Jun 16, 2009 | Demand chains, Management, Marketing, Strategy
There is a theme in the demand chain category of this blog. Wherever I go, I see the power of information transparency to improve performance, not just in commercial situations.
There is an ongoing battle in Australian education for school scorecards, anyone who seriously thinks about performance improvement of Australia’s education system comes to the conclusion that information on current performance is a pre-requisite for improvement, but the bureaucracy, and the teachers union together, but for their own reasons are making it difficult, all in the name of our childrens education.
Bullshit. It is in the name of retaining the very comfortable status quo.
Similarly, a scorecard of hospital performance has been shown in parts of the US to have a dramatic effect on surgical outcomes. Won’t happen here, even with the seeming catalysts for change that are evident in several hospitals, Bundaberg in QLD and Campelltown in NSW amongst others.
In the event we ever get real transparency, where results can be seen, and lessons learnt, the productivity of public dollars spent on health care would improve dramatically.
Businesses and value chains that have used transparency as a management tool routinely see productivity double over time, and there is no reason the results in Healthcare and Education would not repeat that performance.
Jun 12, 2009 | Management
“We do not have time for that long term stuff, we have to …..(fill in your own)… or we will not survive to worry about it”.
This is true, particularly in small business, but if you do not put aside time and energy to consider the origins of the symptoms, and treat them, all you get is steadily worsening symptoms, taking more time and resources to manage, whilst getting sicker.
Identify the problem, treat it, and the symptoms go away, leaving you do something useful with the time freed up.
Jun 11, 2009 | Demand chains, Management, Sales, Strategy
Most supply chains are driven by orders, someone reacts when an order is received.
The niggling question is always about demand, as most recognise it drives orders, inventories, innovation, competitive pressure, and so on, but is rarely measured.
Orders are at the end of the process, they arrive after making allowances for out of stocks, poor display, customers memory, competitive activity, the skill and interest of the sales person, and many other factors.
Demand is created by understanding the customer, and positioning your good or services in their minds as the best value solution available to address their need. This is longer term stuff, harder to measure, easy to ignore, but it is the foundation of commercial sustainability.
How much better would it be to have in place signals that reflect demand, they might give us an opportunity to reduce the incidence of lost opportunities, whilst better managing our investment in inventories, brands, customers, and the short term sales tactics used to stimulate an order.
Jun 10, 2009 | Management, OE, Operations
Most efforts to improve Operational Efficiency (OE) have at their core the elimination of variation in a process. It starts by setting standards, measuring the variations, and then progressively eliminating the causes of the variations, until you have a repeatable process with minimum variation.
Terrific so far.
Change in an organisation, change of any sort, has at its core a dissatisfaction with the status quo, and a determination to change it, not necessarily by the CEO, or anybody with power, but by someone who is dissatisfied with the way things are.
How do these things sit together?
The value of process conformance leading to OE are undoubted, but in gaining the benefits, we eliminate, or at least minimise, the opportunity for change, which flourishes on diversity.
Change, or non conformance, brings risk and growth, high levels of conformance brings a death by boredom, but both are necessary for organisations to flourish.
This is another paradox that challenges the leadership of organisations, one not generally recognised by those who advocate “Lean” thinking, of which I am one, and its cousin “6 Sigma“, but something that leaders perhaps need to consider in the way they go about nurturing the culture of the organisations they run.
Jun 9, 2009 | Management, Operations
Further to the earlier post, “An agile demand chain” that drew the distinction between agility and flexibility, consider the differences between efficiency and agility.
In many plants, efficiency has been built at the expense of agility, as long runs of product dominate the thinking of many operational managements.
Agility without efficiency is a way to a quick commercial death, as competitors will be aggressive with prices once they realise their costs are lower than yours. The leading symptom is high unit costs driven by low machine availability.
Efficiency without agility will take far longer to impact, but ultimately is no less commercially lethal, as consumers will abandon an offering that becomes “stale” in a competitive environment. The symptom is high finished goods inventory to accommodate infrequent but long production runs .
Jun 4, 2009 | Management, Sales, Strategy
Great, the big presentation nailed it, the sale is made, the goal achieved.
When the cheering is over, and the empties from the celebration cleared away, perhaps a reflection on what really made the sale would be useful.
The presentation did not make the sale, it was just the last piece in the jigsaw.
The lead-up work that made the sale possible was made by the researcher who realised that the potential customer had a challenge your product could solve, or the truck driver who told you the competitive lead times were 6 weeks, and you can deliver in 3 days, or the operations guy who suggested that by adding an ingredient in your factory, you could eliminate a whole process in theirs, the sales people who nutted out the strategies in a Key Account Plan, and so on, you get the picture.
Industrial sales are usually made by a myriad of small things that together add up to something you can leverage, the presentation is only the end game, and is useless without the graft at the front end.
The graft is an organised process of gathering collating and prioritising market and customer intelligence, and matching that to the competitive advantages you can deliver, so the presentation can be produced, and sales gathered.
The font end is the hard bit, the presentation is the glory bit.
