Management Theory and Practice - Bulletin Board - July 2013

Engineering and Management News - A Daily Publication



31 July 2013

Summary - Principles - Organizing
Human Resource Management and Selection

30 Outdated Leadership Practices Holding Your Company Back
http://www.forbes.com/sites/mikemyatt/2013/07/28/30-outdated-leadership-practices-holding-your-company-back/

Five ways to innovate faster
http://blogs.hbr.org/anthony/2013/07/how_to_innovate_faster.html

30 July 2013
Line-Staff Authority and Decentralization - Review Notes
Effective Organizing and Organizational Culture - Review Notes

10 Software Tools for Collaborating with Virtual Assistants
http://michaelhyatt.com/virtual-assistant-tools.html


A New Leadership Key Performance Indicator

If a picture = 1000 words
A demonstration = 1000 pictures (a million words)
A working model = 1000 demonstrations (a billion words)
http://www.managingamericans.com/BlogFeed/Leadership-Teambuilding/A-New-Leadership-Key-Performance-Indicator.htm


29 July 2013
Optimization, Excel Based Modelling, VBA, ARENA Simulation and Modeling Tips

27 July 2013
The Nature of Organizing - Review Notes
Departmentation in Organizations - Review Notes

Optimism's Role in Employee Motivation
http://switchandshift.com/optimisms-role-in-employee-motivation

Key to Operational Excellence
http://www.scmr.com/article/key_to_operational_excellence

Pallet Storage System combines push-back, flow styles.
http://news.thomasnet.com/fullstory/Pallet-Storage-System-combines-push-back-flow-styles-20011743

26 July 2013
Decision Making - Review Notes
Summary - Principles of Planning

Supply Chain Finance tipped for high growth trajectory. Finance based on e-invoices.
http://dofonline.co.uk/index.php/accounting/11516-supply-chain-finance-45656465

25 July 2013
Strategies, Policies, and Planning Premises - Review Notes
Business Firm and Society - The External Environment, Social Responsibility and Ethics - Review Notes

CEOs are to Blame for Short CMO tenures
http://blogs.hbr.org/cs/2013/07/ceos_are_to_blame_for_short_cmo_tenures.html

10 Talent Management Lessons Every Company Should Embrace
http://www.forbes.com/sites/meghancasserly/2013/07/23/10-talent-management-lessons-every-company-should-embrace/

Don’t Ask, Don’t Learn
http://www.strategy-business.com/blog/Don-Ask-Dont-Learn?gko=e2460


24 July 2013
The Nature and Purpose of Planning - Review Notes
Objectives and Goals - Review Notes

Supply Chain Risk Management
______________

______________
More videos on supply chain risk management

Big Brain Theory - podcast
http://blogs.hbr.org/ideacast/2013/07/big-brain-theory.html

Your Brain at Work
by Adam Waytz and Malia Mason
HBR article July-August 2013
http://hbr.org/2013/07/your-brain-at-work/ar/1
Four network ideas that have the most consistent backing of neuroscientists: the default, reward, affect, and control networks.

The Case for Paying People More
http://blogs.hbr.org/fox/2013/07/the-case-for-paying-people-mor.html

5 Must-Have Qualities Of The Modern Manager
http://www.forbes.com/sites/jacobmorgan/2013/07/23/5-must-have-qualities-of-the-modern-manager/
Follow from the front
Understand technology
Lead by example
Embrace vulnerability
Belief in sharing




23 July 2013
Process of Management
Planning: A Management Process

How Criticism Creates Innovative Teams
http://blogs.hbr.org/cs/2013/07/how_criticism_creates_innovati.html

Blogpost updated
Operations Research - An Efficiency Improvement Tool for Industrial Engineers


22 July 2013

Management: Definition and Process
Evolution of Management Thought and Theory - Review Notes

11 Common Interview Questions That Are Actually Illegal
http://finance.yahoo.com/news/11-common-interview-questions-that-are-actually-illegal-164547841.html

6 Surprising Secrets of Truly Great Bosses
http://www.inc.com/geoffrey-james/6-surprising-secrets-of-truly-great-bosses.html

