Martin Reeves, Kevin Whitaker

In the current model of corporate capitalism, each company is treated as an economic island to be optimized individually. While this simplifies management and accountability, it masks the extent of economic and social interdependence between different stakeholders. In contrast, resilience is a property of systems: an individual company’s resilience means little if its supply base, customer base, or the social systems upon which it depends … [ Read more ]

Randy Lim, Jean-Benoît Grégoire Rousseau, and Brooke Weddle

Some organizations worry that fostering innovation might jeopardize safety by introducing change, which many see as a source of risk. Our results, however, highlight the significance of line ownership: in our experience, one of the most effective bulwarks against accidents is the use of “near miss” programs, which encourage employees to identify hazardous situations and propose solutions before safety is jeopardized. Engaging employees in the … [ Read more ]

Glenn R. Carroll

What strikes me as really interesting is that in advanced economic systems, we’re seeing that more and more products and services — at least, personal products and services — are being chosen on the basis of their perceived authenticity. Among consumers, the appeal of authenticity is stronger than almost any other attribute. I don’t know whether it means that quality has become so good that … [ Read more ]

Bill Aulet

Culture eats strategy for breakfast, operational excellence for lunch, and everything else for dinner.

Marc Onetto

Humans are extremely creative and flexible. The challenge of course is that sometimes they are tired or angry, and they make mistakes. From a Six Sigma perspective, all humans are considered to be at about a Three Sigma level, meaning that they perform a task with about 93 percent accuracy and 7 percent defects. Autonomation helps human beings perform tasks in a defect-free and safe … [ Read more ]

Marc de Jong, Nathan Marston, Erik Roth

Some ideas, such as luxury goods and many smartphone apps, are destined for niche markets. Others, like social networks, work at global scale. Explicitly considering the appropriate magnitude and reach of a given idea is important to ensuring that the right resources and risks are involved in pursuing it. The seemingly safer option of scaling up over time can be a death sentence. Resources and … [ Read more ]

Pascal Visée

Functional silos almost assure suboptimal outcomes. Most business processes cross functional boundaries. One example is order to cash: sales receives an order, logistics undertakes fulfillment, and finance handles invoicing and cash. Managing a process through separate silos almost guarantees complexity. It creates internal inconsistencies and punishes the customer with foreseeable mistakes. There are exceptions, of course. One is the supply chain, which in many multinational … [ Read more ]

Chief Executive Magazine

Breaking operations into four parts—problem-solving, daily management, strategic alignment and people development—and fine-tuning them both individually and in concert can help ensure better performance.

Zeynep Ton

Good service rests on a foundation of good operations. But good operations rest on a foundation of skilled and motivated employees.

Zeynep Ton

Great performance, whether in customer service or the quality of manufacturing, requires operational excellence. Operational excellence requires a great operational design and great people to carry it out. Neither can make up for the lack of the other.

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 ]

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.

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 ]

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 ]

Theodore Levitt

Discretion is the enemy of order, standardization and quality.

Jeffrey Wincel

In the business world, the equivalent white lie to, “The check is in the mail,” is: “Our suppliers are our partners.” Both statements represent promises that should be kept, but aren’t. They represent good intentions, but lack reality.

Michael Porter

The short-term cost savings of outsourcing were very apparent, very attractive, and very seductive to companies [that] were desperately trying to improve their earnings per share quarter to quarter. But when you outsource something, you tend to make it more generic. You tend to lose control over it. You tend to pass a lot of the technology, particularly on the manufacturing or service delivery side, … [ Read more ]

Clayton Christensen

The outsourcing gurus have been…saying everybody ought always to do this. But it is really contingent on where you are on the spectrum from “not good enough” to “more than good enough,” relative to each tier of the market. It is when the product is not good enough that proprietary integration gives you a competitive edge. You cannot outsource and be competitively successful in this … [ Read more ]

Sonny Saksena

Many companies believe that they incur no incremental costs when they add just one more feature to a product or one more term or condition to a contract. Yet these seemingly minor changes accumulate over time into significant financial costs; IBM research has found that they can account for 15 percent to 20 percent of total business costs. The rule of thumb across industries is … [ Read more ]

Randy Garber, Suman Sarkar

While today’s “enterprise” may be inextricably linked to its supply chain partners, ERP systems continue to define the entrprise as being principally focused on internal transactions, decisions, visibility, and reporting. This view can limit the supply chain’s flexibility.