Editorial Reviews. From the Back Cover. Never be caught out by the latest management jargon again. Management models provide a handy framework for . KEY MANAGEMENT MODELS Pdf next post Knowledge And Knowledge Systems Learning From The Wonders Of The Mind Pdf. Back to top. Key management models In an increasingly competitive world, we believe it's quality of thinking that will give you th.
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Read "Key Management Models, 3rd Edition The 75+ Models Every Manager Needs to Know" by Gerben Van den Berg available from Rakuten Kobo. Sign up . Download Read Key Management Models, 3rd Edition: The 75+ Models Every Manager Needs to Know (3rd Edition) | Ebook PDF Free. MARCEL VAN ASSEN. GERBEN VAN DEN BERG. PAUL PIETERSMA. Key management models. The 60+ models every manager needs to know. 2nd edition.
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Chi ama i libri sceglie Kobo e inMondadori. Choose Store. Or, get it for Kobo Super Points! Includes the classic and essential management models from the previous 2 editions.
Thoroughly updated to include cutting edge new models. Two-colour illustrations and case studies throughout. Skip this list. Ratings and Book Reviews 0 0 star ratings 0 reviews. Overall rating No ratings yet 0. A brief description of each model is provided, together with suggestions as to its application.
Comments have also been included and, where appropriate, attention is drawn to any potential limitations or shortcomings. The collection of management models is largely the result of literary research. We arrived at the final selection by asking some 70 managers, consultants and academics around the world which models they consider to have been the most helpful in their own work.
For this purpose, we defined a model as a tool that can be employed to enable or enhance the daily functioning of both organizations and the managers within them, or to solve related problems. The collection thus reflects those ideas and insights which have proven to offer solid footing, are considered workable in practice and have contributed positively towards solving the organizational problems with which managers and consultants are frequently confronted.
Rather, the number, the variety and the differences between the models included in the collection aim to place in perspective not only each individual model but management models in general. Together with the descriptions and typifications of the various models, this reduces the danger that managers will be tempted to view the next popular model that happens to come along as a panacea for whatever ailments their organization happens to be suffering from at the time.
They offer a common language when it comes to solving problems, contain inspiring typifications, but above all are of great practical value when it comes to analysing situations and identifying possible courses of action. The criterion for inclusion, therefore, was not whether the models selected are scientifically or technically sound, but whether they actually work.
It is with both pleasure and pride that we present this collection. For each specific situation, they will subsequently be in a position to identify the underlying problem and determine how best to deal with it in that specific instance.
Unfortunately, neither a single model nor a whole list of models can offer any guarantee that a manager or consultant will deal with an organizational problem objectively and to the best of his or her ability. Models can nonetheless offer valuable insights and a sound framework on the basis of which the right choices can be made — right from the point of view of the profession, the organization and also of the managers and other employees involved.
It was never our intention to produce an unambiguous taxonomy of models, based on a simplified overview of our field of work. Assuming that such a taxonomy already exists in the minds of good managers and consultants, our aim is rather to supplement it by providing additional ideas and insights, and sound, easily comprehensible descriptions of management models.
Thus enriched, the taxonomy will enable managers and consultants to quickly determine which model is most appropriate for a given situation, while recognizing its limitations. This ties in neatly with our field of work, confronted as we are on a daily basis with the extreme difficulty of successfully managing, changing and providing contingent advice simultaneously.
We view this book as a means not only give expression to this complexity, but also to make it somewhat less unmanageable.
It is impossible to thank personally all of those who have been involved in the publication of this book. There are nonetheless a few who deserve a special mention. The final analysis There is a plethora of models and tools available to support managers and business analysts in customer marketing and relationship management. One of the inherent dangers is the tendency to focus on getting the readily available Customer Relationship Management suites installed, as opposed to taking the time to consider the scope of potential customers.
The success of an organization in targeting, acquiring and retaining customers is, of course, also influenced by many factors besides customer relationship management.