Updating of this blog's post
Inspection Methods Efficiency Engineering


Engagement at Work: Its Effect on Performance Continues in Tough Economic Times
Key findings from Gallup's Q12 meta-analysis of 1.4 million employees
http://www.gallup.com/strategicconsulting/161459/engagement-work-effect-performance-continues-tough-economic-times.aspx

21 July 2013
5 Ways to Find, Train and Oversee the Ideal Intern

http://www.entrepreneur.com/article/227321

How to Build a High-Performing Design Team

http://www.howdesign.com/design-career/in-house/high-performing-in-house-design-team/

7 Things Project Managers Should Do Every Day

http://www.pmhut.com/7-things-project-managers-should-do-every-day


20 July 2013
42 Rules to Lead by from the Man Who Defined Google’s Product Strategy
http://firstround.com/article/42-Rules-to-Lead-by-from-the-Man-Who-Defined-Googles-Product-Strategy#

The management framework that propelled LinkedIn to a $20 billion company
http://firstround.com/article/the-management-framework-that-propelled-LinkedIn-to-a-20-billion-company

Six Fundamentals Every Entrepreneur Needs to Succeed
http://blogs.hbr.org/cs/2013/07/as_an_entrepreneur_who_founded.html


19 July 2013
5-key-points-to-consider-when-developing-an-innovation-strategy
http://www.innovationmanagement.se/2013/07/03/5-key-points-to-consider-when-developing-an-innovation-strategy/

Can HR ever really be strategic?
http://www.hrmagazine.co.uk/hro/features/1077730/can-hr-strategic

Use Catalytic Questioning to Solve Significant Problems
http://blogs.hbr.org/cs/2013/07/catalytic_questioning_five_ste.html?cm_sp=blog_flyout-_-cs-_-catalytic_questioning_five_ste

Employee Engagement Does More than Boost Productivity
http://blogs.hbr.org/cs/2013/07/employee_engagement_does_more.html

18 July 2013
Disengaged Employees - Do Something about it.
http://blogs.hbr.org/cs/2013/07/disengaged_employees_do_someth.html

Problem Areas in Project Communications – Part 1
http://blog.aecsoftware.com/2013/07/problem-areas-in-project-communications-part-1/

Problem Areas in Project Communications – Part 2
http://blog.aecsoftware.com/2013/07/problem-areas-in-project-communications-part-2/

17 July 2013
Increase Your Team's Curiosity
http://blogs.hbr.org/cs/2013/07/increase_your_teams_curiosity.html

15 July 2013
The Curse of the B Team
http://blogs.hbr.org/cs/2013/07/the_curse_of_the_b_team.html


14 July 2013
The Steep Cost of Poor Management
http://www.talentculture.com/leadership/the-steep-cost-of-poor-management/

7 Management Practices That Can Improve Employee Productivity
http://www.forbes.com/sites/victorlipman/2013/06/17/7-management-practices-that-can-improve-employee-productivity/

The Skills Most Leaders Don't Have
http://www.inc.com/brian-evje/the-skills-most-leaders-dont-have.html

The Copernican Revolution In Management
http://www.forbes.com/sites/stevedenning/2013/07/11/the-copernician-revolution-in-management/

13 July 2013
27 Tips For Effective Classroom Management
http://www.edudemic.com/2013/07/27-tips-for-effective-classroom-management/

Why Charisma Matters In The Work World
http://www.forbes.com/sites/learnvest/2013/07/09/why-charisma-matters-in-the-work-world/

Cost Leadership Competitive Strategy

Barney and Hester

In general, a firm has a competitive advantage when it is able to create more economic value than rival firms. Economic value is simply the difference between the perceived benefits gained by a customer that purchases a firm's products or services and the full economic cost of these products or services. (Barney and Hester, Page 11)

How a firm can create competitive advantage?

A firm can keep its cost same as the competitor, but can increase the benefits gained by a customer by enhancing the product benefits.

The other alternative is to keep the product benefit similar to the competitors, but reduce the cost of production and distribution operations.

