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Idea 43 - System thinking Some farmers discovered systems thinking the hard way. With their crops being devoured by insects, they reached for the spray gun and blasted them with pesticide. And it worked - for a time. But then the crop damage returned, worse than ever, and the pesticide that was so successful had no more effect, As it happened, the insect that was eating the crops had also been eating, or competing with, another insect. Now that insect no. 1 was out of the way, insect no. 2 was having a field day. 'Systems thinking' says that things are more complicated than they seem and actions can have unforeseen and unintended consequences.   Systems thinking recognizes that no man - or insect - is an island, and that there is an interconnectedness in social and natural processes that is not always immediately apparent. 'Linear' thinking operates in a straight line. It says that if you do A to B, the result will be C. Systems thinking says that if you do A to B, it m

Idea 42 - Supply chain management When supply chain managers compare notes, the talk will eventually get round to. 'The perfect order', that’s an order which reached the customer complete, in the right place, undamaged and on time. Like other manifestations of perfection, it is not as common as some companies would like. Lower-than-necessary perfect order rates not only create unhappy customers, but suggest supply chain inefficiencies that are costing the company money. So. Attention to. The supply chain has moved out of warehouses and loading bays and into. Mahogany Row, The supply chain is made up of the physical and information links between suppliers and the company on one side, and the company and its customers on the other. It includes production planning, purchasing, materials handling and, under the subset of 'logistics', transport and storage (warehouses and distribution centers). Though companies used to think of the supply side and the demand (custo

Idea 41  -  Strategic alliances 'It's partner or perish', declared Xerox CEO Anne Mulcahy. She was announcing yet another in the chain of strategic alliances that her company has built, to powerful effect, over many years, starting with Fuji of Japan in 1960. It may have sounded like roll-of-the-drums hyperbole, but in today's fast-moving markets - and particularly in the high-tech arena where Xerox competes - it was no more than a reasonable observation. Managers and shareholders want their businesses to grow, though not always for the same reasons. Growth comes from building share in existing markets or expanding into new ones, and there is more than one way of doing either. The conventional options have always been either to build growth, or to buy it. Companies can grow organically, the hard, backbreaking way. The (deceptively) easy alternative is go out and acquire a competitor or a business in the chosen new market. The trouble with acquisition is that

Idea 40  -  Stakeholders It is the fate of some words to evolve rapidly through enlightening to hot, overused and, finally, very irritating, and 'stakeholder' has become one of them. It is sprinkled over reports and jammed into mission statements, as if use alone were enough to prove concern. Worse, politicians have got hold of it. In their mouths, it seems to refer to the population at large, which makes them sound caring without meaning very much. All this is a pity because its original concept represents a radical shift in the way the corporation views, or should view itself. The stakeholder idea began its march with R. Edward Freeman's 1984 book Strategic Management: A Stakeholders Approach. Freeman held that commercial firms would be much more effectively managed at a strategic level if the concerns of various stakeholders were taken into account. In other words, there would be long-term benefit for shareholders. He said later that the word 'stakeh

Idea  39 - Six Sigma Martial arts mixes with the Greek alphabet and a US electronics maker in a defects control discipline that has won many thousands of corporate converts - Six Sigma. It was designed to reduce. Defects and shorten cycle times, something it does very effectively, but today its sponsors are promoting it as a fully integrated management system. Six Sigma was developed in the 1980s by electronics and communications firm Motorola. It was part of that company's response to devastating competition from foreign - read 'Japanese' - manufacturers. Sales were taking a hammering and there was a rising tide of complaints from the field sales force about warranty claims. As Motorola tells the story, the senior sales vice president looked the chief executive in the eye and said: 'Our quality stinks.' The two of them agreed on a goal of tenfold quality improvement over the next ten years. The job of making that happen fell to Bill Smith, an enginee