April 29, 2015

Z Reminds me of Theory Z


This is the last post of A to Z April Blogging Challenge. This year I blogged on management subject on all the 26 days. It helped me to revise management theory. I intend to do it next years also, may be with industrial engineering as the subject of focus.

To begin writing this post I first studied my earliest post on the topic: Theory Z - Type Z Organizations and made some changes to it. I also plan to add more content in the coming days.


William Ouchi proposed the concept of theory Z organizations. The concept was developed in his efforts to understand the best practices of Japanese management which can be used in companies of USA. He identified the differences between American and Japanese organizations in some aspects.

American Organizations                      Japanese Organizations
Short-term employment                      Lifetime employment
Individual decision making             Collective decision making
Individual responsibility                     Collective responsibility
Rapid evaluation & promotion     Slow evaluation & promotion
Explicit control mechanisms             Implicit control mechanisms
Specialized career paths                     Nonspecialized career paths
Segmented concern for employee as an employee   Holistic concern for employee as a person


Practice of Theory Z in American Companies

Then he went around interviewing managers of various companies asking them to identify American Companies which are practicing the characteristics identified by Ouchi as Japanese organization practices. But Ouchi had not told the managers that they were Japanese practices. Many managers identified some American companies as following those practices. The companies identified were IBM, Procter and Gamble, Hewlett Packard, Eastman Kodak, and the US Military. These companies are named Theory Z companies by Ouchi. They are companies in USA but follow practices similar to Japanese companies.

Like Japanese companies, type Z companies tend to encourage long-term employment. They rotate employees around functions. Even though they have modern information and accounting systems, they do not dominate decision making. Explicit and implicit information and issues seem to exist in a state of equilibrium. There is a central set of objectives to which all employees have agreed. The corporation’s philosophy or central set of values preserves the freedom of employees to pursue projects they felt would be fruitful. Organizational life is treated as a life of interdependence. It is team work and individual performance measure in a period has some ambiguity.

The decision making is collective but the responsibility for decision still resides in the individual. In type Z companies, superiors show broad concern for the welfare of subordinates. At peer level also, there is concern for co-workers. Egalitarianism is a central feature of type Z organizations. In egalitarianism in organizational contexts means that it is believed that each person can apply discretion and can work autonomously without close supervision. The belief is that every person can be trusted.

Ouchi proposes that American companies adopt type Z company practices. In stead of trying to imitate Japanese companies which are very far in a different culture, American companies can learn from some other American companies only, to follow some of the Japanese best practices.
 Strategies to Transform the Organization

Ouchi proposed 12 strategies or steps to transform a typical American company, named as type A company to type Z company.




Theory Z of Maslow

Maslow is a well known psychologist. He is known for his hierarchy of needs model.
Maslow's Theory Z , presented in Maslow on Management, presupposes that people, once having reached a level of economic security, strive for a life steeped in values, a work life where the person would be able to create and produce. Maslow's Theory Z and Ouchi's Theory Z are different.

Y Reminds me of Theory Y



Some managers make the Theory Y assumptions about their subordinates.

Theory Y Assumptions

Average person has intrinsic interest in his work

He has desire for self-directing and he seeks responsibility, and he has  capacity to be creative in solving business problems.


Douglas McGregor concludes after providing description of Theory X and Theory Y, that the latter approach is the more desirable one for managers to follow.


Beyond Theory Y
John J. Morse and Jay W. Lorsch
FROM THE MAY 1970 ISSUE of Harvard Business Review
https://hbr.org/1970/05/beyond-theory-y

The authors, Morse and Lorsch proposed contingency theory in the above article. With some people, theory X based management will work and with some people theory Y based management will work. Managers have to find which works with whom and accordingly use the supervision method.

April 28, 2015

X Reminds me of Theory X

Some managers follow Theory X in managing people.

Theory X assumes that people dislike work and must be coerced, controlled, and directed toward organizational goals. Furthermore, most people prefer to be treated this way, so they can avoid responsibility.
Douglas McGregor pointed out the Theory X and proposed that managers must use Theory Y to get better results.

April 27, 2015

Work-Methods Science



Ergonomics - Science Related to the Effect of  Work Posture, Body Movements and Brain Use on Human Body, Brain and Mind.

Manual packaging, storage and retrieval operations frequently involve the task characteristics that have been associated with the development of disorders of the upper extremities and lower back. When risk factors that cause these disorders are recognized, they can often be reduced or even
eliminated with very little effort and no capital expense. In the original process design and installation itself these risk factor can be eliminated provide science of the disorders that are developed due working methods is developed.  There are some methods, which  operational plant personnel, who have had little or no training in ergonomics, with an analysis tool to both evaluate and improve current workstations and work  methods, as well as to avoid the hazards of poorly designed tools and equipment, prior to their purchase and installation.

The costs that are most generally addressed related to musculo-sceletal disorders are the direct expense of high worker's compensation insurance and the potential for OSHA fines. These costs, although high, are not the only costs associated with the muscular skeletal disorders. Absenteeism and turn-over rates, as well as reductions in product quality and productivity, can also be important consequences that can have indirect costs that are much higher than the direct financial costs.

Some of the disorders are explained below.


1 Tendinitis and Tenosynovitis: A tendon is made of tough, fibrous connective tissue in which muscle fibers end and muscles are attached to bones. A tendon may or may not be surrounded by a sheath. A sheath protects and lubricates tendons. Tendons of the wrist, shoulder, and hand are surrounded by tendon sheaths; however, tendons of the elbow and forearm are not. Tenosynovitis can occur when a tendon that is surrounded by a sheath becomes inflamed because of excessive or insufficient amounts of synovial fluid in the sheath. Stenosing tenosynovitis is caused by the narrowing of the tendon sheath and triggering movements of the digits which is known as trigger finger. Tendinitis occurs when a tendon becomes inflamed because the tendon has been stretched beyond its strength or when the tendon is stretched across the bone when the wrist is deviated.

2 Thoracic Outlet Syndrome
 Thoracic Outlet Syndrome is a neurovascular condition which occurs when there is
compression of the neurovascular components (nerves of the brachial plexus and the brachial artery
and its branches) or compression between the muscles of the neck and shoulder. The result is
numbness and pain in the distal upper extremity. Most of the cases are attributed to poor muscle
condition. The syndrome is a result of reaching above shoulder level or carrying heavy loads at the
side of the body. Overhead work causes the muscles of the shoulder region to become tight or
compressed

3 Rotator Cuff Tendinitis
 The rotator cuff consists of four tendons that fuse over the joint in the shoulder. The rotator
tendons rotate the arm inward and outward, as well as move the arm away from the side of the body.
 Rotator cuff tendinitis is a common shoulder tendon disorder which occurs when the arm tendons
push against the bony structure in the shoulder, the acromion. Pain occurs when the tendon becomes
inflamed. The condition occurs in tasks that require the shoulder to be abducted (arm is away from
the center of the body) and the elbow is extended.

4 Epicondylitis
Epicondylitis is a form of tendinitis that occurs when the tendons from the elbow tear or
degenerate. These tears are a result of repeated mechanical overload. There are two forms of
epicondylitis: “tennis elbow” (medial) and “golfer’s elbow” (lateral). Both result from forceful
forearm rotation with a bent wrist  or repeated gripping, twisting, and wrist
extension or flexion against resistance  According to Sinclair's [1965] study  almost 50% of the subjects that had tennis elbow symptoms worked on jobs involving gripping tools with contractions of the extensor muscles or forearm rotation.

2.5 De Quervain’s Disease
This disorder is a form of tenosynovitis which occurs when the extensor tendons of the
thumb become inflamed due to thumb movement to the extreme of its range of motion.. According
to Guidotti (1992) this disorder tends to occur in occupations which use hand tools that require
deviation of the wrist either toward the thumb (radial deviation) or toward the little finger (ulnar
devaition).

2.6 Carpal Tunnel Syndrome
Carpal tunnel syndrome (CTS) is the most common nerve entrapment disorder which occurs
when the median nerve is compressed between the carpal ligament and structures in the narrow
carpal canal. Within this area are the median nerve and the
flexor tendons that connect the fingers with the muscles that provide grip strength. Compression of
the median nerve causes tingling, pain and numbness to the hands and fingers, and can cause loss of
feeling and loss of grip. CTS is usually a result of forceful hand movements  or
repeated grasping, pinching and gripping.

