March 2, 2024

Total Quality Control, 4th Ed. - Feigenbaum

 Total Quality Control, 4th Ed. : Achieving Productivity, Market Penetration, and Advantage in the Global Economy

Publication date 30 Sep 2015

Table of contents

Part One: Business Quality Management 

Chapter One: The Quality of Products and Services 

Chapter Two: The Buyer Producer, and the New Marketplace 

Chapter Three: Productivity, Technology, and the Internationalization of Quality 

Chapter Four: What are the Factors in Controlling Quality and What are the Jobs of Quality Control 

Part Two: The Total Quality System 

Chapter Five: The Systems Approach To Quality 

Chapter Six: Establishing the Quality System 

Chapter Seven: Quality Cost: Foundations of Quality-Systems Economics 

Part Three: Management Strategies for Quality 

Chapter Eight: Organizing for Quality 

Chapter Nine: Achieving Total Commitment to Quality 

Part Four: Engineering Technology of Quality 

Chapter Ten: Quality-Engineering Technology Chapter Eleven: Process-Control-Engineering Technology Chapter Twelve: Quality Information Equipment Engineering Technology 

Part Five: Statistical Technology of Quality Chapter Thirteen: Frequency Distribution Chapter Fourteen: Control Charts Chapter Fifteen: Sampling Tables Chapter Sixteen: Special Methods Chapter Seventeen: Product Reliability 

Part Six: Applying Total Quality Control in the Company 

Chapter Eighteen: New Design Control 

Chapter Nineteen: Incoming Material Control 

Chapter Twenty: Product Control 

Chapter Twenty One: Special Process Studies

To be rewritten

Summary of 3.2 Total Quality and Total Productivity 

These new work patterns in today's offices and factories, are broadening the concentration of productivity from the traditional primarily factory-oriented attention to "more product and service output per unit of resource input" of the entire business system that includes the factory. The patterns are progressing toward a market-oriented business productivity concept measured by "more saleable, good-qualtty product and service output per unit of input."

No company is likely to be profitable today with a bad product. The product that cannot be sold because it does not have adequate consumer value, or one that must be recalled from the field because it is unreliable or unsafe, or one that must be too often returned for service-these are unproductive outputs of negative business value to the company that offered them.  The economically meaningful business indicator of productive input-output efficiency for company management in today's markets is the degree to which product and service output provide customer quality satisfaction, with the corresponding positive impact upon product saleability. 

This customer-oriented business productivity measure changes the focus of program planning attention. No longer is the emphasis solely upon techniques to improve factory work efficiency, as has been the case for more than 50 years and as important as this remains; it is now also focused upon the fact that achieving customer-oriented productivity requires the strong use of modern quality programs. These programs help to bring about fundamental changes in marketing and product planning actions, in conventional production practices, in traditional industrial engineering approaches, and in the practice of management itself. 

This is an important part of the new approach increasingly being widely used by major companies throughout the world: Industrial productivity must focus upon the input-output effectiveness across the enttre scope of the company organization. Economists call the approach "total resource-factor productivity," or, simply, "total productivity."

Updated 3.3.2024

Posted 29.8.2022

February 21, 2024

Industrial Management - Business Management - Toyota Way of Management


Toyota Way is highlighted aspect of industrial management and business management practiced by Toyota.  Toyota uses full knowledge of industrial management, business management and industrial engineering. It highlights certain aspects for more focus and intensive application.

Corporate Philosophy

Toyota Way 2001

Sharing the Toyota Way Values

The Guiding Principles at Toyota reflect the kind of company that Toyota seeks to be. The Toyota Way 2001 clarifies the values and business methods that all employees should embrace in order to carry out the Guiding Principles at Toyota throughout the company's global activities.

With the rapid growth, diversification and globalization of Toyota in the past decade, the values and business methods that had been passed on as implicit knowledge were identified and defined in 2001. Toyota is preparing to operate as a truly global company, guided by a common corporate culture.

In order to continue fulfilling its role as the backbone of all Toyota operations, the Toyota Way must evolve amid an everchanging business environment. Toyota will continue to update it in the future to reflect changes in the times.

