Visual management (VM) is
a relatively young field of knowledge and practical activity, formed during the
evolution of information and socio–economic relations to facilitate the
perception and comprehension of important and significant information. This is
a complex and rapidly developing process since the 1960s, associated with the
beginning of the global informatization of society, the active penetration of
mathematical methods and IT-technologies into production management. As the
business environment becomes more complex and the flow of information grows,
the need for accumulation, generalization, codification and translation of
useful experience and accumulated knowledge for solving practical problems is
satisfied. Often the experience of VM becomes a competitive advantage and an
impulse for the transition of management to a qualitatively new level of
development. It simplifies and facilitates the work of performers, makes it
more rational, safe, comfortable, scientifically sound and effective. However,
the issues of evaluating the effectiveness and efficiency of visualization
systems in management practice remain poorly understood.
Research hypothesis:
the
growth of information saturation in a complex and ambiguous competitive
environment actualizes the role of visual management as a successful
independent professionally implemented organizational technology.
Based
on the principle of continuity of the organization's activities, it is
advisable to evaluate the effectiveness of the corporate information
visualization system using dynamic standards, which can be classical indicators
- labor productivity, costs and net profit.
The purpose of the study
is to comprehend the VM system in terms of technology, to clarify the essence,
directions of development and features of VM as an indispensable technology for
managing limited resources and, on this basis, to think over the methodology
for forming the composition of key indicators and a method for evaluating
efficiency based on the model of the reference dynamics of these indicators. General
scientific research methods were used: search and study of scientific
publications on the topic of research, analysis and synthesis, the relationship
of historical and logical processes, the search for cause-and-effect
relationships. A matrix approach is used to find a solution to a practical
problem.
We define the concept of «management»
as the main one in the phrase VM, and, despite the versatility of the essence
(science, practice, experience, art) and the numerous interpretations, we
single out its attributive feature. Management is a set of scientific
knowledge, principles, means and forms of effective management of production
and production personnel in a competitive environment. In the context of the
hypothesis, we will consider management as a technology for coordinating and
combining the work activities of other people in such a way that it is
effective and efficient [1].
Management technology
allows you to decompose the production process into its constituent elements,
which opens up the possibility of repeatedly increasing the efficiency of labor
operations due to rationality, the exclusion of secondary work, the
sophistication of organizational methods and techniques, the sustainability of
obtaining results, impersonality and reduction in resource costs [2]. This
fully corresponds to the essence of the VM and is confirmed by the interpretation
of the concept:
•
the visual
management system
is a set of tools that should constantly remind workers
and managers of all the elements that ensure the success of the company's
activities: from the presentation of a strategic goal to a list of employee
proposals. This system responds promptly to changes, makes problems visible and
obvious, relies on standards, focuses on achieving specific goals, solving the
most important production tasks [3];
•
visualization of
processes
- such placement of tools, parts, containers and other indicators
of production, when an employee understands the state of the system at a glance
- the norm or deviation [4];
•
visual project
management
is a new concept of practice that combines visual thinking tools
and data visualization methodologies with more traditional methods of
communication, reporting and project facilitation; it is a revolutionary new
approach to presenting data and information in visually rich designs that
improve awareness and understanding of project critical points and key
performance indicators [5];
•
visual control
is a system of visual elements (boards, diagrams,
charts, signs, marking
information on displays) that control people's actions; it is the practice of
effectively conveying messages to workers or exchanging information between
them. The content of these messages relates to modes and methods of work,
organization of activities, procedures, instructions, as well as problems of
the enterprise [6];
•
visual management
is the placement in an understandable form of all tools, parts, production
activities, indicators of the production system so that the current state of
the system can be understood at a glance to any person involved in the activity
[7].
The presented views are
united by the VM's focus on important operational information «at the first
glance of the user» for diagnosing the current state of the production system
and adequate impact when a deviation from the norm is detected. With the help
of VM tools, transparency of organizational processes is achieved when solving
numerous tactical and strategic tasks, which can be divided into three groups
(fig. 1). At the level of executors' workplaces, priority remains for the
operational solution of tasks aimed at achieving the efficiency and safety of
production, the development of increased returns from external and internal corporate
communications.
VM is a multilevel phenomenon:
organization of workplaces, measurement and display of operational data,
training, development of managerial decisions, control, diagnostics and
analysis of performance results, public policy and feedback. A high-quality VM
system is positively perceived by the performer, because it simplifies the
extraction and synthesis of key information, reduces the time and stress of
their comprehension [8]. The visibility of data has a motivating effect on
almost all employees, reveals hidden mental schemes involved in the generation
of various scenarios and team decisions [9]. So, for example, despite a long
history, the most popular business applications based on OLAP-technologies
remain indispensable for budgeting, analyzing the seasonal dynamics of cash
flows, and predicting the results of a planned marketing mix in various
territorial markets.
