Business, Digital Transformation, Leadership, Management, Technology

Change Management

Change must be effectively articulated, passionately owned, and persistently driven to completion (Tichy & Charan, 1989). Employees must be part of the change, know exactly where the company is heading, why it is going there and what is in it for them once they get to the final stop.

People usually hate the change. Thus they shall be encouraged and enlightened about the overall journey the company is willing to take (JWMI, 2015). Change management is the course that helps employees embrace new practices of doing business, and it is certainly not an easy path.

References:

JWMI (2015) What is the role of a leader? [Online]. Jack Welch Management Institute. Available at: https://goo.gl/BNanBL.

Tichy, N. & Charan, R. (1989) Speed, Simplicity, Self-Confidence: An Interview with Jack Welch [Online]. Harvard Business Review. Available at: https://goo.gl/5OCc24.

Business, Digital Transformation, Innovation, Leadership, Management, Operations Management, Technology

Business Digitization

Business digitization is not just the concern of the IT executives; it is strategically significant and serious to business leadership that should take a strong stand through adjacently running both the operations and technology. Considering this, once things are concerned with digitizing business processes, company’s leadership is generally accountable for managing and controlling the transformation.

As a result, digital transformation is becoming more of a management concern, which where it should be. Digital transformation at the same time shall consider agility and speed as fundamental factors whenever business processes are being evaluated and re-engineered. Business operations and processes are supposed to be transformed radically and operate faster, become more secure, and more resilient (Hottges, 2017).

References:

Hottges, T. (2017) ‘Digital Transformation Is a Management Issue’, Abolhassan, F. (ed.) The Drivers of Digital Transformation. Switzerland: Springer, p. 8. (Accessed: 8 November 2018).

History, Politics, Social

ألمانيا و الشعب الجيرماني

عبر تاريخ القارة العجوز الطويل و ما توالى عليها من صراعات و تداول للسلطة بين إمبراطوريات و ممالك عديدة, فإن أكبر مساحة وقعت تحت سيطرة نظام حكم واحد منذ القرن الخامس قبل الميلاد و حتى يومنا هذا, كان إبان الرايخ الألماني الثالث,  Das Dritte Reich , و الذي في عهده القصير خضعت ثلاث أرباع القارة لحكمه, في ظاهرة لم تتكرر لا في أزهى عصور الإمبراطوية الرومانية, البيزنطية, اليونانية و لا حتى العثمانية.

الرسم المبين أدناه و باللون الرمادي الغامق يمثل حجم تلك المساحة, حيث تظهر أراض عصت على كل الطامعين احتلالها لقرون, كفرنسا و التي منذ عهد الفرانكس ( الفرنجة ) Kingdom of Franks منذ القرن الخامس الميلادي, مرورا بما تلاها من الامبراطوية الفرنسية ثم الجمهورية الأولى و حتى الثالثة, لم تتعرض للاحتلال إلا على يد الجرمان لتنهار و خلال أسابيع ستة فقط. الفرانكس هم الذين أوقفوا التمدد الإسلامي عبر بوابة الأندلس و ذلك بقيادة أشهر ملوكهم تشارل مارتل في معركة بواتييه ( بلاط الشهداء) , و الذي رفقة حفيده تشارلمان (الشهير جدا في العصور الوسطى ) شكلوا حلف الإمبراطوية الرومانية المقدسة و الذي استمر عهده للقرن التاسع عشر الميلادي. فللفرانكس و خصوصا تشارل مارتل (الملقب بالمطرقة) , و استنادا لوثائق البابوية الكاثوليكية في روما,  الفضل في نشر الديانة المسيحية عبر الولايات الأوروبية الشمالية و التي معظمها كان يدين بالوثنية, بالإضافة لملء الفراغ السياسي و الإداري الكبير و الذي خلفه انحلال الامبراطوية الرومانية.

