Sep 7, 2010 | Management, Operations
We all find ourselves dealing with ambiguity, preconceptions, vested interests, status quo methods, and often hubris as we set out to consider options in any management situation. In these circumstances, we usually mix quantitative data with what we know, and what we believe in a varying recipe that delivers a result we are comfortable with.
In this post by Eric Paley, the tensions inherent in these differing and mixed methods of analysis are beautifully articulated in a sporting story most can relate to.
Sep 2, 2010 | Change, Customers, Marketing, Operations, Sales
We spend lots of time dreaming up new stuff, but there are almost always things that we take as given, things that we do not question, usually because they are so basic, that we never think to do otherwise.
Many years ago, a part of my responsibilities was for the marketing of Ski yoghurt in Australia. At that time, all 1kg yoghurt came in round tubs, it was easy, cheap, all the filling equipment was designed for round tubs, as it was the cheapest shape to produce and print, anything else was a dumb idea, and would cost a motzza. I changed Ski to a rectangular tub, and sales tripled overnight, and the market was changed. Consumers for a number of simple, practical, but to then unspoken reasons, preferred a rectangular tub
The whole industry had been dependent on the manufacturers of the filling equipment, who supplied machinery designed to deliver the least cost option, nobody was silly enough to even consider an added cost alternative, so round tubs were the standard, all operational equipment was optimised for round tubs, and the suggestion that you should retool a factory for an alternative was never considered. It’s just that consumers when given the choice abandoned the round tub overnight, and retailers, reaslising a rectangulat tub offered better shelf utilisation, were happy to put them on shelf.
When looking for opportunities, consider the things that are just “there” that are part of the fabric, and are as a result taken for granted, and find one to change.
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.