Fig.
1. Organizational tasks solved by the VM system in the workplace (compiled by
the author)
The technological essence of the VM is
confirmed by the presence of:
– signs characteristic of technologies,
namely: a) the division of the labor process into phases and stages; b) the
unambiguity of the procedures; c) the target orientation; d) the regulatory
nature; e) the binding of procedures to certain calendar dates;
– three aspects explaining the nature of
[10]: a) essential, reflecting the means of technology (instrument of
influence, goal-setting activity, transformation process); b) epistemological,
representing technology as systematized knowledge; c) managerial, considering
technology as a set of knowledge and methods, a sequence of procedures and
operations purposefully applied in various fields activities;
– basic structure-forming elements -
principles, laws and patterns of organization and management; methods and means
of collecting and processing information; methods of effective influence on
employees; d) control systems [11];
-
cognitive resource: VM
techniques are based on the use of the biological nature and psychological and
emotional patterns of functioning of the intellectual capital of the management
object;
-
mechanisms and tools for
identifying, extracting and formalizing knowledge necessary to create the
required socio-scientific strategy for mastering innovations to increase the
effectiveness of group interaction, develop the creative potential of
employees, overcome social and cognitive problems [12].
VMs have clear advantages:
– ease of extracting and synthesizing
information, availability of software, the ability to solve technically complex
tasks and effectively coordinate the actions of a large number of participants
[13];
– involvement of visual memory and
focusing the performer's attention on actions that mediate the achievement of
the result;
– clarity, accuracy and unambiguity of the
description of details and the algorithm of actions, which eliminates the
erroneous choice of actions and reduces the risk of injury as much as possible;
– reduction of waste of time and resources
without loss of quality of work;
– productive interaction in a team,
exchange of knowledge, ideas, experience.
VM tools are dynamically developing,
changing and expanding depending on the general concepts and scientific schools
prevailing in the theory and practice of management. When substantiating the
stages of VM development, the results of the authors' research were used
[14-17] (fig. 2). In the course of its evolution, VM has gone from the simplest
methods of observing, documenting, compressing information and statistical
processing of structured data for their visual perception to the most complex
highly intelligent methods of project management, identifying patterns and
strategic planning of business processes, including the ability to integrate
unstructured data.
Effective address primitive VM tools
include the following methods of employee concentration:
– color marking of tools, parts,
assemblies; «road signs» - signs, positions of placement of important work
items; outlining places of permanent storage of devices or posting information;
- information boards of various shapes and
sizes, divided into two fragments according to the principle «Before»-«Became»
(«Stop-«Go», «Before»-«After»);
– technical acoustic and visual warning or
warning systems in the event of danger, problem or defect in operation («alarm
lamps»).
PERIOD AND SCHOOL OF MANAGEMENT
|
PRIORITY ASPECTS
OF MANAGEMENT
|
DOMINANT TREND AND
PRODUCTION PARADIGMS
|
PREVAILING VISUALIZATION
TECHNIQUES AND TOOLS
|
School of Scientific Management
(1885–1920).
|
Operational
methods of work, division and coordination of labor,
specialization
and assembly lines, technological discipline; accounting, control and
document flow
|
Craft Production
Production as a set of controlled sandtandardized
repetitive operations
|
Simple planning, accounting
and workflow systems
Graphical methods of statistics, maps of
work operations,
Gantt chart and cockscomb
chart
|
Administrative School
(1920-1940)
|
Development
of general organizational and administrative issues and universal principles
of scientific management
|
Mass Production
Operational activities with an emphasis
on ensuring the quality of work and product. Process approach in management
|
Total Quality Management
(System of Differentiation)
Six Sigma, Shewhart charts, control
charts, quality spiral, PDCA cycle,
|
School of human relations
(1930-1950)
|
Planning,
organization, management
personnel,
management, coordination, accounting, budgeting. Empirical (pragmatic)
approach to management
|
Mass Production
Management from the standpoint of
psychology and human relations
management
from the standpoint of psychology and human relations.
Systematic
approach to management
|
Birth of the Business Process Management Software
Industry
Tableau De Bord model.
Business Process Reengineering,
information
boards,
accent visualization,
scenario
modeling,
road maps
|
Entrepreneurship school and
School of strategic management
(1960-1980)
|
The
Importance of the Entrepreneur's Personality.
Resource
saving.