The Toyota Way is supported by two main pillars: 'Continuous Improvement' and 'Respect for People'. We are never satisfied with where we are and always work to improve our business by putting forward new ideas and working to the best of our abilities. We respect all Toyota stakeholders, and believe the success of our business is created by individual effort and good teamwork.

Human Resources Development by the Toyota Institute

To promote sharing of the Toyota Way, the Toyota Institute was established in January 2002 as an internal human resources development organization.

Since 2003, overseas affiliates in North America (U.S.), Europe (Belgium), Asia (Thailand and China), Africa (South Africa) and Oceania (Australia) have established their own human resources training organizations modeled after the Toyota Institute.

Even when they highlight certain rules and principles, Toyota managers do take decisions and implement in deviation with them, if they are beneficial in the light of circumstances. They are very rational and apply all alternative decision making methods to problems.

Toyota makes efforts to adopt all new innovations in management and industrial engineering by monitoring developments in the subjects and acquiring understanding of them at various levels.

Industrial Engineering - Toyota Style Industrial Engineering

Toyota developed a version of industrial engineering which proved useful to them. They acknowledged the usefulness of industrial engineering and applied it rationally to their production system.

They monitor developments in engineering and industrial engineering and adopt them if appropriate. Toyota is presently updating its technologies, facilities, and processes to implement Industry 4.0 technology set.

Free Download EBook (122 pages). 7800+ Downloads so far. MODERN INDUSTRIAL ENGINEERING. IE OF PRODUCTS, FACILITIES & PROCESSES - Maximum Customer Value. Minimum Cost Value. Minimum Facilities and Minimum Use of Facilities.


January 24, 2024

Quality 4.0 - Introduction and Bibliography


Evolution of The Quality Management Philosophy and Practice


"Quality 4.0" is a term that references the future of quality and organizational excellence within the context of Industry 4.0.



Quality 4.0 is more than technology. It’s a new way for quality professionals to manage quality with the digital tools available today and understanding how to apply them and achieve excellence through quality. By speaking the digital language and making the case for quality in disruption, quality professionals can elevate their role from enforcers to navigators to successfully guide organizations through digital disruption and toward excellence.


As more work is automated the need for flawless processes remains the same, if not more important. Existing processes will be broken and the need to educate the next generation of workers to implement new processes and strategies will be vital to not only the quality professional but also business operations. Quality is a vital link and should be included at the strategic level for sustainability during digital transformation.


Technology is growing 10 times faster than it used to, and organizations’ platforms, such as processes, systems, data, operations and governance, must keep pace. Technology also is a great leveler because it gives any individual with the right idea and intent the capability that previously was available only to large organizations. Quality professionals must move from data analyst roles to data wrangler roles by engaging with new technologies, understanding these technologic advancements and the potential outputs they create, and determining how and when to use them.


Artificial intelligence: computer vision, language processing, chatbots, personal assistants, navigation, robotics, making complex decisions.

Big data: infrastructure (such as MapReduce, Hadoop, Hive, and NoSQL databases), easier access to data sources, tools for managing and analyzing large data sets without having to use supercomputers.

Blockchain: increasing transparency and auditability of transactions (for assets and information), monitoring conditions so transactions don’t occur unless quality objectives are met.

Deep learning: image classification, complex pattern recognition, time series forecasting, text generation, creating sound and art, creating fictitious video from real video, adjusting images based on heuristics (make a frowning person in a photo appear to smile, for example).

Enabling technologies: affordable sensors and actuators, cloud computing, open-source software, augmented reality (AR), mixed reality, virtual reality (VR), data streaming (such as Kafka and Storm), 5G networks, IPv6, IoT.

Machine learning: text analysis, recommendation systems, email spam filters, fraud detection, classifying objects into groups, forecasting.

Data science: the practice of bringing together heterogeneous data sets for making predictions, performing classifications, finding patterns in large data sets, reducing large sets of observations to most significant predictors, applying sound traditional techniques (such as visualization, inference and simulation) to generate viable models and solutions.

