APICS - The Performance Advantage
March 1998 • Volume 8 • Number 3


Developemental Decision-making:

Integration — The New Core Competency


By Philip E. Quigley, CFPIM

There is a lot of talk today about core or key competencies and how companies need to identify and develop them. Companies talk about selling, design, service, etc. as key competencies. No one can deny that being good in any of these areas is a necessity, but based on some experience and talking to other APICS professionals, I believe there is another competency — integration. What do I mean here? Let's look at some examples:

  • Dell Computer, with its assemble-to-order manufacturing process, uses the same system to closely track market demands and incorporate new requirements into its system.

  • Toyota closely tracks market acceptance of its products and quickly incorporates new designs. (New van and Lexus GS series).

Manufacturing companies design, produce, market and sell products. Therefore, a key competency for a manufacturer is the ability to take information from any one of these areas, analyze it, and then incorporate changes throughout the rest of the organization. Examples are:

  • Design engineering makes a breakthrough in using a new material to lighten a product.

  • Manufacturing develops some new processes to improve flow through several critical work centers.

  • Service organization identifies several problem areas and develops solutions for them.

  • Marketing, while talking to customers, identifies several modifications or new product ideas that will have wide acceptance.

Each one of these developments is significant. But the challenge is to quickly take these ideas and move them across the organization. The design engineering breakthrough must be quickly transformed into a new product that can be manufactured successfully and sold. Improved manufacturing processes must be transformed into quicker delivery, reduced cost, reduced lead time or new products, or else the improvement counts for nothing.

The problem for management is that moving ideas across functional areas isn't easy in any organization. Having an organization built around processes will help, but won't be the silver bullet. To build competence in integration management, an organization must do the following:

  • Build an organization that generates a large amount of new ideas, concepts, insights on a regular basis.

  • Build a process to evaluate — quickly — these ideas and that identifies high potential (and risk) ideas for development.

  • Build a process that takes recommendations and quickly finds the project and assigns key people to work on it.

  • Build a project management process that quickly takes the idea and develops and implements it.

  • Build a process that ensures lessons learned from the project are quickly disseminated through the organization.

Building these tasks are not easy, but they can be done. There are companies that can be used as models and new information technology is available to help. Necessary management actions include:

  • Honda and Toyota both have successful employee suggestion systems that generate thousands of ideas for improvement. These companies make a concentrated effort to generate ideas and quickly implement them. Employees see immediate feedback and financial rewards. Management is required to review these suggestions on a daily and weekly basis.

  • Reviewing ideas from other organizations takes a combination of people effort and new systems. People effort must be in groups — teams, committees, etc. — meeting on a regular basis to review suggestions, ideas, etc. and make decisions. A point here is to have the teams be as low in rank as possible. The people doing the work should make the bulk of the decisions. When the decision reaches a threshold in dollars and effort, it should be passed on to higher management. The new systems are groupware tools like Lotus Notes. Databases can be established on ideas, chatrooms can be established for discussion and brainstorming, and minutes of review meetings can be posted for everyone's information.

  • Management must build into its budget and resource processes the ability to quickly allocate funds and people to projects. Again, depending on the size of the project, authority should be kept as low as possible within the organization.

  • People trained in managing and being part of a project must be ready to work. This means management must have spent the time and money to develop project management and team skills in its people. Neither of these skills come without effort.

  • Management must then have a combination of rewards and systems to ensure that knowledge learned — even negative — from a project is quickly made available to the organization. People must believe that admitting mistakes and failures so others can learn from them is not career-ending. This will take positive management action. The first time a person who admits a mistake is seen as being punished, the organization will clam up and nothing will be learned.

All of us that have been in management know that none of the above points can be done easily in any company. It will take work and commitment. But in today's world, the ability to move ideas, information and technology across departments, divisions and processes is key to long-term success.


Phil Quigley, CFPIM, is project manager with IBM Global Services, Costa Mesa, Calif. He is a member of the Orange County Chapter of APICS and teaches project and information technology management at the University of Phoenix, Southern California Campus. He may be reached at 714-438-5227 or by e-mail at [email protected]