2.7 Raynaud’s Syndrome
This disorder is associated with occupational tasks which require the handling of vibration
tools and working in cold temperatures (Lahey, 1984). Vibration delivered to the hand and arm by
pneumatic tools causes injury to the small blood vessels in the hand resulting in a lack of circulation.
 This lack of circulation results in whiteness of the fingers.

Several occupations subject operators to biomechanical stress and operators in them  have been found to be suffering from these disorders. The biomechanical stressors are referred to as occupational risk factors that cause musculo-sceletal disorders. A risk factor is defined as any attribute, experience or
exposure that increases the probability of a disorder.

Research studies have found that the following risk factors can contribute to musculoskeletal disorders:
1) awkward postures, 2) wrist deviations, 3) forceful exertions, 4) pinch grips, 5) cold, 6) vibration, 7) high grip forces, 8) direct mechanical impact, 9) wrist accelerations, and 10) repetitive motions.


1 Awkward Posture


Shoulder Abduction. The side-ways movement of the upper arm away from
the center of the body.
Shoulder Adduction. The movement of the upper arm toward or across the
center of the body.
Shoulder Flexion. The forward movement of the upper arm away from the
center of the body.
Shoulder Extension. The backward movement of the upper arm (reaching
behind the back).

Forearm Pronation. Rotating the forearm so that the palm is down.
Forearm Supination. Rotating the forearm so that the palm is up.

Radial Wrist Deviation. Bending the hand at the wrist in the direction of the
 thumb.
Ulnar Wrist Deviation. Bending the hand at the wrist in the direction of the
 little finger.
Wrist Flexion. Bending the hand toward the palm at the wrist.
Wrist Extension. Bending the hand backward at the wrist (dorisflexion).

Awkward postures that result in fatigue and discomfort are usually a result of poor work
station design, layout, or poor work methods that require excessive horizontal or vertical reach
distances. Examples of awkward postures include shoulder elevation, awkward elbow postures
(elbow above mid-torso), deviated wrist postures (flexion, extension with force, radial deviation and
ulnar deviation), and pinch grips.

Research Studies

According to Tichauer [1966], tasks, such as tightening screws, are particularly harmful because the
forearm is extended and turned through supination (palms-up) at the same time. In a study of 154
workers, the number of complaints of pain in the extensors of the forearm increased as the included
angle between the forearm and upper arm increased. The most comfortable posture is when the arm
is flexed so that the included angle between the forearm and the upper arm is 90 degrees.

In a study of 1979 of two matched female populations, one group having problem of carpel tunnel syndrome and the other not having the problem. The work methods of both groups were analyzed with respect to hand and wrist positions and hand force. It was found that the diseased group tended to use a wrist position deviated from neutral more frequently than the non-diseased group. Furthermore, the diseased group exerted more force than the non-diseased group.


Fernandez, Dahalan, and Halpern [1991] performed a study to determine the effect of wrist posture (neutral, 1/2 of maximum extension, 1/2 of maximum flexion, maximum extension, and maximum flexion) on seven pinch grip styles (five pulp pinches, a lateral and a chuck pinch). The pulp pinches were defined by the finger that was used with the thumb to pinch. They found that as the wrist deviated from the neutral position, the pinch strength decreased by up to 34 percent for the maximum flexion using the ring finger and thumb.

DeCaro, Feuerstein, and Hurwitz [1992] found that the more the hand and wrist deviated from the neutral position, the more the subjects experienced pain and
fatigue.

Harber, Bloswick, Beck, Pena, Baker, and Lee [1993] compared 50 supermarket checkers’ motions and symptoms from questionnaires. They found relationships between wrist flexion and extension and carpal tunnel syndrome symptoms. They also found that forearm pronation showed a
relationship with hand,wrist, and lower arm symptoms.

Loslever and Ranaivosoa [1993] investigated both biomechanical and epidemiological data on seventeen high risk jobs. They found the prevalence of carpal tunnel syndrome highly correlated with the frequency of flexion and the use of high forces. They also found that high or low flexions were a greater risk than high or low extensions.

The studies indicate that having the wrist in an awkward posture is definitely a contributing factor to the incidence of CTDs.

2.  Forceful Exertions
Forceful exertions such as using knives and other tools  can cause inflammation of joints, muscles, and tendons. Poorly balanced tools and poorly maintained tools (e.g., dull knives or scissors) can increase the force required by an operator. Gloves can also increase the muscular effort required to perform a gripping task because they can reduce tactile feedback, as well as reduce the friction between the hand and the object being grasped.

According to Welch [1972], the use of excessive force was the cause of tenosynovitis in 30% of 500 cases studied.

Kim and Fernandez [1993] conducted a study for a simulated drilling task at different
applied forces and angles of wrist flexion. They found that the maximum acceptable frequency for
gripping was significantly reduced as the required drilling force and the angle of wrist flexion
increased. Therefore, they concluded that the task frequency for a drilling task should be lowered as
force and wrist flexion angle increase.

Vanderpool, Friis, Smith, and Harris [1993] performed a study with cardiac sonographers. Based on a questionnaire to identify the possible causes of musculoskeletal disorders (the response rate was low)  they found that high-pressure hand grip correlated significantly with carpal tunnel syndrome symptom.

3. Cold Temperatures

Working in cold temperatures and handling cold parts can reduce manual dexterity and tactile sensitivity and this demands use of increased force to do the job. This creates the potential for muscle strains and sprains. Gloves  when used to avoid the cold temperature, also increase the force required to perform a task.

Schiefer, Kok, Lewis, and Meese [1984] studied the relationship between finger skin temperature
and performance with four manual dexterity tasks. They found that cooling the finger skin temperature to 0-20 degrees Celsius affected strength and dexterity and therefore performance. Hence a person operates at a higher proportion of his maximum strength in cold temperature.


Reference
A COMPUTER-BASED JOB ANALYSIS SYSTEM TO REDUCE
CUMULATIVE TRAUMA DISORDERS
Steven L. Johnson
M. Michelle Dime
Sherry A. Brown
Jeffrey B. Hardcastle
Department of Industrial Engineering
University of Arkansas
Fayetteville, Arkansas 72701
January, 1996

http://comp.uark.edu/~sjohnson/EJA-Users-Manual.pdf


Industrial Engineering Knowledge Revision Plan - One Year Plan


January - February - March - April - May - June





April 25, 2015

Value Engineering - Recent Developments


Article first postedd on 25 April 2015

Take a system-wide view as part of Value Engineering and identify s the weak link in
a chain of components. If the weak link is performing at the desired level, other
components in the product might be over engineered. Examine the design of the other components for reducing the cost.

On the other hand, improving the characteristics of the weak link could increase the overall performance of the system and may give a higher performance system at a lower cost.
http://argoconsulting.com/content/wp-content/uploads/2015/03/Argo_ValueEngineering_FINAL-March-20151.pdf

Integrated Construction Value Engineering
http://managementsolutionsllc.com/articles/integrated-value-engineering-delivering-value-across-the-project-lifecycle/


Value Engineering Risk Analysis
http://www.wsdot.wa.gov/publications/fulltext/CEVP/VERA.pdf


Value Engineering of Divan
http://www.ijirset.com/upload/2014/october/24_Application.pdf




Industrial Engineering Knowledge Revision Plan - One Year Plan


January - February - March - April - May - June



April 23, 2015

Understanding Marketing Productivity






I proposed a framework for application of industrial engineering: technical processes, business processes and management processes.

The first and major focus of industrial engineering is engineering activity. It is only after their success in improving productivity of engineering activities and processes that industrial engineers develop the basic understanding to study and improve business processes and management processes.

Marketing is a business process in contrast to production or operations process and there is management activity related to it which called marketing management.

Management is processes consisting of functions planning, organizing, staffing (resourcing), directing (executing) and control.

Marketing has activities like market research, marketing communications, sales and customer service.

Every activity in organizations has to be productive. Productive means it has to be effective and efficient. It has to deliver what it was supposed to deliver. It has to use as less resources as possible. Marketing activity also has to be productive.

Kotler emphasized marketing productivity right from the first edition of his text book. The emphasis gets more prominence in the recent editions (14th edition)


Some of the aspects of marketing productivity covered by Kotler.


