Articles on Management Subjects for Knowledge Revision and Updating by Management Executives ---by Dr. Narayana Rao, Professor (Retd.), NITIE - IIM Mumbai --- 4 MILLION Page Views---
Global Top Blog for Management Theory---Management for Effectiveness, Efficiency and Excellence.
You can see how various authors only prescribe these skills in their articles.
Peter Economy - 10 things that super successful leaders do.
It was published in the Corporate Dossier of Economic Times (22 May 2015). Peter Economy was the author.
The 10 things listed were:
1. Acknowledge
2. Motivate
3. Be Decisive
4. Communicate
5. Trust
6. Be Confident
7. Develop
8. Direct
9. Partner
10. Be Honest and Transparent.
Jack Zenger and Joseph Folkman wrote in article in HBR Blogs.
The Skills Leaders Need at Every Level
The list given by them
Inspires and Motivates others
Displays High Integrity and Honesty
Solves Problems and Analyzes Issues
Drives for Results
Communicates Powerfully and Prolifically
Collaborates and Promotes and Teamwork
Builds Relationships
Displays Professional or Technical Expertise
Develops Others
Takes Initiative
Innovates
Champions Change
Connects the Group to the Outside World
Establishes Stretch Goals
Practices Self Development.
Provide value - Procure inputs - Process inputs (Produce outputs) - People focus
Providing Value to Customers Purchasing or Procuring Input Resources Processing the Inputs into Outputs People Relations
Every business manager has to do these four essential tasks.
Every MBA must learn these four tasks.
They are classified by some management scholars as conceptual skills (business conceptual skills), technical skills (process skills) and people skills.
In the blog, chapter summaries of chapters from world famous textbooks are provided. Additionally, important developments and articles of each subject are provided as subject updates of the year. Readers comments are invited as suggestion, feedback, questions etc. for improving the content to make it more useful to the readers to utilize the ideas in practice and increase production and profits for the organization and the society. Management as a profession must increase pleasure of the society and reduce pain of the society. Management as a profession has social purpose. But we need to fulfill organizational purpose and purposes of individuals working for the organization to fulfill the social purpose.
Business is done by people, Business is done for the people , Business is done with the people.
People dimension is important for business.
But there is no business if someone cannot find a business opportunity. Marketing is important. Providing value to people is marketing and sales.
If unfulfilled demand for a category is found, there have to be sources of inputs and a process to convert inputs into useful products. Supply chain and production process are important.
2Ps of Industrial engineering - Productivity and Profits
Industrial engineering is profit engineering. Industrial engineers analyze systems and make them more productive and profitable. Industrial engineering is concerned with 2Ps - Productivity and Profits
An effective and efficient business organization or an industrial organization is created by managers or entrepreneur managers using multiple skills. Acquire the knowledge, use the procedures under guidance for some time and become proficient in them. Have a successful managerial career.
Lean Management for Productivity Enhancement
Presentation at Tata Steel
Dr. K.V.S.S. Narayana Rao, Professor , NITIE, Mumbai
Industrial Engineering Knowledge Center http://www.nraoiekc.blogspot.com
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Lean Management
Lean management gives importance to both effectiveness and efficiency.
Lean Managers simultaneously take care of customer satisfaction and productivity/ cost reduction responsibilities.
Hence lean management leads to more productivity in the organization.
It is appropriate that NPC came out with the theme “Lean Management for Productivity Enhancement”
Management is achieving objectives prescribed by owners/superiors, set by the manager himself and set in collaboration with the team members, together with the team with the resources provided to the team or acquired by the manager/team.
Soldier and Commander
Commander is a manager.
He may be a very good soldier himself.
Management is a lot more than being an expert doer.
But managers require the technical skills of a function they are managing.
Management Process
Planning
Organizing
Resourcing (Acquiring various resources including human resources known as staffing)
Directing (Executing describes the management steps at this stage better)
Controlling
Effectiveness and Efficiency
Managers have to be effective and efficient.
Effectiveness is achievement of objectives.
