia Gomaa ; 2008
Case Study:
Business: X Company
Strategic Objectives
Discipline Main Objectives
Market Grow Market Share
Financial Improve Profit Ratio
Operation Improve Production Capacity
Reduce Employee Turnover
Resources
Improve Material Productivity

SWOT Matrix
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Business: Brainstorming

Discipline Financial
Objective Improve Profit Ratio

SWOT Matrix
Leader: Eng. xxx :‫ تجميع اﻷفكار‬:‫المرحلة اﻷولي‬
Strengths: Weaknesses:
1) 1)
2) 2)
3) 3)
4) 4)
5) 5)

Opportunities: Threats:
1) 1)
2) 2)
3) 3)
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 Business:
Discipline Financial
Objective Improve Profit Ratio

SWOT Matrix
Leader: Eng. xxx :‫ تجميع اﻷفكار‬:‫المرحلة اﻷولي‬
Strengths: Weaknesses:
1) Low fixed cost 1) Lack of financial resources
2) 2)
3) 3)
4) 4)
5) 5)

Opportunities: Threats:
1) High market price 1) High material cost
2) 2)
3) 3)
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SWOT Matrix; for example: Brainstorming

- Surveys - Questionnaires - Focus Groups

SWOT Matrix for X Company

Strengths: Weaknesses:
• High product quality • Low profit
Current • Good experience • High labor cost
Performance
Analysis • Low fixed cost • Low production capacity
• Low material scrape • High overdue work orders
• Low customer claims • High employee turnover

Opportunities: Threats:
Competition • High customer satisfaction • Strong competition
Analysis
• New customers • Low market share
• Growing market demand • High inflation rate
• High supplier availability

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 SWOT Matrix for X Company
(One of best SWOT analysis)
Strengths: Weaknesses:
S1: High product quality (95%) W1: Low profit (15%)
Current
Performance S2: Good experience (20 years in business) W2. High labor cost (30% of cost)
Analysis S3: Low fixed cost (40% of the production cost) W3. Low production capacity (60%)
S4: Low material scrape (15%) W4. High overdue work orders (20%)
S5: Low customer claims (8%) W5. High employee turnover (12%)

Opportunities: Threats:
Competition
Analysis O1. High customer satisfaction (85%) T1. Strong competition (3 competitors)
O2: New customers (+10% annually) T2. Low market share (15%)
O3: Growing market demand (+10% annually) T3: High inflation rate (13%)
O4: High supplier availability (5 suppliers)

Dr. Attia Gomaa ; 2008

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Correlation of SWOT Items with Strategic Objectives

Discipline SWOT Items Strategic Objectives
S5: Low customer claims (8%)
W4. High overdue work orders (20%)
O1. High customer satisfaction (85%)
Grow Market Share
Market O2: New customers (+10% annually)
from 15% to 25%
O3: Growing market demand (+10% annually)
T1. Strong competition (3 competitors)
T2. Low market share (15%)
S3: Low fixed cost (40% of the production cost)
W1: Low profit (15%) Improve Profit Ratio
Financial
W2. High labor cost (30% of cost) from 15% to 25%
T4: High inflation rate (13%)
S1: High product quality (95%)
Improve Production Capacity
Operation S4: Low material scrape (15%)
from 60% to 85%
W3. Low production capacity (60%)
S2: Good experience (20 years in business) Reduce Employee Turnover
W5. High employee turnover (12%) from 12% to 5%
Resources
Improve Material Productivity
O4: High supplier availability (5 suppliers) from 85% to 90%
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 Report #5: SWOT Evaluation
Company: Period:
1) Strategic Objectives
2) SWOT Matrix
3) Correlation of SWOT Items with Strategic Objectives:
Discipline SWOT Items Strategic Objectives

Market

Financial

.‫ العوامل الداخلية والخارجية المؤثرة علي اﻷهداف اﻹستراتيجية للمؤسسة‬SWOT

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Strategic Objectives & Strategies over 5 years

