Just In Time: Different Prespective

Hello Friends

I was recently preparing a Just In Time Training Module in my company. And my biggest challenge was how to explain it to high school pass operator.

So, the following two points I thought of:
1. JIT is like driving a sports car at a speed of 200 miles/hr. Imagine when you are driving a bicycle at the speed of 20 what is important to you. And in comparison when you are driving a sports car on the track what is important to you. I think when you are driving sports car the most important thing to you is Reliability of your machinery. When we are talking about JIT then Reliability doesnt come only under machinery, but the whole process means whole supply chain or value chain per se.

2. JIT is like a relay race where next player can't run till the earlier one hasn't handed over baton to him. This is in essence the Pull System which is pillar of JIT. Also it defines the very existence of Kanban system.

If you have any more ideas do lemme know.

regards
Prabal

Just Another Explorer : Balanced Score Card of Life!!!

Hello Friends

The first diagram you are seeing is of Balanced Score Card for Corporates as designed by Kaplan and Norton.

It talks about the four perspectives

1. Financial


2. Customer


3. Internal Business


4. Innovation and Learning

You can read more about this balanced score in my other articles in the same blog.

Taking inspiration by Kaplan and Norton, I designed the Balanced Score Card of Life, which is in second diagram.
It talks about again four perspectives:

1. Wealth
2. Health
3. Career
4. Personal Life

I am working on this concept for last 1 year. I am putting this article to get more ideas from the readers. The ultimate goal is to be able to implement in my personal life.

I will write more articles on this concept soon.

Regards

Just Another Explorer

(Prabal Aggarwal)

PS: Friends, as an author of this article, I authorize anybody, can use this article for publishing on any media i.e. print, visual, audio, internet, forwarding emails, intranets, etc. on the condition that, the name of the author, body of the article will not be changed or altered. Secondly, one has to give due credit by mentioning that this article was originally written & posted by Prabal Aggarwal, on Jan 25 2009 on www.managementinformatika.blogspot.com. Also, if anybody using this content, feel like that monetary contribution should be made, you can donate on my behalf that sum of money to Project Why (http://www.projectwhy.org/), not for profit organization.

If you like this article, then subscribe to justanotherexplorer@googlegroups.com, by visiting http://groups.google.co.in/group/justanotherexplorer

BENCHMARKING

Courtesy: Professor Satish Ailawadi
( can be contacted at ailawadi24@yahoo.com)

Definitions of benchmarking

(1)“A continuous systematic process for evaluating the products, services and work of organizations that are recognized as representing best practices for the purpose of organizational improvement.”

(2)“ A continuous search for, and application of , significantly better practices that lead to superior competitive performance.”

(3)“A disciplined process that begins with a thorough search to identify best-practice-organizations, continues with the careful study of one’s own practices and performance, progresses through systematic site visits and interviews, and concludes with an analysis of results, development of recommendations and implementation”.

(4) “Benchmarking is an external focus on internal activities, functions, or operations in order to achieve continuous improvement.”

(5) “Benchmarking is systematic and continuous measurement process – a process of continuously measuring and comparing an organizations business processes against process leaders anywhere in the world to gain information which will help the organizations to take action to improve performance.”

Why Benchmarking ?

•Successful companies in every industry engage in a variety of practices, which lead to achievement of high level of performance.

•Benchmarking has become one of the most important tools of business management in corporate that attempts to gain and maintain competitive advantage.

•The central essence of benchmarking is about learning how to improve business activity, processes, and management.

The Benchmarking Process

•Benchmarking involves looking outside a particular business, organization, industry, region or country to examine how others achieve their performance levels and to understand the processes they use.

•Thus, benchmarking helps explain the processes behind excellent performance.When lessons learnt from benchmarking exercise are applied appropriately, they facilitate improved performance in critical functions within an organization or in key areas of the business environment



Types of Benchmarking

BPR - Business Process Reengineering

Courtesy: Anurag Kushwaha

BPR(Business Process Reengineering)

Reengineering is the fundamental rethinking and redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed.
(Hammer & Champy, 1993)

Purpose of BPR
· Purpose of reengineering is to ”make all your processes the best-in-class”.

BPR Versus Continuous Improvement

BPR
· Radical Transformation
· Process & Technology Focus
· High Investment
· Rebuild
· Champion Driven


Continuous Improvement
· Incremental Change
· People Focus
· Low Investment
· Improve Existing
· Work Unit Driven

Why Reengineer?
· Customers

• Demanding
• Sophistication
• Changing Needs

Competition

• Local
• Global

Change

• Technology
• Customer Preferences

Why Organizations Don’t Reengineer?
· Complacency
· Political Resistance
· New Developments
· Fear of Unknown and Failure

Performance
· BPR seeks improvements of
o Cost
o Quality
o Service
o Speed

Key Characteristics
· Systems Philosophy
· Global Perspective on Business Processes
· Radical Improvement
· Integrated Change
· Focus on End-Customers
· Process-Based
· People Centred

Business Process

courtesy Anurag Kushwaha

What is a Process?

o A specific ordering of work activities across time and space, with a beginning, an end, and clearly identified inputs and outputs: a structure for action.