Efficiency is effectiveness combined with minimum consumption of resources.
No effectiveness - no efficiency.
Effectiveness first, efficiency next.
Scientific Management
F.W. Taylor advocated scientific management that highlighted the importance of efficiency in production shops.
Development of science of using machines and men in productive work is the theme of his management thought – scientific management
Taylor was responsible for development of industrial engineering discipline.
Principles of Management – Fayol
Management as a subject to be taught was advocated by Henri Fayol.
He gave 14 principles of management and explained management process.
He appreciated Taylor’s thought and advocated its wide adoption.
Principles of Management – Koontz
Koontz extended the 14 principles of management to around 30 and embedded them in the five functions.
He stressed importance of effectiveness and efficiency in his first chapter. Also included some principles of efficiency in his list.
Koontz – Definition of Management
Management is the process of designing and maintaining an environment in which individuals, working together in groups, efficiently accomplish selected aims.
Koontz on Productivity
In a real sense, this book (Management) is about the improvement of productivity.
But still, efficiency got neglected on a holistic basis in his book.
Industrial engineering is not mentioned in the book
Effectiveness and Efficiency as opposing ideas – An Error in Management Thought
Certain management authors positioned effectiveness and efficiency as opposing concepts.
They created tables showing differences between them.
Managers became isolated from the efficiency dimension.
Lean Management
Lean management philosophy brings efficiency back into the management discipline as a major component.
Managers must also have efficiency/productivity improvement skills
The Toyota Motors’ managers are to be given credit for this development.
Developments in Japan
Japanese executives captured the spirit of scientific management and industrial engineering almost from its birth in USA.
Industrial engineering was given a Buddhist religious dimension in the slogan-
Eliminate muda, mura, muri
Kiichiro Toyoda – Toyota Motors Founder
Kiichiro Toyoda was sure of the quality of his car.
But he was worried about its price.
He said unless its cost was reduced and price was reduced Toyota motors will not survive.
Effectiveness is there but Efficiency is the need.
So according to Kiichiro Toyoda, effectiveness was there.
Japanese customer is happy with the car.
But efficiency is not there.
Cost of production is high and hence price is high.
Manager’s Focus on Productivity/Efficiency
Therefore Kiichiro Toyoda’s focus shifted to productivity.
More and more managers were asked to focus on productivity.
Productivity in other words is cost reduction
Taichi Ohno
Taichi Ohno is a production manager.
Started concentrating on cost reduction.
Used Industrial Engineering.
Toyota Style Industrial Engineering.
Industrial Engineering
Industrial engineering is reducing cost of a product and increasing profit by increasing sales due to low prices.
Industrial engineering is profit making engineering (Ohno).
The other engineering is market-establishing and fulfilling engineering.
Industrial Engineering – Definition or Explanation by Narayana Rao K.V.S.S.
Industrial Engineering is Human Effort Engineering and System Efficiency Engineering.
JIT Systems - Lean Management
Kiichiro Toyoda looked around his production-distribution system for eliminating muda (excess resources).
Inventory seemed to him an excess resource.
He told his managers, that they have to think of JIT systems or low inventory systems.
Thus Kiichiro Toyoda is the man who first advocated JIT.
Taichi Ohno – JIT, IE and Productivity Activities
Reduce inventory – Create flow production.
Increase worker productivity
Use more automatic machines
Make a worker attend more machines.
Make machines intelligent. No defective unit production
Kaizen
The change must be good.
The change must be profitable.
Do proper economic analysis.
Importance of Engineering Economic Analysis.
Low “lot size” inventory requires lower setup times.
Reduce setup times.
SMED
Shigeo Shingo, now a famous industrial engineer, helped Ohno.
Setup times for big presses were reduced to 3 minutes from earlier 2 to 4 or even 8 hours.
Low Safety Stocks
Systems have to be reliable and production should not result in defective parts.
Involve people in process quality improvement - TQM
Machines should not breakdown.
Improve maintenance and involve production workers also in machine upkeep
OEE
Emphasize on high availability of machines for production.