Behavioral
approach to management
Situational
approach to management
The
concept of management culture
|
Flexible Production
The human factor as the basis of
production and commercial success. Identification of the individual with the
organization. Business Management and Business-Process Reengineering
|
Growth in the number of firms
involved
in software development
Integrated
packages (workstation); maps of business processes and financial flows;
matrix analysis; Balanced Scorecard, transactions in the ERP system.
|
School of Systems Management
(1990-2020)
|
Focus
on innovation; project management; management by objectives and based on
information technology; strengthening the role of intellectual capital
|
Customization and personalization
Construction of networks and clusters.
Integrated business-space based on global informatized networks
|
Software as a Service
Graphical
notations based on Business Process Model and Notation. Online Behavioural
Advertising.
Attribute Explorer.
Single
database; client-server, visual development tools, graphic editors.
|
«
New school
»
present time
|
Innovative production as the basis of
the knowledge economy.Introduction to management of the apparatus of exact
sciences and computers. cognitive management Cognitive management
|
Socially oriented industries
Achieving social priorities
Management of non-standard solutions.
Mathematical modeling, game theory, system analysis. Business value
management
|
Digital Business
Adaptive
Case Management. Cognitive modeling .
Network
communications. Digital marketing.
Description
of multidimensional objects.
Roadmaps
supply and risk management, logistics routes .
logical
models and mental maps of business-processes.
Low-Code
Platform; Appian, PowerApps, Microsoft, Salesforce Lightning
č
Zoho
Creator.
Road Map
|
2030 year –
forecast
[14,
c. 175]. The concept of management will be based on the use of human capital,
which ensures intensive economic growth as part of the development of the
sixth technological order after overcoming the global economic crisis of the
2020 years. Management based on the use of human capital: knowledge, skills,
talents and abilities of employees
|
Fig. 2. Development of VM
tools in coordination with the evolution of management schools (developed by
the author)
The VM techniques are successfully used in
small business, when several areas of responsibility are delegated at the same
time. For example, an administrator of the hotel is obliged to prepare a
certificate of security systems at the facility weekly, controlling the
manifestation of certain factors (fig. 3).
Fig. 3. Controlled
factors in the hotel security system
More complex unique
intelligent visualization systems based on the Work Explorer software and
multimedia technologies «guided» the employee through all operational areas and
«critical points» of the technological cycle, indicating the process features
as clearly as possible.
The transition from one
operation to another is accompanied not only by an image, but also by a short
text. The scenario of such a step-by-step instruction may vary depending on the
complexity of the work and the qualifications of the performer. If necessary,
the employee can independently open additional applications in the form of
drawings,
schemes,
sketches, photographs, reference data and necessary explanations. The
possibility of direct operational communication with the foreman or work
manager is provided. Such «smart» workplaces minimize the number of violations
and technological errors.
Leading specialists and top-managers
actively use digital business modeling tools in the course of planning and
analyzing financial flows, for example, developing appropriate mental maps. The
mind map of the business process clearly and visually represents a set of
elements and their relationships in the process of production and sale of the
product, illustrates the procedure for «making money» [18]. The high
effectiveness of the application of business models in managing knowledge and
motivation of personnel has been repeatedly confirmed due to the fact that
almost all parameters of the business process are compactly described and
visualized [19]. For the presentation of complex and voluminous concepts, the
world's leading corporations use mind maps developed with the help of special
software editors that allow you to change fonts, color and size of elements, if
necessary, integrate images to attract attention (Mind Jet, Map It, Imind,
Freeplane) [20]. The return on VM costs is expanding (from 30 to 50%) - saving
working time, mobilizing reserves, improving product quality, continuous
improvement of business processes, reducing costs, increasing business
reputation.
The software of the VM
system is diverse and allows you to quickly solve a wide range of applied
management tasks. Reviews of the evolution, state, «bottlenecks» and problems
of software development of management processes of organizations and
enterprises are published regularly, for example, works [21-22]. The
researchers point to the irreversibility of the processes of developing hybrid
systems and the intellectualization of software products, which corresponds to
the management's request for effective tools for complex analysis and planning
of the sustainability of business processes under the impact of modern global
and local challenges. In the context of the hypothesis under study, we note
certain aspects.
✓
Management of a complex system of
organizational, industrial, social, commercial and other relations is based on
an accurate and complete formalized representation of business processes
provided by SADT, IDEF, DFD methodologies. To maintain managerial routines
(normal and predictable patterns of business behavior), computer modeling
methodologies based on CASE technology are used. The most popular is the UFO
triune construct – «Node – Function – Object» (UFO – toolkit), within which a
formal semantic normative system is used. It can be assumed that a «node»
(«crossroads of the flow of connections») is a specific center of
responsibility; a «function» (a means of balancing connections) is a set of
carriers of working competencies; an «object» (a material embodiment of a
function) is a space in which responsibility and competencies are distributed.
