Jan 20, 2010 | Change, OE, Operations
It is generally accepted that Henry Ford was the first to automate production along a line, dramatically increasing productivity and reducing costs as a result.
Not the case.
There were remarkable instances of mass production much earlier, the most interesting and perhaps least known is the Venetian Arsenal, in the 1300’s, as well as Guttenbergs printing presses, and Springfield rifle manufacturing in Virginia in the 1860’s. All are well documented, classic examples of production line techniques, specifically, one-piece flow, that emerged well before Henry arrived to take the credit.
Shows again, that there are very few genuinely new ideas, and there is much to be gained by understanding where we came from, as well as where we are going.
Jan 18, 2010 | Leadership, Management, Marketing
Customers remember the best and the worst.
When you absolutely “nail” it, they remember, and when you absolutely “stuff” it, they also remember, but guess which one they remember when you do both.
The parable of the bungled baggage, and variations of it is a story often used to illustrate the point, a small or seemingly unrelated factor can undo all the good work that goes into a customer interaction, so watch for the small things, and focus manically on what Jan Carlzon calls on the “Moments of Truth” those times when there is a direct contact between your front line of customer service, and your customer, after all, without customers, there is not much else.
Jan 17, 2010 | Management, OE, Operations
Machine utilisation and machine efficiency are probably the most commonly used KPI’s used to measure the performance of factory management. Both serve a purpose, but they do not by any means describe the “whole”.
The factor that completes the picture is “flow”, the state where product “flows” uninterrupted from one process to another, at a rate dictated by demand from the market.
Most factory managers know instinctively, if not by data, that their factories run best when there is uninterrupted flow through the processes, but if they are measured on machine efficiency, (production units/time) as they often are, they will be pushed to maximise the efficiency of individual machine points, building up inventory elsewhere, and interrupting the flow, and compromising the productivity of the factory.
The measurement of efficiency of individual points of a production process is ingrained, it is a fundamental part of the cost accounting and investment disciplines we all take for granted, but badly needs to be re-thought and taught to emerging operations and general management.
Jan 14, 2010 | Innovation, Leadership, Strategy
Like it or not, “Green” is now mainstream, and the market, not the motley bunch of politicians, bureaucrats, activists, and assorted hangers-on who showed up to the failed Copenhagen party, will determine what happens.
Make no mistake, this is a seismic change in nature of economic activity that is evolving far more rapidly than those who seek to extract “rent” from it can change the rules to effectively charge the rent.
Al Gore fronted “An Inconvenient Truth” the documentary which won two Oscars in 2007 (best documentary, best original song) simultaneously with credible economic and political muscle being put behind the notion of global warming, and the stick was pushed into the ants-nest. Concurrently, Prius was a runaway sales success, Slow food & food miles suddenly emerged, Carbon foot-print became a board issue, and Wal-Mart decreed all products on its shelves would have a carbon score displayed, and the ants were running everywhere.
Smart investment is being funneled into development of sustainable/renewable energy technologies from solar, wind, “clean” coal, and those that use energy are seeking ways to minimise use without compromising productivity.
Under these circumstances, the best thing for the rent-seekers to do is stand back, and try to garner some of the credit when it emerges, as they can have little impact on the technical revolution that is happening around them.
Jan 13, 2010 | Change, Innovation, Leadership
Manufacturing is fundamentally important to a thriving, vibrant economy, and the notion that the economy can evolve and grow based on services alone is nonsense. If we ever needed evidence, just look at the impact of the GFC on the “service” economies compared to those, largely in the developing world, who still rely on manufacturing, or the Australian economy that benefits from the provision of inputs to manufacturing, although we do precious little ourselves.
The reduction in the technical education of our kids is appalling, by default we have accepted that manufacturing is yesterdays way of developing the economy, that there is some logical evolution along a continuum from basic manufacturing of small, cheap imitations through to increasingly complicated manufacturing, and then to services, and this is an inevitable process all economies go through as they evolve and develop.
If you asked China or India what they wanted from you, would they ask for assistance to develop a new financial product, or would they ask for a lend of your engineering expertise?