في سياق متصل لما سلف ,الجيرمان عرق يستحق التأمل و الدراسة, فالتاريخ و الحاضر يثبت أنهم من طينة مميزة , حيث أنهم في الوقت الراهن هم القوة الفعلية المسيطرة على أوروبا الغربية كاملة, لا من خلال الاحتلال و السلاح, بل بذكاء و دهاء أكبر و دون إراقة دماء, و ذلك من خلال المال (الإقراض) و تسيدهم للمشهد السياسي لدول غرب القارة كعراب للاتحاد الأوروبي. و لكن و من ناحية أخرى, فإن كل تلك الهيمنة المالية و السياسية يقابلها خضوع مطلق لشرطي العالم الأول , العم سام. و الذي ما زال يدير أكثر من 30 قاعدة عسكرية في ألمانيا, بعد أن كانت تزيد عن 150 عقب إنتهاء الحرب العالمية الثانية. فلنا أن ندرك من خلال ذلك حجم قوة الولايات المتحدة الأمريكية, و التي تزيد ميزانية وزارة الدفاع لديها عن ميزانيات دفاع كل دول أوروبا مجتمعة, بشقيها الشرقي و الغربي.

 

 

Innovation, Leadership, Management, Operations Management

The prominence of sustainability in insuring company’s success

Accenture and back in 2010 surveyed more than 700 global executives, from which 93% have firmly admitted the prominence of sustainability in insuring the future success of their companies. Accordingly, the vision of integrating sustainable strategies into companies’ strategic endeavors is in the heart of most global corporations, but varies between those who just have it on papers, partially applied it and companies that lead the domain of sustainable strategies similar to Dow Chemical, Nestle, General Electric and Walmart. The majority of organizations that work on generating value out of sustainability will initially consider the required measures to increase profits on capital, which commonly signifies decreasing operating expenses via enhancing the management of natural resource, similar to waste and energy usage. Corporations can as well work on cutting unnecessary operational expenses through methodically supervising their value chains. Moreover, organizations might bring more value thru enhancing workers’ motivation or retention by embracing activities with sustainable nature or through increasing prices or attaining greater share of market by employing current or new sustainable products (Bertels 2010).

Organizations that thoroughly follow sustainability are as well repeatedly reexamining their business portfolios for the sake to define the probable influence of developments, similar to present or probable environmental or trade regulations, which might lead to different development of market prospects. Waste management, for instance, rediscovered itself as a supplier of incorporated ecological contributions through totaling waste to energy and waste decrease solutions to its portfolio of offerings. Corporations correspondingly scrutinize strictly for unfulfilled necessities generated through sustainability developments in accordance with their strategies, and consequently recognize probable consumer segments. While on the other hand, and speaking of the range of accompanied risks as part of this process, then the improved management of risks that appear from sustainability concerns commences with identifying significant threats of operational disturbances from resource shortage, climate change, or public concerns, similar to commercial boycotts or interruptions in receiving clearance to undertake business operations (Bonini 2011).

For global corporations to develop a sustainable supply chain, they should consider some crucial constraints. The initial and most significant one is the complete backing of the executive team and board of directors, to be followed with a series of changes and enrichments on corporate procedures related to ecological enhancement, as well as to conform to legal ecological necessities, apply to ISO 14001 certification and select adequate suppliers based on ecological benchmarks. Moreover, the management should furnish the atmosphere to cooperate jointly along with suppliers in order to comply with ecofriendly objectives, in addition to allocate adequate resources to develop internal techniques and tools to asses suppliers’ credibility based on ecological standards.

Additionally, the executive team has to cooperatively work with current and potential customers in order to achieve eco-designs and undertake cleaner methods during construction. Furthermore, sustainable supply chain adoption includes the procurement of green technologies and applications, with construction designs that recycle, decrease, reclaim or reprocess energy, resources, or components, along with layouts that decrease or dodge the usage of poisonous or dangerous components (Cucchiella & Koh 2012). Nevertheless, any change experience is going to be encountered with different set of challenges, which will require a solid and proven change management methodology in place. Accordingly, it is essential to recognize the main burdens for adopting sustainable supply chain prior accepting the change. The first burden will be generated from general public, second from government regulations while the third from clients. Without ignoring that the staff working circumstances, ecological and green concerns, corporate social responsibility and sustainability are the main present barriers in front of the sought mission (Malviya & Kant 2017).

References:

Bertels, S. (2010) ‘Embedding Sustainability in Organizational Culture’. Simon Fraser University & Network for Business Sustainability. Available online from: http://nbs.net/wp-content/uploads/Executive-Report-Sustainability-and-corporate-culture.pdf, (Accessed: December 12 2017).

