Business Case
I’ve read nearly everything I could get my hands on about business, and how to go about running a business. Every one of them follow a simple rule, plan and you will be successful. They go on about the need for the precise predictions, and that the 90% of businesses that fail, failed to plan properly. However history does not bear this theory out. The most successful business people in history didn’t follow the designs of Harvard’s or Yale’s business plan matrix, but instead set out to break the rules of established business models. They didn’t set out to reinvent the wheel (except in the case of Harvey Firestone), but to change the view of how the rules were viewed. Granted that in today’s environment the more likely situation is that there must be a bit of a combination of the two extremes. Yet the fact that remains is that the true idealist has long past their usefulness in this “cookie cutter” world of 2003. The visionaries of today are those that identify the ways to further conform the model to meet the design of structured corporate efficiency. The national reports state that over 50% of the business innovations come from small to medium businesses. Yet if we are to assume that small to medium businesses look to organizations like the Small Business Administration for inspiration and funding, then there is little hope for innovation, or growth. Their “cookie cutter” designs do not inspire innovation, but conformity. Repetitive duplication of the same formula does not inspire, it grinds growth to a halt. I cannot speak for all people, I am but one person, but as far as I have learned from my personal experience and study, the only truly innovative, and progressive growth has always been those that went their own way and did not follow, but lead the way in spite of popular trends.
That’s all for today, please come on back now, another day…
Fragile! Handle With Care
This side up, please.
One problem faced by organizations is logistics. The movement of people, things and ideas. However it is the movement of things that currently is of most importance. This can be titled distribution, or shipping and receiving. At least for the manufacturing concern, this is an issue that is extremely complex. It represents a deep hole into which many organizations can pour great sums of capital with no real measure of return. Yet it must be performed, for the products must move out of the warehouse and get to the customer. Real time distribution coupled with real time production, and performed in both a ethical and ecological manor may seem nearly impossible, but it is not. Fortunately for business today there is technology. With technology, real time logistics is not only possible, but also necessary. To even hope to realize a ROI on your distribution efforts and investments, the organization must affect a real time distribution policy.
First your organization must take a look into the distribution model. If you manufacture a product, even a single product, you have more than one supplier, more than one channel, and a complex set of solutions to a misunderstood problem. First there is the incoming traffic. They are the products that represent your raw materials from your suppliers. They are transported by various means to your factory and are sitting in a vehicle awaiting your receiving clerk to check them in. You will then stock them into your warehouse or storage building, awaiting production to call them into the line. A glitch at the supply end, and you have no raw materials, therefore no products to sell, therefore no profits, therefore you lose money and maybe customers.
Okay, so you have to over order your supplies in order to ensure that they will be there when you need them. Now you have too many materials for the products that need to be made to fill the orders you currently have to ship. So you make extra product that you can back stock for those extra orders you want to fill, if your sales force can bring in the new orders. Which is fine, if all were equal, but it is not. The warehouse begins to fill with old stock, while the flow of product only increases by small increments. You can compensate for that, if you want to, but the paperwork is constantly shuffled, because business runs on paper. Furthermore your suppliers do not like to shift their shipments very often and would prefer to have a constant level of supply, because like you they have logistics problems as well. So you decide that the supply chain software you have heard (or read) about is the answer. To some degree it is, but the degree that it suits your organization is fairly unlikely, at least without extensive tuning by the IT department. Manpower is expensive, especially highly skilled IT manpower. Although it has been getting more reasonable with the dotcom bust. Still automation of the supply chain is necessary for efficient and profitable operation of your organization.
So, what do you do then? Well, throwing more money at the problem won’t help, and hiring a consultant to figure it out won’t solve your ignorance of the situation either. The solution is simple really, admit that you have a supply chain, and that it is but one part of the business process. Okay now, don’t you feel a lot better?
Stay tuned for part two.