In the notation of DFD- and IDTFO-diagrams, the resources of the responsibility
center are usually represented by the competencies of the staff; in the
notation of BPMN-diagrams, they are an abstract class of business relationships
called an «Event» that enters the operational cycle or is generated by a
business process. For example, for the purposes of project financing and
budgeting, they get an adequate idea of the dynamics of cash flows, which
eliminates any possibility of collisions, errors of interpretation and inaccurate
interpretation. Unambiguity in the interpretation of notation signs «allows
using it as a basis for creating a method of graph-analytical modeling of
project financing systems, constructing analytical procedures and generating
binary code of simulation models» [23].
✓
For
the purposes of project management, developers of graphic editors of models of
complex innovative business processes offer software tools for structural,
simulation, analytical modeling. Experts recognize the IDEF standard (1981) and
its later (2004) modification – BPMN notation (The Business Process Modeling Notation)
with high language comfort and the ability to detail engineering
tasks from the design stage to the implementation and control of the idea. The
graphical space combines artifacts, areas of responsibility (Swimlanes),
data, connecting elements (Connecting Objects) and flow elements (Flow
Objects) with events, actions (Activities) and gateways built into
the flow. For example, users of various templates and basic shapes-blanks of
the
Microsoft Visio
graphic editor can successfully build an
organizational diagram or a roadmap of the technological process, visually
support new interpretations of competitive advantage, adapt service information
for various responsibility centers, promptly make adjustments taking into
account the constantly changing production or market situation. A very
effective tool are the applications of the
ConceptDraw Office
package:
problem-oriented templates, thematic libraries, a set of vector drawing tools,
a built-in presentation mode reduce the time for solving complex professional
and technical tasks, simplify the description of new processes, facilitate the
installation of default properties for added objects, open the possibility for
slide shows. Using the
Flow Breeze
module for
Microsoft Excel,
managers make flowcharts in automatic mode, pre-formatting the text, choosing
the color of shapes, font, line style, type of text alignment, copying
fragments of other documents [24]. To optimize business reporting and feedback
from stakeholders, the built-in templates in the
Diagram Designer
systems
[25-26],
Edraw Max
6.5.0.2046 Portablet [27-28], PaceStar WizFlow
Professional
v6.0 [29] are used without causing difficulties. They allow you to visualize the
structures of operational, labor, and financial processes and fill business
plans, innovation and index cards, investment projects and programs with
graphic content. Chart styles and templates can be changed by creating your own
chart types, the functions of importing objects from other files and exporting
ready-made flowcharts to files are supported, as well as saving them to
separate files in EMF, WMF, BMP and JPG formats.
✓
The
main user of a management decision is always a person, therefore, a large burden
in creating a unique, non-monotonous, attractive and memorable positive design
of a visual product falls on color and animation creatives. All the proposed
editors allow you to choose a font, images, color combinations, contrast, style
and appropriate animation [30-31]. It is reported that users are less
sympathetic to bright colors, but comfortably perceive the classic ones – «dark
plum», «red», «dark blue», the color of «blue steel», as well as white and gray
[32]. Dynamic text is actively used to position key production tasks for the
purpose of occupational safety and health, teaching advanced work techniques,
and solving problems of saving resources. Available interactive software
products (ActorScript, VBScript, PHP, ASP, Actionscript, Javascript) use
traditional coding methods, and allow you to write scripts, present complex
situations in a playful way (two-dimensional animation sets an object in motion
in four possible directions from the center, explaining what and why is
happening in the workspace) [33]. A variety of HTML animations are created
using the library D3.js . (Data-Driven Documents). It has been
repeatedly proven that the modeling of industrial hazardous situations, the use
of role-playing games, team problem solving in emergency situations is very
effective when instructing personnel. The employee becomes the subject of
interaction, actively participates in the learning process himself, following
his individual route. The most popular are animated 3D videos showing typical
accidents, consequences of erroneous actions and their causes. For example, the
program «Fire extinguishing at electrical installations»: builds a sequence of
multimedia plots depending on the correct or incorrect actions of the trainee [34].
