And after Toyota we have ?
The time has come when management is making one its momentus periodic shifts in thought. The textbooks might take a little time to catch up. Most university textbooks don’t do Toyota yet. And after all, as we all know, Toyota is passed its zenith. But as ever, the world moves on, and we learn from engine-makers and manufacturers.
This time it is Chinese motorcycles. How do they make them quite so cheap?
Chinese process networks & local modularization
I have been looking for good references to understand the phenonmenon of “local modularization”. At last, I have found a good paper the motor cycle industry in Chongqing where this practice emerged. It is a pdf document presented at Davos 2006 by Hagel & Brown who are now part of Deloittes.
Working tips for finding work that will still be here in 10 years’ time
As ever, I’ve made a working checklist for my own good. I imagine it might have been superceded by know, though. 3 years is a long time in today’s management practice.
Think supply chain not assembly line
The key to this thinking is ‘supply chain’ not the assembly line. Now there are specialized master’s degrees in supply chain & logistics. It is a serious business. I have a very amateur take of what we can learn generally about where business is going but this is what I make of it.
#1 Pull vs push
Look for networks where people are asking you to do things. Avoid networks and people are trying to ‘push’ services and products (spam you in other words). You are looking for networks that are based on people putting up their hands and calling “I need . .” You can go back to them saying “I can do X at this price.” Then neither you nor them have to say “Please buy . . .” and waste time and money on marketing. I haven’t seen any writing, other than a reference that I’ve listed below, on how networks make the change from push to pull. Please tell me if you have!
#2 Change the game to give you and your partner permanent competitive advantage
Outsource strategically rather than tactically. That is, form an alliance that changes the game. Don’t just buy in finished goods. A strategic alliance
- Shares the goal setting with the outsourcing partner.
- Expands the pie.
- Deepens capability (and know how)
- Is a long term relationship.
When you are calling for assistance, begin with the long term relationship. Have a discussion about your long term goal. The British aerospace industry have a cracking questionnaire on the questions to ask. It’s worth a look.
#3 Talk long term but go with whomever delivers
At the same time, be loosely coupled. Don’t try to specify the entire process or lock people in. It’s a scary thought at first but every person and every supplier is redundant. That is the natue of pull systems. Utterly redundant.
This feature may seem sem to contradict the second point and this is how the contradiction is resolved. A long term relationship comes from discussing the long term goal. In the past, one person specified the goal and others had to fall in in lockstep. Now long term goals are jointly agreed but if a partner doesn’t deliver, the network simply closes over, just like the internet, and moves on. The ‘self-healing’ of networks, ruthless as it is, is the biggest guarantee of quality (and also a worry for people who study exploitation).
#4 Go for good company rather than total dominance
Choose networks where you are one specialist link in a network rather than a dominant player. You don’t need to dominate the network; you need a good network. And good networks are full of people at the top of their game where the network, not just the members, gets better every day.
The British aerospace industy even have a programme to switch the whole industry over to strategically thought out relationships which though not quite pull, go in that direction. I can imagine this point worrying people. Certainly I would like to see work on how we protect ourselves from people who do try to dominate the network.
Moving from old styles of business to new
Hagel and Brown also gave me this checklist for managing our futures strategically. It might be sufficient to answer my two unanswered questions. How do we make the shift and how do we protect ourselves from ‘powerful pirates’?
- Where can we see the future? Where shall we post lookouts?
- Where can we do things differently with other people? Where can we work on innovative solutions?
- Where can we push the limits of organizational practice?
- Where is the “edge” or “boundary” that meets the outside world and informs the core?
- What sustains relationships?
- Where are we getting better and getting better faster?
- Which industries are unbundling and what is the patten? In 2006, Hagel & Brown forsaw businesses unbundling into infrastructure management, product innovation & commercialization, and customer relations.
I need to explore Hagel and Brown’s work more, on their own site and Deloitte’s. These lists are pretty rough but hopefully you’ll find these two lists useful in some way. Comments?