Pricing and the intrinsic value proposition of the product or service are just two examples of the various attributes that are 64 Key management models all too easily swept under the corporate marketing header. More generic problem areas also exist, such as the lack of a wholesome marketing strategy and company culture endorsement of a customer-centric approach. The consequent learning should be implemented in planning the new activities.
The Deming cycle allows an organization to manage improvement initiatives in an disciplined fashion. When confronted with this model for the first time, many realize that they are steering, but not really managing their organization. When to use it Systematically go through the four steps when pursuing improvement in specified activities. Plan ahead for change. Analyse the current situation and potential impacts of adjustments before doing anything else.
Predict what different results are expected, with or without a theory. How can you measure the impact, if and when the desired result has been achieved? Plan to include result measurement in the execution. Make an implementation plan with assigned responsibilities for participants.
How can this be linked to the higher purpose of our organization? Where will it happen? When will it happen? What is the step-by-step procedure?
How can we measure the improvement, if at all? When executing, do take small steps in controlled circumstances in order to be able to attribute improvements or failures to the planned changes in the activity. Study the results of your experiment.
Did the desired result occur? If not, why not? Take action to standardize the process that produced the desired result, or, in the event that the result proved to be different from that which was desired, use the experience as input for new attempts at improvement.
Act Plan Check Do The final analysis Many organizations are unable to specify objectives, activities and desired results, let alone to systematically and consistently manage their own improvements, Deming cycle or not. There have been several adaptations of the Deming cycle. For example, Plan can be split up into: Do can be split up in training and education, and implementation. The Deming cycle constitutes an important part of kaizen thinking described later in this book.
The model explains gaps in performance and helps identify improvements. The EFQM model is based on the premise that excellent results with respect to performance, customers, people and society are achieved through partnerships, resources and processes. When to use it The model discerns five organizational areas enablers and four performance areas results. The organizational areas are key elements in managing an organization: The following criteria determine excellence in policy and strategy: According to EFQM: People must be involved and empowered.
There should be dialogue between people and the organization. People should be rewarded, recognized and cared for. Excellent processes: In EFQM, customer results, people results and society results are measured in: What the organization is achieving in relation to its planned performance are collectively called key performance results: Additionally, a feedback loop from performance areas to create objectives in organizational areas is essential to establish a co-ordinated learning effect.
Performance indicators can be generated to measure the effect of the improvements. The final analysis Often used by managers in Europe, the EFQM model is a recognized tool for professionalization of the planning and control cycle. Use of the model enables core elements for managing an organization to be easily structured, analysed, assessed and improved. The EFQM website www.
It is, however, not a prescriptive model at all, having been designed as a tool to assist with management analysis. Rather than helping to select the appropriate strategic direction, the EFQM model simply helps to realize improvements that will ultimately lead to achievement of the stated goals. When to use it There are five simple steps to creating your own Eisenhower matrix: Rank importance.
Rank urgency. Divide into categories. In more detail, this is what you should do in each step: List all your issues and tasks. Imagine you had all the time in the world for every single item, and forget deadlines. Then rank all items or groups by applying an order or rank of importance. Back to reality again, what is the real absolute deadline or latest possible date to start each task or to tackle each issue?
Plot your items on two dimensions according to their importance see 2 and their urgency see 3. Draw dividing lines. This is where you discern priorities based on your available time or capacity. Many people find it difficult to concentrate on things that, though important, do not have to be done right now particularly when there are other things demanding attention, albeit less important ones!
The trick is to train yourself to prioritize; this way you can get all the important things some of which may be less urgent out of the way and thus clean up your diary. On the whole, people are more effective when they enjoy what they are doing, and — to a limited extent — when put under pressure. It is an appropriate measure to use for: Traditional accounting systems determine the value of organizations on the basis of performance measurements such as earnings per share and return on equity.
