Feb 7, 2014 | Change, Leadership, Management, Operations, Strategy
Scaleable.
My world is SME’s, helping them to be more profitable, more commercially sustainable, more accountable, by being focused on customers and their own processes and priorities. The outcome is that most successfully remain SME’s, avoiding the many death traps that lurk, and a few make the leap and become SLE’s, or sustainable larger enterprises.
Watching this evolution occur over many years, different in the detail every time, but following a few core principals, there is one principal, “StrategyAudit’s second law” (the first is “Look after the cash, and the cash will look after you”) that keeps coming up, time and time again.
The second law is “Solutions to problems are specific, and generally do not scale, but principals by which decisions are made can be successfully scaled”
Building scalability into the solutions of problems is about as fundamental lesson in growing a small business into a larger one that I have seen.
Principals scale, single solutions usually do not.
Feb 4, 2014 | Change, Governance, Leadership, Marketing, Operations
Charman Stone Member for Murray
The decision by the federal Government not to support SPC last week has opened a can of worms. This time, the worms have some grunt, as the head worm, Charman Stone has shone a light into the corners of the decision, and in the process, dumped on her party.
Thank heavens!!.
For the first time as another important business in the Australian food processing industry seemingly disappears, there is some debate about the facts, and analysis of the implications, rather than just having emotion and ideology spewed at us. Anything other than facts, and dispassionate analysis based on those facts, is meaningless if we are to come to grips with the real commercial issues, rather than those of political self preservation.
All this has been sparked by Stones vigorous defense of SPC in her electorate, culminating this morning in an interview in which she as much as called the PM a liar.
Pretty strong, even from one noted to be a bit outspoken
Over a long period, the Australian food processing industry has been gutted by a range of factors, from the globalisation of supply chains, the power of the retail duopoly, years of drought (drought is really the new normal) short sighted, risk averse, and spineless management, union intractability, subsidies of various sorts recieved by international competitors, and the high $A. Some we can address, some we can’t, but allocating blame is not a helpful strategy.
Hopefully, some further intelligent debate will evolve, but the inconsistencies in policy, highlighted by the Cadbury decision before the election, and announcement today of support for Huon Aquaculture will do nothing for the confidence of investors.
Charman Stone is aggressively putting her case, lets see some other pollies grow some backbone.
Dec 23, 2013 | Change, Management, Operations, Strategy
Amongst all the emotional rhetoric and dubious numbers being visited upon us by various interest groups and pollies after the announcement by GM that they will be folding their tents, there seems to be very little sensible analysis of the whole picture. Comment has all been focussed on the current supply chain, the economic and social impact of its crumbling, and what others should have done in the past to prevent it, and now clammering for compensation.
Compensation for what?
Lets have a look at some of the more common blathering.
- Holden is a national icon. GM is a huge multinational company, with problems facing it appropriate to its scale. Australia is a pimple on its arse, no matter how much we blather about “Holden, the national icon”. Why should we continue to support its operations here? If they are not commercially sustainable on their own merits, experience suggests, it is just a matter of time, and the longer we administer the medicine, the more painful the withdrawal.
- The workers need compensation. Fair enough, there will be pain in many households supported by Holden, and Ford over Christmas. However, compensation for what, where are the lines drawn? These workers have had many years of news that their employers are in the edge, so the announcements should not be a surprise, and now they have 4 years notice, and generous redundancy. There are many thousands of worker that have been displaced over the past 20 years who would have killed for just a month of notice and modest redundancy, let alone the largess heading the way of displaced auto industry workers.
- The supplier businesses need compensation. Similarly, the manufacturers in the supply chain, now to be supplying only Toyota whilst they remain manufacturing here, are facing tough times. Should be no news in any of this for them, so failure to adapt over several strategic horizons should not be an excuse for handouts.
- Employees pay taxes. So, the argument goes, being employed, even by a subsidised industry, owned overseas, is better than having them unemployed and the industry closed. This is the sort of economic and social poop, ignoring the lessons of many past disruptions that even the far left should be embarrassed about.
- The industry is the engineering University of Australia. There is some real truth in this, the capabilities nurtured by the car industry have benefited many other industries. However, as the decline in manufacturing in this country is across the board, not just in the car industries, perhaps we should be considering engineering capabilities in the wider context than just one industry that is clearly at the end of its life as it has been run to date. Australia has several sources of potential international competitiveness, mining engineering and technical mining services, solar engineering are just two. The fist of these we squeezed mercilessly for current income, disregarding the long term opportunities to build sustainable engineering capabilities, the second of which we actively encouraged to go overseas to find financial and technical support. How stupid are we?
- Loss of sovereignty. Perhaps the most spurious of the lot. As it goes, without the car industry we have no ability to defend ourselves, no national pride, no capacity to be Australian. Given that only 20% of the cars sold over the last couple of years have been manufactured here, this argument holds little water.