Quality 4.0

A detailed article with multiple references from ASQC

What is Quality 4.0?
Based on phase one of our research, here is our working definition of Quality 4.0 (CQI - IRCA Japana):

Quality 4.0 is the leveraging of technology with people to improve the quality of an organisation, its products, its services and the outcomes it creates.

This definition sees quality professionals as having two roles:

To help organisations adopt and use digital technologies – so they create value for customers and other stakeholders

To adopt and use digital technologies in quality management – to effectively deliver governance, assurance and improvement

Quality 4.0: The Future of Quality?
June 15, 2019

January 23, 2024

Evolution of The Quality Management Philosophy and Practice

New article found.

Ignoing F.W. Taylor is a blunder. It is only ignorance on the part of writers of the article.

Till 1800, production of goods and services was primarily done by single person owned or family owned facilities. The quality of the item was negotiated and set by the individual owner-operator who was in turn also responsible for producing the item. This phase, which continued till Taylor's publication of Shop Management, that is the time period up to 1900, is now called the period of ‘Operator Quality Control’. In operator quality control,  controlling and improving quality of the product was aligned with the philosophy of pride in workmanship.

In the early days of factory of production, foreman became the most important managers of the factories. He is responsible for all management activities. So during the early days of factory production,  a second phase of quality management evolved, which is now termed as  the ‘Foreman Quality Control’ period.  Supervisors are now responsible to ensure that quality was achieved. We can imagine that he is doing some inspection. Also, the operator may not be directly talking to the customer now. Foremen or supervisors controlled the quality of the product, and they were also responsible for the shop floor operations.

The next phase of qual­ity is the ‘Inspection Quality Control’. With more complicated prod­ucts and processes it became impossible for the foreman to keep close watch over the quality dimension. Inspectors were assigned to check the quality of a product after processing. Individual product standards were set, and any discrepancies between standard and actual product features was reported. Defective items were set aside as scrap, and few items with minor defects are reworked to meet the specified standard or specification. This practice was picked up by Taylor, and inspection or quality foreman became one of the functional foremen in Taylor's functional foremanship model.  As we know, Taylor's function foremanship model was converted into line and staff model of management and inspection departments were established. They became very big also with plant level quality control or inspection head with many inspectors reporting to him.

In 1924, Wal­ter A. Shewhart of Bell Telephone Laboratories introduced the concept of statisti­cal charts to monitor variability of the process using measurements of product characteristics.  These charts were called process control charts. In the latter half of 1920s, H. F. Dodge and H. G. Romig, also from Bell Telephone Laboratories, proposed acceptance sam­pling plans for inspection. These plans proposed the concept of samples for inspection, thus elimination 100 percent inspection and saving inspection time. It is a productivity improvement innovation in inspection. But, it was stated that sample based inspection will give similar rate of outgoing quality as 100% inspection was giving. Industrial engineers adopted sample inspection plans in their productivity improvement practice. During 1930’s application of acceptance sampling plans was in full flow in industries. In 1929, Walter Shewhart with the help of American Society for Testing Materials (ASTM), American Society of Mechanical Engineers (ASME), American Statistical Association (ASA), and Institute of Mathematical Statistics (IMS) created the joint committee for the development of statistical techniques for application in engineering industries.

Total Quality Management: Focus on Six Sigma - Review Notes


If Japan Can, Why Can't We?

Deming's Big Hit TV Program in 1980 on NBC

Selected Papers By Dr. W. Edwards Deming
Dr. Deming published over 170 articles, wrote numerous unpublished papers for his students and clients, and conducted hundreds of studies for clients. These and numerous other writings by Dr. Deming are in the National Archives, The Library of Congress (LOC) in Washington, DC.

Out of the Crisis

William Edwards Deming
MIT Press, 2000 - Business & Economics - 507 pages

Out of the Crisis, originally published in 1982, Deming offers a theory of management based on his famous 14 Points for Management.

Deming offers a theory of management based on his famous 14 Points for Management.

"Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment."

