The Seven Deadly Sins of Outsourcing

While outsourcing is a powerful tool to cut costs, improve performance, and refocus on the core business, outsourcing initiatives often fall short of management’s expectations. Through a survey of nearly a hundred outsourcing efforts in Europe and the United States, I found that one or more of seven “deadly sins” underlie most failed outsourcing efforts:
1. Outsourcing activities that should not be outsourced
2. Selecting … [ Read more ]

Jim Clemmer

If you put a good person into a bad system the system will win. This has been proven so often that it has become a truism in the quality improvement field called the “85/15 Rule”. The 85/15 Rule shows that if you trace errors or service complaints back to the root cause, about 85% of the time the fault lays in the system, processes, structure, … [ Read more ]

Location, Learning, and Logistics: A framework for Managing Trade-Offs in Capacity Location Decisions

Business leaders who misjudge the location of production relative to the location of product and process development resources may adversely impact the company’s long-term competitive position. We explore the link between production location decisions, the nature of the capabilities required to create a product, and the ability of a company to develop the next-generation technologies it may seek.

Zero Injuries, Waste, and Harm

How AkzoNobel NV, a leading manufacturer, is making its health, safety, and environment procedures stronger by making them more consistent.

W. Edwards Deming

The supposition is prevalent the world over that there would be no problems in production or in service if only our production workers would do their jobs in the way they were taught. Pleasant dreams. The workers are handicapped by the system, and the system belongs to management.

Link Strategy and Operations to Achieve Strategy Execution Excellence

A brilliant strategy will not produce its intended results if it is not translated into operational terms that define new ways of working. It is one thing to declare important strategic objectives. But to achieve these objectives, managers must link strategy to operations; that is, they must identify the specific work processes and actions needed to reach the strategic objectives the company has defined. Only … [ Read more ]

Christopher Bartlett

It is not centralization that drives scale; it’s specialization. And that doesn’t have to be central at all. Specialization is about where you create centers of excellence—and that may or may not be at the corporate center. Now, creating this integrated network of specialized operations does increase the coordination needs. So when we wrote about centralization versus coordination, we emphasized the challenges of coordinating operations … [ Read more ]

Better Fostering Innovation: 9 Steps That Improve Lean Six Sigma

Lean Six Sigma brings rigor and discipline to project management, but its approach to project selection is lacking. A new approach incorporates a structured, enterprise-level view of metrics to jump-start corporate innovation.

When Product Complexity Hurts True Profitability

Most companies are prolific producers of new products. This can be a good strategy for raising share and accessing new markets, but it can backfire if companies cannot determine which items actually make money. A product complexity management framework can help you determine what to make, what to jettison and how to increase product profitability.

A Fresh Look at Procurement

When supply cost pressures increase, so does the opportunity to gain an important source of untapped margin. By taking a more comprehensive approach to what they buy and how they buy it, companies can free up cash and refocus resources to fund strategic priorities without the pain of layoffs. A comprehensive approach means deploying a broader set of tools to better negotiate prices or becoming … [ Read more ]

Ten Ways to Improve Inventory Management

There’s more to streamlining inventory levels than the standard advice, repeated ad infinitum, of applying “just-in-time” techniques.

Designing the Right Supply Chain

Companies that align their operations to their strategy unleash superior performance.

Managing Risks in the Supply Chain: Reaching New Standards

Supply chain risk is an increasingly common topic and for good reason: Almost any disruption—weather event, supply failure, technology glitch, financial fiasco—can affect a company’s ability to manage its supply chain. Accenture discusses the many forms of risk, surveys risk management technologies and introduces a five-step risk management program.

Yogesh Malik, Alex Niemeyer, Brian Ruwadi

The first question for organizations exploring multiple supply chains is how many are needed. Answering it requires a close look at the way the supply chain assets that a company uses to manufacture and distribute its products matches up against the strategic aspirations it has for those products and their customers.

This requirement seems obvious, but in practice most companies examine only the second half of … [ Read more ]

Building the Supply Chain of the Future

Getting there means ditching today’s monolithic model in favor of splintered supply chains that dismantle complexity, and using manufacturing networks to hedge uncertainty.

Whipping the Supply Line into Shape

If a company makes purchases from its suppliers more unpredictably than it sells to its customers, it is said to “bullwhip.” Bullwhips can cause problems in the supply chain because it may be difficult for suppliers to adjust production in response to the changeable demand.

“Up until now,” says Robert Bray, an assistant professor of managerial economics and decision sciences at the Kellogg School, “anyone who … [ Read more ]

Why Things Fail: From Tires to Helicopter Blades, Everything Breaks Eventually

Product failure is deceptively difficult to understand. It depends not just on how customers use a product but on the intrinsic properties of each part—what it’s made of and how those materials respond to wildly varying conditions. Estimating a product’s lifespan is an art that even the most sophisticated manufacturers still struggle with. And it’s getting harder. In our Moore’s law-driven age, we expect devices … [ Read more ]

The Hershey Company: Aligning Inside to Win on the Outside

Changes in the marketplace, if not monitored, can cause serious losses in profit, market share, and in stakeholders’ confidence. Such was the case with one of the most celebrated American companies, Hershey’s. When the company failed to keep its ear to the ground and eye on the ball it lost touch with consumers and retailers. A shift in the company’s focus and a re-alignment of … [ Read more ]