The solutions for the car industry have been obvious for a while, and although not easy, or without risk are not inconsistent with the commercial choices faced by any firm in an industry facing disruption. A few companies have embraced them. Futuris, a former subsidiary of Elders, and a major suppliers of car seats went offshore several years ago, and are reaping the rewards, and there are others, although way too few, who have moved to accommodate the long term trends in the industry, and have prospered.
Here is where I have problems. We are focussed on the political cycle, short term returns, ideology lacking foundation in the real behaviour of real people, and an expectation that it will be all done for us, by the “government”, forgetting that the government is us, spending our money in ways that suit them, and their political priorities, that have little to do with the long term development of engineering capabilities in the country.
Bit like Canute up to his arse in waves bitching about the tide.
Nov 18, 2013 | Change, Governance, Leadership, Management, Operations
Perhaps unfortunately I was on the receiving end of a rant about design thinking last week. It was a passionate, articulate, and informed rant, but a rant nevertheless.
There is no doubt in my mind that design thinking is a competitively crucial capability. In this homogeneous and connected world, recognising the value that design can deliver, that it is an integral part of not just the physical products, but of enterprise culture and processes, is essential to commercial longevity.
However, design thinking has a fundamental flaw, a flaw clearly demonstrated by the “rantor” last week. As my old Dad used to say, “Son, you get 1/10 for thinking about it, the other 9 are for doing it”
My rantor was a thinker, but do not ask him to do anything creative. It is hard, dangerous (to a career) work to be contentious, advocate stuff outside the status quo, to be the questioner who backs up the questions with action, and most shy away.
We do need more design thinking, but we also need way, way more design doing, so stop hyping, and start doing.
Oct 21, 2013 | Communication, Governance, Lean, Operations
I had a post prepared for this morning, relating to the evolution of “local” agriculture, specifically around Sydney.
However, the events of the weekend, the burning of Sydney’s surrounding bushland, including several of the farms of those I have been talking to, seems to make everything else trivial by comparison. Getting your head around the scale of the fire disaster facing us is difficult, for most of us, most of the time, as it is no-one close to us who is affected, so can be pushed aside as we go about our business.
This morning is different.
Walk outside your comfy suburban home, and look at the sky, smell the smoke, observe the odd orange light, and you just know this is different, it is not just another Sydney summer bushfire. Hurts to wonder what may happen when summer actually gets here.
As we watch and listen to the news reports, there is a huge application of technology and human effort to managing the logistics of the fire-fighting effort, but one shot on a news report caught my attention. Behind all the activity of the control centre, the people on phones and computers, handling reports and updates, stood a big whiteboard, what appeared to be a visual record of the fires, their relative risk, resources deployed, resources expected and in reserve.
It always happens, people relate to visual material, when under pressure, a picture can immediately summarise a situation that words alone cannot, so they tend to gravitate to pictures, or a whiteboard in a large group situation, something that can be kept up to date in real time, that all people who need to see it, can see it as it evolves. The whiteboard is perhaps the best collaboration tool ever invented.
When the fires are out, the cleanup someone elses problem, and the inevitable wrangling with insurance is the news topic of the day, the lessons of visual should remain with all of us as we go about improving the way we go about achieving goals.
Our thoughts go to all those who have been impacted by the fires, ands will be over the next few days as the fires continue to ravage Sydney’s bush outskirts. Our grateful thanks for the courage, and committment of the “fireies”
Sep 23, 2013 | Customers, Lean, Operations, Sales
It is amazing how people adopt to “lean” instinctively, without any planning, or knowledge of the cliches and tools spruiked by consultants (including myself). People are pretty sensible when left to themselves, they do not build waste into a system deliberately. Usually when failure occurs, there is a system in place that fails under pressure, or someones ego is involved.
On Sunday my local tennis club took our turn to have a BBQ at the local chain hardware store (Thanks Bunnings) in an effort to raise the funds to keep our historic grass courts going. Most grass courts have been beaten by the maintanence costs, and have been replaced by various low maintanence surfaces, but there is still nothing like grass, so we hang in there!
It takes about 10 minutes to cook a sausage (cycle time) so when we got going, the cooks organised themselves so that sausages were progressively rolled across the hotplate so that they were cooked by the time they got to the end, at about the time they were stuffed into a bun for a customer. They had a lean JIT process going.
As the morning progressed, and demand increased, the cooks responded by adding a second row to the hotplate, and varying the number of sausages being cooked (WIP)at any time in the second row according to the demand. It still took 10 minutes to cook a sausage, but only a few minutes to adjust the number being cooked as demand changed. This increase in the demand is reflected in what is called, in Lean parlance, Takt time, or the amount of time you have to allocate to a process so that it meets the demand from the market.
Nobody was directing this evolution of this simple BBQ production line, it was just common sense, so sensible people just made it happen. It occurred to me, not for the first time, that the various forms of waste that end up in operational systems are there largely because the demand is not clearly communicated to those running the systems, and so they just cover their arses with inventory, and allow silly practices to evolve and get in the way of demand transparency.
Left on their own, people will instinctively respond to the apparent demand, so why not just give them the information and let them get on with it.