According to W. Edwards Deming, American companies require nothing less than a transformation of management style and of governmental relations with industry. In Out of the Crisis, originally published in 1982, Deming offers a theory of management based on his famous 14 Points for Management. Management's failure to plan for the future, he claims, brings about loss of market, which brings about loss of jobs. Management must be judged not only by the quarterly dividend, but by innovative plans to stay in business, protect investment, ensure future dividends, and provide more jobs through improved product and service. In simple, direct language, he explains the principles of management transformation and how to apply them.

Previously published by MIT-CAES

Out of the Crisis, reissue
Front Cover
W. Edwards Deming
MIT Press, 16-Oct-2018 - Business & Economics - 448 pages
2 Reviews
Deming's classic work on management, based on his famous 14 Points for Management.
"Long-term commitment to new learning and new philosophy is required of any management that seeks transformation. The timid and the fainthearted, and the people that expect quick results, are doomed to disappointment."
—from Out of the Crisis

In his classic Out of the Crisis, W. Edwards Deming describes the foundations for a completely new and transformational way to lead and manage people, processes, and resources. Translated into twelve languages and continuously in print since its original publication, it has proved highly influential. Research shows that Deming's approach has high levels of success and sustainability. Readers today will find Deming's insights relevant, significant, and effective in business thinking and practice. This edition includes a foreword by Deming's grandson, Kevin Edwards Cahill, and Kelly Allan, business consultant and Deming expert.

According to Deming, American companies require nothing less than a transformation of management style and of governmental relations with industry. In Out of the Crisis, originally published in 1982, Deming offers a theory of management based on his famous 14 Points for Management. Management's failure to plan for the future, he claims, brings about loss of market, which brings about loss of jobs. Management must be judged not only by the quarterly dividend, but by innovative plans to stay in business, protect investment, ensure future dividends, and provide more jobs through improved product and service. In simple, direct language, Deming explains the principles of management transformation and how to apply them. 

The Essential Deming: Leadership Principles from the Father of Quality: by W. Edwards Deming  (Author), Joyce Orsini (Editor), Diana Deming Cahill (Editor)


Juran on Quality by Design: The New Steps for Planning Quality Into Goods and Services

Simon and Schuster, 04-May-1992 - Business & Economics - 538 pages

Building on the experiences of scores of companies and hundreds of managers, J.M. Juran, the world-renowned quality pioneer, presents a new, exhaustively comprehensive approach to planning, setting, and reaching quality goals. Employing three case examples which encompass the three major sectors of the economy -- service, manufacturing, and support, he offers a practical plan for companies to achieve strategic, market-driven goals by following a structural approach to planning quality.
Quality, according to Juran, has become a prerequisite for business success. He cites the loss of market share, failure of products, and waste as results of poor quality planning. Juran provides a set of universal steps which can be used in the basic managerial process to establish quality goals, identify customers, determine customer needs, provide measurement, and develop process features and controls to improve business tactics.
The author gives new emphasis to setting quality goals, planning in "multifunctional" processes, establishing data bases for quality planning, motivating managers and the work force, and introducing quality planning into organizations.

Juran's Quality Handbook: The Complete Guide to Performance Excellence 6/e 6th Edition

The Lean Six Sigma Pocket Toolbook: A Quick Reference Guide to 100 Tools for Improving Quality and Speed: by Michael L. George (Author), John Maxey (Author), David Rowlands (Author), Mark Price (Author)

Quality 4.0

A detailed article with multiple references from ASQC

Updated 25.1.2024, 25.4.2022,  21.4.2022,  9.4.2022,  20 May 2021
Pub 25 March 2017

January 4, 2024

Intel - “IDM 2.0,” - A Major Evolution of Intel’s Integrated Device Manufacturing (IDM) model.

  “IDM 2.0,” a major evolution of Intel’s integrated device manufacturing (IDM) model. 

23 March 2021

Engineering the Future

During a virtual presentation on March 23, 2021, Intel CEO Pat Gelsinger outlined the company’s path forward to manufacture, design and deliver leadership products and create long-term value for stakeholders.