Discipline
Strategic Objectives Strategies
(SMART) (Improvement Recommendations)
1) Enhancing customer service
Growing Market Share 2) Creating competitive advantage
Market 3) Creating new markets
from 15% to 25%
4) Developing the motivation program
1) Reducing fixed cost
Improving Profit Ratio 2) Reducing overhead cost
Financial
from 15% to 25% 3) Reducing production cost
4) Improving financial position
1) Analyzing the product defects
Improving Production Capacity 2) Improving working conditions
Operation 3) Enhancing MRP system
from 60% to 85%
4) Updating maintenance programs
Reducing Employee Turnover 1) Updating motivation programs
from 12% to 5% 2) Running advanced training program
Resources
Improving Material Productivity 3) Reducing material scrape
4) Reducing material shortage
from 85% to 90%

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 Objectives Analysis: Profit Ratio
25%
Discipline: Financial

Objective:
Improve Profit Ratio
from 15% to 25% over 5 years

Targets
Profit Ratio
15%
Period (5 years)
Target #1 Target #2 Target #3 Target #4 Target #5

≥ 17% ≥ 19% ≥ 21% ≥ 23% ≥ 25%

Activities Activities Activities Activities Activities

? ? ? ? ?

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Objectives Analysis:
Market Share
Discipline: Market 25%

Objective:
Grow Market Share
from 15% to 25% over 5 years

Targets
Market Share
15%
Period (5 years)
Target #1 Target #2 Target #3 Target #4 Target #5

≥ 17% ≥ 19% ≥ 21% ≥ 23% ≥ 25%

Activities Activities Activities Activities Activities

? ? ? ? ?

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 Objectives Analysis: Production
Capacity 85%
Discipline: Process

Objective:
Improve Production Capacity
from 60% to 85% over 5 years

Targets
Production
Capacity 60%
Period (5 years)
Target #1 Target #2 Target #3 Target #4 Target #5

≥ 65% ≥ 70% ≥ 75% ≥ 80% ≥ 85%

Activities Activities Activities Activities Activities

? ? ? ? ?

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Objectives Analysis: Employee

Turnover 5%
Discipline: HR

Objective:
Reduce Employee Turnover
from 12% to 5% over 5 years

Targets
Employee
Turnover 12%
Period (5 years)
Target #1 Target #2 Target #3 Target #4 Target #5

≤ 11% ≤ 10% ≤ 9% ≤ 7% ≤ 5%

Activities Activities Activities Activities Activities

? ? ? ? ?

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 Strategy Roadmap (Master Plan); for example
Perspe Projects
ctive Strategic Objectives Strategy (Main Activities)
Running advanced training program Project #1
Improve the
Market

Creating competitive advantage Project #3

market share from
20% to 30% Creating new markets Project #4
over the next 5 years
Developing the motivation program Project #2

Improve the Running advanced training program Project #1

Process

capacity utilization Analyzing the production system Project #5

from 50% to 80%
over the next 5 years Developing the motivation program Project #2

Improve the Running advanced training program Project #1

Quality

quality ratio from Analyzing the product defects Project #5

90% to 95%
over the next 5 years Developing the motivation program Project #2

… … …
..

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Strategy Roadmap Timeline (Milestones)

Project #1 Project #3 …

Periods; Quarters (Q1 to Q20)

Project #2 Project #4 …

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 SWOT Strategic
Analysis Objectives
Strategic
Objectives Why?

Activities What?
Periods When?

Budget How?
Responsible
Who?