Bonini, S. & Gorner, S. (2011) ‘The Business Of Sustainability: McKinsey Global Survey Results’. McKinsey. Available online from: http://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/the-business-of-sustainability-mckinsey-global-survey-results, (Accessed: December 12 2017).

Cucchiella, F. & Koh, L. (2012) ‘Green Supply Chain: How Do Carbon Management and Sustainable Development Create Competitive Advantage for the Supply Chain?’ N.P.: [Bradford, England]: Emerald Group Pub., 2012. University of Liverpool Catalogue, EBSCOhost, (Accessed: December 12 2017).

Malviya, R. & Kant, R. (2017) ‘Modeling The Enablers Of Green Supply Chain Management’, Benchmarking An International Journal, 24, 2, pp. 536-568, Business Source Complete, EBSCOhost, (Accessed: December 12 2017).

Innovation, Leadership, Management

Leadership, Innovation and Creativity

Right at the crux of visionary leadership lies the cradle of innovation and creativity, which helps to navigate business’s strategy development and execution towards achieving the sought target and market footprint. Entrepreneurship has an unbreakable bond with creativity, which helps in equipping the needed foundation for startups to gain the necessary pace and momentum, while helps established and developed businesses to sustain and thrive (Amabile & Khaire 2008).

For the sake to develop an atmosphere of creativity and innovative business culture, global leaders must work and on simultaneous basis on three crucial vectors: strategy, staff and leadership. Speaking of strategy, then companies must make it certain that the entire range of administrative hierarchy across all levels are embracing and backing the adoption of innovation and creativity.  Moreover, organizations should foster the principles of flat organizational practices through promoting hierarchal and operational resilience. Workers regardless of their organizational grade must realize how the culture of innovation can increase the levels of flexibility in terms of organizational hierarchy and communication channels. Furthermore, companies must evolve robust and effective communication structures in addition to encourage a pattern of continual change and innovation across the company (Rigby et al., 2009).

Speaking of the staff vector, then corporations are obliged to consider recruiting individuals who are creative and are willing to embrace the challenge of innovation. Foster the risk-raking atmosphere among the working staff. Advocate the spirit of positive and creative reasoning between the workforces, encourage endowment and foster the teamwork. Moving to the third vector, then companies’ leaders must embrace the values of creativeness that are built on the grounds of trust and respect for all the notions and thoughts being received from employees. Nurture the principles of unrestricted support and backing where ordinary employees can feel empowered to speak out their concerns and ideas freely without expecting any subsequent negative impact on them (Wetlaufer, 1997).

In addition to earlier said, companies’ leaders should stimulate the bonds of confidence and faith between employees and their managers. Promote the practice of unit solving practices where team members can collaborate jointly on overcoming difficulties without spending valuable time reverting back to their direct line managers. Such practice can see the light through gradual adoption of decentralized administrative practices across the organization. Additionally, companies should promote substantial encouragement through supplying employees with amusing and motivating assignments. (Catmull, 2008).

Following the previous discussion, the theoretical narrative of fostering creative climate and culture is significantly easier once compared to its tangible practices amongst global and domestic corporations. Both innovation and creativity practically all the time suffer from companies’ identity as well as mentality. Except if, when the company deliberately devotes energies to grip the slowing down forces, innovators and creators will be smashes due to the burden of hierarchy and corporate rules (Laroya 2012). As a result, beating the power draining culture must be one of the most fundamental tasks of global leaders prior setting their sights for achieving an atmosphere of creativity.

References:

Amabile, T. & Khaire, M. (2008) ‘Creativity and the Role of the Leader’. Harvard Business Review, 86 (10), pp. 100-109. Available online from: https://hbr.org/2008/10/creativity-and-the-role-of-the-leader, (Accessed: December 2 2017).

Catmull, E. (2008) ‘How Pixar Fosters Collective Creativity’, Harvard Business Review, 86, 9, pp. 64-+, Social Sciences Citation Index, EBSCOhost, (Accessed: December 2 2017).

Laroya, G. (2012) ‘Why the Big-Company Monster Kills Creativity’. Huffington Post. Available online from: http://www.huffingtonpost.com/gil-laroya/creativity-at-work_b_1971392.html, (Accessed: December 2 2017).

Rigby, D., Gruver, K. & Allen, J. (2009) ‘Innovation in Turbulent Times’, Harvard Business Review, 87, 6, pp. 79-86, Business Source Complete, EBSCOhost, (Accessed: December 2 2017).