9 June 2021

11 October 2022

Intel Embraces an Internal Foundry Model

CEO Pat Gelsinger introduces an internal foundry model for both external customers and Intel product lines.

17 Oct 2022

Intel’s Role as a Systems Foundry, Explained
Intel Foundry Services still makes silicon wafers for customers, but it does more than just that traditional foundry role.

At Intel Innovation in September, Gelsinger said Intel Foundry Services (IFS) is ushering in the “systems foundry era.” Instead of just supplying wafers to customers, which is the traditional foundry model, Gelsinger said Intel offers silicon, packaging, software and chiplets.

“IFS will usher in the era of the systems foundry,” he said, “marking a paradigm shift as the focus moves from system-on-a-chip to system in a package.”

21 March 2023
SANTA CLARA, Calif., March 21, 2023 – Intel Corporation today announced the appointment of Stuart Pann as senior vice president and general manager of Intel Foundry Services (IFS), Intel’s commercial foundry business. Pann will report to Intel CEO Pat Gelsinger and drive continued growth for IFS and its differentiated systems foundry offering, which goes beyond traditional wafer fabrication to include packaging, chiplet standards and software, as well as U.S.- and Europe-based capacity.

29 March 2023
Four Takeaways from Intel’s Investor Webinar
Intel leaders focus on the company’s Data Center and Artificial Intelligence business unit with roadmap and progress updates.

31 May 2023
Intel Foundry Services Ushers in a New Era
New IFS leader shares his point of view on foundry progress, new collaborations and opportunities for success.

In April, Intel Foundry Services (IFS) and Arm announced a multigenerational agreement to enable chip designers to build low-power compute system-on-chip (SoCs) on Intel technology. We are excited to provide our customers with the opportunity to design their mobile SoCs on Intel’s leading-edge 18A process technology paired with the latest, most powerful Arm CPU core — the recently launched next-generation Cortex-X4 — for improved power and performance.

21 June 2023

Intel Provides Update on Internal Foundry Model

New model represents fundamental change to operations aimed at unlocking significant value.

Intel leaders told analysts and investors during a webinar Wednesday that its transition to a new internal foundry model will be a key enabler to achieving its stated cost savings goal of more than $8-10 billion exiting 2025. In this new operating model, Intel’s internal product groups move to a foundry-style relationship with the company’s manufacturing group. As a result, company execs say they are projecting a broad class of increased efficiencies that will be reflected in greater profitability as Intel pursues its long-term ambition to achieve non-GAAP gross margins of 60%.

Newroom Intel

Keyvan Esfarjani
Chief Global Operations Officer 
 | Shaping the future of #sustainable semiconductor #manufacturing | Purpose and people driven leader

December 29, 2023

2024 Perspectives - Themes for Operations and Supply Chain Management & Managers

In 2024— productivity, technology enablement, and sustainability are the key drivers of future success. 

Navigating the new normal: Operations insights for 2024

November 10, 2023.  McKinsey Podcast

Cost Reduction through Productivity Improvement is Industrial Engineering.

2023 BEST New E-Book on Industrial Engineering.   


Industrial engineering improves technology, facilities and processes in the dimension of productivity. 

Under Editing (One round of editing done) - This article is a Top 10 for 2023. Hence more needs to be written highlighting the issues and supporting points.

McKinsey Podcast

What are the three things companies should be thinking about when it comes to their operations agendas?

Number one, how to apply generative AI and automation to the back-office and shared-service functions. 

Number two, purchasing under inflationary circumstances; there are huge gains to be had quickly if you navigate this space. 

And third, sustainability. In operations, we’ve long been optimizing for efficiency, quality, and cost. Now, it’s also about sustainability and carbon footprint.

Your company’s future success demands agile, flexible, and resilient operations. 

There is an increasing demand on supply chains and organizations to deliver productivity.

The second thing  is that supply chain executives are also being asked to deliver on sustainability and to help improve the carbon footprint and reduce the impact on our environment. And they’re also being asked to increase the resiliency of their operations coming out of a global pandemic, not to mention the many other disruptions we’ve had. 