However, they take no account of the effectiveness with which resources are deployed and managed, i. As a result, many companies that appear profitable on paper are in fact considerably less so. What makes EVA unique is that it focuses on measuring both value and performance. To ascertain value, subtract from the net operating profit the cost of the capital employed to generate it over a given period: EVA will show just how much wealth has been created or destroyed.
To measure and reward performance, use increase in EVA as the measuring stick, as opposed to the attainment of budget-driven targets: With regard to measurement, three steps should be taken. Firstly, establish rules to convert accounting profit to economic profit, i.
Next, identify EVA centres within the organization — these may be large or small, but must all be accountable for their own results.
Then link these centres so as to harmonize decisions across the organization. This enables EVA to be tracked unit by unit on a monthly basis. Measuring EVA is one thing; acting on the results is another. Management and EVA, therefore, must become inextricably linked. Budgeting and planning techniques must be adjusted to incorporate the concept, and a link established to operating and strategic levers. Finally, checks must be carried out to ensure that EVA-thinking actually sticks.
By basing incentive compensation on an increase in EVA, managers can be motivated to think and act like owners because they are paid like owners — by increasing shareholder wealth, they simultaneously increase their own.
Bonuses and other incentives, therefore, must be linked to performance as opposed to budgets, allowing managers to focus on Measurement track EVA month by month Management incorporate EVA into decision-making process Mindset generate commitment to EVA company-wide Motivation create link between rewards and increase in EVA EVA — economic value added 75 maximizing wealth instead of merely meeting corporate expectations.
It goes without saying that a certain degree of risk must also be involved, with penalties for underperformance. An additional advantage is that shifting from continuous negotiation of financial targets to a one-time setting of bonus parameters greatly simplifies the planning process.
Last but not least, there is mindset. EVA is, in effect, an internal governance system under which individuals are automatically encouraged to work in the best interests of the shareholders.
When fully implemented it has the potential to transform corporate culture. Company-wide commitment and training is essential: The final analysis Despite being described as a measure of financial performance, and moreover one which can theoretically be calculated, it is important to remember that EVA is not so much about generating a specific figure as about capital growth in general.
The very fact that there are over such anomalies illustrates the impossibility of ever being able to come up with a precise figure. Stern in fact recommends selecting no more than 15, emphasizing that the intention is to take into consideration only the most important factors in an attempt to identify growth and put a rough figure on your cost of capital.
As with many models, the steps to be taken are far easier to write down than to put into practice. However, simply by stimulating managers to break out of their current mindset and think laterally a great deal can be achieved. The steps to be taken when calculating EVA should therefore be viewed not as a straitjacket, but as a list of items for consideration. In his bestselling book, Peter Senge described five disciplines that together constitute the key ingredients for a learning organization: It provides a way of understanding practical business issues in terms of particular cycles and levels of detail or complexity.
Generic archetypes are: Limits to growth — reaching a level of saturation, possibly even leading to suffocation. Shifting the burden — continuation of short-term measures that fight symptoms rather than the underlying problem s. Eroding goals — easing long-term goals as current problems take precedence. Escalation — an uncontrolled zero-sum game, such as price wars.
Success to the successful — reinforcing the advantage of an initiative at the expense of support for the alternative. Tragedy of the commons — domino effect of exhausting common resources or target markets, leading to depletion of resources or suffocation of markets. Growth and underinvestment — uncontrolled growth to keep up with demand, resulting in lower quality and lack of competitive insight.
Personal mastery refers to the ability to continue to clarify and deepen personal vision, to focus energy, to develop patience, and to see reality objectively.
Mental models are assumptions and generalizations of how we see the world. They determine how we think we can successfully interact with the world. Key skills are: Balancing inquiry and advocacy — putting emphasis on listening and observing, as well as speaking and controlling.
Distinguishing between espoused theories said and implicit theories done. Shared visions emerge from personal visions, deriving energy and fostering commitment as they evolve.