Wetlaufer, S. (1997), ‘What’s Stifling the Creativity at CoolBurst?’, Harvard Business Review, 75, 5, pp. 36-&, Social Sciences Citation Index, EBSCOhost, (Accessed: December 2 2017).

Business, Leadership, Management, Operations Management, Supply Chain

Just in Time, Lean Manufacturing and Manufacturing Resource Planning

Just in Time and Lean Manufacturing:

JIT enables companies to uplift efficiency standards, enhance quality and boost productivity through decreasing materials’ waste, improving production efficiency in addition to decreasing production’s associated time and effort. Accordingly, and in order to execute this philosophy, then Kanban system shall be presented to guarantee that the company is operating its SC both expertly and efficiently. The part taken care by Kanban is to bond diverse manufacturing procedures jointly, decrease work in progress, maintain low cost of operations in addition to minimize lead and setup times (Wang & Sarker 2004).

Manufacturing Resource Planning:

MRP as a core module within ERP systems helps in substituting complicated and manual connections amongst diverse corporate functions and systems, with the main benefit is in decreasing the headcount in finance and the operating capital. Moreover, the entire business data is assembled for one time throughout the preliminary initiation, then saved centrally, to be consequently amended on instant basis. By that, business can guarantee that all stages of scheduling are grounded on the exact data, and that the subsequent procedures accurately replicate the dominant operating circumstances of the company. Additionally, system generated reports offer executives with a holistic sight of business’s health in different areas of the company, which can be utilized to recognize required enhancements and take benefit of market prospects (Hendricks et al. 2007).

My Position from Both Approaches:

Following the earlier discussion, MRP can be positioned as a technology that permits for an astonishing level of progressive planning for cases that can be found in companies with high-volume production or even with relatively average inventory (Aggarwal 1985). However, is seen by many as a standout amongst the most costly methods for gaining zero or at least a negative ROI. The execution is quite expensive; signaling one of the top issues with the MRPs’ rollout. Where every implementation is subject for medium to heavy levels of customization, which will go in parallel with recognizing its consequences on the company, in addition to the exhausting part of training the employees to effectively use it (Slack 2014).

While on the other hand, JIT preserves low inventory expenses and includes workforce, yet necessitates excellent structure of supply lines and supportive employees (Aggarwal 1985). Nevertheless, there is a general observation concerning a major hindrance towards JIT’s full adoption in the SME organizations, which is usually due to their less accessibility to needed assets. While in the case of giant corporations, then the case is different, due to their better positioning in terms of their financial status as well as the volume and skills of their workforce (Bayo-Moriones et al. 2008).

Possibility of Forming a Hybrid Setup:

Some studies can be found describing the connection between JIT and ERP as so close leading to consider JIT as part of some ERPs. In line with that, (Cagliano & Spina 2000) and through their review to the subject, realized that companies with desire to gain the most possible improvement out of their business operations are highly advised to consider the hybrid adoption between both, the ERP (technology) and JIT (philosophy). Their justification was built on studies that proved where sole dependence on technology, or excessive usage of it, would most likely not improve the overall performance, but rather with the combined usage of technology and process enhancement that will eventually end up with bigger influence. Where the technology can bring operational discipline and relatively better handling of process changes. While the philosophy will offer a reliable and robust supporting framework (Bayo-Moriones et al. 2008).

References:

Aggarwal, S.C. (1985) ‘MRP, JIT, OPT, FMS?’, Harvard Business Review, 63, 5, p. 8, EBSCOhost, [Accessed on April 29 2017].

Bayo-Moriones, A., Bello-Pintado, A. & Merino-Díaz-de-Cerio, J. (2008) ‘The role of organizational context and infrastructure practices in JIT implementation’, International Journal of Operations & Production Management, 28 (11), pp. 1042-1066, [Accessed on April 29 2017].

Cagliano, R. & Spina, G. (2000) ‘Advanced manufacturing technologies and strategically flexible production’, Journal of Operations Management, 18, pp. 169-190, ScienceDirect, EBSCOhost, viewed 29 April 2017.

Hendricks, K., Singhal, V. & Stratman, J. (2007) ‘The impact of enterprise systems on corporate performance: A study of ERP, SCM, and CRM system implementations’, Journal Of Operations Management, 25, pp. 65-82, ScienceDirect, EBSCOhost, [Accessed on April 29 2017].