Consumer-facing industries are relatively weak as  the consumer has less money to spend and Europe being quite affected by high interest rates. At the same time, some industry sectors  are booming. For example,  green-energy transition and battery factories. So the combination is an unusual one. I would say in both of these extremes, operations has never been higher on the CEO agenda.

A new trend is purchasing in an inflationary environment. We have had 25 to 30 years since we saw something similar. So the capabilities needed to purchase the tools are quite different from what we’ve seen for a while. We also have new technological opportunities, opening up brand-new opportunities to restructure back-office and such functions. And given the macroeconomics, tying back to that, I think the urge to move has never been bigger among our clients. And it’s not just a COO topic; it’s really a CEO topic.

Where are clients placing their big bets and using consultancy services?

The reality is that for a lot of operations leaders, productivity is a nonnegotiable.  It’s just the reality of where we sit and the reality of the cost pressures a lot of people have faced—whether you’re a product manufacturer and input costs and raw materials or whether you’re a services company, you’ve seen the cost of labor grow meaningfully. The need to drive productivity has never been higher. So I would say for most of our clients and companies, that’s kind of a nonnegotiable. 

Then what we see on top of that is a lot of supply chain leaders and executives thinking really hard about where they’re going to make their big bets.

For example, resiliency and how to build in more operational flexibility were supercritical capabilities that were front and center for everybody over the last couple of years. But the question is, how much will companies invest in that supply chain and operational resiliency as we return to something that feels more normal? And will the importance there continue to be as high as it has been the past couple of years? While we can’t predict what the next disruption will be, we are quite confident that there are more and more disruptions coming down the pike.

On the sustainability front, we’ve also got to tackle head-on where the emissions sit today. A lot of companies are heavy emitters, and a lot of that is upstream from their individual supply chains, so they are having to place big bets on how they can improve impact and the environment through their operations. And some of those things actually reduce costs, which is a very good thing. Others potentially require investment.

Automation now a savior for how we get the work done.

Now, there are nearly a million manufacturing jobs open in the US.1 And that’s before we add the billions and billions of dollars of investment that will come from IRA [Inflation Reduction Act], the CHIPS [and Science] Act, and the [Bipartisan] Infrastructure Law that the US government has passed. When you look at that, the increasing demand for manufacturing jobs, construction jobs, etcetera, is going to put real strains on our ability to fill them and, therefore, to produce the products we need to make and get the jobs done that need to get done we welcome automation.

The capital intensity in the world is seemingly going up, driven by a number of megatrends. We touched upon electrification, battery factories being built, the electric grid needing to be rebuilt, and more power generation needed in Europe. There’s a huge need for infrastructure investment, and infrastructure investment is going up. So any type of capital intensity is increasing, also driven by IT and different digital innovations that also require investment.

Therefore, capital excellence, or how to deal with large capital-consuming projects in an efficient way, is also a theme  seeing increased traction. I think this trend will probably become more prominent in the next 15 to 20 years. 

Fundamentals of operational excellence, COOs cut their teeth on the lean methodologies, and we’re seeing that back-to-basics approach happening now, but enhanced with technology and thinking differently, holistically, about purpose and how people are involved in delivering excellence.

Our practice was initially founded on the lean principles, and for many years, the vast majority of the work we did was around lean methodologies. I think over the past 15 years or so, we’ve seen a shift from classical lean toward more technology-driven operations of various forms. I would still say that for those of us who remember the old lean principles, they still apply. It’s now evolved into different types of lean—it’s morphed into new shapes. As a result, most of our clients are pretty good at doing it. Now our clients are thinking more about the next wave of lean and digital manufacturing and leveraging the latest procurement tools in digital.

We already spoke about service operations, automation, and what generative AI can mean for that. All of this is, of course, based on lean principles, but it’s really the technology-enabled, next-generation version of that. And I think the macroeconomic environment that we started talking about is driving a much faster adoption of these new technologies and new practices with our clients.

How are CEOs engaging with some of these typical operations topics?