The more people share the vision or enrol in it, the more likely they feel it is achievable. People will start working towards the vision. Compliance is often mistaken for enrolment or commitment to a vision — many managers find themselves left in the cold, feeling betrayed when the going gets tough, because though seemed everyone was aboard, they were in fact only complying.
Team learning requires the discipline of suspending personal assumptions and thinking together, of learning how to recognize patterns of interaction and how they may both undermine and enhance learning. One must understand the fundamental difference between dialogue and discussion.
By contrast, a discussion is characterized by the presentation and defence of different perspectives and opinions in search of the best answer to a problem. Senge stresses that dialogue and discussion are potentially complementary, but most teams lack the ability to distinguish between the two.
When to use it Each discipline has both different aspects business, personal, interpersonal and levels practice, principle, essence. As a result, using the disciplines is difficult or, more romantically put by Senge et al. We refer to the Fieldbook and the Dance of Change book for more detailed self-help tips for managers. In short, the key ideas behind practising the five disciplines are: Personal mastery means that you should be true to yourself.
Meditation for self-discovery and consciousness is key to successful pursuit of personal mastery. Tools for uprooting your paradigmatic, preconceived notions of the world and expose mental models suggested by Senge are: Perhaps you are too high up the ladder of inference, taking actions based on beliefs rather than observing and experiencing on the other end of the ladder? Enrolment in a shared vision results from free choice and genuine enthusiasm for a vision.
Individuals trying to get download-in for their vision should believe in themselves, understand the vision what, why and how , refrain from overselling and ignoring genuine concerns, and let people choose for themselves. Team learning can be stimulated through sessions with a managed balance between dialogue and discussion. Explicit mapping of mental models and assumptions, as well as methods to make people willing to speak out and suspend their assumptions are key.
The final analysis Senge is right. But putting the fifth discipline into practice is a daunting task that may take longer than anyone is willing to commit to. Additionally, there is a very real chance that politics may hinder learning.
Sprenger and ten Have say that successful knowledge management requires four learning competencies to manage the knowledge flow in an organization: Four competencies of the learning organization Absorption Diffusion Generation Exploitation Rather than knowledge itself, argue Sprenger and ten Have, it is the combined ability of an organization to absorb, diffuse, generate and exploit it that secures true competitive advantage.
A competency approach to organizational learning is much more sustainable. When to use it There is no such thing as a bad time to enhance organizational learning. More often than not, though, managers are directly confronted with the need to critically assess the learning ability of their organizations.
Some clear indicators of this need are: The first step in enhancing organizational learning is to create understanding and awareness of organizational learning. Furthermore, the diagnosis itself effectively creates a foundation for action.
It is important to understand why knowledge is so important, but also what the different types of knowledge are, where knowledge is stored, and how it flows or not through the organization.
The four types of knowledge are Dierk Knowledge is stored in four ways Quinn Some examples are manuals, work procedures and database structures; in management systems, both formal and informal, such as in meeting rules, management styles, project management, quality control and information management; in norms and values, to keep the above together, such as a shared understanding of how learning should occur, as well as openness, curiosity, and how to deal with conflicts of interests.
The second step in using this model is a diagnosis of the learning ability of the organization along the balancing scales of the four learning competencies. How does management direct learning? What is the balance between knowledge in people and knowledge in systems? Which are the learning obstacles? The third step is to connect the key issues emerging from the diagnosis with corrective measures. For this process, Sprenger and ten Have propose five steps: Analyse and discuss issues and obstacles.
Formulate learning objectives and a knowledge management policy. Focus on solutions to learning obstacles. Implement learning instruments. The instruments to increase organizational learning can also be used as a checklist in interviews with management and operational groups to answer some of the key questions in the diagnosis. The final analysis The strength of this model is in the concept of organizational learning through the identification and stimulation of learning competencies, as opposed to creating a blueprint or redesigning the organization in an image.