✓
Intelligence
maps are being actively introduced into calendar planning - simple, very
convenient visual formats for organizing (highlighting, displaying, fixing and
storing) the flow of information to popularize the most important ideas,
concepts, and significant stages of production. For example, the scope of a
shift assignment (job functions) is divided into independent elements, each of
which is then divided into specific installations, tasks, initiatives,
indicating the methods of their solution. Computer software packages, including
many templates, cliparts, and special modules, allow decomposition to be
carried out in sufficient depth and detail. This is
ConceptDraw MINDMAP 7
as part of the
ConceptDraw Office package; Edraw Max v. 6
with an editor
for drawing Gantt graphs and flowcharts);
XMind 3.2; MS Visio 2010;
Mindjet:MindManager 2012 v. 9; MindMeister, XMind Zen; MindMup; Mind42; LOOPY
[35]. Creative visual techniques of integration of strategic and mental maps
are successfully used by top management to solve non-standard tasks of
optimization and restructuring of business processes or strategic consulting.
Thus, in the course of innovative technological modernization of production, it
is required to show a roadmap of movement from planned goals and objectives to
specific indicators and achievements.
✓
VM
is the first step towards multidimensional digitalization of production, as it
relies on tools for converting analog organizational information into digital
for automated processing of an array of management data [36]. Business modeling
systems aimed at achieving operational and/or strategic goals provide
significant improvement in indicators: improving labor productivity, customer
service quality, optimizing operations, and forming a new business model. The
VM system covers all levels of digitalization of the operational cycle in
accordance with the typology of Strohmeier S. [37]. At level 1 (analog),
«paper» reporting prevails, and the potential of digitalization does not cover
either strategic or current activities. VM tools are used for the rational
organization of workplaces: they clearly indicate the rules of the layout of
the tool, the sequence of operations, scheduled shift tasks. At the second
level (operational), digitalization covers only the management of operational processes,
and VM tools help to improve the quality of work, reduce production costs,
speed up paperwork, document flow and reporting. At the third level
(strategic), digitalization covers all key business processes and business
communications. To search for new commercial ideas, VM technologies are
directly integrated into strategic planning and business analytics, activate
feedback with customers and partners in the network space. At the fourth level
(integration), the introduction of artificial intelligence makes it possible to
digitalize management functions as much as possible, leaving specialists time
for creative work and useful initiatives. This leads to high management
efficiency, multiplicative effect of organizational changes and economic efficiency
of activities [38]. At this level, VM practice is identified with the concept
of «electronic human resource management» (electronic HRM or e-HRM), which is
progressively transformed into the concept of digital management (digital HRM).
It covers the whole range of applied tasks – quality of customer service, conditions,
productivity, safety and remuneration, competence development, training,
motivation and career growth [39]. At the same time, the VM system remains an
effective tool for implementing corporate functions of target groups of linear
and administrative employees to create value [40].
The commercial basis of
any production process is the
customer value chain
in a sequence of
interrelated operations for the development, production and sale of an economic
good. The task of management is to ensure maximum value for the consumer and
the lowest cost for the producer through the rational use of resources. M.
Porter combined five elements in this value chain: managing the creation of
resource reserves (incoming logistics), technological operations for converting
raw materials into a product, delivering the product to the consumer (outgoing
logistics), marketing and sales, and service (customer service) [41]. At the
same time, at the stage of formation of information visualization, its «reference
model» was proposed [42]. At the initial stage, chaotic information is
converted into a table of meaningfully structured data and then into a visual
structure, which is transformed into a specific graphical representation. These
two models are well coordinated, which allows us to identify the role and place
of the VM system in the customer value chain (fig. 4).
To confirm the hypothesis, we proceed from
the fact that evaluating the effectiveness of organizational management
technology is rather complex and multifaceted task.
The
current accounting system does not allow for reliable identification and
allocation of costs and benefits created directly by the corporate VM system.
The value of the VM is manifested in the intellectual support of production,
therefore, efficiency should be expressed in terms of the ratio of benefits and
costs received, which corresponds to the generally accepted approach [43].
Fig. 4. The place of the
VM system in the chain of creating consumer value of a commercial product
(compiled by the author)
A method for evaluating
the effectiveness of information visualization using the ratio «informativeness
– efficiency» is proposed [44]. The informative value of visualization depends
on the detail of the information flow, the composition of search tools and the
type of models (graphs, maps, matrices, histograms). Increasing the information
content of graphic models often negatively affects the efficiency of
perception, so the concept of graphic design and the scenario for using the
visualization system should take into account the capabilities and features of
the human cognitive apparatus as much as possible. Another study reports on the
«automation pyramid» as an exemplary Haldan MES business growth model, which
collects data on the status and efficiency of equipment in real time and
presents reports to the staff on the dashboard [45]. Collected data becomes
valuable information for control, planning and allocation of resources. It is
shown that the faster the information is processed at the lower workplace, the
faster the response corrective action is implemented when the work cycle
deviates from the standard task. Through the classification of operational
data, processing and comparative analysis, the system displays key production
performance indicators. Databases and advanced VM tools (Google Sheets, App
Sheet, STC-LAM) are able to generate intelligent predictive information and
thus increase productivity.