For a lot of companies, things went wrong in operations and were very challenging over the last couple of years. Naturally, it has become more of a board- and a CEO-level topic. And I think there are a couple of big things behind that.One is obviously, with some of the major disruptions we had, it was impossible to run your supply chain. And one of the things I think has been lost in the discussion around the supply chain disruptions over the past couple of years is the crazy spikes in demand that we saw in different industries.

The second is this led to some challenging conversations and big strategic discussions. Early on in the pandemic, what we found in all of our surveys was that people were basically trying to increase inventory, and that’s fine. You can do that in relatively short order, etcetera. But as we’ve seen it evolve over the past couple of years—and it’s not just been the pandemic; there’s been the war in Ukraine and all these other disruptions—all of a sudden people are saying, “Should we be doing more nearshoring or reshoring and doing more production closer to the consumer? Should we be rethinking our talent profile? And are we overconcentrated in certain countries around the world? Should we be thinking about changing the specifications of our product?”

A lot of those things led to really strategic, important discussions that brought supply chain to the forefront of not just the CEO and the executive room, but the boardroom as well.

It’s a record time for the amount of different operations-related topics that reaches the board. Manufacturing and supply chain footprint has been a huge topic, given political tensions, and increased supply chain resiliency needs to be more focused than it was ten years ago. Sustainability is also a key consideration. A certain supplier of nickel can be thousands of times more environmentally hazardous than another supplier of the same metal. So your supplier selection matters greatly from a sustainability point of view. That’s also on the board agenda.

Then operations, of course, is on the agenda. How do you save money? We have a shortage of some professions, so we can’t hire for some jobs. Why do we have unemployment in other areas? There’s just a record number of very different operations topics that all reach a CEO or reach a board. And then prioritizing where we start and how we make sense of this is, of course, much more difficult now than it ever has been before.

And of course, part of that is around transparency, data information, and having that at your fingertips at a much faster pace. Which is presumably an opportunity for the technology and the innovations that are coming down the pike and then also, potentially, the impact of generative AI.

The opportunities, leveraging data on digital across the operations space, are more or less infinite. We’ve seen it for a decade or more in digital manufacturing and in various next-generation digital applications. But now, we are expecting a new S-curve driven by generative AI. You can see applications of generative AI in most areas within operations. I think the shift will be almost as big as when the computer hit the desk in the office: what you can do, how it will change clients, how it will change the software industry, and how it will change customer service. It will be a big new revolution.

But to benefit from that, you need to have your data strategies well sorted. You need to have control of what data you are accessing, should be accessing, and should be leveraging to make your corporation even better.

The CTO [chief technology officer] and the COO have to be in lockstep right?

When you look backward at some of the technology implementations within operations, one of the failure modes you see is that sometimes the CTO and the head of operations or the head of the supply chain weren’t in lockstep. So what you end up with is a tool implementation that hasn’t reaped the benefits or had the impact that one might hope. We see this all the time, whether in advanced planning or technology implementations or whether we see it with more source-to-pay in the procurement arena, where people have put the tool in but haven’t gotten the value.

So the idea of being super clear on the business case, understanding where the impact comes from, and also recognizing the nontechnological factors that are required to deliver the impact are crucial. For example, how do you build the capabilities of your organization to actually use the tool? How do we put the right performance management and metrics in place to measure how we’re doing, both in terms of compliance with tool usage and the outputs? As these technologies get better, and as people get clearer on what it requires to deliver impact, the CTO and the CEO will need to be in lockstep.

The other way we need to look at it is for each area where you’re trying to improve your business, what’s the full potential of the technology in generative AI? We should never do a planning transformation that isn’t really looking across "how do you improve the process and the capabilities of the people? How do you leverage traditional technology, such as an advanced planning system? And do you leverage generative AI, etcetera?" So not only should we be looking at it as generative AI end to end across your company, but we should be asking the question, “For each business problem, what full suite of tools, including the more advanced technologies, do we have to solve that problem?" And that’s a learning and an adaptation for people across a lot of client organizations.

Global Lighthouse Network

I know we’ve been working on the Global Lighthouse Network with the World Economic Forum, and it’s encouraging to see the number of lighthouses being called out; they’re growing each year.

