9/11, 2001 has hit a whole lot
of business. But the most badly hit was air industry. US airlines were virtually
on the ground for most of time rather than in the sky. As old adage says. Planes
are safer at the ground. But they are built to fly and that where they should be
all the time. Almost whole aircraft industry was badly hit by being grounded.
Million of jobs evaporated and billion of dollar went under drain. All these was
due to not doing anything.
Peter Drucker, in his book
‘Managing for result’ defines the cost point in the whole supply chain.
1.
Productivity cost
2.
Support cost
3.
Policing
4.
Waste or Idle time.
Drucker accept that to some
point all three cost centre productivity cost, support cost, policing cost are
imperative to any business. It takes massive investment to produce something and
market it successfully. A corner cutting here and there can be welcomed but you
can’t remove any of these three cost centre at all.
But waste rarely needs to be
analyzed. It is usually quite clear that this or that cost cannot produce
results; whether we can do anything about it is another thing.
But waste is very hard to
find.
These fact are hidden the
accounts book only. The normal available account will not show this. You need to
dig hard to find these unacceptable costs to your product and services,
In it services industry or any
knowledge intensive industry, major concern of any top management people in 2001
was the bench period. As industry defines it as a time when your know ledge
worker are sitting idle in the absence of project. This cost awesome money to
any organization and pull it into big trouble. Lucent technology faces the
similar effect in 2001-02.
Although to avoid these waste
effort and tools are totally outside of conventional approach to cost control
and cost cutting. They required major, prolonged efforts, but the fact is most
cost cutting, let alone the across-the-board cut, does not even touch waste.
Yet, in business waste is real cost centre. It required a lot of systematic
planning and organized effort to recognize a waste in the supply chain and get
rid of it.
Any Manager Job is to keep the
ship running tight to produce the greatest value for the constituents.