The method of practical
management effectiveness, including its graphical model, for obtaining
estimates of current and forecast strategic management is discussed [46]. The
main idea is to obtain an integral assessment of management effectiveness by
two parameters – «effectiveness» and «cost-effectiveness». However, this rather
time-consuming technique (as a variant of the earned value method) does not
give an unambiguous and reliable idea of the return of resources and efforts
put into the development of VM tools directly. It is possible to evaluate the
effectiveness of the considered organizational technology as an element of
general management, based on the motivation for profitable activities, using a
more accessible method.
Each organization
formulates a mission, from which its intention about the continuity of economic
activity in the foreseeable future follows, therefore, we propose to evaluate
the effectiveness of VM based on the principle of continuity of implemented
business-processes. In a competitive environment, the efficiency criterion is
the volume of products sold, confirming its market demand. The intensity of
resources used, in addition to the volume of output, characterizes the
indicator «labor productivity». The expansion of business activity justifies
the increase in operating costs, but it is important to maintain a certain
rhythm of cash flows Higher growth rates of sales revenue indicate the
effectiveness of investments, the opposite is an overspending of resources. The
digital competencies of management, the skills of operational analysis using VM
tools allow developing measures to support the required proportions and
sustainability of the reproduction process.
In
this regard, the most effective solution to this problem will be the method of
dynamic standards. The method corresponds to the principle of business
continuity, is based on the formation and subsequent comparison of the actual
dynamics (growth rates) of consciously chosen indicators with their reference
order [47]. To assess the effectiveness of management of the organization's
activities, the choice of criteria and assessment method is made accounting for
generally accepted ideas, confirmed by successful practice. The following
authoritative opinions have been taken into account:
– P. Drucker (1954) suggested that the
mandatory factors that make an organization better and more efficient, include «employee
performance and internal productivity»;
– Steers T. (1975) defined the
organization's ability to adapt through cost management as a criterion of
effectiveness;
– Peters T. and Waterman R. (1986)
recommended to evaluate the
«the productivity of each
employee»;
– Sink S. (1989) pointed to «productivity
and quality of working life».
As indicators of the effectiveness and
efficiency of VM as an organizational management technology, we have selected
labor productivity, net profit and VM maintenance costs (hereinafter referred
to as costs).
Labor productivity fully reflects the
results of the impact of VM tools focused on the employee in terms of training
competencies, labor protection and motivation for creative productive
activities. An expert way can be used to evaluate the contribution of the VM to
the overall result of the activity according to the scheme we propose (Fig. 5).
Fig. 5.
Schematic diagram reflecting the contribution of the
VM system to the formation of the
total
consumer value of the product (compiled by the author)
Let us consider the essence of the
proposed criteria in more detail.
Costs,
as a fundamental economic category, characterize the monetary value of consumed
resources. Management efficiency lies in their reduction. In an unstable and
risky external environment, the criterion of strategic effectiveness is the
organization's ability to adapt through cost management.
Labor productivity
is defined as the ratio of revenue to the average number of employees. It
characterizes the efficiency of labor in an organization, primarily from the
standpoint of the performance by employees of specified production operations
at specific workplaces in accordance with certain instructions and regulations.
At the same time, labor presupposes mental activity of a person, therefore,
creative initiatives and rationalization proposals of employees are encouraged.
The ratio of creative and routine components of labor depends on the applied
management technologies, including VM tools. Therefore, the growth of the
indicator indicates the sustainability of the activity, high profitability and
efficiency of management technologies.
Net profit.
The final and main financial result of economic activity, characterizing the
increase in the organization's own capital. Almost all management decisions are
focused on maximizing profits. If labor productivity is considered as evidence
of the social and economic recognition of the created consumer value, and not
only as a characteristic of the level of intensity of the use of personnel [48],
then there is a direct relationship between net profit and output.
These
indicators are the most capable of integrating all the positive results and
effects from the functioning of the WM system (production, economic, financial,
labor, social, environmental, status, etc.). Evaluation of performance
improvement
of activity
in
space and time is carried out by incrementing the value of each indicator. The
change in the dynamics of costs should correspond to the change in the dynamics
of labor productivity and profit. The excess of the growth rate of results
(production and profit) over the growth rate of costs means that the amount of
income allows the organization to pay off the costs incurred in full and make a
profit. Four options for the dynamics of indicators have been identified (Fig. 6).
Let's describe the possible options:
1.
Productive VM.
The growth
rate of labor productivity outpaces the growth rate of costs, despite the fact
that net profit growth, on the contrary, lags behind the growth rate of costs.