Value of Industry 4.0 Technology Set

This is super exciting. We’ve been able to generate several lighthouses proving the latest and greatest in different operations technologies—most notably, various types of digital manufacturing or digital tools, generating results that bring them to the top of the top in their respective industries. Speaking of the impact and common thread across those cases, I believe the key concept is value. I think that’s an evergreen topic, something every operations leader needs to bring with them. All these lighthouses began by identifying the applications for new technologies within operations that can bring them the biggest value. Then within those areas, how do we apply the technology in the most efficient way and get the most bang for the buck? Then actually do it so you have a proof point—a lighthouse—to show that it can be done, and you can prove the impact with it.

This staging, starting value back, and then deciding which technology to apply sounds very simple. But actually, very few do that. We all have a tendency to go with the latest trend and get excited about some tool and then invest many millions of dollars in applying various tools without always getting the value for it.

One of the things that’s been really interesting is making sure companies are thinking about scaling the impact from these use cases and the digital journeys from the very beginning. In the good old days, people would try something, see if it worked, then have the proof point, and then think about how they scale it. Well the reality is, what you need to do to scale it could be very different from what you need to do to prove that it works the first time.

We see a lot of leading companies changing their mindset of trying to figure it out in one place. And not only [are they] doing that, but also they’re thinking what are the things that I need to put in place so I can scale this across my entire network from the beginning, and that is a massive shift in thinking.

As C-suite leaders and the boardroom are thinking about their planning for 2024 and the opportunities, but also the challenges that need to be navigated, what are the three things they should be thinking about when it comes to their operations agenda, Axel?

Number one, how to apply generative AI and automation to the back-office and shared-service functions; there’s a huge opportunity for every company I know of regardless of industry. 

Number two, purchasing under inflationary circumstances; there are huge gains to be had quickly if you navigate this space. It has been a long time since we faced a similar environment. So most people in the purchasing department are not up to speed with what can be done. 

And third, sustainability in operations. In operations, we’ve long been optimizing for efficiency, quality, and cost. Now it’s also about sustainability and carbon footprint. There are many methodologies to do both at the same time, and you can make money from that.

Another Three

One is, while I think a lot of our clients feel enormous pressure to deliver productivity in this environment, I would encourage people to use this environment as a chance to change the mindset around productivity within your organizations.

There’s never been a better opportunity to get heads of marketing, CFOs, and heads of sales focused on productivity to tackle some of the things that an operations executive can’t do on their own, but that require collaboration with others. 

The second thing I would think about is, how do we infuse technology enablement into everything we do from an operations perspective and have it not be a tech agenda versus an operations agenda—but bring those two things together?

And the third mindset I encourage people to have is, how do we ensure that supply chains and operations remain a boardroom topic and a CEO priority? As we return to something that feels more “normal”—I’m not sure any of us know what normal means anymore— this has been a unique time where operations and supply chains have moved into the boardroom, and I think that’s a really good thing. It’s especially good for companies to have more boards and CEOs thinking about supply chains and operations every day.

The CEO: Architect of the new operations agenda

December 6, 2021 | Article


Pub. 13.11.2023

December 28, 2023

Management - Articles, Research Papers, Blog and Social Media Posts - Best of 2023

Best of 2023  #Management   #MBA  7000 views

Principles of Management – Koontz and O’Donnell

Organizational Behavior – Theoretical Frameworks

Agility of a Business Organization and Its Performance - McKinsey & Other Top Management Consultants

Operations Strategy and Competitiveness - Review Notes

Supply Chain Strategy: Achieving Strategic Fit and Scope - Review Notes

Management - Definition: Koontz and O’Donnell – Narayana Rao

The Marketing Concept - Kotler

Marketing Strategy - Marketing Process - Kotler's Description

Tailoring Strategy to Fit Specific Company - Industry Situation - Review Notes

2024 Perspectives - Themes for Operations and Supply Chain Management & Managers.

In 2024— productivity, technology enablement, and sustainability are the key drivers of future success.

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