Managing Automation - June 2008 - (Page 66)

.. robert malone NEXT Growing Pains robomalone@aol.com Peter F. Drucker is a popular pick for the greatest business adviser of the 20th century. His wisdom remains pertinent to manufacturers today. Some obscure Greek playwright or philosopher stated that pain falls on one’s head like tiny droplets of water, and that leads either to wisdom or a very wet head. Good advice is often painful. It can go against our cherished beliefs, doctrines, strategies, and tactics. But companies that are willing to change their thinking are often better for it. The classic example is Gillette, which long had considered its business to be razors. Somewhere along the line, the company realized selling razors was a losing proposition. It decided instead to give the razors away and sell the blades. The strategy worked. The late Peter F. Drucker, through his books, continues to drop water on corporate heads. His advice runs counter to accepted practice and, therefore, is likely to cause pain. But when heeded, his advice proves invaluable. Here are a few examples. “Quality in a product or service is not what the supplier puts in. It is what the customer gets out and is willing to pay for.” The late W. Edwards Deming also insisted that quality was not something you hoped for at the end of a series of inspections in a manufacturing line, but was a total process, active from supplier to customer and the customer’s customer. This is quality perceived and not quality hoped for. More important, it is quality perceived by the customer. “There is nothing so useless as doing efficiently that which should not be done at all.” Remember the bin-picking industrial robot that could pick a bolt from a bin into which bolts had been dumped? It did the job efficiently, but is it better to build a machine to remove chaos or to avoid chaos in the first place? The bolts should never have been dumped in the bin and so the bin-picking robot was unnecessary. “It is not necessary for a business to grow bigger, but it is necessary that it constantly grow better.” In the1960s and 1970s, conglomerates were in. Take on anything and grow. Whether it was bowling alleys, fish farms, or household storage facilities, it made little difference until the company realized it had lost focus on its core business. In many cases, bigness ran counter to growing better. Today, the same choice can lead to unexamined outsourcing. It is a way to grow, but does it grow the business better? “Yesterday’s good performance must become today’s minimum; yesterday’s excellence, today’s commonplace.” This means knowing the business you are in. Otherwise, how do you increase performance? Growing the business well was a major theme for Drucker, and it is relevant today in the face of a possible recession. How do you grow a business in a world with less trade? How do you grow when getting investment money is hard? How do you grow when customers want more of a product for less money and your costs give you fewer parts for more money? You can’t make it up in volume. The quotes cited are from a Drucker classic: The Practice of Management, first published in 1954 and recognized as the book that defined modern management practice. That was the same era in which John Diebold’s book Automation was published. It was a time ripe for good business ideas: Eisenhower was president and the Cold War was raging. Bad times can foster great thinking. ■ Robert Malone, based in New York, is principal of Robert Malone Associates and former editor-in-chief of Managing Automation. maonline managingautomation.com For more of Robert Malone’s views, visit: ❑ Mean Manufacturing www.managingautomation .com/next49 ❑ A Giant Leap www.managingautomation .com/next48 ❑ The Digital Devolution www.managingautomation .com/next47 ma June 66 2008 Photo: Dirk Kikstra http://managingautomation.com http://managingautomation.com/next49 http://managingautomation.com/next48 http://managingautomation.com/next47

Table of Contents Feed for the Digital Edition of Managing Automation - June 2008

Managing Automation - June 2008 Contents Take 1 SAP Cites Functionality, Cost Structure in Modified On-Demand Product Rollout Dassault Exec Predicts More PLM Consolidation The Blackberry Goes Native with SAP CRM QAD Brings MDM In-House with FullTilt Buy Power Experts Look to End Voltage Sags The Progressive Manufacturers Notes Cover Story: Playing the Globalization Game to Win Special Report Integration Transformation Industries Product Scan Advertiser Index Next

Managing Automation - June 2008

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