supply chain transformation

4. Construct and deploy sensible metrics The current manufacturing metrics of efficiency, keeping all machines busy all the time (utilization), and overhead absorption were developed after the stock market crash of 1929. Any manufacturing manager can tell you what products are really the most profitable. Rarely does the formal accounting system come up with the same answer. Sensible metrics must be deployed that encourage better integration of various components within the company. These metrics align resources, working capital, and activities to the company goal of being sustainably profitable. Sustainable profitability is far more important than short-term operational efficiency. 5. Learn…

Develop and use “Thoughtware” Companies must invest and unleash the intellectual capital within their organizations. Too many companies are spending fortunes on hardware and software and getting little return on that investment. While technology continues to advance, there is still no substitute for thinking. Hardware and software are ineffective without the right “thoughtware.” Currently America’s educational system prepares students for more education rather than teaching them to think critically and adapt to a changing environment. The late Dr. Eliyahu Goldratt, author of “The Goal,” frequently commented that the average manager would rather spend $5 million than spend 5 minutes thinking….