Efficiency Control

The company has to examine the question.
Are there more efficient ways to manage the sales force, advertising, sales promotion, and distribution?

Some companies have established marketeting efficiency officers in controller's department.

Job Costing - Review Notes

Job Costing System

In this system of costing, the cost object is an individual unit of product or service, batch, or lot.  A classic example is an order based job made for a specific customer. Hence the name job costing.

Relevant Cost Concepts

Cost object
Direct cost of a cost object
Indirect cost of a cost object

Cost pool:  Cost pool is grouping of individual cost items. It can be very broad comprising of hundreds of cost items. Or it can be narrow having only two items

Cost-allocation base: Cost allocation bases are used to link an indirect cost pool to a cost object. Usually cost drivers are used as cost allocation bases. Horngren gave the example automobile operating cost of an organization. The cost driver is number of miles traveled. Number of miles traveled is used as a cost allocation base. Different jobs are charged for automobile cost on the basis of number of miles traveled by the persons of the organization in producing and delivering the job.

Relevant Costing Concepts

Actual Costing:  Actual costing is costing method that traces direct costs to a cost object by using actual direct-cost rate of cost item times the actual quantity of the direct-cost input (item) and allocates indirect costs based on the actual indirect-cost rate (rates in case multiple indirect cost pools are there) times the actual quantity of the cost-allocation base (appropriate base when multiple cost pools are used).

Normal Costing: In this method of costing, direct costs are traced to cost object in the same manner as in actual costing. But indirect costs are allocated on the basis of budgeted indirect-cost rate and the actual cost quantity of cost allocation base.

Source Documents in Job Costing

An accountant in financial accounting system makes entries on the basis of some source documents and journal and ledger are the main registers for accounting entries.

Similarly cost accounting is also based on source documents and records.  A key document or record or account in cost accounting is job cost record (or job cost sheet). It records and accumulates all the costs assigned to a specific job as resources were consumed in producing the goods and services specified in the job. Hence, the job cost record is started as soon as the work begins on a particular job.

Each entry in a job cost record is based on a source document.

Materials from the store are ordered by the manufacturing engineers using a materials requisition record. This form is the source document for charging job cost records and department for the cost of direct materials used on a specific job.

For recording direct labor related costs in job cost record, labor-time record is the source document.  Each employees of the organization can have a labor time record and the time that he spends on various jobs is recorded on a daily basis on this record.  The cost per hour of each employee is determined and accordingly labor cost is recorded in job cost records. 

The indirect cost items are given standing order numbers and standing order cost records are maintained for them. Based on materials requisition records and labor-time records costs are charged to standing order cost records.

Special attention needs to be paid to the accuracy of the source documents as the accuracy of job cost records depends on the reliability of inputs.

Seven Step Procedure of Job Costing

Step 1: Identify the chosen cost object. The specific jobs for which job cost is to be ascertained is to uniquely identified and a job cost record is to be opened for each job.

Step 2: Identify the direct costs of the job: The job number is to be mentioned in the material requisition record and labor-time records. From these source documents, the job cost records are to be posted or charged with direct costs.

Step 3: Select the cost allocation bases to use for allocating indirect costs to the job.

Step 4: Identify the indirect costs associated with each cost allocation base.

Step 5: Compute the rate per unit of each cost-allocation base.

Step 6: Compute the indirect costs allocated to the job.

Step 7: Compute the total cost of the job by adding all direct and indirect costs.

Journal and Ledger Entries in Cost Accounting

Like in financial accounting, in cost accounting also journal and ledger are maintained.
Job costing system has a separate job cost record for each job and entries are made in it for each cost item charged to it. A summary of the job cost record is posted in a subsidiary ledger. In the general ledger, Work-in-Process Control Account is there and it presents the totals of the separate job cost records pertaining to all unfinished jobs.

A general ledger account with control in their name or title signifies or indicates that they are supported by underlying subsidiary ledgers that have additional details. Materials Control Account and Accounts Payable Control Account are additional examples of control accounts. Material Control Account has a subsidiary ledger – Stores Ledger that has detail on each type of material stored and used in the company. Accounts Payable Control Account has a subsidiary ledger that has accounts of individual suppliers.

Horngren has given examples of transactions to illustrate the use of journal entries in cost accounting.

1. Purchases of materials on credit $89,000

Materials Control A/c Dr.   $89,000
 To Accounts Payable Control     $89,000
2. Materials issued to manufacturing departments: direct materials: $81,000, and indirect materials $4,000
Work-in Process Control A/c   Dr.   $81,000
Manufacturing Overhead Control A/c  Dr.         4,000
 To Materials Control      $85,000

3. Total manufacturing payroll or salaries and wages: Direct $39,000 and indirect, $15,000
Work-in Process Control A/c   Dr.   $39,000
Manufacturing Overhead Control A/c  Dr.       15,000
 To Materials Control      $54,000

Summary

The important points to be remembered from this chapter or topic are the method of arriving at job cost and method of arriving at indirect cost of a job. There are source documents and from these source documents job cost record is prepared and this record will show the cost of a job. Journal and ledger are kept and the ledger will show the value of inventory in the form of material, work-in process and finished goods.

References

Horngren, Charles T., George Foster, and Srikant Datar, Cost Accounting: Managerial Emphasis, Tenth Edition, Prentice Hall, Inc., Upper Saddle River, New Jersey, USA, 2000


Videos on Job Costing
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Updated  23 April 2015
First published  8 Dec 2011


originally posted in Knol
http://knol.google.com/k/narayana-rao/job-costing/ 2utb2lsm2k7a/ 1212

The Role of Theory in Practice of Engineering and Management




Theory provides the relationship between input variable and output variable. Normally the interest is in output variable to start with. We want the output variable or do not want it. If we know the input variable which is going to cause the output variable, we may be able to increase the input variable and thus get the desired output variable. But how do we know which is the input variable. Theory development which is called research observes the phenomena of interest and identifies the input and output variables. The input variables can be more than one. After a theory brings out the input variables and output variables, the job of engineering to create a convenient way of creating input variables and also create convenient way of generating output. Engineering depends on scientific theory, but is an independent exercise of creativity and judgment to invent devices like air conditioners which are today available in various sizes and can be mounted on wall, ceilings etc.

April 21, 2015

Six Sigma - Zero Defect Movement Systematized



Six sigma method is engineering solution to zero defect movement started by Phil Crosby.



Zero Defects is the approach to quality that was developed and promoted by the guru Philip B. Crosby in his book ‘Quality Is Free’.

It’s a way of thinking about quality that doesn’t tolerate errors or defects and continually strives to improve processes and prevent errors so that work is always done correctly without needing repetition or rework or generating waste;

The accepted theory was that a certain level of defects is seen as normal or acceptable, as implied by the Acceptable Quality Limit approach; Crosby took a strong line against AQLs for precisely that reason, he saw them as a “commitment, before we start the job, that we will produce imperfect material”.

Zero Defects is based on four key principles:

Quality is simply conformance to requirements.
It is always cheaper to do the job right the first time than to correct problems later
Quality is measured in monetary terms (the price of non-conformance)
The performance standard for a process must be Zero Defects.


The key word for achieving Zero Defects is Zero defects production. Not reworking to correct errors of deviations.

The case for Zero Defects

Crosby explains that defects result in costs which can be measured - inspection, waste/scrap, rework, lost customers, etc. By eliminating defects these costs are sufficiently reduced that the savings more than pay for the quality improvement programme; hence his assertion that ‘Quality is Free’ and his advocacy of the quality management movement.

As with many areas of quality management it’s about the philosophy and the journey you take from where you are now to being a better business, it is the “attitude of defect prevention”.

When your goal is zero defects it sets a standard against which all your processes can be assessed. It’s about continually striving to work better and not being satisfied with the status quo.

Crosby gave a 14 step quality improvement programme.
http://www.qualityandproducts.com/2009/12/08/the-pros-and-cons-of-%E2%80%98zero-defects%E2%80%99/


Lockheed Martin - Proud of Phil Crosby and Zero Defect Program

It was at the Martin Company’s Orlando plant that a far-reaching and influential program was born: Zero Defects, the granddaddy of nearly every quality control program in the world.
One of the plant’s first jobs was the production of the first Pershing missile for the United States Army. Philip Crosby was the quality control manager on the Pershing missile program, and he established the four principles of Zero Defects:


1) Quality is conformance to requirements,
2) Defect prevention is preferable to quality inspection and correction,
3) Zero Defects is the quality standard, and
4) Quality is measured in monetary terms—the Price of Nonconformance.


