CONTINUOUS IMPROVEMENT AND BOTTLENECK
system at world level ,country level , state level or at any further lower levels are all interconnected and interdependent. Effect of change of one level affect the other level. we are not living in isolation. Natural system is managed by either some unknown force or check and balances are already inbuilt. Any violation of Natural Law by any one become visible through repercussions. whether we do other thing or not for happiness of life but follow natural Law .
Whatever religion you are following, follow it but not forget to apply reasoning whether or not we are doing as per the Natural requirement i.e earning happiness without harming others .
keeping the above sentences in mind, let us think about changes which we can make individually or collectively for our happiness . I am not talking about only possession of money because money is one of the important ingredient of happiness, but there are other ingredients.
second most ingredient for happiness is , every person want to keep busy himself in some constructive activity suiting to his talents. Even if he has lot of money , he can not keep himself happy unless his self esteem is fulfilled. Here constructive work is to give happiness to others also. what ever we do , we drive more pleasure when we do good thing for others including for ourselves.
Constructive work can be defined in many ways but here we are restricting ourselves to the activities of producing goods and providing services. Person who dedicate himself in such activities is entrepreneur. whether you are owning company or in the job or doing any other activity you will be called as entrepreneur because you are managing.
To meet first two requirement we have to be busy in managing circumstances. on the one side these circumstance give us set back but on the other side it sharpen our mind and we get ability to resolve
The above two requirement of human being can be fulfilled if circumstances allow us. Reality is circumstances are not expected to be favorable always. Dependency and fluctuations are reality of life. If not managed and fluctuations are not minimized , events head toward crisis. We need to know where to go from here?. Here need of knowledge about system management.
This is fact adverse circumstances create impediments, such circumstances many times created by us by our own mind and some times by others mind. so third requirement of human being is management of fluctuations and dependencies
Goal of the enterprise is to generate money. Every persons mind is money generator. This is the goal set by entrepreneurs who invest resources. To meet this goal it is the responsibility of Managers to think actions and perform activities such as
- competitive advantage
- Market share
- Customer satisfaction
- First time quality of product or services
- A satisfied secue work force
- These are the strategies or operative Plans
Distinguish between two type of resources I) bottleneck II) non bottleneck. Once you do it , begin to see vast implications. You will commence balancing of flow. bottleneck determines the effective capacity of the plant.
Bottleneck are not bad or good, they are simply a reality. Wherever they exist, you must use them to control through the system and into the market. Finding out the bottleneck, it make enormous difference in how you manage your resources. The periphery is always sacrificed to protect the core. Increase sales, significantly and rapidly . there must be a way, there must be a way to increase sales. We must understand buyers need. We must be clear minded business people. When shops reducing their surplus stocks, net sale will increase
Goal are the results or achievements towards which effort is directed
Necessary conditions is circumstance indispensable to some result, or that upon which every thing is contingent. Pre-requisit is you must satisfy the necessary condition. in order to attain the goal
Pre-requisite tree: before going for any new thing we must ensure and ask question , why it can’t be achieved? . Then list out the
requirements by raising obstacles, i.e by raising questions. We must make more money than inflation
THINKING PROCESS
Underlying any given situation there are actually only one or two core problems i.e called as root cause. These one or two are cause for all other undesirable effects , we normally say other UDE are derivatives of core problems.
There is need to direct our efforts toward the core reason, not to the symptoms. Thinking process give us a step by step recipe how to do it?
Start with list of UDE ( 5 to 10), connect them, you will end up with a clear identification of core problem.
EVAPORATING CLOUD
Used to resolve hidden conflicts that usually perpetuate chronic problems. Most core problems exist because some underlying tug of war, or conflict, prevents straight forward solution of the problem, otherwise problem would have been solved long ago.
EC is “creative engine,” an idea genetator that allows us to invent new” breakthrough” solutions to such nagging problems.
This answers “ what change to?”
FUTURE REALITY TREE
It allows us to verify that an action we would like to take will, in fact, produce the ultimate result we desire. It enable us to identify any unfavorable new consequences our contemplated action might have, and to nip them in the bud .
We can logically “test” the effectiveness of our proposed course of action before investing much time, energy or resources in it.
Avoid making situation worse that when we started. This answers “ what to change to?. FRT is invaluable planning tool.
PREREQUISIT TREE
Once we have decided on a course of action, PRT help implement that decision. It tells us in what sequence we need to complete the discrete activities in implementing our decisions It also identify implementation obstacles and suggests the best ways to overcome those obstacles.
PRT answer to the question “ how to change?”
ANALYSIS
Managers are trying to run their companies by striving to achieve local optima. For every mode of operation Managers develop suitable measurements, measurement that focus on local optima. Cost accounting terms such as efficiency, variance , product cost; you name it , we have to violate it, it was only way to improve companies
Many actions that are needed for improving lead time, reliability, quality, response time and service do not save cost/ and increase cost in short run.
Companies do not come up with sufficient innovative ideas in marketing.
If the concept of product cost is misleading in operations, it might be that the concept of margin is harmful in marketing.
STRATEGY
Goal of the company is to make money now and in future. It is futile to define a goal without defining boundaries within which we can attempt to reach it.
These boundaries are necessary conditions that we are not allowed to violate.
Provide a secure and satisfying environment for employees now as well as in future. If you violate necessary condition you cannot reach your goal. How could we with a demoralized workforce?.
Market punishes companies that don’t satisfy the market perception of value. You can fool a few customers for long time. You can mislead many customers for short time, but you cannot mislead many for long time. Provide satisfaction to the market now as well in future
Strategy is the direction we take to reach our goal. Strategy which clashes with one of the above three entities should be discarded, because these are panic- driven, they are not sensible strategies.
Start with developing a decisive competitive edge. If the company doesn’t have a unique technology, or outstanding product then it is better not to do business. Concentrate on small changes that eliminate negative for the market.
Such changes might not to change physical products at all. We have to change the policies
Degrading the performance translates almost immediately into lost clients.
This will cause more layoffs, even worse performance, and the company spirals down at an incredible speed.
Larger than required warehouses and more inventory, delay in delivery, deterioration in quality, delayed services are few of the indicators
CURRENT REALITY TREE
Consider the need,
To get enough sales.
To get reasonable margins.
To get reasonable product margin
Make decision and act upon
the client’s perception of value
the supplier’s perception of value
Here perception of value for supplier and for client are conflicting.
Do right things, concentrate on global optima then local optima.
Optima is right thing within the box but we want breakthrough solution
Take actions that sufficiently increase perception of value of market has for company’s products(it is direction)
MARKET
When many of person’s problems are eliminated, that person might change his behavior.
Market:
1. person who the company interact with.
2. companies to which it sells its products
4. end consCOMPETENCE
3. companies that buy from the companies whom it sell to.