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Action Plan (Key Activities); for example

Perspe Strategic
ctive Year #1 Year #2 …
Objectives
Creating competitive offers
Improve Targeting new markets
Market

market share
Ensuring on-time deliveries
from 20% to
30% Enhancing customer service
Developing the motivation program
Analyzing product defects
Improve
Enhancing MRP system
Process

capacity
utilization Improving working conditions
from 50% to Updating maintenance programs
80%
Applying Lean Six Sigma

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 Action Plan for each Objective; for example
Action Plan for Continuous Improvement ‫الخطة التنفيذية‬
Strategic Objective #1:
Improving market share from 20% to 30% over 3 years

Budget
ID Activity Period Responsible Indicators
(1000 LE)
1 Creating competitive
1 year 300
offers
2 Targeting new markets 1 year 200 Market
Share %
3 Ensuring on-time
1 year 100 Marketing
deliveries
Leaders Customer
4 Enhancing customer Satisfaction
1 year 100
service %
5 Developing the motivation
1 year 100
program

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Action Plan for each Objective; for example

Action Plan for Continuous Improvement ‫الخطة التنفيذية‬
Strategic Objective #2:
Improving capacity utilization from 50% to 80% over 3 years

Budget
ID Activity Period Responsible Indicators
(1000 LE)
1 Analyzing product defects 1 year 300 Capacity
2 Enhancing MRP system 1 year 200 Utilization
Operation
%
Improving working Leaders
3 1 year 100
conditions
&
Updating maintenance Sigma
4 1 year 100
programs Level
Quality
Leaders
5 Applying Lean Six Sigma 1 year 100
OEE %

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 Action Plan for each Objective; for example
Action Plan for Continuous Improvement ‫الخطة التنفيذية‬

Strategic Objective #3:

Reducing Staff Turnover Ratio from 15% to 5% over 3 years

Budget
ID Activity Period Responsible Indicators
(1000 LE)
Updating advanced Staff
1 1 year 300 HR
training program Satisfaction
Leaders
Implementing profit share %
2 1 year 200
policy &
&
3 Reviewing salary rates 1 year 100
4 1 year 100 Operation
Staff
Leaders
5 1 year 100 Turnover %

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Action Plan for each Objective; for example

Action Plan for Continuous Improvement ‫الخطة التنفيذية‬

Strategic Objective #4:

Improving Energy Efficiency by 10% over 3 years

Budget
ID Activity Period Responsible Indicators
(1000 LE)
1 1 year 300 Energy
2 1 year 200 Leaders
3 1 year 100 Energy
&
Efficiency
4 1 year 100
%
Operation
5 1 year 100 Leaders

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 Action Plan for each Objective; for example
Action Plan for Continuous Improvement ‫الخطة التنفيذية‬

Strategic Objective #5:

Improving Profit Ratio from 15% to 25% over 3 years

Budget
ID Activity Period Responsible Indicators
(1000 LE)
1 1 year 300 Financial
2 1 year 200 Leaders
3 1 year 100 & Profit %
4 1 year 100
Operation
5 1 year 100 Leaders

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Financial Plan (Budget Plan):

Period Quarter Annual Total
Year Comments
(Quarter) Budget Budget Budget
1 xxx
2 xxx
#1 xxx
3 xxx
4 xxx
5 xxx
6 xxx
#2 xxx
7 xxx
8 xxx xxx
9 xxx
10 xxx
#3 xxx
11 xxx
12 xxx
… … … …
… … … …
… … … …

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 Report #6: Action Plan:
Briefly discuss the strategic objectives and action plan in your field.
Company: Period:
Strategic Objective #1:
……
ID Activity Period Budget Responsible Indicators

Strategic Objective #2:

……
ID Activity Period Budget Responsible Indicators

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Risk Assessment for Strategic Objectives

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 What is Risk?
Risk is “Effect of Uncertainty on Objectives”
ISO 31000 (2018)

Risk has two dimensions

Uncertainty Effect on Objectives

RISK

Probability * Impact
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Impact: :‫شدة الخطورة‬

Impact of the defect

on the business

Severity Consequence
Effect

Very High
High
Medium
-Low
Very Low
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 Probability: :‫إحتمال الحدوث‬

Frequency of Failure

Likelihood Occurrence
Frequency

Very High
High
Medium
-Low
Very Low
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Risk = Impact x Probability

Risk = Severity of Failure x Probability of Failure
Probability of Failure

Risk Matrix:

Severity of Failure

Very High
High
Medium
-Low
Very Low
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 For example;
Scenario #1: Risk?
• Severity =
• Probability =
• Risk =

Scenario #2: Risk?