Put simply, it’s better to do it right the first time than to have to correct mistakes later. Crosby’s standards were credited with a 25 percent reduction in the Pershing missile program’s overall rejection rate, and a 30 percent reduction in scrap costs. Zero Defects meant a better product, produced more economically.

The Martin Company offered Zero Defects freely to all other aerospace companies and, years later, it was adopted by automobile manufacturers around the world.

Zero Defects was the guiding principle behind Martin Marietta’s work on the Titan rocket series, which propelled NASA’s Gemini astronauts into orbit over ten months in 1965 and 1966. The end result was a program that launched ten manned missions and had a 100 percent success rate—a feat unmatched in space travel before.
http://www.lockheedmartin.com/us/100years/stories/zero-defects.html


More articles by me on Six Sigma

The Certified Six Sigma Black Belt - Donald Benbow and T.M. Kubiak - Book Information

Six Sigma - Introduction

Total Quality Management: Focus on Six Sigma - Review Notes

Control of Variation in Inputs and Outputs - Management Insights from Statistics

Organization and Management of Advanced Manufacturing - Waldemar Karwowski, Gavriel Salvendy - Book Information

Organization and Management of Advanced Manufacturing
Waldemar Karwowski, Gavriel Salvendy


John Wiley & Sons, Feb 11, 1994 - 426 pages


The race to take full advantage of technological breakthroughs in computer science and communications has forced major changes in the role of people in companies that employ, or wish to implement, advanced manufacturing systems (AMS). Ironically, as industry has become more dependent on advanced technology, human factors have become ever more critical to the success of any business venture. The implementation of new technologies requires fundamental changes in a company's mode of planning; plant organization; job design; compensation and raise policy; personnel selection, training, and education; and labor management relations. Organization and Management of Advanced Manufacturing is a comprehensive review of human factors issues as they relate to computer integration of manufacturing resources, computer-aided process planning, manufacturing, design and engineering. It provides a framework for the successful integration of technology, personnel, and organization. And it offers the insights, observations, and proven methods of 47 leading international authorities on the subject, from industry, government, and academia. For industrial and production engineers, managers, plant supervisors, and human resources administrators, this book is an outstanding practical guide to the ins and outs of implementing and maintaining AMS. Researchers will discover a well-constructed platform from which to launch further inquiries. Organization and Management of Advanced Manufacturing is also indispensable reading for graduate students in engineering, business administration, computer science, psychology, and sociology.

https://books.google.co.in/books?id=Mz_tLNoWaPkC



Relaxation During Work Day - Recovering from Fatigue



Relaxation during work day is essential and standard times fixed by industrial engineers have relaxation time built into them. Managers have to allow the employees to relax within the planned relaxation time.

It is important to note that F.W. Taylor improved productivity by even 100% by giving rest of more than 50% to a person loading pigs. That experiment and the theory based on that shows that relaxation during the work day is very important and essential. That is why a tea break is normal part of work day. Similarly toilet break and water break are also normal.

Quantitative Thinking for Management



If one says I improved a system. Then the question is by how much. How one will answers. Only if you measure a performance metric before doing the improvement and then measure it again  you can answer the question. If you measure some thing you are quantifying it. Why does one do business? For making profits through satysfying the needs of customers. Can you measure profits? Yes, Accountants measure profits. So, in business measurements are used and plans can be made to increase profits. Managers have to learn quantitative thinking so that they can say what profit they expect to make on a business transaction or investment or for period.

April 20, 2015

Liabilities and Interest - Review Notes

Review Notes


Current Liabilities

A current liability is one which is expected to be paid out of current assets within one year or the operating cycle of the business, whichever is longer.


Accounts Payable

Notes Payable

Sales Taxes Payable

Unearned Revenues

Current Maturities of Long Term Debt

Contingent Liabilities

Payroll Liabilities

Additional Fringe Benefits


Notes Payable

The accounting procedure for Notes Payable:  Johnson Company borrows $100,000 on March 1 for four months at 12% interest. The interest amount for the four month period would be $100,000 * .12 * 4/12 = $4000.

A debit to Cash account and credit to Notes Payable account is to be recorded when cash come into the company on 1 March.

If the company closes its books monthly, an adjustment entry needs to be made at the end of each month for interest accrued. For example, at the end of March, one month has elapsed, and $1,000 of interest expense ($100,000 * .12 * 1/12) is accrued:

After four months, the Interest Payable would amount to $4,000, and the entry to record payment of interest and principal amount would require a debit to Interest Payable for $4,000, a debit to Notes Payable for $100,000, and a credit to Cash for $104,000..

Sales Taxes Payable

Many states levy a sales tax on certain items.  The  retailer is in a position to collect the tax at the moment of sale.  After collection, the tax becomes a liability for the retailer. Therefore, the retailer is not incurring a sales tax expense; rather, the retailer is acting only as a collection agent.  Periodically, the retailer is required, by state law, to remit the taxes collected to the state.

If sales taxes are not accounted for separately, the retailer may have to determine the amount of sales tax rung up.  For example, if $1,000 was taken in, how much of the $1,000 is sales tax, if the sales tax rate is 6%? The approach is to use algebra and calculate the amount. Let S = sales for the day. S + .06S = 1000; or, 1.06S = 1000; S = 943.40. The sales tax liability = 943.40 * .06 = 56.60.

Unearned Revenues

An Unearned Revenue occurs when someone pays us for services that we will provide in the future. If cash comes in before we perform the service, debit Cash and credit Unearned Revenue. Unearned Revenue is a current liability and is reported on the balance sheet.

When we perform the service for which the advance payment was made, we debit Unearned Revenue and credit Fees Earned. Some typical examples where Unearned Revenues occur include: purchase of season tickets for entertainment programs spread over a month, and payment of a lawyer's retainer for the full period of the case. In both cases, the party who will provide the product receives cash before earning the revenue.

Current Portion of Long Term Debt

If a company has purchased real estate, such as a building, the debt incurred for the asset’s purchase will be in the form of a mortgage payable. Although,  a mortgage as a long term liability, payments are made each month from the start of the mortgage. The debt to be paid off within one year is considered a current liability, and is reported separately from the remainder of the mortgage.

Example: A company purchased an office for $100,000 and signed a mortgage payable for that amount. In addition to the interest, the principal of the note will be reduced by $6,000. The $6,000 would be reported as a current liability; the remainder of the debt ($94,000) would be reported as Mortgage Payable in the Long Term Liabilities section of the balance sheet.


Contingent Liabilities

As the name implies, a Contingent Liability is one which may or may not result in an obligation to pay. Contingent liabilities result from lawsuits, misunderstandings or differences of opinion with the Internal Revenue Service, or other claims. The question is: should a liability be recorded on the books? According to GAAP, a liability should be recorded if the contingent event is probable and can be reasonably estimated.

If the contingent liability is only reasonably possible, disclosure of the item should be made in the notes to the financial statements.

If the contingent liability is only remotely possible, it need not be recorded or disclosed.

This discussion of contingent liabilities is important because warranties are so prevalent with merchanisers.  Warranty expenses are recorded as current liabilities even if customers have not returned the faulty merchandise as yet.  In fact, the incurrence of the warranty liability occurs at the moment of sale. The only requirement is that the warranty costs must be probable and estimable. Like depreciation, warranty costs are estimated, and the estimate can be altered over time.

Warranty Expenses

One example of a type of contingent liability that is usually recorded as an actual liability is that of Warranty Expenses arising from sale of a product. If the requirements shown above are met, (that warranty costs are probable for the product and can be estimated), then a liability is recorded. The journal entry would be a debit to Warranty Expense, and a credit to Estimated Warranty Liability. If a customer brings back a defective product and insists on a refund, a debit is made to Estimated Warranty Liability, and a credit is made to Cash.

