Lean is a philosophy that spurred from the Toyota Production System (TPS). TPS was created by Toyota’s founder Sakichi Toyodo, Kiichiro Toyoda, and Taiichi Ohno. Much of TPS was also influenced by W. Edwards Deming’s statistic process control (SPC) and Henry Ford’s mass production lines. However, the Japanese were not impressed with Ford’s approach because it was filled with over-production, lots of inventory, and much waiting. Toyota identified these weaknesses in Ford’s production line and adapted the production line to create a more productive and reliable production line. TPS and lean also use just-in-time inventory where only small amounts of inventory were ordered and very little inventory was left waiting in the production line. This also was very different from Ford’s production line which usually bought high volumes of materials and had high inventory levels to lower costs. After TPS proved to be successful for Toyota, many companies adapted their Continue reading
Modern Management Concepts
Concept of Virtual Network Structure (VNS)
In today increasingly stiff competitive environment, organisational structure is becoming a very important role to a company in the market competition. The organisational structure is explained as the formal decision-making framework that will be done by dividing, grouping and coordinating job tasks. However, in order to design organisation structure managers need to address six key elements, those are work specialization, departmentalization, chain of command, span of control, decentralization and formalization. Secondly, for the face on the sharply environment change, HR managers should divide the tasks and then coordinate those, in essence balancing job-related specialization with group, inter group, and organisation-based integration as necessary. They also said that organisational structure defines the firm’s decision-making authority and serves as the connecting fibers between the company’s strategy, the actions and behaviors of members. For example, organization must design structure that facilitates close to coordination between the activities of manufacturing and those of research, Continue reading
Innovation-Triggered Change in Organizations
In the modern world of business, innovation has become the fulcrum point of the business enterprises which not only guides the diverse processes used by them but also the manner in which they manufacture the products or the services offered by them to the customers. Furthermore, within the spectrum of the business world, it is observed that the amount of competition which the diverse organizations had to face has increased in an exponential manner keeping in pace with the emergence as well as the mushroom of the various new enterprises. This trend observed with the business world has made it imperative for the organizations to not only take the help of different kinds of innovations but also integration these innovations within the framework of their organization so as to make the most of the business opportunities presented by these innovations. It is precisely here that the construct of leaders gains Continue reading
Activity-Based Costing for Small and Service Industries
Activity Based Costing (ABC) is an accounting method that assigns costs to activities according to their use of resources, rather than products or services. This enables resources and other related costs to be more accurately attributed to the products and the services which they use. It does not change or eliminate any costs, in the other way; it provides detailed information on how costs are consumed. The main benefits of Activity Based Costing are providing understanding into the fastest growing and least visible element of cost-overhead. We can also improve profitability by monitoring total life-cycle cost and performance so that we can improve the effectiveness of budgeting by identifying the cost of different service levels. In addition, ABC costing does encourage continuous improvement and total quality control because control and planning are directed at the process level and it links the corporate strategy to operational decision making. By using ABC Continue reading
Innovative Organizations – Meaning, Elements and Leadership Behavior
Many organizations are resistant to changes and continue operating the way they had been operating in the past. To remain competitive, they work harder, improve efficiency, reduce cost and implement best practices. But, this is not enough. Instead of getting stuck in their standard mode of operations, organizations need to adopt innovative ways to change the strategies. The best way to create a competitive edge and be in the head of the competition is to innovate by drawing advantage from the creative power of your people. Turn your greatest assets into opportunistic entrepreneurs who discover new ways and improve the way they do business. Management innovation involves total transformation of existing culture to enhance organizational performance in an integrated manner involving technological innovation, product and service innovation, and strategy and structural innovation. Every organization needs to have a vision, a culture and a process of innovation to build a truly Continue reading
eGovernment – Definitions and Benefits
EGovernment is one more of the recent years “buzzwords”. It is usually either paired with the word “services” at the end or other words like eGovernance and Digital Government. Like every other (relatively) new and cool “buzzword” they are used widely by a broad spectrum of individuals who represent mostly two different backgrounds. Information technology and politics. The first because it is a technological issue, the later because they have come to realize, even though a little late, that they represent an excellent vehicle for them to provide a better experience to anyone who interacts with the Government. But, what do these terms mean? Do they collide or conflict each other? How about covering or including one another? EGovernment is in the first stages of development. Most governments have already taken or are taking initiatives offering government services online. However, for the true potential of eGovernment to be realized, government Continue reading