• Severity =
• Probability =
• Risk =

Scenario #3:
• Severity = Risk?
• Probability =
• Risk =

Scenario #4: Risk?

• Severity =
• Probability =
• Risk =

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Scenario #4:
Scenario #2:

Scenario #1:
Scenario #3:

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 Risk Management:
Preparation

Breakdown

Risk Identification

Risk Analysis
Main References
Risk Control ISO 9001:2015
ISO 31000:2018
Risk Plan / Risk Register
PMBOK: 2017
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Risk

Negative Positive

Threats Opportunities

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 Risk Assessment for Strategic Objectives; for example:
Identify Analysis Control
Risk Strategic Risk Risk Main
Cause Effect
Category Objectives Title Level Actions
High High
High Increasing
Improving Product Inflation High
material cost material stock
Profit Ratio Cost rate
Financial
from 15% Low Low Improving
Breakdown

to 25% Customer Customer Low income Medium customer

demand Satisfaction service
High Low High process Updating
Improving Process Reliability downtime High maintenance
Production shutdown % losses programs
Operation Capacity
from 60% High High process Updating
Low safety
Material downtime High inventory
to 85% stock
shortage losses control policy
Grow
Market Brainstorming
Market
Share from
15% to 25%

Risk Level: H (High) , M (Medium) , L (Low)

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Change Management for Strategic Objectives

OUR VISION OUR MISSION
• ____________________ • ____________________
• ____________________ • ____________________
• ____________________ • ____________________
• ____________________ • ____________________

OBJECTIVES STRATEGY
• ____________________ • ____________________
• ____________________ • ____________________
• ____________________ • ____________________
• ____________________ • ____________________

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 Change Management ‫إدارة التغيير‬

Change management is a systematic approach

to prepare and support individuals, teams, and
organizations in making organizational change.
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Change Management ‫إدارة التغيير‬

Current State Future State

1. Reactive 1. Proactive
2. Groups 2. Teamwork
3. Pessimistic How? 3. Optimistic
4. Short-term 4. Long term
5. Data 5. Information
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 Change Management ‫إدارة التغيير‬

Good Bad
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Change Management
‫إدارة التغيير‬
7
1 Motivation
Problem
‫التحفيز‬
‫المشكلة‬
2 6
Objective Documentation
‫الهدف‬ ‫التوثيق‬

3
Awareness 5
‫التوعية‬ Standardization
4 Training ‫التوحيد القياسي‬
‫التدريب‬
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 Change Management for Strategic Objectives; for example:
Identify Control
Strategic People Awareness Training Motivation
Perspective …
Objectives Problems Program Program Program
Low staff
satisfaction Running
Improving Enhancing Developing
Lack of advanced
HR Labor motivation
awareness of
training
motivation
Productivity quality programs
Low awareness program
Breakdown

of quality
Low safety
Improving awareness Provide Developing
Increase safety
Safety Working safety safety
Lack of safety awareness
Conditions training motivation
plans
Improving Lack of Enhancing Provide
information Developing
Planning & Planning & awareness of planning &
estimation
Estimation Estimation Estimation information estimation
motivation
Efficiency errors & estimation training

… … … … … …

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Change Management
Perspective: Problem: Objective:
IT Paperless Improve paperless efficiency

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 Change Management
Perspective: Problem: Objective:
IT Paperless Improve paperless efficiency

Skills:
Paperless awareness- Computer skills - Team work - Motivation -
Incentives:
Man of the month – Financial rewards - Career growth -
Resources:
Online website - Training materials – Training videos – Software - Budget
Action Plan:
Objective Activity Period Budget $ Indicators Responsible
Paperless Awareness 1m 10,000
Running advanced
1m 10,000
training program Labor
Improve IT Dept.
Developing the productivity
paperless 1m 10,000 &
motivation program &
efficiency HR Dept.
Quality rate
Preparing Standard
information & 1m 10,000
templates
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Change Management
Perspective: Problem: Objective:
Market Customer satisfaction Improve customer satisfaction