Payroll Liabilities


Employee Payroll Entry

Similar to Sales Taxes, a business may act as an agent of a governmental unit by deducting amounts from the earnings of employees and depositing these amounts with the proper authorities. The deductions include FICA taxes, Federal Income tax, and various voluntary deductions. Here is a general model you might use for the employees' payroll entries:

Date Salaries Expense xxxxx
     FICA Taxes Payable xxxxx
     Federal Income Tax Payable xxxxx
     State Income Tax Payable xxxxx
     Salaries Payable xxxxx
The cumulative earnings of employees represent an expense of the business, in this case, Salaries Expense or Wages Expense. Not all of that amount, however, is paid out to employees. Various deductions are made, resulting in liabilities (FICA Taxes Payable, Federal Income Tax Payable, etc.). The balance becomes Salaries and Wages Payable, which will be paid out as checks to employees. Keep in mind that there are many opportunities for error in recording payroll; it is the wise employee who checks payroll stubs and questions calculations that are not understood.



Employer’s Payroll Tax Entry

In addition to employee contributions to various taxing authorities, there are some taxes (Payroll Tax Expenses) levied solely on employers. Generally, such taxes include:

FICA Tax Payable (Social Security taxes);

FUTA Tax Payable (Federal Unemployment taxes);

SUTA Tax Payable (State Unemployment taxes).


When it comes to unemployment taxes, employers alone are responsible. The majority of unemployment taxes are levied at the state level (SUTA). A small amount is levied at the Federal level (FUTA).

Here is a model entry to construct the Payroll Tax entry:

Date Payroll Tax Expense xxxxx
     FICA Taxes Payable xxxxx
     State Unemployment Tax Payable xxxxx
     Federal Unemployment Tax Payable xxxxx

Note that both payroll entries require payment of FICA tax.  This is because FICA is levied on both the employee and the employer.  Notice also, that the employee does not pay unemployment; in the U.S., unemployment taxes are the responsibility of employers.

Additional Fringe Benefits

Fringe benefits often take the form of a health insurance plan and a retirement plan. The entry for such benefits requires a debit to each benefit as an expense to the employer, and a credit to Employee Benefits Payable.


Current Liabilities
http://seattlecentral.edu/faculty/moneil/A220/L11/Horngren11.htm

Long Term Liabilities
http://seattlecentral.edu/faculty/moneil/A220/L16/Horngren15.htm

Present Value - Future Value concepts
http://seattlecentral.edu/faculty/moneil/A230/AppxC/Ch15AppxA.htm

Presentation slides

http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_09.ppt

More detailed note on accounting for long-term liabilites
http://users.cba.siu.edu/ugrin/acct322/notes/Ch14.pdf


Updated  20 April 2015,  8 December 2011

Managing Self - Leading Self



Managing self has become an important theme. Every manager must manage himself.








Heidi Grant Halvorson

Heidi Grant Halvorson, PhD, is a psychologist, researcher and consultant. She writes about the scientifically-tested strategies we can use to be more effective reaching our goals at work and in our personal lives.

She is Associate Director of Columbia Business School's Motivation Science Center, and Director of the Diversity & Bias Practice at the NeuroLeadership Institute.


http://www.heidigranthalvorson.com/


HOW TO OVERRIDE THE ASSUMPTIONS YOUR COLLEAGUES MAKE ABOUT YOU
YOUR COWORKERS AND BOSSES CAN'T HELP BUT MAKE AUTOMATIC JUDGMENTS ABOUT YOU. HERE'S WHY AND WHAT YOU CAN DO ABOUT IT.
BY HEIDI GRANT HALVORSON
http://www.fastcompany.com/3044082/work-smart/how-to-override-the-assumptions-your-colleagues-make-about-you


No One Understands You. What to do about it?
http://www.heidigranthalvorson.com/books/no-one-understands-you-and-what-to-do-about-it

http://www.forbes.com/sites/heidigranthalvorson/


http://www.forbes.com/sites/heidigranthalvorson/2013/04/23/who-is-right-is-it-you/


How Happiness Changes as We Age
http://www.huffingtonpost.com/heidi-grant-halvorson-phd/how-to-age-gracefully-_b_3796343.html?ir=India

April 19, 2015

Data Science - A New Subject - Introduction and Courses Information


Data science includes  topics such as plotting, statistics and probability, Monte Carlo simulations, data modeling, clustering, and plotting. Data scientists are in high demand due to development of Big Data technologies and the adoption of these technologies by companies in both manufacturing and marketing as well as in surveillance and risk management.


https://www.coursebuffet.com/tag/Data%20Science


Data Science with R: Intro to Data Analysis
Date: Sept. 28th; Oct. 5th, 12th, 19th, 26th; 2014
http://nycdatascience.com/courses/r-programming-intensive-beginner/

Data Sciences - Moocs
http://www.coursetalk.com/courses/data-science



Updated  19 April 2015
1 August 2014







April 18, 2015

Product Development - Introduction

What is a product?
A product is something sold by an enterprise to its customers.

What is product development?
Product development is the set of activities beginning with the perception of a marketing opportunity and ending in the production, sales and delivery of a product.

The success of the product development project is determined by five dimensions.

Product quality
Product cost
Development time
Development cost
Development capability

Who in an organization are involved in new product development?

Main departments or functions involved are: Marketing, Design, and Manufacturing

The Challenges of Product Development

Trade-offs, Dynamics, Details, Time pressure, Economics

Approach of The Book "Product Design and Development" by  Karl Ulrich and Steven Eppinger

Structured methods
Industrial examples
Organizational realities


Structured Methods

Structured method makes the decision process explicit. It allows everyone to understand the decision rationale. So all people who have to implement the decision will understand and support the decision.

Second, the method given as steps in sequence, provides the checklist for the steps to be done.

The structured method is a self documenting. As the team implements each step and records the output of the step, it develops into a document that can be used during the development of the next product by another team.

Industrial Examples:

The book explains every sub-process with an example of the implementation of it for a product.

Organizational Realities

Some organization may be having practices that make product development ineffective and unsuccessful.

1. Lack of empowerment of the product development team.
2. Functional allegiance of the team members and neglect of project management activities.
3. Inadequate resources
4. Lack of cross-functional representation on the project team.

April 17, 2015

Financial Statement Analysis - Review Notes

Review of chapter of Horngren (Introduction to Financial Accounting) to be posted



Investors who purchased equity and debt securities of a company or who want to purchase securities of a company use financial statement analysis to predict expected returns and risk associated with those returns.

Normally the analysis (that is making judgments or developing estimates) uses financial statements of number of consecutive years up to the current year.


Horizontal Analysis


Many decisions hinge on whether the numbers - in sales, income, expenses and so on-are increasing or decreasing over time. Absolute changes as well as percentage changes are interesting and useful information.

The study of absolute amount of change and percentage change in comparative consecutive statements over a period of time is called horizontal analysis of financial statements.

The study of percentage changes in comparative statements is called horizontal
analysis. Horizontal analysis compares one year to the next. Computing a percentage
change in comparative statements requires two steps:
1. Compute the dollar amount of the change from the earlier period to the
later period.
2. Divide the dollar amount of change by the earlier period amount. We call the
earlier period the base period.


Trend Percentages


Calculation of trend percentages is also a form of horizontal analysis.

In this type of analytical statement, the amounts of a financial statement in a base year are stated as 100. The amounts in the corresponding line items in the subsequent years are expressed as percentage of this base amount. For example the sales in the base year is 100%, and in the next year it can be 110% and the subsequent year it can be 117%.

Trend precentages indicate the direction a business is taking. How have sales changed over a five-year period? What trend does net income show? These questions can be answered by trend analysis over a period, such as three to five years.


Trend analysis percentages are computed by selecting a base year (the earliest year). The base year amounts are set equal to 100%. The amounts for each subsequent year are expressed as a percentage of the base amount. To compute trend analysis percentages, we divide each item for the following years by the base year amount.

Vertical Analysis


Vertical analysis of a financial statement reveals the relationship of each statement item to a specified base, which is the 100% figure. For an income statement, net sales is usually the base.

How Do We Compare One Company with Another?

Horizontal analysis and vertical analysis provide much useful data about a company.

Benchmarking
Benchmarking is the practice of comparing a company with other leading companies.
It often uses the common size percentages in a graphical manner to highlight differences.
There are two main types of benchmarks in financial statement analysis: benchmarking
against a key competitor and benchmarking against the industry average.