The model offers a transparent set of concepts to help create a learning organization. On the other hand, there is little focus on the so-called mental models, which are often hot topics in organizational learning. How to deal with organizational power play and politics is left untouched. The model proposes a learning competency associated with each of the four knowledge flows identified by the authors. However, when knowledge management is approached from a systems perspective, the analogy can be taken even further.
Knowledge can also be used inappropriately, can be of inferior quality, or simply be wrong. Finally, knowledge can also flow out of the organization, as disgruntled people leave and misunderstood systems are replaced.
Similar reasoning can be applied to devise alternative ways in which knowledge enters an organization. In fact, says Porter, there are only three internally consistent and successful strategies for outperforming others: A cost leadership position defends an organization against all five competitive forces: An alternative to cost leadership, differentiation, is to worry less about costs, but instead to seek to be perceived as offering something that nobody else can offer.
Be it durable, novel, rare, serviced globally, very reliable or of high emotional value, differentiation requires the product to appeal to customers in other ways than low price. Differentiators have to invest more in research, design, materials, service, etc. Logically, one can conclude that one has to choose. In fact, argues Porter, companies may choose to focus on only a particular group of customers within a market or a limited product line.
The focus strategy is built around serving a specific narrow market segment extremely well. Porter adds to this that within a particular focus market often referred to as a niche , cost leadership and differentiation are options.
Target customers All customers 1. Cost leadership 2. Differentiation 3. Focus Narrow market segment 3a. Cost focus 3b. By logical deduction, this is undesirable because there will inevitably be a competitor that is either cheaper or better differentiated than your company is.
Asking yourself the following questions can help: Are these differences sustainable and defendable? Generic competitive strategies 87 Having established your current position, appropriate steps can then be taken to either maintain or improve it — at this point think about the difference between where your organization and its products are now, in relation to where you would ideally like them to be.
The final analysis Plotting your company and its competitors on a generic competitive strategy chart or matrix is a very useful exercise early in the strategy process. The problem is: The main difficulty with regard to determining cost leadership lies in the lack of transparency as regards the actual costs of competitors; it is difficult enough to calculate actual costs within your company.
Assessing the extent of differentiation and the extent to which customers appreciate the differentiated proposition is trickier still. There are various ways in which one can try to overcome these obstacles for using the concept of the generic competitive strategies.
Differentiation can be obvious, yet harder to measure. By that, we mean that a BMW is differentiated in terms of prestige and image, but so is a Mercedes.
How much more or less is one differentiated from the other? What about subtle nuances? Both brands of automobiles have a differentiated focus 3b , but what makes customers choose one above the other? Happily stuck in the middle Although Porter, with his competitive forces analysis, generic strategies and value chain, has taken a lot of the guesswork out of strategic planning and replaced it with internally consistent and seemingly logical trade-offs, many companies nonetheless managed to get themselves happily stuck in the doomed middle.
These companies e. Wal-Mart, Toyota were once differentiated cost leaders. Strategic planning is an analytical process that obstructs strategic thinking: A creative and intuitive process of synthesizing an integrated perspective of the company.
Things change while you are busy planning. Data required for analysis not only takes long enough to harden to be outdated by the time it is integrated in the strategic plan, it also tends not to contain the critical nuances of some of the soft data. Also, said Mintzberg, strategy cannot be formalized; the assumption that plans follow a rational and orderly sequence does not hold.
Mintzberg correctly noticed that, sometimes, acting goes before thinking — and some companies thrive on it. Generic competitive strategies 89 The gods of management The big idea Charles Handy — uses four Greek gods to illustrate four more or less generic management styles and their resulting organizational structures.
Each god, or company culture, is based on a set of key assumptions held by its members about power, influence, motivation, learning and how changes occur. The four gods are: Zeus — one strong charismatic leader. Good examples are young entrepreneurial organizations, political groups and specialized professional service firms.
