Environmental Releases

Figure 6.2 Cost center - a core of integrated performance measurement

Box 6.1: Textile factory - a case study: frequent customer complaints about quality of fabric and delivery times

A textile factory (in a subtropical climate area) with spinning, weaving and dyeing plants, was supplying fabrics of various designs to a large customer. The increasing number of complaints from the customer was recorded over a time period and was spotted by the EEMS operational team. The team has triggered an investigation into the causes of complaints. The complaints ranged from those about delayed deliveries, or unknown times for delivering specific shipments, to those about the quality of fabrics delivered. The following issues were examined:

(i) Why the customer could not be given an accurate delivery schedule?

(ii) What could be the causes for delayed deliveries?

(iii) How it could have happened that company's own quality control (QC) have passed substandard quality products to the customer?

(iv) What was the cause for the substandard quality in the first instance?

The textile factory was quite large, so when specific orders were received and the order fulfilment process triggered, customer services did not have the means to track the particular order through the production stages (spinning, weaving and dyeing), therefore they were not able to tell the customer when exactly the shipment would be delivered.

The delays were tracked back to the spinning department, and after further analyses, attributed to an air conditioning system that was not working properly, therefore causing production stoppages. The problem was diagnosed as the malfunction of an air washer, and responsibility for maintenance was with the company's utility department.

The company QC was situated in a space that was not air conditioned. The temperature and humidity in the area were occasionally (depending on the weather) quite high, thus creating a harsh working environment, and making it difficult for the QC staff to concentrate on their tasks. That was the reason why substandard products were passed on to the customer.

And finally, the cause ofpoor quality was tracked back to the dyeing plant and to a particular machine where the production department was responsible for maintenance. In order to solve the problem of customers' complaints, the following improvements were implemented:

1. The air conditioning system in the spinning department was fixed, and additional performance indicators were defined and included in the regular performance monitoring system, in order to prevent recurrences of the problem.

Box 6.1: Continued

2. A bar code tracking system was introduced enabling the tracking of any order through the stages of production thus ensuring accurate estimates of delivery times.

3. A new air conditioning system was installed at the QC area.

4. The malfunctioning dyeing machine was replaced by a new one, more energy efficient and less environmentally polluting, and more technologically versatile.

This case illustrates also how all aspects of operational performance are intrinsically integrated in any event, because the customer complaint led to a quality issue, to an energy issue, to a HR issue, to a maintenance issue and to a production planning and control issue.

The problem solving in this case did not take a great deal oftime because performance management was already integrated and appropriate organizational structures were in place that included responsible people form all areas in the company. Should that not have been the case, the usual finger pointing and blame game might have started, delaying the solution of the problem and leading potentially to losing that big customer.

The case further illustrates how an EEMS can grow by on-the-job learning, how it can shift the focus on quality issues when required, how the scope of a performance measurement system can be easily extended to include additional performance indicators, and how customer satisfaction does indeed drives improvement across production and utility departments.

Integrated performance management in operations evolves in that way from concurrent and loosely connected, almost independent management systems for various performance categories (Fig. 6.3a) into an integrated system, which avoids duplication in performance measurement, avoids data incompatibilities and non-synchronal data records and provides a complete, reliable and true picture of a company's operational performance at any moment in time (Fig. 6.3b), as well as an efficient framework for continuous performance improvement and related learning.

So far we have studied internal influencing factors relevant to energy, environmental and operational performance management. The EEMS, as described, provides a powerful tool for managing continuous improvement of business performance in the reality of day-to-day operations. The most important features, which in our experience make EEMS effective in delivering performance improvement, are:

Energy and environmental performance measurement screen

Continuous performance 1 improvements J" "M""'

Compliance

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requirements

Multiple 1 requirements

I Energy

Energy and environmental performance measurement screen

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