Using Ratios to Make Decisions

Different ratios explain different aspects of a company. The
ratios we cover further may be classified as follows:
1. Evaluating the ability to pay current liabilities
2. Evaluating the ability to sell inventory and collect receivables
3. Evaluating the ability to pay long-term debt
4. Evaluating profitability
5. Evaluating stock as an investment


Evaluating the Ability to Pay Current Liabilities

Working capital is defined as follows:
Working capital measures the ability to meet short-term obligations with current
assets.

Current Ratio
The most widely used ratio is the current ratio, which is current assets divided by current
liabilities. The current ratio measures a company’s ability to pay current liabilities
with its current assets.

What is an acceptable current ratio? The answer depends on the industry. The
norm for companies in most industries is around 1.50, as reported by the Risk
Management Association.

Acid-Test Ratio
The acid-test (or quick) ratio tells us whether the entity could pay all its current liabilities
if they came due immediately.


Acid-Test Ratio = [Cash + Short-term investments + Net current receivables]/Current liabilities

An acid-test ratio of 0.90 to 1.00 is acceptable in most industries


Evaluating the Ability to Sell Inventory
and Collect Receivables

Inventory Turnover
The inventory turnover ratio measures the number of times a company sells its average
level of inventory during a year.

To compute inventory turnover, we divide cost of goods sold by the average
inventory for the period. We use the cost of goods sold—not sales—because both
cost of goods sold and inventory are stated at cost.

Inventory turnover varies widely with the nature of the business. For example,
most manufacturers of farm machinery have an inventory turnover close to three
times a year. In contrast, companies that remove natural gas from the ground hold
their inventory for a very short period of time and have an average turnover of 30.

Days in Inventory
Another key measure is the number of days in inventory ratio.

Days in inventory = 365 days/Inventory turnover ratio

Gross Profit Percentage
Gross profit (gross margin) is net sales minus the cost of goods sold. Merchandisers
strive to increase the gross profit percentage (also called the gross margin
percentage). This measures the profitability of each net sales dollar.

Accounts Receivable Turnover
The accounts receivable turnover ratio measures the ability to collect cash from
credit customers. The higher the ratio, the faster the cash collections.

To compute accounts receivable turnover, divide net credit sales by average net accounts receivable.

Days’ Sales in Receivables
The days’ sales in receivables ratio also measures the ability to collect receivables.
Days’ sales in receivables tell us how many days’ sales remain in Accounts receivable.
To compute this ratio,  divide 365 days by the
accounts receivable turnover ratio we previously calculated:

Reference

Horngren: Financial and Management Accounting

Introduction to Financial Accounting


Presentation

Financial Analysis


http://wps.prenhall.com/wps/media/objects/1838/1883037/powerpoints/ch_12.ppt

http://www.cob.sjsu.edu/mcwill_m/fa6ch13.ppt#476,1,Financial Statement Analysis

HBS Alumni Excel based tool
http://www.alumni.hbs.edu/new_alumni/toolkit/tools/ratioanalysis.xls

Financial Analysis - Southwest Airlines - Illustration
http://teknirvana.com/documents/Southwest.pdf



Updated 17 April 2016, 22 April 2015
First published:  8 December 2011

April 16, 2015

Organizational Sociology

Organizations emerged as a recognized field of social scientific study during the 1950s.


The two academic centers most critical in shaping this nascent discipline were the Carnegie Institute of Technology (now Carnegie-Mellon University) and Columbia University. The Carnegie group included political scientists, economists, and psychologists. Collaborative work of March & Simon 1958 analysed organization.

The Columbia scholars, under the leadership of Merton, were all sociologists.  Simon and colleagues at Carnegie worked from a model—that of “bounded rationality”—that neatly linked arguments stressing purpose and intentionality with the recognition of cognitive and social constraints restricting such rational action (Simon 1945, March & Simon 1958, Cyert & March 1963).

Merton (1949) at Columbia emphasized the “unintended consequences of purposive action,” and his junior colleagues, who carried out early definitive studies of public and private organizations, each gave his own twist to the enquiry. Blau (1955) focused on the “dilemmas” of bureaucracy, as formal structures designed to solve one problem give rise to others; and Gouldner (1954) wrote of the “Janus-faced” nature of organizations as systems of coercion and consent.

In the United Kingdom, an eclectic collection of organizational scholars pursued a “socio-technical” model, insisting that organizations represented a “coupling of dissimilars” (Emery 1959).


http://www.annualreviews.org/doi/full/10.1146/annurev.soc.30.012703.110644

http://workinprogress.oowsection.org/2014/10/29/panel-the-future-of-organizational-sociology/

Needs and Wants - Marketing Concepts


Marketing Management Revision Article Series





Philip Kotler gives needs, wants and demand as the first group of core concepts of marketing.

Needs are basic human requirements. Food, air, water, clothing, and shelter are essential for survival. People also need education and entertainment.

The needs become wants when they are directed to specific objects that might satisfy the need.

Marketers do not create needs. Many of the needs are biological.

Marketers try to influence wants and create demand for the products that they selling.

April 14, 2015

Market Orientation




Key Contributions to the theory of Market Orientation


As a part of review of research in management course of fellow programme of NITIE, we did a review of 19 articles on the topic market orientation. 

The seminal article by Kohli and Jaworski was published in the April 1990 issue of the Journal of Marketing. Here, Kohli and Jaworski (1990) initially defined market orientation as being the implementation of the marketing concept. Following empirical analysis in the form of a large scale qualitative study, however, a more refined perspective of market orientation was proposed: “the meaning of the market orientation construct that surfaced in the field is essentially a more precise and operational view of the first two pillars of the marketing concept - customer focus and coordinated marketing”  They defined market orientation as being a one dimensional construct consisting of three organisation-wide activities: market intelligence generation, the dissemination of this intelligence across departments in the firm, and the responsiveness to intelligence. They developed a measuring instrument also (Jaworski and Kohli 1993). Many scholars have adopted this definition when conducting research into market orientation (e.g., Bhuian 1998; Cadogan et al. 2002b; Diamantopoulos and Hart 1993; Homburg and Pflesser 2000; Kwon and Yu 2000; Pitt et al. 1995; Pulendran et al. 2000; Raju et al. 1995; Vorhies and Harker 2000)

The second approach of Narver and Slater  appeared in the October 1990 issue of the Journal of Marketing. Narver and Slater (1990, p. 21) first defined market orientation as “the culture that most effectively and efficiently creates the necessary behaviours for the creation of superior value for buyers and, thus, continuous superior performance for the business”. They then elaborated on this conceptualisation by arguing that market orientation consists of five components: customer orientation, competitor orientation, inter-functional co-ordination, a long term focus, and a profit focus. Narver and Slater (1990) also provided a description of their measuring instrument for market orientation. Numerous researchers have adopted Narver and Slater's (1990) conceptualisation and measurement approach to test market orientation theory  (see, e.g., Farrell 2000; Gatignon and Xuereb 1997; Greenley 1995a; Han et al. 1998; Kumar et al. 1998; Lukas and Ferrell 2000; Siguaw et al. 1994; Slater and Narver 2000; Van Egeren and O'Connor 1998).

The works of Deshpandé and colleagues are also significant in the topic. These authors have argued that market orientation and customer orientation are synonymous concepts (Deshpandé et al. 1993). From a definitional perspective, customer orientation is a type of organisational culture (Deshpandé and Webster 1989): it is “the set of beliefs that puts the customers' interest first, while not excluding those of all other stakeholders, such as owners, managers and employees, in order to develop a
long-term profitable enterprise” (Deshpandé et al. 1993, p. 27). Deshpandé et al.'s (1993) measuring instrument  was used by Baker et al. (1999) and Steinman et al. (2000) - Deshpandé et al.'s notion that market orientation is a cultural phenomenon has was further supported by some recent authors (e.g., Harris 1998; Harris and Ogbonna 2000; Homburg and Pflesser 2000; Hooley et al. 1999; Webster 1995).


It is important to distinguish marketing orientation explained in detail by Philip Kotler and Market Orientation as defined by Kohli and Jaworskhi and Narver and Slater. Research scholars are making mistakes when they have not carefully noted the difference by using the terms interchangeably.


