Strategic changes and waste in production

It is the managers of the companies who should focus on these strategic changes in such a way as to make their organizations more efficient and competitive.

Introduction

Much has already been written about the Seven Classic Mudas of Ohno, but what could be said of those actions that are not fully operational; such as waiting times, overproductions or internal transport, among others; Not only do they harm the normal operation of the company, but they also cause large volumes of waste, both monetary and physical.

These other and special activities that generate waste, which divert the organization from its strategic and operational objectives and goals, are what we call the "Nine Strategic Changes".

First of all, it is necessary to wonder about the reason for being of these strategic changes, and secondly, how they affect or act on the normal functioning of the organization. To do this, let us first enunciate them, to later analyze them carefully.

Generation of incorrect and / or late information. Organizational or businessman blur. Lack of systematic problem solving and decision making. Incorrect management of human resources. Incorrect management of material resources. Incorrect brand management. Incorrect management of computer resources. Existence of conflicting objectives or lack of unambiguous monitoring by all staff and organizational areas. Communicational failures.

Failure to properly take into account each of the previous strategic changes is what leads the organization to serious subsequent situations, resulting from the effect they have on operational, financial, commercial and logistical activities.

Only a careful analysis of each of the points listed above is enough to understand and have a clear notion of the effects they have on both quality levels, productivity, customer and consumer satisfaction levels, as well as so also in the profitability ratios achieved.

Generation of incorrect and / or late information

You cannot take decisions or take corrective measures without having reliable information, in a timely manner. It will be of very little use to have a bunch of data without order or interpretation, nor should it be of much use to have incorrect, outdated or generated information out of time regarding the needs and requirements of the organization and more specifically of the officials who they have to make both strategic, tactical and operational decisions.

It is essential to overcome this inconvenience to establish a series of guidelines:

Clearly define the information required by each sector or area of the organization. How and from where the data to be used as a basis for generating the information will be obtained. Who will be responsible for its generation and delivery. How often should they be produced and delivered, or made available. Under what format and formula should be displayed. Who or who will be responsible for evaluating the correctness of the information and compliance with its preparation, delivery, generation deadlines and established formats.

Lack of information, such as incorrect information, not only generate a lack of key elements at all levels when making corrections in daily actions, but can also lead to serious errors when making decisions.

The decisions cover each and every one of the aspects of the organization, from the commercial, through the productive, the security, the financial, the human and the logistics among many other aspects.

Not knowing which products and services are generating the highest marginal contributions, what interest rates we are paying and their relationship with those paid by our competitors, what level of productivity the production processes register, what level in sigma does the company have in its various areas, processes and products, what average cost level is the existing one for each product and what its upper and lower control limits are just a small range of information required every day by different company managers.

Organizational blur

What activities are we in? What activities should we really be in? Why do we do what we do, and we offer what we offer? Does what we do and offer really meet our capabilities and goals? What activities do not really respond to our mission?

They are not small questions, they are questions of the utmost importance, which must be valued and analyzed in their proper gravity and importance.

Just as a highly concentrated beam of light can produce a powerful laser beam, a deconcentrated beam of light will not itself generate any power. In the same way, concentrating resources in the area with the greatest capacity for results is very different from blurring or diluting resources among a large number of unrelated activities, lacking interrelation, or even having a relationship that they are too expanded.

Many entrepreneurs allocate their limited resources to a wide variety of business activities, and even concentrating on a few, they try to cover all their varieties. In this way, some are dedicated under the same organizational framework to construction, hotels, mining and computing, as well as others dedicated to medical implantology, they operate or at least try to operate in all the wide ranges and varieties of products, from bone implantology, through dental and skin implants among many others.

On the one hand we have a positioning problem. The company is positioned in the minds of current or prospective customers as specializing in a certain range of products, and a new range leads to confusion or bewilderment. Or, by lacking a specialization, the company is not directly positioned in the minds of customers and / or consumers in any way, with all the consequences that this has for the future of the company.

The company that tries to do everything ends up doing nothing well. And that customers, consumers and users know very well and therefore look for specialists in both products and services. In addition, a specialist tends to achieve a better use of resources with all that this entails when it comes to reducing costs, improving productivity and achieving better services.

For this reason, an unfocused company loses the ability to improve results and wastes in such a way important material and financial resources in order to cover multiple areas.

Lack of systematic problem solving and decision making

Not having a system for better decision-making implies leaving each and every one of the members of the organization to their best judgment and ability. An organization that claims excellence cannot afford such a luxury. In reality, no organization can give it to you because generally the decisions and the resolution of problems taken without proper criteria and system generate more failures than successes.

Many make decisions based on past experience, intuition, or common sense (this being the least common of the senses). What was successful in the past is not necessarily going to be successful in the present and future. The environment changes, and more and more rapidly, therefore assuming that what always worked out, will turn out again can lead to very serious consequences.

There is always a better way of doing things, and problem solving and decision making is no exception.