This may indicate the availability of an accessible and effective
hardware-information, professional, and educational environment. The workers
are motivated, ready to expand their skills and abilities, comply with
technological regulations, master the techniques of lean production, and
prevent injuries and defects at work. Visualization techniques involve most of
the sensual aspects of performers in the process of perception.
It
is possible that the target organizational technology SQDCME is being
implemented, which allows overcoming the inconsistency in the goals of activity
between management and employees, increasing labor productivity by 5-10%, and
ensuring progressive economic growth [49]. Q – quality; D (Delivery) – order
execution; C – costs; M (Morale) – corporate culture, E - environmental
standards. At the same time, the lag in the growth of net profit may be due to
the current high accounts payable or other mandatory payments attributed to
profit.
Such a short-term situation is acceptable
when expanding the business activity of an organization that invests in
expanding the production base or in creating its own distribution network in
the face of growing market demand.
Fig.
6.
Variants of the quality level of VM depending on the
dynamics of performance indicators (compiled by the author)
2.
Efficient VM.
The best
possible pair dynamics of indicators is achieved: the growth rates of labor
productivity and net profit outstrip the growth rate of costs. At the same
time, the best (ideal) ratio is observed when the growth rate of net profit
outstrips the growth rate of labor productivity. An example is the practice of
machine–building enterprises using powerful tools of intelligent production
control - Augmented Reality technologies.
An employee from the available software support at the
right time independently selects the necessary text or graphic image. Virtual
reality provides the manager with complete visual analytics to support
decision-making to improve the quality and competitiveness of the product at
every stage of the technological cycle.
The essence of accent visualization
consists in fixing attention exclusively on the details of the task performed
by him and adjusting the active elements of the interface displayed on the
interactive information panel (dashboard). The employee integrates into the
cycle («human-in-the-loop»): he uses reference information, regulations,
regulates the level of data detail, and a computer algorithm helps him to keep
attention on important aspects of work [50].
3.
Allowed VM.
The growth rate of net profit exceeds the growth rate of costs, but the costs
themselves grow faster than labor productivity. The situation is typical for
organizations for which the growth of production volume is limited or is not a
strategic goal. Commercial success is determined by the level of complexity and
quality of work, ensuring production safety (including environmental),
effective marketing policy, activity in the development of innovations.
These can be construction or service
organizations (health, culture, education), waste processing enterprises, treatment
facilities, transport companies. Almost all business entities operating during
an economic downturn or external restrictions (for example, during the COVID-19
period) are in a situation where it is important to maintain the profitability
of production and effectively manage cash flows. Flexibility, ability to adapt
to a dynamic environment and, if necessary, rebuild business-processes often
becomes a strategic goal of management.
The skills of building
and detailed description of the market map, logistics of commodity flows,
analysis of customer needs, diagnostics of the product portfolio,
identification of factors determining the market capacity lead to success. In
this case, the effect of the VM system implementation is achieved by a reliable
risk analysis and is expressed as a difference in the values of the same
indicators in «as is» and «as will be» situations [51]. Digital systems are
used: operational analytics (SAP HANA, Lumira, Predictive Analytics),
organizational and financial management support (Enterprise Resource Planning
System), production and product lifecycle management (MES, PLM, SCADA, SAP
Cloud ALM, Solution Manager).
Domestic
universities, expanding the use of computer analytical services in management
and focusing on the openness of information for stakeholders, constantly
evaluate development trends to improve the quality of human resources [52].
4.
Inefficient VM.
The growth rates of net profit and productivity lag behind the growth rate of
costs. The organization misses opportunities to increase its competitiveness
associated with the VM system.
Let us illustrate the
proposed approach with a hypothetical example. A medium-sized agricultural firm
with a land area of 32,000 hectares has been operating since year 2008. The
enterprise produces and sells vegetables, the revenue from which is 90% of the total
income. Organizational management was based on electronic document management
based on a traditional platform. From years 2017 to 2019, the management of the
enterprise faced a set of problems - an increase in industrial injuries and
staff turnover, an increase in non-production losses of resources and a
decrease in sales. It was decided to organize a new responsibility center for
the phased introduction of lean manufacturing techniques based on the «5S»
technology (Fig. 7).
Fig. 7.
Stages
of implementation of lean production technology at the facilities of the
agricultural company
The main performance
indicators of the agricultural firm before and after organizational changes and
the introduction of lean manufacturing technology into the workspace are
presented in Table 1.