Porter says, a company has to make a strategic choice between the two, he means that to be successful with any of these choices, the company has to spend significant amount of time in identifying and developing innovative solutions that support the strategic choice and both can't be pursued by a single business unit.

Who are the cost leaders in various industries.

Ryanair, Southwest Airlines
Walmart in retail sales
Timex and Casino in watches
BIC in disposable pen and razor market
Hyundai in automobile
Tata Steel in steel industry
Many cement plants
RBC Bearings   http://www.rbcbearings.com/aerospace/index-intro.htm
Nucor


Sources of Cost Advantage

1. Size and economies of scale
2. Size and diseconomies of scale
3. Experience difference and learning-economies
4. Access to low-cost resources
5. Technological advantages independent of scale
6. Policy choices


Management controls in implementing cost leadership

Management controls imply plans, measurements and control actions.

Cost leadership firms are characterized by very tight cost-control systems. It means, there is detailed planning, frequent measurement of actual costs, and control actions to come out with more detailed plans to achieve cost targets or replanning the higher level plans to reach the still higher level plans. Control action could imply, more experienced managers take over the responsibility of an activity that is behind target.

Target achievement is provided incentives. Failure to achieve plans and targets is noticed and disincentives are in place to minimize them. Managers who fail to achieve targets can't have a long career.

Thompson and Strickland

A low cost provider's strategic target is meaningfully lower costs than rivals.  In making efforts to create cost advantage, managers must take care to include features and services that buyers consider essential. Companies have to achieve cost advantage in ways difficult for rivals to copy or match.

The cost advantage can be turned into higher profit margin in two ways.  In option 1, the price is reduced strategically below rivals to get profitable higher volumes. In option 2, the price is maintained and higher profits are realized due to less costs.

Achieving Lower Costs - Value Chain Framework

To be a cost leader, the firm must have its cumulative costs across its value chain at lower figure than rivals.

The two ways to accomplish this are:

1. Eliminate some cost producing activities from the value chain.
2. Have more efficiency in the value chain activities compared to rivals.

Cost Drivers
Cost of value chain activities is reduced by controlling the cost drivers. There are nine major cost drivers that come into play in determining the costs of various activities in the value chain.

1. Economies or diseconomies of scale
2. Learning curve effects
3. The cost of key resource inputs
4. Links with other activities in the company or industry value chain
5. Sharing opportunities with other organizational or business units within the enterprise.
6. Vertical integration and outsourcing
7. First mover advantages and disadvantages
8. The percentage of capacity utilization
9. Strategic choices and operating decisions

Niche/Focus Competitive Strategy

Niche or focus competitive strategy is attention on a narrow piece of the total market. The narrow piece can be a small geographic area, specialized requirement in using a product, or a special product attribute combination that appeals to only a small segment. Local bakery is a good example of niche market position.  Automobile manufacturers catering to only sports cars is another example of niche strategy.

Niche market positions are attractive when:

The niche is big enough to provide a profitable business opportunity and growth.
The market leaders do not serve the niche and show no intention of serving it.
It is costly for multi-segment players to service the niche.
The industry has more niches

Differentiation Competitive Strategy

Differentiation strategies are attractive in product or service industries whenever buyers' needs and preferences are too diverse and therefore a standard product cannot satisfy the entire market. This gives opportunity for companies to study or research the market and find out a distinct set of buyer-desired product attributes into its product or service offering that are distinct from its rivals. Competitive advantage results once a sufficient number of buyers become strongly attached to the unique set of attributes offered by the company.

Successful differentiation allows the firm to:

charge a premium price
increase sales by making more persons aware of the product
increase sales by more frequent purchase by loyal customers


Differentiation through all Activities of Value Chain

Porter strongly stated that differentiation is not limited to the product alone or marketing and advertising activities. All value chain activities have the potential to provide differentiation benefits to the buyers.

Buyers have to perceive the differentiation features and benefits to pay the premium. Hence the company has to make efforts to make the buyer aware of the differentiation features and benefits.