Multiple Perspectives on Market Orientation's Domain Specification:
Implications for Theory Development and Knowledge Accumulation
Chapter published in:
Hart, Susan (ed), Marketing Changes,
Thomson Business Press, 2003, pp. 95-123 and pp. 325-328.
John W. Cadogan
School of Business & Economics
Loughborough University and Lappeenranta University of Technology
LE11 3TU
Great Britain

April 13, 2015

Location of Production Facilities




Location of a production facility can be done by gravity method.

Gravity  models find the location that minimizes the transportation cost of multiple raw materials to the production location from the raw material sources and the distribution finished goods to the consumption locations.

Mathematical Model of Gravity Method

xn, yn: coordinates of a supply source or consumption market
Fn: Cost of shipping one unit for one mile between the production facility and the supply source or consumption market.
Dn; Quantity transported between the production facility and the supply source or consumption market.

x, y : coordinates of proposed production facility

Calculate the distance between (xn,yn) and (x,y) = dn = SQRT [(x- xn)^2 +  - yn)^2]


The location that minimizes total transportation cost is obtained by calculating x* and y* using formulas

x* =  Sigma of [(DnFnxn)/dn]/Sigma of [(DnFn)/dn]
y* =  Sigma of [(DnFnyn)/dn]/Sigma of [(DnFn)/dn]


You can see more detailed explanation of the model in the video below:

_____________________

_____________________
Windesheim upload

Knowledge Management Software Packages



Knowledge Base Manager Pro

Knowledge Base Manager Pro is developed to support and enhance the organizational processes of knowledge creation, storage/retrieval, transfer, and application. KnowledgeBase Manager Pro is commonly used to complement a help desk or for sharing information among employees within the organization or business unit. It might store troubleshooting information, articles, white papers, user manuals, or answers to frequently asked questions. Typically, a search engine is used to locate information in the system, or users may browse through a classification scheme.

Knowledge Base Manager Pro streamlines the entire documentation and knowledge base creation process for companies to share information with employees, customers, and partners. This knowledge base software can be utilized by any company, corporation, or organization in numerous different ways:

Vending Company. Provide your customers with access to full information about products you sell, about company you run and terms of service you follow. Receive feedback from your clients with suggestions, questions and thanks to improve the quality of service.
Service Provider. This could be hosting providing, consulting, business functions, entertainment, health care consulting, information services, social services, or something else. Create web self-service help system covering special valuable topics within selected area.
Educational Organization. Provide students with centralized knowledge base with courses and learning aids. Students can participate in courses creation and improvement process.
Any Company. Get Knowledge Management Software Solution for an internal use. Reduce employee training time. Keep corporate knowledge integrity whenever employee comes or leaves.
Enterprise class Knowledge Management Software Solution

Knowledge Base Manager Pro is a Rich Internet Application, which conception relies on long-term experience of Enterprise-class software development. It has all approaches, necessary for usage in commercial purposes, implemented.

http://www.web-site-scripts.com/knowledge-management/overview.html

https://www.atlassian.com/software/confluence

KANA Knowledge Management solutions

KANA Knowledge Management solutions make your data work for you by providing access to information contextually to make search—and service—targeted and efficient.



 If your information resources aren’t well integrated with your service processes, your agents are spending their time on the search process itself, fishing for information using keywords that often bring up either too many results or tangential information. As a result, the service process is inefficient, costing agent handling time and causing customer dissatisfaction.

KANA Knowledge Management software solutions draw on customer and inquiry context to make search results and service interactions efficient and meaningful. In turn, every query and customer action feeds the search engine algorithm, continually fine-tuning search to make it better.


Knowledge Discovery, Knowledge Engineering and Knowledge Management: First International Joint Conference, IC3K 2009, Funchal, Madeira, Portugal, October 6-8, 2009, Revised Selected Papers

http://www.kana.com/knowledge-management-systems?


Ana Fred, Jan L. G. Dietz, Kecheng Liu, Joaquim Filipe
Springer Science & Business Media, Feb 4, 2011 - 411 pages


This book constitutes the thoroughly refereed post-conference
proceedings of the First International Joint Conference on Knowledge Discovery, Knowledge Engineering, and Knowledge Management, IC3K 2009, held in Funchal, Madeira, Portugal, in October 2009.

This book includes revised and extended versions of a strict selection of the best papers presented at the conference; 27 revised full papers together with 3 invited lectures were carefully reviewed and selected from 369 submissions.

According to the three covered conferences KDIR 2009, KEOD 2009, and KMIS 2009, the papers are organized in topical sections on on knowledge discovery and information retrieval, knowledge engineering and ontology development, and on knowledge management and information sharing


https://books.google.co.in/books?id=UxsCxCPslikC

April 11, 2015

Supply Chain Management Update - 2014




Supply Chain Management - Subject Update 2015

2014

July
Principles and Standards of Ethical Supply Management Conduct with Guidelines
ISM Booklet
http://www.ism.ws/files/sr/principlesandstandardsguidelines.pdf
Material may be copied and used with permission with credit given to ISM.

June

26 June
Insights from the 2014 Gartner Supply Chain Study

19 June
The Strategic Advantage of Supplier Engagement

January

Managing Unpredictable Supply Chain Disruptions
Simchi Levi et al, Harvard Business Review, Jan - Feb 2014
http://hbr.org/2014/01/from-superstorms-to-factory-fires-managing-unpredictable-supply-chain-disruptions

Gurus' Predictions for 2014
http://www.scdigest.com/assets/FirstThoughts/14-01-31.php?cid=7797

Supply Chain and Logistics Predictions for 2014
Growth of Natural gas fleets
Increase in warehouse robots
The rise of omni channel courier companies
More easy to use supply chain software
Completion of Panama Canal widening project by 2015

http://www.forbes.com/sites/stevebanker/2014/01/10/supply-chain-and-logistics-predictions-for-2014/

2013
MIT Forum for Supply Innovation and PWC released a report on Supply Chain Risk Management Practices.

Download the report from
http://supplychain.mit.edu/events/Forum-PwC-Report

Nissan's actions after 11, March 2011 9.0 magnitude earth quake in Japan were highlighted as an exemplar case study in risk management or disaster recovery project in the report.


2012
5 Supply Chain Trend Predictions for 2013

Overarching Theme for 2013: This will be the Year of the Network

Stanford Professor Hau Lee says that competition is supply chain versus supply chain.

some interesting supply chain trends that we here at E2open see on the horizon for 2013:

Fast Data Will Become the New Big Data
The “Social Supply Chain” Will Transform the Way We Work
Supply Chain Control Towers Will Transition From Concept to Adoption
Dynamic Cost Will Transform Decision Making
Risk Management Will Move from Static to Dynamic

http://www.forbes.com/sites/ciocentral/2012/12/18/5-supply-chain-predictions-for-2013-the-year-of-the-network/





Supply Chain Management - Review and Revision Notes 

Chapter Summaries based on Chopra and Meindl's Book

Supply Chain Management - Coordination

Supply Chain Management Revision Article Series

Summary

Coordination implies actions by various agents in the supply chain that are aimed at increase in total supply chain profits. It also implies that supply chain agents avoid actions that improve their local profits but hurt total profits. Hence supply chain coordination principles requires each stage of the supply chain to take into account the impact its actions have on other stages.

A lack of coordination creates "bullwhip effect" in the supply chain. Due to this effect, fluctuations in sales become larger and larger fluctuations in orders at higher stages in the supply chain. This leads to situations wherein large shortages or large surplus capacities are felt in the supply chain cyclically.

Bullwhip effect reduces the profit of a supply chain by making it more expensive to provide a given level of product availability.

In what way bullwhip effect increases costs for the supply chain?

1. In increases manufacturing cost.
2. It increases inventory cost.
3. It increases replenishment leadtimes.
4. Increases transportation cost.
5. Increaes labor cost in shipping and receiving.
    All items of cost increase because excess capacity has to be installed to take care of unnecessary peaks in demand.
6. It reduces product availability due to some orders not getting filled when demand peaks. So some retail outlets may go out of stock.
7. Leads to problems of relationships - every body claims that they have done right. But still there is problem in the supply chain either as unfilled orders or excess inventory not having the order from down stream side.

The main reasons for coordination problems in supply chain are distributed owners of various stages of production & distribution, and product variety.

The fundamental challenge is for supply chains to achieve coordination in spite of multiple ownership and increased product variety.