Street gangs and criminal organizations also fit this profile. Apollo — highly structured and stable: Many rules and regulations govern the way people work and interact.
This is your typical bureaucracy, such as a year-old insurance corporation or bank. Athena — all about talent, energy, and ambition. Individuals are recognized and rewarded in accordance with well they perform their tasks in teams. This type of organization is common among consulting firms, advertising agencies, research companies and business units of high-tech enterprises.
Dionysus — serves mainly as an infrastructure for the existence and pursuit of purpose of its individual members. Good examples are universities, group medical practices, and lawyers sharing office space and secretarial services. So-called cultural confusion will show up in inefficiency and slack: Hardy calls slack the organizational balm to ease the pain of inefficiency: When to use it Hardy uses this model to help managers address inefficiency problems from an organizational culture perspective.
Organizations eventually become paralyzed by their multiple Apollonian layers and structures. For organizational efficiency, it is essential that there is cultural purity. Harmony is health. At the same time, organizations ought to live with, even cherish, the diversity of gods.
After all, says Hardy, organizations are just large sets of diverse jobs to be done. The three categories of jobs are: A shorter life cycle, or higher rate of change, is an indicator of the extent to which Athena is at work in an organization.
The problem-solving capacity can be increased by pulling people out of production into product development teams, or out of sales into market development. In this respect, decreasing administrative tasks and bringing in consultants are nothing but divine interventions by Athena.
Work patterns can be either flows input for next step, e. Flow and copy patterns tend to require Apollo cultures, whereas unit patterns can be Zeus-like, Athenian or 92 Key management models Dionysian. Finally, says Hardy, there is a bit of each god in all of us. We people are adaptable functions of the different divine forces.
Education and upbringing have a large impact on us. Using top management as a bridge is distorting and undue use of executive time. Formal co-ordination can be achieved through functional grouping, centralized information and individual liaisons.
It is very important to keep in mind that these are generic types of organizational cultures. Who knows? And Hermes may influence your organization with a continuous process of fuelling and draining of organizational knowledge, as people enter and leave at an increasingly higher rate.
The influence of time on past decisions is a major factor causing phases of evolution and revolution as organizations grow. Many of the major problems of growing companies are, in fact, rooted in solutions to old problems.
Management principles and problems are rooted in time, changing over the life span of an organization. Time itself is a contributing factor to the need for a revolution, as attitude and behaviour tend to become more rigid as time goes by. Size of the organization. As organizations grow, increasing numbers of people and resources must interact, levels of hierarchy increase and co-ordination becomes complex. Stage of evolution. Periods of continuous growth without major setbacks can occur, in which many organizations can successfully depend upon tried measures to problems.
Stages of revolution. Industry growth rate.
A factor influencing how quickly a company goes through the various phases of [r]evolution is the industry growth rate. Evolution can be prolonged as long as profits hold up, even whilst problems are mounting in the organization. Based on these key dimensions, Greiner developed a model with five generic growth phases. Most important in this model is that each phase constitutes a logical result of the preceding phase.
Phase 1 is a phase of creativity. The start-up company is developing both a product and a market. Characteristics of this stage are: Conflicts become more frequent. Partners argue over new products and markets. Through lack of decisive direction, the company enters a leadership crisis. With the installation of a business manager, the company enters the next phase.
The founders either become directors, sell up, or share ownership in order to offer incentives to new management talent. If all this happens in relative harmony, the founders take chief technology, new business, new product or new market development positions. In phase 2: The characteristics of the company have changed: The directive management style funnels energy efficiently into growth. However, as the organization grows even more complex, top management is no longer able to oversee all operations and lower-level management feels tied down, despite their greater knowledge of markets and products.
The autonomy crisis is born. Very soon, the company needs to allow decisions to be made by local and lower management, or people might leave the organization. When entering phase 3: When to use it Once again, the organization embarks on a period of relative prosperity, until top executives feel a loss of control.