As follows from the
presented data, the introduction of VM tools in the «5S» part of the technology
allowed to reduce the loss of resources in all problematic positions by half for
two years. Despite the fact that the planned performance indicators were not
achieved, the actual results increased slightly and the growth rate of net
profit exceeded the growth rate of costs by 2.64%. The growth rate of costs
exceeded the growth rate of productivity by 1.1%. The level of VM development
is Allowed. With a favorable market situation and an increase in consumer
demand, the agricultural firm has the opportunity to use the experience gained
to increase sales.
Table
1. Main performance indicators of the agricultural firm (year 2021)
Performance
indicators
|
Center
of the VM
|
Growth rate,
fact, %
|
before the creation of the center
|
after the creation of the center
|
Plan
|
Fact
|
Plan
|
Fact
|
1.
Revenue from sale, rub./hectare
|
300000
|
265000
|
3000000
|
287000
|
108,30
|
2.
Net profit, rub./ rub.//hectare
|
960
|
720
|
960
|
788
|
109,44
|
3.
C
osts, rub./hectare
|
257
|
250
|
257
|
267
|
106,80
|
4.
Loss of profit, rub./hectare:
|
|
4.1.
Industrial injuries
|
-
|
0,150
|
-
|
0,032
|
21,33
|
4.2.
Product loss
|
0,050
|
0,087
|
0,050
|
0,037
|
42,53
|
4.3.
Loss
of resources
|
-
|
0,050
|
-
|
0,008
|
16,00
|
4.4.
«Human factor» (losses)
|
-
|
0,035
|
-
|
0,012
|
34,28
|
4.5. Irrational logistics
|
-
|
0,043
|
-
|
0,018
|
41,90
|
To
tal loss
|
-
|
0,230
|
-
|
0,107
|
46,52
|
5.
Labor
productivity
,
mill.. rub./human
|
4,57
|
4,04
|
4,57
|
4,83
|
105,7
|
6.
The ratio of growth rates of net profit and costs
|
109,44 > 106,8
|
7.
The ratio of growth rates of labor productivity and costs
|
105,7 < 106,80
|
The
Level Assessment of VM
|
Allowed VM
|
From the short review
presented, it follows that the history of VM is inseparable from the history of
management itself.
In the course of
the evolution of management theory and practice, information visualization
tools have gone from the simplest document management techniques and visual
agitation to a reliable and efficient technology of organizational management
and strategic planning (SM). Digital visual systems for supporting the
production process ensure safety, rhythm, rational distribution of resources
and development of human resources in any area of economic activity.
A
distinctive feature of VM is the focus on achieving transparency for the
contractor of all components of the organizational and technological processes
of a particular production. First of all, with its help, any important
operational information is perceived «at a glance by the user», which allows
you to fix emerging violations and problems. The performers work clearly
according to a well-established algorithm, technological discipline and responsibility
for the results of work are increasing. Successful experience can become a
competitive advantage and put management on a higher quality level. Its
capabilities:
–
positively influence the conscious individual
development of employees' competencies and elements of corporate culture
through targeted digitalization of work operations;
–
to motivate specialists and managers in solving the most important tasks to
actively master new information technologies (control, business intelligence,
multimedia, information retrieval mechanisms);
–
quickly change and adjust the toolkit for specific applied production
situations, which ensures the adoption of more accurate, timely and efficient
management decisions;
–
to
overcome the language
barrier and misunderstanding in employee communications and feedback from the
external environment by maximizing the visibility, clarity and
comprehensibility of information, primarily for the purposes of security,
resource saving and increasing return on costs at each workplace.
In
a complex and unstable business environment, the development of VM becomes more
adequate to the features of modern management tasks - interdisciplinarity,
multifactoriality,
dynamism,
riskiness,
uniqueness,
and the
demand
for team efforts. Investments in the development of VM tools should pay off,
and efficiency should be determined by the ratio of the results achieved and
the costs incurred to ensure them. Despite the complex of produced effects
(industrial, economic, social, environmental), it is advisable to include labor
productivity and net profit among the key results of VM. Reliably assessing the
pair dynamics of these indicators in comparison with the change in costs is not
difficult. In this case, it becomes possible to compare alternative options for
the level of development of VM as a unique organizational technology -
effective, efficient, acceptable and ineffective. This approach greatly
simplifies and concretizes the assessment, makes it adequate, accessible and
understandable not only for decision makers, but also for all participants in
the activity. The applied value lies in the possibility of supporting the most
important management decisions in the field of organization and motivation of
labor, budgeting, mobilization of resource reserves, early warning of
production risks, and activation of the intellectual potential of the
organization.
The author expresses gratitude to Evgeny
Viktorovich Mordasov, Chief IT-Specialist of the Stavropol Regional branch of
the Social Insurance Fund of the Russian Federation for consulting support in
the preparation of illustration.
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