Slack, N., Brandon-Jones, A. & Johnston, R. (2014) Operations management. 7th ed. Harlow: Pearson Education.

Wang, S. & Sarker, B. (2004) ‘A Single-Stage Supply Chain System Controlled by Kanban under Just-in-Time Philosophy’, The Journal of the Operational Research Society, 5, p. 485, JSTOR Journals, EBSCOhost, viewed 29 April 2017.

Business, Leadership, Management

Corporate Sustainability

Sustainability in general is accomplished through consuming resources for the sake to fulfill present demands without jeopardizing future needs. In line with that, there are several connections amongst the domains of Operations Management (OM) and Sustainability Development (SD), with the intersection amid the two fields establishes a triggering point for undertaking a comprehensive integration between both. However, the main variance of significance is that SD commonly depends on a wider range of consideration compared to the OM. Yet, attaining such integration would be deemed as a great achievement, since it will positively impact the sequence of business operations and design, in addition to its influence on improving all dedicated resources in the process of transforming inputs into services and products (Peter & Magnus 2011).

Following the earlier discussion, sustainability is taking a major part in integrating several operational aspects, with the product life cycle and supply chain management being one of the most imperative elements that gets associated via multiple techniques. Starting from the assessment of product life cycle through which the company can estimate resources’ consumption along with any negative environmental impact, moving all the way to adopting lean and quality production techniques that can assist in eliminating unnecessary consumptions, decreasing the waste and recycling the products. Additionally, companies can consider the extension of product lifetime, which can help in avoiding resources’ depletion when manufacturing new products. While concerning the supply chain, then it should be clearly stretched to reflect the whole lifespan of the product, in addition to enhancing the product from two standpoints, present as well as total cost (Linton et al. 2007).

Another relevant subject in maintaining a sustainable trend of operations is through business’s contribution to its social obligation, which is commonly known as Corporate Social Responsibility (CSR). It can be defined as business’s moral contribution and behaviour towards economic growth, while taking into the consideration its commitment towards local, national or global communities, in addition to the working conditions of its employee along with the quality of life being offered to their families (Slack et al. 2014). Nevertheless, undertaking socially responsible resolutions will predominantly lead to economic significances; especially that investment returns have neither financial nor timeframe guarantees, but will have higher chances of influencing the public opinion and consequently on business’s reputation (Albino et al. 2013).

Finally, the necessity for protecting our environment that goes adjacently with the growing requests for consuming natural resources are obliging organizations to reexamine their operational models and reform their supply chain processes. Nevertheless, and despite the fact that pollution and waste decrease are associated with the classical targets of operations management, yet not every green procedure will guarantee savings, with some might even increase the operational cost. Therefore, the primary challenge for businesses out there would be to finding operational answers for the ways to maintain a sustainable business today without affecting the environment for future demands (Wu & Pagell 2011).

References:

Albino, V., Carbone, P. & Taticchi, P. (2013) ‘Corporate Sustainability’, Berlin: Springer, eBook Index, EBSCOhost, [Accessed on May 13 2017].

Linton, J., Klassen, R. & Jayaraman, V. (2007) ‘Sustainable Supply Chains: An Introduction’, Journal Of Operations Management, 25, Supply Chain Management in a Sustainable Environment, pp. 1075-1082, ScienceDirect, EBSCOhost, [Accessed on May 13 2017].

Peter, F. & Magnus, P. (2011) ‘Integrating Sustainable Development Into Operations Management Courses’, International Journal Of Sustainability In Higher Education, 3, p. 236, Emerald Insight, EBSCOhost, [Accessed on May 13 2017].

Slack, N., Brandon-Jones, A. & Johnston, R. (2014) ‘Operations management’. 7th ed. Harlow: Pearson Education.

Wu, Z. & Pagell, M. (2011) ‘Balancing Priorities: Decision-Making in Sustainable Supply Chain Management’, Journal of Operations Management, 29, pp. 577-590, ScienceDirect, EBSCOhost, [Accessed on May 13 2017].

Business, Leadership, Management

The Good, The Bad, And The Ugly Side Of Globalization !

