Jun 30, 2009 | Management, Strategy
Making choices is the stock in trade of any manager, so following are a few questions you can reasonably ask yourself that will force you to consider some of the basic choices every business needs to ask itself.
- Which markets and products are we focused on?
- What is it that will motivate customers in that market to buy our products?
- What are the things we need to be good at to deliver “2” over the long term, and how do we improve our current performance on those things?
Pretty simple really, but how often are you doing something not connected in any way to the answers to any of these questions?
Business is simple, produce something and sell it at greater than your cost, and you will make a profit, the complication is when you add people who do not buy into the answers to the three questions to the mix.
Jun 29, 2009 | Management, Operations
These terms are often used interchangeably, often in my experience muddying the waters in situations where clarity is required.
Efficiency is all about how well you use the status quo, productivity is more about how you leverage gains to be made from changing the status quo.
Controlling costs of a process (efficiency) is far easier than figuring out how to make the process better (productivity), and in the long run is nowhere near as useful.
Jun 28, 2009 | Uncategorized
No secret in being right, just be prepared to be wrong, and be prepared to accept the responsibility for being wrong, then learn from it.
Thomas Watson Sr was spectacularly wrong when he said “there is a market for perhaps 6-8 computers in the world”, but IBM went on to create the industry, ride the wave, and then reinvent itself after almost dying, and today is still a dominating presence.
Orville Wright in 1900 said “not in a 100 years will man fly”, got that wrong by 99 years, and Bill Gates dismissed the internet before recognising the mistake and radically changing Microsoft’s strategy virtually overnight, and accepting in a memo to all Microsoft employees he had made a mistake, and asking them to join him in fixing it.
When you are prepared to take a considered chance, you will get some wrong, and people forget, you will get some right, and nobody notices, and you will get a few spectacularly right, and everybody thinks you are enormously smart, and perhaps a bit lucky.
Jun 28, 2009 | Management, Strategy
I am sometimes asked the differences between Lean and Six Sigma. The “toolboxes” for operational improvement represented by these two approaches contain substantial overlap, particularly at the relatively basic level where most improvement initiatives start.
Lean seeks to maximise the value of a process to an end customer by elimination of waste in the process, waste being defined as anything that does not add value to the consumer, whereas Six Sigma seeks to achieve stability in a process by the elimination of variation through the process by the use of statistical improvement tools.
The overlap occurs because a wasteful process always suffers from variation.
It can also be argued that the Lean approach is a more macro approach that includes the management of human resources as very important to the improvement, whereas Six Sigma focuses on a more micro, quantitative approach to improvement.
The final irony in any discussion about lean, 6 sigma, and the TPS, is that it all comes from Henry Ford, who evolved a management system using the principals espoused in all three approaches, subsequently lost when he died, and his various writings ignored until the Japanese, post WW11 looking to rebuild their shattered economy came across them. If you did not click the hyperlink above, I suggest you do now for a brief history.
Jun 25, 2009 | Demand chains, Management, Strategy
Three things constitute the basis of decision making in most enterprises, Risk, Cost and Reward. Boiled down, this is what it is all about.
In a supply chain, each participant does its own assessment and comes to a conclusion about the balance between RC&R in their situation, and acts accordingly.
For a chain to work with maximum productivity, each of the participants needs to come to a bunch of conclusions that complement all the others in the chain, and rarely will this happen on its own.
In some manner, control needs to be exercised through the chain, and as most managers know, managing the things over which we have so called control is usually hard enough, without setting out to manage things over which we have no control.
The control cannot be applied, it must be accepted as consequence of being a part of the larger entity, the chain, which is a part of maximising the RC&R matrix for the business.