Do preventive and planned maintenance.
Condition monitoring employed for planned maintenance.
Maintenance for high available production time.
Total productive maintenance.
Low Inventory
Only a day’s inventory as buffer
Between components and assembly section only a days maximum consumption of each item is kept (as an illustration).
Components are made in small batches as per the use on that day.
Communication by Kanban.
Low inventory systems are lean systems
What is a lean system?
A system that satisfies customer requirements with a very low level of inventory.
It is a system that uses less resources than mass production systems based on traditional inventory principles.
Hence lean systems produce products at lower costs vs. high inventory systems.
Lean Manager
Lean managers use all management principles and techniques along with all the industrial engineering tools and also tools specially developed in Toyota Production System and its further development as Lean Enterprise System (Womack and Jones, The Machine that changed the World)
Is Lean Applicable to Steel Plants?
Yes.
Tata Steel is itself following some lean practices.
Its managers are talking of lean at least since 2001. May be lean movement started some time before.
Recent Publications
2003 Phd thesis on application of lean in a steel plant.
Lean supply chain practices in steel plants
Value stream mapping and reduction of production lead time in steel plants.
Optimizing inplant supply chain(PPC) using Lean.
Traditional Industrial Engineering Tools Applied in Lean Systems
A Different IE Tool Classification Product Design Efficiency Engineering
Process Efficiency. Engg.
Human Effort Eff. Engg.
Efficiency Engg. Of Various Resources
Process Efficiency Engineering - Classification
Technical Processes
Business Processes
Managerial Processes
New Ideas and Tools in Lean Systems
Just in Time Production - Change in Inventory Control Practices
Just in Time Supply
Kanban Communication System - Change in Production Planning and Control Procedure
Special Focus on Seven Wastes
Zero Defect Movement
Total Quality Control (Inspection by production persons only - no additional inspector) Total Productive Maintenance (Involving production operators significantly in preventive maintenance) Aggressive Kaizen (Team leaders responsible for monthly improvement in processes)
Visual Communication (Standard Work Sheets, Daily Targets and Production, and Problems)
Value Stream Mapping to identify and remove obstructions to flow
SMED (Application of methods study to setup time reduction)
U-shape layouts
Poka Yoke
Leveled production or production smoothing
Mixed model assembly or flexible production facilities
Supplier process improvement
Supply chain cost reduction led by Assembler.
Seven Waste Model – Waste and Elimination Principle or Technique
Waste of overproduction - One cannot produce without a production Kanban
Waste of time on hand (waiting) - Multiple machines to an operator, all producing as per tact time.
Waste in transportation - Machines in line or flow placed close together
Waste of processing itself - Standardized Methods
Waste of stock on hand - JIT system
Waste of movement (of workers) - Machine layout changes
Waste of making defective products - Problem solving approach to produce zero defects. 5 Why’s?-Poka Yoke
Let us Hope
Hope Management Professors, Managers, Executives, Supervisors and Operators learn the new development in management – Lean Management.
High Customer Satisfaction and High Productivity (No tradeoff).
Hope Industrial Engineers become Lean System IEs and Support Managers at all levels.
The further development in lean has to provide more scientific insight into how product and service attributes contribute to customer value; what matters most for improving classic lean variables, such as lead time, cost, quality, responsiveness, flexibility, and reliability; and new opportunities for cross-functional problem solving to eliminate anything that strays from customer-defined value. http://www.mckinsey.com/business-functions/operations/our-insights/next-frontiers-for-lean
Principles of Industrial Engineering - Presented by Dr. K.V.S.S. Narayana Rao in the 2017 Annual Conference of IISE
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Industrial Engineering Knowledge Revision Plan - One Year Plan
The authors reported that analysis of the same survey results suggests that six specific factors in organization design can make a company more likely to become a top performer, with faster growth and higher profits than its peers. The six factors are:
Agile ways of working
A value-adding corporate center
Clearly delineated profit and loss (P&L) responsibilities
A flat management structure with a strong frontline focus
Effective use of shared services
Strong support for people and collaboration
Any activity can be analysed by its costs and the ’output’ it generates. A business might want to know the cost of running a production line compared to other production lines or ways of producing things. Similarly, a firm might want to look at the total cost of running training courses (salary, rents, training materials, utilities and so on) compared to the number of people actually trained.
