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.
Jun 23, 2009 | Management, Marketing, Strategy
When considering an important move, the range of possible reactions to the move by competitors often receives too little attention.
Predicting competitive response to a move is of critical importance, and clear analysis should be done prior to committing resources.
A simple test, often missed, is to put yourself in the position of your competitors, and allowing for the management style and culture of the competitor ask yourself a couple of questions :
- Will I see the move, and consider it relevant?
- What is my likely response?
When you have answered those questions to yourself, you are in a position to consider the wisdom of the initial move, and counter measures that may be required.
Jun 21, 2009 | Management, Marketing, Strategy
Brands are often the greatest asset a business has, in the case of service businesses, brands make up most of the assets.
Why then are the brand sensitive decisions so often made by young, inexperienced so-called “marketers” whose agenda is driven by many things, but not usually the health of the brand beyond their expected short tenure.
It does not matter if the CEO is by training an accountant, or engineer, or anything else, it remains that his/her biggest job is to nurture the long term returns to shareholders, and to do they must become the Senior Brand Manager.
Jun 18, 2009 | Management, Marketing, Strategy
Re-reading Seth Godins little gem “Triibes” during the week, I again came across the term “sheepwalking” to describe the pervasive impact on most people of the status quo.
Last week I was chatting to a mate about a book he is writing offering some ideas on the commercialisation of scientific IP by Australia’s largely publicly funded research agencies, whose record in this regard leaves a lot to be desired.
As a scientist who “sold out” and ran companies, and then went back to the scientific world after 25 years, he is in a great position to bring insight to the table. His descriptions of the power of the status quo in these organisations, and the reaction of those who live in them are exemplars of Sheepwalking.
Australia is supposed to be the lucky country, and it has been, our track record in inventing stuff is great, commercialising it has been a bit of a problem, but unless we get our act together in the race to commercialise knowledge, organisations like CSIRO will become shepherds keeping a few nerds employed at public expense.
Jun 17, 2009 | Demand chains, Management, Strategy
Nice thought.
Contracts are the usual form of defining an agreement, they are an enforceable substitute for trust that each party will keep his end of the bargain.
However, the web has made information so freely available, that the potential is for a substitute form to evolve, a form that calls for, and publishes performance data for all to see.
The ambient threat that non performance to an agreement will become public knowledge is going to become as powerful as a contract, as it will inform others that your business is not to be trusted. Similarly, the converse is true.
Will facebook replace a contact, perhaps not, but it may mitigate the current monopoly lawyers and the courts have on the process of agreement enforcement, becoming entirely more democratic and affordable in the process.