Globalization and for decades was considered as an eminent thing for several 2nd and 3rd world countries who had the opportunity to gain entry to world’s strong and established markets, in addition to the possibility for them to export back their relatively cheap merchandizes. While from global corporations’ perspective, then they had the opening to widen their international presence through penetrating new developing markets and consequently boost their operations and revenue streams. Nevertheless, globalization was not that helpful for both white and blue collar, since it had its share in deindustrializing heavyweight economies similar to the U.S. Accordingly, and since globalization is a complex subject, it is essential to assess both the advantages and disadvantages prior jumping into any conclusions (Ghemawat 2017).

Proponents of globalization debate that it includes the prospective to transform this world into a greater living place and to resolve world’s irritating concerns similar to poverty and unemployment. Thus, the pro-globalization groups argue that it helps in sustaining the foundations of free trades that will consequently decrease obstacles similar to VAT, tariffs and subsidization, in addition to promoting growth of global economy through making new jobs, inspiring competitiveness levels and lowering the prices (Collins 2015).

From the social perspective, then globalization can encourage cultural intermixing; with every nation can become better positioned to grasp more knowledge and understanding from other cultures, which will help in promoting tolerance, respect and acceptance of others. Additionally, workforce can relocate from a nation to another for the sake to promote their talents and seek for better opportunities (Manolică & Roman 2012).

The opposing groups of globalization perceive it differently, with their claims are grounded on several standpoints. Initially, they argue that in a time globalization is hypothetically meant to encourage free trade through eliminating all barriers, a rising contrasting trend by G20 to earlier claim is being noticed through imposing nearly 1,000 obstructive import and export measures (WTO 2014). In addition to the fact that the counter of VAT global club members is on constant increase and has surpassed 160 members (USCIB 2016).

Moreover, one of the perturbing issues for developed nations similar to the U.S. and Western Europe is the gradual loss of jobs and having them offshored to countries with less operational cost. Not just that, where developed nations are even threatening their workers to slash their wages and to happily accept that, unless they are willing to see their jobs ending up somewhere else overseas (O’Meara et al. 2000). Furthermore, international companies are blamed for social unfairness, unjust working circumstances, in addition to the absence of environmental sense of concern, biological damage and natural resources’ abuse. Besides, and amid the latest time of fast worldwide expansion of trade between the 60s and late 90s of late century, UNDP reported that inequality rates have got worse both domestically and internationally. The same report highlighted that 86% of global consumption is done through world’s wealthiest 20%, leaving the remaining population of 80% to consume just 14% (Bigelow & Peterson 2004).

References:

Bigelow, B. & Peterson, B. (2004) ‘Rethinking Globalization: Teaching for Justice in an Unjust World’, Harvard Educational Review, 74, pp. 347-348, British Library Document Supply Centre Inside Serials & Conference Proceedings, EBSCOhost, [Accessed on June 8 2017].

Collins, M. (2015), ‘The Pros and Cons of Globalization’. Forbes. Available online from: https://www.forbes.com/sites/mikecollins/2015/05/06/the-pros-and-cons-of-globalization/#34e6de16ccce, [Accessed on June 8 2017].

Ghemawat, P. (2017) ‘Globalization: Myth and Reality’. Harvard Business Review. Available online from: https://hbr.org/ideacast/2017/02/globalization-myth-and-reality. [Accessed on June 8 2017].

Manolică, A. & Roman, T. (2012) ‘Globalization: Advantages And Disadvantages From The Perspective Of The Manufacturer’, Centre For European Studies (CES) Working Papers, 4, 4, p. 747, Complementary Index, EBSCOhost, [Accessed on June 8 2017].

O’Meara, P., Mehlinger, H.D. & Krain, M. (2000) ‘Pros and Cons Of Globalization’, The Economist. Available online from: http://www.economist.com/node/393331, [Accessed on June 8 2017].

USCIB (2016) ‘Value Added Tax Rates (VAT) By Country’. United States Council for International Business. Available online from: http://www.uscib.org/valueadded-taxes-vat-ud-1676/, [Accessed on June 8 2017].

WTO (2014) ‘WTO report says restrictive trade measures continue to rise in G-20 economies’. World Trade Organization. Available online from: https://www.wto.org/english/news_e/news14_e/trdev_05nov14_e.htm, [Accessed on June 8 2017].

Management, Technology

When the ERP implementation strikes you hard!