Characteristics of process

o They have customers (internal or external)

o They cross organizational boundaries


What is a Business Process?

o A group of logically related tasks that use the firm's resources to provide customer-oriented results in support of the organization's objectives.

Like – Checking the quality, selling the product, paying to the creditors, hiring employees.

Classification of business process

o Operational process

o Management process

o Cycle process

Operational Process

o Product development

o Customer requirement identification

o Integrated Logistic

o Manufacturing

o Order management

o Sale and service

Management Process

o Process monitoring

o Information management

o Asset management

o Human capital management

o Planning and resource allocation

Cycle process

o Equipment life cycle management

o Human resource life cycle management

o Product life cycle management

o Cash flow management

o Material flow management

Importance of business process

o Standard work procedure

o Standard completion time

o High rate of information flow

o Faster decision making

o High customer satisfaction

Balanced Score Card-An Integrated Management Approach

Hi friends

Very often in every business, whether its SME or MNC the management gets into dilemma what measures to focus at. Is it financials or is it marketing? Then managers especially the top ones, are always in constant hurry to get over with all the report studies. I worked in medium sized company as well as world renowned MNC’s like Philips and GE but it was all same. Higher you move, more load of reports get on you. But, the question is, is it worth that effort? Why can’t be simpler and leaner reporting system? Even lean operations experts find themselves juggling with this scenario. The answer to these problems lies in Balanced Score Card Approach.

What is so special about it?
The name itself suggests, it creates balance. It focuses on four prime perspectives, i.e.
· Financial Perspective-How do we look to our shareholders?
· Customer Perspective-How do customers see us?
· Innovation and learning Perspective- Can we continue to improve and create value?
· Internal Business Perspective-What must we excel at?

The reason is quite simple; all the above perspectives together make the heart of the company. But, at the same time, some are leading indicators while others are lagging indicators. The company can’t have strong financials in the long term, if we are loosing our customer perspective. Also, we will get beaten overnight by some e-commerce company, if we don’t focus on Innovation and Learning perspective. Also, its very important to choose which core competency to develop before you are having sleepless nights, due to impending strategic inflection point.

So, balance card is a tool that creates a balance between all the mentioned four perspectives as well as between long term and short term perspective. Its very easy at times, to have good customer excellence, and screwing your financials, and vice versa. But, business can run only if there is balance.

So, balance card gives us a strategic tool, in which we create metrics which will govern the key perspectives. The metrics can vary from company to company.
The typical metrics are:

Financial Metrics
· ROI
· Growth rate of profit
· EPS

Marketing Perspectives
· Growth rate in sales revenue
· Growth rate of customer base
· Customer Satisfaction rating
· Growth in market share

Internal Business Processes Perspective
· Manufacturing excellence
· Sales Excellence
· Logistics Excellence

Growth and Learning Perspective
· Reduction in New Product Introduction cycle
· Reduction in throughput time
· Reduction in cycle time

Now these metrics act as MIS for top management. And its drilled down at every department and every level to align the actions of everyone in the organization to the objectives of the business.

Further these metrics are supported by the measures, targets, and initiatives in front of each metric. And finally, these metrics enable the whole business activity.

ERP Vs Family Patriarch

The article doesn’t intent to explain the technology part of ERP, but the significance.

Irrespective of the country or environment, we have all seen the traditional businesses being run, since our childhood.

In a traditional business normally a family is involved. And one of the family members assumes the position of the Patriarch.

Role & Importance of Patriarch


Patriarch is central to the whole business. He is the person, who has final say on every issue. All people, whether a production guy, HR guy, IT guy, Finance guy reports to him. They give reports on issues ranging from minute to critical. He is informed about working capital issues, bad suppliers, bad customers, defaulting employees, competitive landscape and so on.
With this continuous input of information, patriarch becomes most informed and most important person to the whole business.



In other terms, he becomes Datawarehouse of the business. And equipped with this information, when there is any info, advice or decision is required by any stakeholder of the business, patriarch( normally a wise person) applies his Datamining skills on the datawarehouse, and comes out with logical info, advice or decision.



ERP as Patriarch


Now in ERP, the patriarch is replaced by a combination of application softwares, hardware and procedures.


And this creates an Artificially Intelligent System known as ERP.

Mckinsey's Seven S's Model

Time of Concept: 1980
Use for : Consulting, Decision making, Organizational effectiveness, strategy formulation

Seven ‘S’s

Strategy : In-tune with Vision and mission of organization
Structure : Amalgamation of corporate hierarchy and external environment
System : The Standard Operating Procedure for work, methodology
Staff : The different personnel in various departments of the organization
Style :The learning curve level of the managers
Skills : The core-competencies of the organization
Shared Value : The culture, core beliefs, foundation of the organization

Pros:
Easy to apply, combines all the rational elements with emotional elements, developing the experience curve
Cons:
The focus should be on all S parallel, Most of the company following this vanished in 1990s

Reviewed by: Abhishesh Kumar Sharma