Aggregate Planning in the Supply Chain - Review Notes

Supply Chain Management: Review Notes Based on Chopra and Meindl's Book

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

In this chapter, the author only described the general nature of the aggregate planning problem and the details involved in aggregate planning are to be learned from books in production planning and control or operations planning and control.

Aggregate Planning

The objective of aggregate plan is to satisfy demand in a way that maximizes profit for the firm over the planning horizon. The time period for the aggregate planning  is not sufficient for building a new set of facilities to increase production to meet the increase in demand.  So in some periods, inventory may need to be accumulated.

 Aggregate planning is done for a given supply chain design. This means that capacity of the various facilities in the supply chain are constraints now. There may be scope to do multiple shifts or to stop using multiple shits by recruiting extra manpower or laying off them.  But demand has predictable or predicted variability for period to period in the planning horizon. Also there is a demand variation which cannot be predicted. Aggregate plan is made to get maximize profit from the estimated demand and given supply chain constraints.

The definition of aggregate planning problem

Given the demand forecast for each period in the planning horizon, determine the production level, inventory level and the capacity level (to extent variation is possible like number of shifts, overtime etc.) for each period that maximizes the firm's profit over the planning horizon (Chopra and Meindl).

Data Required for Aggregate Planning

Demand forecast in units for each period in the planning horizon

Cost data:

Labor cost - for regular time and overtime

cost of subcontracting

cost of changing capacity by hiring and firing workforce

Cost of adding or reducing machine capacity

Inventory carrying cost or holding cost

Stockout or backlog cost or backfilling cost


Manhours and machine hours required per unit

Constraints

overtime

layoffs

capital available for inventory financing

stockouts

To get the cost data required for the decision making model, supply chain managers, production managers, and production planners have to design and develop systems in management accounting system to get the past data and have to get the help of executives involved in economic forecasting and various operating activities like purchasing/sub contracting, human resource management etc.

Aggregate Planning Strategies

1. Chase strategy: Capacity is the lever. Capacity is changed as per the demand. Capacity includes both machine capacity and man power capacity.

2. Workforce time flexibility based capacity strategy: Workforce works for more or less time depending on the demand. The machine capacity is not varied. Workforce size is also not varied but the working time is made flexible.

3. Level Strategy: Production levels are kept uniform and inventory is accumulated during slack periods and used during peak demand periods. In this case in some months excess production is there and it is carried as inventory and in some month, some orders will not be fulfilled. It can be used when inventory and backorder costs are relatively low.

Aggregate planning problems can be formulated as linear programming problems and solved. The book has given more explanation for the L.P. formulation of the problem. It also has material on using excel for solving the problem.

Some Suggestions for Effective Aggregate Planning:

Do sensitivity analysis and be flexible with aggregate plans.

Be ready to rerun the aggregate plan when conditions warrant.

As capacity utilization increases more attention is required on capacity planning.


References


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

Originally posted at
http://knol.google.com/k/narayana-rao/supply-chain-planning-aggregate-planning/2utb2lsm2k7a/1357#

Updated   29.3.2012, 23.1.2012

Management Theory Review Bulletin Board January 2013

23 February

Started changing links of Marketing Management, 13th edition, Philip Kotler, Book Information and Review


Call for Papers - 6 EuroMed EMRBI Research Conference in Portugal 2013
http://nraoiekc.blogspot.com/2013/01/call-for-research-papers-in-industrial.html

Management Theory Review - December

I am preparing Knowledge History Review sheet one for each calendar day. Collecting events in science, engineering, and management in it. Collecting also some interesting recent videos. I am also including two blog posts from this blog. Such inclusion should help revision of management knowledge by prompting some topics every day.



Knowledge History of The Day


December
December
December
December
December


December
December
December
December
December 10


December
December
December
December
December 15


December
December
Dember
Deceecmber
December 20


December
December
December
December
December


December 21
December 22
Science, Engineering and Management - History - 23 December
December 24
December 25

December 26

December 27
December 28
December 29
December 30

December 31


This Knowledge Management History series helps me also to do revision reading.