What are Obstacles to Coordination in a Supply Chain?

Incentive obstacles
      If a transport manager's incentive compensation is based on average transport cost, he tries to optimize his incentive objective without considering its effect on other supply chain stages.

      If sales force has incentive for selling to dealers, they push sales to dealers even though there is no sale in the period to customers. This will reduce orders from the dealers in the subsequent periods.

Information processing obstacles

       If each supply stage depends on orders from its previous stage without considering the ultimate sales to the consumer bull whip effect will appear.
Operational obstacles

        Economic batch quantities result in large lot sizes which are released periodically.

Pricing obstacles

        Quantity discounts and sales promotion discounts to dealers create distortions in orders.

Behavioral obstacles

         Each stage of the supply chain thinks locally and it unable to see the effect on the total supply chain and other supply chain stages.



Managerial Levers to Improve Coordination in Supply Chains

Aligning goals and incentives
Improving information accuracy
Improving operational accuracy
Designing pricing strategies to stabilize orders
Building Partnerships and trust
(Chopra and Meindl)


Building Strategic Partnerships and Trust within a Supply Chain

Mutual Trust is a belief that each agent or party is interested in the other's welfare and would not take actions without considering their impact on the other stage.

Cooperation and trust in a supply chain relationship leads to the following benefits:

1. They are more likely to take  the other party's objectives into consideration when making decisions.
2. Sharing of information is natural between  parties that trust each other.
3. Operational improvements are easier to implement.
4. Pricing schemes are easier to design if both parties are aiming for common good.
5. Supply chain productivity increases because inspection can be avoided at many steps.

The key steps to be taken in the design of partnership are:

1. Assessing the mutual benefit of the partnership.
2. Identifying opertions roles for each party in the partnership.
3. Creating effective contracts
4. Designing effective conflict resolution mechansim


Supply Chain Management - Collaborative Planning, Forecasting and Replenishment (CPFR)




References


Sunil Chopra and Peter Meindl, Supply Chain Management: Strategy, Planning and Operations, Prentice Hall, 2001. Supply Chain Management: Chopra and Meindl - Book Information and Review


What Drives Supply Chain Behavior? HBS Working Knowledge article June 2004



Articles for Further Study - Coordination in Supply Chain


Ring, P.S., and A.H. Van de Ven, "Developmental Processes of Cooperative Interorganizational Relationships," Academy of Management Review, 19 (1994).

Kumar, N., "The Power of Trust in Manufacturer-Retailer Relationships," Harvard Business Review (November-Dec 1996), 92-106

Child, John, and David Faulkner, Strategies of Cooperation, Oxford, England, Oxford University Press, 1998.

Mariotti, John L., "The Trust Factor in Supply Chain Management," Supply Chain Management Review (Spring 1999), 70-77.

Bowersox, Donald J., David J. Closs, and Theodore P. Stank, "21st Century Logistics: Making Supply Chain Integration a Reality," Supply Chain Management Review (Fall 1999); 44-49.

Balakrishnan, Anantaram, and Geunes, Joseph, "Collaboration and Coordination in Supply Chain Management and E-Commerce," Production and Operations Management, Spring 2004.
http://findarticles.com/p/articles/mi_qa3796/is_200404/ai_n9366598/

Crum, Colleen, and George E. Palmatier, "Demand Collaboration: What is Holding Us Back?" Supply Chain Management Review (Jan-Feb 2004); 54-61.

Supply Chain Coordination with Revenue-Sharing Contracts: A Missed Opportunity?




Fugate, Brian, Sahin, Funda,and Mentzer, John T., "SUPPLY CHAIN MANAGEMENT COORDINATION MECHANISMS," Journal of Business Logistics, 2006

http://findarticles.com/p/articles/mi_qa3705/is_200607/ai_n17180845/



Qing Zhang, Essentials for Information Coordination in Supply Chain Systems, Asian Social Science, October 2008.
Presentation Slides

Partnerships in the Supply Chain

Links to be given to above two references

Supply Chain Management - Revision Notes of All Chapters based on Chopra and Meindl's Book

Knol Number - 1381

Updated 11 April 2015, 21 March 2013

Job Design



Job design is an important topic human resource management and operations management.

Job design will specify the activities to be performed by a person occupying the job. The job has to be designed so that organization's requirements are met by the output given by the job. Its integration with input and output sides has to be ensured in the design. The supervision aspects of the job are also to be specified.

The qualifications or competencies required for the person filling the job are to specified.

April 10, 2015

Innovation Marketing



New product marketing and innovation marketing are similar. But innovation marketing is more closely related to invention. So innovation marketing is concerned with new category of products for the company. It is not a product improvement. For an automobile company presently selling petrol and diesel cars, electric car is an innovation. How to do marketing of this new product? There is no past data to forecast demand. The new product concept is to be explained to potential buyers. A prototype can be shown to them. Samples cannot be given in good number. With limited number of prototypes, marketers have to create awareness, find out the likely demand and also find out the modifications required.





7 Principles of effective innovation culture change programs
Frank Mattes
http://www.innovationmanagement.se/2014/07/24/the-7-principles-of-highly-effective-innovation-culture-change-programs/
1. Understand your starting point.
2. Draw energy from existing culture.
3. Know where you want to go
4. Act your way into thinking
5. Provide learning spaces
6. Arrange management alignment
7. Use easy and effective navigation tools.


Updated 11 April 2015, 10 April 2015

Coordination in the Supply Chain - Review Notes

Chopra and Meindl's book, Supply Chain Management: Strategy, Planning, and Operation, is a comprehensive introduction on supply chain management.


Coordination is a very important issue in management theory. Fayol included coordination as a function of management or element of management in the theory of management developed by him. But Koontz and O'Donnell argued that the purpose of management is coordination and hence every elements of management contributes to coordination and coordination is not a separate element in management. Chopra and Meindl also indicated that coordination is the output of SCM approach. They said adopting SCM implies a focus on coordination.

Coordination implies actions by various agents in the supply chain that are aimed at increase in total supply chain profits. It also implies that supply chain agents avoid actions that improve their local profits but hurt total profits. Hence supply chain coordination principles requires each stage of the supply chain to take into account the impact its actions have on other stages.

A lack of coordination creates "bullwhip effect" in the supply chain. Due to this effect, fluctuations in sales become larger and larger fluctuations in orders at higher stages in the supply chain. This leads to situations wherein large shortages or large surplus capacities are felt in the supply chain cyclically.

Bullwhip effect reduces the profit of a supply chain by making it more expensive to provide a given level of product availability.

In what way bullwhip effect increases costs for the supply chain?

1. In increases manufacturing cost.
2. It increases inventory cost.
3. It increases replenishment lead times.
4. Increases transportation cost.
5. Increases labor cost in shipping and receiving.
    All items of cost increase because excess capacity has to be installed to take care of unnecessary peaks in demand.
6. It reduces product availability due to some orders not getting filled when demand peaks. So some retail outlets may go out of stock.
7. Leads to problems of relationships - every body claims that they have done right. But still there is problem in the supply chain either as unfilled orders or excess inventory not having the order from down stream side.

The main reasons for coordination problems in supply chain are distributed owners of various stages of production & distribution, and product variety.

The fundamental challenge is for supply chains to achieve coordination in spite of multiple ownership and increased product variety.


What are Obstacles to Coordination in a Supply Chain?

Incentive obstacles
Information processing obstacles
Operational obstacles
Pricing obstacles
Behavioral obstacles
(Chopra and Meindl)

Managerial Levers to Improve Coordination in Supply Chains

Aligning goals and incentives
Improving information accuracy
Improving operational accuracy
Designing pricing strategies to stabilize orders
Building Partnerships and trust
(Chopra and Meindl)

Building Strategic Partnerships and Trust within a Supply Chain

The key steps to be taken in the design of partnership are:

1. Assessing the mutual benefit of the partnership.
2. Identifying operations roles for each party in the partnership.
3. Creating effective contracts
4. Designing effective conflict resolution mechanism

References


Sunil Chopra and Peter Meindl, Supply Chain Management: Strategy, Planning and Operations, Prentice Hall, 2001.

What Drives Supply Chain Behavior? HBS Working Knowledge article June 2004

Supply Chain Management: Chopra and Meindl - Book Information and Review




Updated 10 April 2015, 10.2.2012