We could go so far as to say that practically all changes are reduced to a common denominator consisting of errors when making decisions. After all, managers come to this position, or at least should, after systematic preparation to make decisions. Decisions regarding the degree of focus, decisions when managing human and material resources, decisions when managing the brand, decisions when generating information, among many other and varied decisions when setting both strategies, as tactics and operations. Decisions that affect the various areas and processes of the organization. For this reason, a bad problem-solving and decision-making process is not only a waste but also generates many other wastes as a result of that error.

Incorrect management of human resources

What does it mean and what are the implications of mismanaging human resources? As for its meaning, it implies that the staff is not managed in an appropriate way to obtain the best results in terms of productivity, quality and profitability. It means that the full potential is not obtained from them, nor does the organization tend to increase that potential.

One way to incorrectly manage human resources is to set them numerical objectives (administration by objective - APO), which tends to significantly reduce quality levels, and with it productivity ratios, with which the result ends up being the opposite of the one sought. originally.

Human resources constitute a fundamental capital for the company, both because they are the ones that finally make quality a reality, and because of everything they can give when producing suggestions, improvements, innovations and new designs.

Managers must support the daily work of their subordinates, so that they can provide the best task for both internal and external clients, since it is the latter who, with their trust in the company and their day-to-day vote with money, allow the organization will continue to exist and develop.

It is essential to use human resources in those activities and tasks for which they are more qualified, have more experience and demonstrate a higher degree of attitude.

Having effective and positive leadership is in this new era of knowledge essential to inspire and collaborate in the development of the intellectual and emotional capacities of the staff.

Incorrect management of material resources

Properly managing material resources implies not having excess materials or finished products, having the appropriate machines and tools to operate, avoiding breakdowns due to lack of adequate maintenance.

Possessing machinery, equipment and technology facilities higher than necessary, or not adjusted to the company's own requirements, is a way of inefficiently using financial resources, in addition to compromising the normal and better functioning of the company in terms of achieving the objectives.

Without an appropriate sales forecasting system, both the management of human resources and that of material resources will not be optimally managed, preventing the best use of resources.

Incorrect brand management

Choosing unfavorable names for the company or products is a serious mistake that ends up paying dearly. A good name, appropriate to the company based on its activity and commercial offer, appropriate to the product in terms of its use and quality, and that facilitates its relationship with the product, being easy to remember and pronounce, is a critical issue. However, many do not give them the slightest importance believing that any name does not matter, or that what matters is that the owner likes the name so much, forgetting that the names are not to satisfy the owners and managers, but to serve of guidance and satisfaction to users and consumers.

Does the name or brand give a clear idea of the product? Do customers or consumers identify this brand with the product and your company? What does the brand mean to customers? How is the brand positioned in the market? What price level do consumers identify the brand with? How much confusion does the brand generate in consumers?

Incorrect management of computing resources

It is quite common for companies to find themselves, as in the case of material resources, with excess capacity in computing, both in terms of hardware and software resources. An excess of these components hinders and hinders their better handling, as well as making their use more expensive.

Others make the serious mistake of computerizing processes without first generating a reengineering of them, which the only thing that achieves is to generate the same errors but at much greater speed.

Computerizing processes without proper strategic planning leads to the use of material, financial and time resources in a totally incorrect way. For those who do not know where they are going, any path takes them.

Existence of conflicting objectives

The lack of an alignment of all sectors and personnel based on clearly identified and expressed objectives, leads to the generation of obstructions, arrests, limitations, oppositions and alterations in the management and conduct of the company.

If the objectives are not clearly defined, expressed and communicated, the various managers and participants of the organization may follow different criteria of application and action, incurring serious errors when planning and developing their daily actions.

Likewise, the lack of clear, practical and feasible objectives makes the members of the organization look for more feasible or possible alternatives to carry out according to their own criteria and needs, altering and contrasting the objectives of each sector or area, one against the other to the detriment of the organization.

Communicational failures

Communication problems in their various aspects, whether they are linked to the quality of the message, the reception and decoding capacity, as well as the medium and codes used, generate different types of problems in terms of quality, productivity, and the correct or adequate decision making.

Communication is the element that keeps the organization together, a lack of communication, or faulty communication, prevents the survival of the organization over time.

The importance of the relationship between communication and information in order to achieve organizational goals and objectives should never be forgotten.

We must never forget that it was through isolation that the Tower of Babel collapsed. In the same way, in a company the lack of communication and understanding ends up destroying its foundations.

Conclusions

It is the managers of the companies who should focus on these strategic changes in such a way as to make their organizations more efficient and competitive. They are the ones who should be responsible for monitoring personally, or through specialists, the existence or not of the above types of waste, which tend to multiply adverse vicissitudes in the different processes and areas of the organization.

Let's think about the following: How long can an organization last with communicational failures? How good decisions can be made in a company if correct information is lacking, in a timely manner? How much productivity and quality can we get in our processes with poorly selected personnel? How much can a company grow without training management of its human resources? How competitive can a poorly managed brand become? How well positioned and profitable is a company with a high level of blurring? How successful will the decisions be made if a method is not followed? How effective will management be if we do not have an adequate IT system? How much money do we lose due to poor stock and warehouse management? And we can continue to expand the list of questions.

However, many entrepreneurs have either not started to think about it, or have done it partially and even having started to think about it, they have done it without any systematicity or methodology.