Managers abroad and in the field are acting ever more independently, running their own campaigns. As Greiner effectively puts it, freedom breeds a parochial attitude. Sooner or later, the corporation finds itself in the midst of a control crisis. The solution is in finding ways to co-ordinate, rather than control. Those companies that survive the control crisis as a single entity will have found and implemented the techniques of phase 4: As limited resources are used more efficiently and local management looks beyond their own needs, the organization grows again.
Product 96 Key management models group managers have learned to justify and account for their decisions and get rewarded accordingly. Over time, however, the watchdog mentality begins to take its toll on the level of confidence that middle and lower management have in the co-ordination mechanism.
Eventually, the rules and procedures become a goal instead of a means. The corporation is getting stuck in a red tape crisis. The organization desperately needs to increase its market agility and people need more flexibility. In phase 5: More recently, he has argued that perhaps, in realization of the limits to internal growth, a sixth phase would showcase an increased focus on extra-organizational solutions, such as mergers, creating holdings and managing the network of companies around the corporation.
Guidelines for using this model are: There is, however, a clear danger of typifying an organization to the point where solutions are taken for granted. One must understand that this model should be used to understand the state of the company, rather than to decide which solutions are best.
About , employees at all levels of a major multinational corporation across 50 countries were involved. All respondents were carefully matched for other characteristics, such as age, sex, and job category. The result was a massive quantity of data from which Hofstede eventually derived the conclusion that there are five major dimensions that can describe a national culture: Hofstede yielded results that were interesting, yet very recognizable.
The results were measured in so-called index values ranging roughly from zero to beyond Power distance, on a continuum between two extremes, indicates the extent to which it is accepted that power is distributed unequally among individuals. The extent to which one feels threatened by ambiguous situations and tries to avoid them by living according to rules, believing in absolute truths, and avoiding conflicts is called the uncertainty avoidance dimension.
The individualism versus collectivism dimension refers to how much people feel they are supposed to either take care of or be cared for by themselves and their immediate families, as opposed to being part of a larger group with a tight social framework to which they belong. The poles of the dimension were so labelled because men and women tend to display these respective characteristics across nearly all cultures. Hofstede later added the last dimension, confucian dynamism, which refers to the extent to which a society exhibits a pragmatic future-oriented perspective rather than a conventional historic or short-term point of view.
One could put question marks against the ratings of some countries depending on whether all cultural groups within a country are represented or not. In either case, ratings on dimensions may be very different for different people from within the same country. What about a Mexican American, or a Turkish Dutchman? Consequently, many people argue that the actual ratings some of which are illustrated here are subject to change as cultures develop and nations undergo demographic changes, for instance, as a result of migration.
In other words, inventory represents inefficiency. The aim of JIT is to speed up customer response, while minimizing inventories. Although inventories may secure quick response times through off-theshelf availability, costs for such inventories may be too high.
Also, low inventories increase the transparency of the production and distribution process. Especially in cases of rapidly changing specifications, complexity and high unit costs, JIT may be more effective and more efficient. When to use it Implementation of JIT draws close attention to the following areas: The following techniques are at the disposal of management as regards the implementation of JIT: SMED1 task analysis pull control systems at production level e. Since the s, improvements as a result of JIT measured at American and European companies have been significant.
Berenschot research in showed that JIT yielded the following percentage improvements: However, in order to successfully implement JIT, there are various issues and elements that must be considered in turn in the following order: Is it worthwhile in view of the costs and obstacles of implementation? Conduct a quick scan of costs and benefits, including a possible project planning. Originating in Japan, SMED is a method of reducing change over time, whereby activities needed to produce new products are either eliminated where possible , or carried out parallel to the production process.
Only when in possession of such a card is the store authorized to replace the container. Lowering inventories before creating flexibility in production can lead to lousy delivery performance.