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 Change Management
Perspective: Objective: Objective:
Market Customer satisfaction Improve customer satisfaction
Skills:
Market awareness – Team work - Negotiation – Motivation -
Incentives:
Man of the month – Financial rewards - Career growth -
Resources:
Software – Hardware – New technology - Training materials – Training videos - Budget

Action Plan:
Objective Activity Period Budget $ Indicators Responsible
Running advanced 3 Customer
20,000 HR Dept.
training program months satisfaction
Improve Developing the 3 index
customer 20,000 & HR Dept.
motivation program months
satisfaction Number of
Creating competitive 6 new
advantage 20,000 R&D Dept.
months customers

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Change Management
Perspective: Problem: Objective:
Safety Unsafe Conditions Improve safety awareness

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 Change Management
Perspective: Problem: Objective:
Safety Unsafe Conditions Improve safety awareness
Skills:
Safety awareness- Team work - Motivation -
Incentives:
Safety Man of the month – Financial rewards - Career growth -
Resources:
PPE – Training materials – Training videos - Budget

Action Plan:
Objective Activity Period Budget $ Indicators Responsible
Safety Awareness 1m 10,000
Job hazard analysis training 1m 10,000 Stop
Improve Safety Dept.
PPE training 1m 10,000 Cards
safety &
Fire Fighting training 1m 10,000 &
awareness HR Dept.
Near-miss
Developing the motivation
1m 10,000
program

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Change Management
Perspective: Problem: Objective:
Process Labor Productivity Improve labor productivity

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 Change Management
Perspective: Problem: Objective:
Process Labor Productivity Improve labor productivity
Skills:
Productivity awareness- Technical skills - Team work - Motivation -
Incentives:
Man of the month – Financial rewards - Career growth -
Resources:
Training materials – Training videos – Software - Budget
Action Plan:
Objective Activity Period Budget $ Indicators Responsible
Productivity Awareness 1m 10,000
Running advanced
1m 10,000 Labor
Improve training program Process
productivity
labor Developing the &
1m 10,000 &
productivity motivation program HR Dept.
Quality rate
Preparing Standard
1m 10,000
information & templates

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Project Outline Strategic Plan Outline – (Most Common Elements)

1) Teamwork (Focus Group) 7) SWOT Matrix
2) Company Overview ± 3 to 10 for each discipline
Outputs / Org. Structure 8) Action Plans
3) Vision Main Activities
Ultimate-Goal 9) Financial Plan
4) Mission Budget Plan
Core Purpose 10) Risk Plan
Critical Risk Elements
5) Values
11) Change Management Plan
Behaviour / Culture
6) Goals; Objectives & KPIs 12) Follow-up & Evaluation Policy

SMART Objectives & KPIs Control Elements

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 Reference Books:

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Reference Books:

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 Reference Books:

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Reference Books:

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 Reference Books:

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Strategic Market Management

‫ صناعة مختلفة‬30 ‫ عام مضي – في‬100 ‫ تحرك إستراتيجي – ﻷكثر من‬150 ‫تحليل ودراسة‬
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 Made in Egypt - ‫صنع في مصر‬
‫ أحفظ مصر وأهل مصر من كل سوء – اللهم أمين‬- ‫اللهم يا حفيظ‬
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 Made in Egypt - ‫صنع في مصر‬
‫ أحفظ مصر وأهل مصر من كل سوء – اللهم أمين‬- ‫اللهم يا حفيظ‬
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Thank you for your attention! Useful Science For

the Sake of Allah

Suggestions Comments
‫اللهم تقبل هذا العلم‬

Questions

Copyrights of this file & More information:

Dr. Attia Gomaa
Prof. & Consultant of Industrial Eng. & Project Management
Faculty of Engineering - Shoubra - Benha University &
ESS - American University in Cairo
[email protected] & [email protected]
Tel: 01222738497
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