Well the story goes like this, with top managers at Levi Strauss decided to revamp their information technology systems. So the executives decided to migrate to a single SAP system and hired a team of Deloitte consultants to lead the effort. The risks seemed small, and the proposed budget was less than $5 million. But very quickly all hell broke loose. One major customer, Walmart, required that the system interface with its supply chain management system, creating additional hurdles. Insufficient procedures for financial reporting and internal controls nearly forced Levi Strauss to restate quarterly and annual results. During the switchover, it was unable to fill orders and had to close its three U.S. distribution centers for a week. In the second quarter of 2008, the company took a $192.5 million charge against earnings to compensate for the botched project—and its chief information officer, David Bergen, was forced to resign (Source: HBR).

 

The lesson learned here: There is no such thing as an easy ERP rollout. It was and always will be a journey of discomfort and sacrifice, but with a remarkable experience and joy the moment it starts effectively running your business.

 

References:
Flyvbjerg, B., and Budzier, A., (2011), ‘Why Your IT Project May Be Riskier Than You Think‘. Harvard Business Review. Available online from: https://hbr.org/2011/09/why-your-it-project-may-be-riskier-than-you-think.

 

Business, Innovation, Management

Innovation Portfolio Management (IPM) at 3M

The notion of Innovation Portfolio Management (IPM), is primarily correlated with the process of provisioning corporate’s resources through its portfolio of new services and products that are aligned with the business strategy (Meifort, 2016). Thus, and to ensure superior control of growing rivalry, corporates must have an efficacious IPM in place that would safeguard a constant pipeline of innovative and quality products (De Maio et al., 1994).

In this article, I will be addressing 3M company, with a target to grow into the most innovative company across the world, through utilizing an extensive variety of Knowledge Management Systems (KMSs), facilitating a suitable working environment, as well as effectively motivating its people (Brand, 1998).

In line with preceding objective, 3M realized that its structure should be a reflection of company’s portfolio management, that is principally built on two main verticals: acquisitions and restructuring. Therefore, in terms of restructuring, the company decided back in 2013 to be divided into five divisions. And through that move, it facilitated the path for 3M to attain significant reductions in terms of operational cost by improved effectiveness, throughput and scale. Moreover, it has as well assisted the company to effectually recognize industries that actually boost development and innovation. As a result, 3M disclosed a recent statement that it is stripping its business in the static control domain, in order to pay extensive consideration to further innovative and profitable business opportunities (Forbes, 2015).

While regarding acquisitions, then 3M and through its strategy is considering them as an essential move for progression, growth of products’ portfolio and reinforcing its global presence, with a target to allocate a hefty budget of as high as $10 billion on acquisitions through the year 2017 (Forbes, 2015). And with that regards, I will bring two recent examples. The first one goes back to July 2014 when 3M secured a large presence in the Japanese market, through buying 25% of Sumitomo Electric in a move that helped the company to fully acquire the joint venture enterprise Sumitomo 3M, and eventually have a bigger control in world’s third largest economy (Reuters, 2014). Speaking of the second example, then 3M realized the high potential in the healthcare IT segment with a potential to reach $66 billion by the year 2020. Accordingly, they have acquired back in February 2014 Treo solutions, a company that is specialized in providing comprehensive business intelligence systems for healthcare suppliers and users (3M News, 2014).

Speaking of the R&D and it is impact on 3M’s portfolio and products growth, then the company announced in its last year’s sustainability report (3M, 2015), that 30% of company’s sales are generated out of the products that were developed over the course of last 5 years. As a result, and due to company’s belief in R&D’s significance in market dominance, 3M’s management decided to allocate almost 5.6% of company’s profit on R&D activities, and to increase the allocated ratio to 6% by the year 2017 (Forbes, 2015).

Conclusion:

After considering the foregoing elements of 3M’s portfolio management, that is accompanied with a set of innovative and distinguished range of products, we can realize how 3M managed to maintain its competitive edge and even dominate a substantial pricing power, that helped the company to sustain growth and maintain a significant influence in the market.

References:

3M (2015), ‘Sustainability Report’. Available online from: http://multimedia.3m.com/mws/media/1064170O/3m-2015-sustainability-report.pdf. [Accessed on November 12th 2016].

3M News (2014), ‘3M to Acquire Treo Solutions‘. Available online from: http://news.3m.com/press-release/company/3m-acquire-treo-solutions. [Accessed on November 12th 2016].

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