Jul 19, 2010 | Customers, Operations
In Australia, the major chains are seeking ways to expand their scope of activities, and staying within the Trade Practices Act is increasingly difficult given the dominance of the “big two”, and now the “rest” have further consolidated with the take-over of Franklins by Metcash.
Logistics costs in Australia are very high, given the centralisation of manufacturing, and the long distances, so the initiative of Wal-Mart in the US, and Wal-mart owned ASDA in the UK is significant to the planning of Australian manufacturers.
It is only a matter of time before Australian supermarket executives start looking harder for competitive advantage by going back through the logistic chain in an effort to reduce their costs, and enhance their competitive position. Woolworths have been very successful so far, and the further success of Wal-mart in going back down the supply chain will only prompt them again.
Jul 18, 2010 | Demand chains, OE, Operations
Two differing approaches to management improvement you may think?
Not so.
Both require extensive:
* Collaboration,
* Transparency,
* Robust processes,
* A set of values imbued through an individual organisation, and group of organisations in a demand chain,
* Respect for the capability of operator level employees to make contributions to improvement, innovation, and a,
* Safe, sustainable and productive workplace.
So how can they be so misunderstood by so many supposedly informed and perceptive commentators?
The Wall Street Journal recently published an article that stated in part “Companies like Apple and Nissan are seeing the drawbacks of lean manufacturing methods, which call for carrying little inventory but make supply snags tougher to offset”.
This statement, a highlight of the article, demonstrates profound lack of understanding of lean manufacturing and the role that customer demand plays in creating a “demand chain” that works to satisfy that demand by removing waste of all types, something most sensible customers would baulk at paying for if they knew, and had the choice.
The businesses cited, several to my surprise, have clearly not absorbed the huge difference between responding to a forecast, and gearing their operations to respond to the drivers of demand with continuously improving capability, innovative solutions to problems, and a vision that engages for the long term, rather than focussing on the latest periods financials.
Jun 30, 2010 | Leadership, Management, OE, Operations
Many businesses offer cash for suggestions, put a suggestion box near the canteen, and wonder why most of the suggestions are physically impossible, morally debatable, and often both.
In the end, successful suggestion programs offer the reward of personal satisfaction and recognition to those making them, any financial incentive is usually secondary. The $50 in the paypacket for a successful suggestion is nice, usually appreciated, but not the reason the suggestion was made.
People who are members of a “community” and a workplace is a community, normally want to contribute to that community, unless it is dysfunctional in some fundamental way, and those contributions build connections and mutual obligations, that are the glue of any community.
Many suggestions will be worthless, but offering recognition and feedback to all offerings creates a sense of personal connection. Create that, and the suggestions will increase in value progressively, and ultimately, very few will have anything to do with deviant behavior, and you will quickly be able to do away with the anonymous box, and have the feedback directly, person to person.
Jun 17, 2010 | Management, OE, Operations
It is pretty easy copying the machines, layouts, and the physical things that go towards producing something, and there are consultants by the thousand who will help if you need it.
What you cannot duplicate easily are the management systems that are deployed. You might get some, or even most of them, but copying their deployment in your circumstances, they will not work the same way. All the connections will not be the same, this is why you can read all you like about Toyota, or 3M, or Google, go and see the way they do things, and copy all you can, but it will not work the same way when you get it home.
Time and time again, I am asked to assist deploying the tools of Lean, 6 Sigma, TPS processes, and other tools, and to an extent it will deliver positive outcomes, but never as much as there is potential so long as it is an outsider driving the delivery.
This stuff has to be internalized and modified to suit the culture and processes in a business, and by the modification, carve your own path. Therefore, I find that most times, when there is a genuine wish to change, and thereby improve, rather than just a financial imperative to reduce costs, which is often the starting point, I find myself digging around in the bowels of organizations, looking at accounting systems, performance measurement, customer facing processes, and innovation processes, in an effort to modify behavior to accommodate the philosophies of improvement, and deploy the appropriate tools in a manner tailored to the needs of the organisation.
Jun 16, 2010 | Management, OE, Operations
The variety of approaches to problem solving appear to form a continuum, that looks a bit like:
- The “workaround” where you find a way around the problem, hoping by magic it will go away.
- Further along the continuum we have some sort of score chart which logs the progress of the symptoms of the problem without actively looking for the cause.
- The next stage is an effort to solve the problem and put in some sort of remedial action,
- Then we have a continuous improvement project that seeks to identify problems and improvements on a continuous basis.
- Finally we have a Kaizen culture, where the standard is revised and improved on a continuous basis by those with the hands on responsibility for the process, with the active support of all around them in the organisation.
I often see the first step, usually the second, sometimes the third, very occasionally the fourth, but I have never seen a culture that actively feeds (rather than just supports) continuous improvement as a underlying value in the business.
Where do you fit?
Jun 15, 2010 | Management, Operations
The oil spill in the Gulf of Mexico is one of disastrous proportions immediately, and into the long term as the environmental impacts become clearer.
However, there are other consequences not talked about yet, that of the impact it will have on the willingness of enterprises to undertake risk, the costs of insurance, and the impact of renewed regulatory zeal on the operations of enterprises in the pursuit of zero tolerance of risk.
The impact of any renewed regulatory zeal goes further. Last week, in a conversation with a local council officer about the absurd imposts before a simple enhancement of a public space in the local municipality could proceed was , “If there had been better regulations in the Gulf, the oil spill would not have happened, I am just trying to ensure nothing like that happens here”.
Hello…..wake up, the simile is nonsense, but perhaps it just provides another excuse to avoid the responsibility to do anything, together with the horrible possibility, from a public bodies perspective, that something they do, or condone, does not work out as planned, and somebody must be held to account, and it better not be them!.
Managing the balance between risk, reward, and the consequences of a failure just became much harder.
