Kejian 168
Business & Management Resources
Archive for June, 2008
What is the ideal way to organize your equipment and processes? In traditional mass production thinking (the way most companies are organized), the answer seems obvious: group similar machines and similarly skilled people together. So mass production thinking sets up departments of mechanical engineering, electrical engineering, accounting, purchasing, and manufacturing as well as departments for stamping, welding, wire soldering, assembly, and the like. The following were the perceived benefits of grouping similarly skilled people and equipment together:
Economies of scale. First and foremost, mass production thinking was about squeezing the most production possible at the lowest cost per unit out of every piece of equipment or every worker in a manual operation. Having one huge stamping press to meet the needs of all the factory’s products would lead to the smallest capital cost per piece. And then you wanted to run that press flat-out 100% of the time to get the greatest asset utilization. Similarly, by organizing people into departments, you can focus on best practices in each professional specialty and squeeze the highest productivity (or innovation) possible out of each person.
Apparent flexibility in scheduling. When you put all the welders together in one department, it’s easier for the welding department manager to schedule available machines and welders to any job that comes up. If you create one-piece flow cells, you take those welding machines and welders and dedicate them to a one-piece cell, so they’re no longer free to do other work that might come up. Read the rest of this entry »
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Your analysis may not be perfect, but you certainly can now begin to define the most important critical objectives that you, as the sales manager, must address to be successful. Try to relate your customer’s solutions to sales behaviors. For example, your results may have shown that you are deficient in meeting the needs of your customer’s challenges on one or more of the following: Read the rest of this entry »
A good place for any company to begin the journey to lean is to create continuous flow wherever applicable in its core manufacturing and service processes. Flow is at the heart of the lean message that shortening the elapsed time from raw materials to finished goods (or services) will lead to the best quality, lowest cost, and shortest delivery time. Flow also tends to force the implementation of a lot of the other lean tools and philosophies such as preventative maintenance and built-in quality (jidoka). A lean expression is that lowering the “water level” of inventory exposes problems (like rocks in the water) and you have to deal with the problems or sink. Creating flow, whether of materials or of information, lowers the water level and exposes inefficiencies that demand immediate solutions. Everyone concerned is motivated to fix the problems and inefficiencies because the process will shut down if they don’t. Traditional business processes, in contrast, have the capacity to hide vast inefficiencies without anyone noticing—people just assume that a typical process takes days or weeks to complete. They don’t realize that a lean process might accomplish the same thing in a matter of hours or even minutes.
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Anyone who witnessed the rebirth of Chrysler under Lee Iacocca knows that one of the best product decisions he made was to invest in the K-Car, the basis for all the new passenger cars introduced in the 1980s. It saved the company from ruin. Then, in the 1990s, he was willing to step back and allow some remarkable leaders like Bob Eaton and Tom Stallkamp and Bob Lutz and François Castaing to reshape the company. A major focus was in product development, where vehicle centers (modeled after Honda) were created to realign the old functional organization into a product-driven organization. Engineers responsible for electrical components, body engineering, chassis engineering, and manufacturing engineering were all put together under one general manager, who took a role something like the Toyota chief engineer. These groups had a single focus—produce excellent vehicles that customers will want to buy at a low cost so Chrysler could make a profit. This led to the LH series of vehicles (Chrysler Concorde, Dodge Intrepid, etc.), a modernized minivan, the Neon, an award-winning new Jeep Grand Cherokee, and even the quirky but popular PT Cruiser. Each general manager was learning from the last one and the organization, at least in product development, was getting stronger and stronger. In the meantime, Tom Stallkamp was revolutionizing purchasing and creating what a Harvard Business Review article called an “American keiretsu” (Dyer, 1996). Chrysler soon became the world’s most profitable car company in terms of profit per vehicle—not the biggest, but the most profitable per vehicle.
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To continue your never-ending exploration of the business realities, you must now apply some of the results of your S.W.O.T. Please do not think this is the only method you need to apply. Work closely with the members of your marketing department to integrate their macro view of the market with your sales-oriented micro view of the customers. Marketing may be deploying surveys, focus groups, consultants, market research, and other analysis tools to mine for critical information you need to be successful. The marketing staff members can be your best partners.