Cost centre analysis tries to attribute all costs involved in a particular activity to one ’location’ or ’cost centre’. To calculate costs involved in a particular activity it is necessary to calculate the cost of:
Materials
All materials used directly and materials used indirectly (for instance packaging).
Labour
All labour costs directly involved and the proportionate cost of any supporting labour (for instance
administrative staff).
Sales And Marketing Costs
Regular, on-going costs of advertising and promotion of that activity’s product or service.
Overheads
Proportionate costs of regular expenses associated with that activity such as rent, rates, power, interest repayments, other charges.
Additional Costs
Other costs solely attributable to the activity (for instance higher insurance costs for a new machine).
Example
ABC Novelties company management want to know the real cost of manufacturing toys. Materials used cost $2,000 per year. Production involves 5 trainees paid $500 expenses each per year. The single machine
used is used for toy production 20% of the time and full depreciation is valued at $1,000 per year. Electricity costs $600 a year and toy production takes up half of a workshop costing $2,000 in rent, rates and repairs
per year. The paid administration worker calculates that he spends 30% of his time on book-keeping, sales and marketing toys. He is paid $8,000 per year. The total income of the project is $25,000 per year
and sales of toys contribute $5,000 to this.
Its total costs are $24,500 per year.
Cost Centre Analysis
Materials = $2000
Labour (5 x $500) = 2500
Depreciation ($1,000 x 20%) = 200
Electricity ($600 x 20%) = 120
Rent ($2,000 / 2) = 1000
Administration ($8,000 x 30%) = 2400
Total = 8220
From these figures we can calculate the following:
Toy making is responsible for 34% of all costs ($8,220 / $24,500 x 100)
Toy making generates only 20% of all income ($5,000 / $25,000 x 100)
In his 1969 seminal text on design methods, “The Sciences of the Artificial,” Nobel Laureate Herbert Simon outlined one of the first formal models of the Design Thinking process. Simon's model consists of seven major stages, each with component stages and activities, and was largely influential in shaping some of the most widely used Design Thinking process models today.
A five-stage model was proposed by the Hasso-Plattner Institute of Design at Stanford (d.school). d.school is the leading university when it comes to teaching Design Thinking. The five stages of Design Thinking in this model are as follows:
Empathise, Define (the problem), Ideate, Prototype, and Test.
101 Design Methods: A Structured Approach for Driving Innovation in Your Organization
Vijay Kumar
John Wiley & Sons, 09-Oct-2012 - Design - 336 pages https://books.google.co.in/books?id=WJQmHlsDhQUC
Selling Skill - Service to Customer and Follow Up After The Sale
A satisfied customer is the best advertisement to you as a salesman and to your product. But if you make a sale and runaway, you do not know the feelings of your customer. The prospect became your customer after buying from you. High performing salespersons do the follow up and provide any service the customer requires and convert this interaction into further sales to the customer or to his friends and acquaintances through referrals.
Service to Customer
A satisfied customer is the best advertisement to you as a salesman and to your product. But if you make a sale and runaway, you do not know the feelings of your customer. The prospect became your customer after buying from you. High performing salespersons do the follow up and provide any service the customer requires and convert this interaction into further sales to the customer or to his friends and acquaintances through referrals.
Service will keep customers and increase sales. Use your company’s goods return policies judiciously to replace defective products with customers. Go back to the customer, check the product that you have sold and make sure that the customer is getting the expected services from it.
Become a customer benefit oriented salesman, your profits swell through your efforts to make the benefits of customers swell. Develop your reputation from providing benefit to customers. Provide service above and beyond the call of duty. Always schedule some time in your daily sales plan for delighting customers. Delight comes to a customer when you deliver something beyond expectations.
