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 主题：看自己人自曝生产黑幕：我从不吃方便面！(转贴) |
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Ok -- 仲夏虎 - (0 Byte) 2005-10-13 周四, 18:35 (405 reads) |
高薪MBA
头衔: 海归中士
加入时间: 2005/10/11
文章: 9
海归分: 595
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作者：高薪MBA 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
Hi,
This is truly an interesting case which is probably faced by many WOFE’s, JV’s and domestic companies alike. I congratulate you for being part of this dynamic and exciting situation. And I wish I could be part of it.
I worked on this reply on-and-off using my spare time. So you may not find coherence as one of the traits in my answer. Since some portions were done while I was on a plane, some "detailed plans" may still appear to be a "3000-mile view from the sky".
Now let’s get into the topic. For a COO, or anyone in a CXO level position, there are only two things he/she should worry about: strategy and people. Simply put, strategy is to set direction for an organization, e.g. cost leadership, product differentiation or superior customer service, and decide resource allocation； while people part deals with how to ｓｅｌｅｃｔ/develop capable and dedicated people to fit in “right” positions. These two things are not mutually exclusive because, most of the time human resource is part of strategy, and right people can support in developing strategy. They sound easy to do, but can be extremely difficult to many people. That is partially why management is viewed as a combination of science and art, and partially why being a good CXO takes more than a good manager or even a good director.
I would not discuss what strategy/people means in details. As a matter of fact, I would not discuss what a COO should do in details, because I sensed that, although you said that you wanted me to think like a COO, that is not what you were truly seeking. Besides, I am sure that there are many CXO’s on this website, who possess years of wisdom and real world experiences. I wouldn’t 班门弄斧。
What I would like to do in stead is, from an operational/ detailed-planning perspective which is usually performed by mid-level management, to show how I would answer your question. Please allow me to separate operations from strategy at this moment (many people may not totally agree that operations is not strategy). I will try not to appear purely academic and consultant-like, although applying frameworks is becoming my way of life. So bear with me if some jargons slip through my keyboard.
The simplest way to look at an organization is from two aspects: top-line growth and bottom-line improvement. That is how I would categorize your issue on-hand.
Top-line growth:
Your quotes: “Not possible to eliminate local Chinese competitors, as entry barrier is low；Local competitors are strong in relationship with local officials； (by the way, bribery is forbidden by our Europe HQ)”, “Local authorities are not so serious on the poor-quality products, irregular practices”. All these concerns can be translated into essentially how to retain existing customers and how gain shares from competitors. From what you described, I assumed that small local companies are your major concern, and that their only advantages are ill-fated cost efficiency and connections with local officials.
How to beat them on cost will be covered later. Let’s talk about local official connections.
First of all, I would never bribe anyone, even for business purposes. Bribery is illegal and immoral around the world. It creates unfair competition and is not good for the advance of human society. I despise that and am sure that you do as well.
But local connection is a “must” in China as it is in many countries. Then how to build connection with local authorities without crossing the line? Two principles with some detailed sample actions:
1. know your alliance and obstacles: the government is not a solid piece of iron board. There are interest groups in the government. That is how administration works in most governments. For example, Quality Supervision departments should be your alliance, since, if I remembered correctly, their income comes from fines collected from non-compliance entities. The least you can to is to provide internationally recognized standards so that the authorities have a reference. To navigate through local and state governments, many foreign companies are hiring a local as a PR advisor.
2. make their efforts yours, and make your achievements theirs:
a. Know what’s on their agenda: Be actively involved in local fairs and even in governance, e.g. sponsor local events whether it is education or public benefits, sit on the board of government, etc； build network with them, e.g. hold activities together, whether it is sports, entertainment, or a simple dinner. The sole purpose is to understand their pain and see how to help.
b. Share your gains with them, make them hero: sponsoring PR campaigns, making them visible in any victories and providing financial/man-power supports can all achieve the objectives.
So now you have the local officials, at least part of them, on your side. Then what’s next to beat local competition? You mentioned “entry barrier is low”. I don’t know if I would agree with you. I apparently don’t know the exact line of business of yours. But in my mind, even making a toilet soap well can be a challenge, let alone producing “with famous brand names” industrial goods, where customer loyalty and quality are the key entry barriers. The easiest way to build entry barriers is to grow with existing customers. Go where they go.
To gain new customers depends upon marketing and sales people. Since sales people is more operations related, let’s talk about sales. You gave a very vivid example on requiring them on-call around the clock/calendar. But the key is to align their incentive with your objectives and measure their efficiency. Some actions include but are not limited to the following:
1. Evaluate sales organization: a. how are they organized, around key accounts, geographical areas, product lines, or industry verticals? The organization should evolve with the shift of product life cycle and business focus； b. how are they incented, by volume, by revenue contribution or by profit margin contribution? Again, that should evolve with product life cycle and business focus.
2. Evaluate sales force effectiveness and efficiency: a monitoring system should be set up to track their productive time, e.g. tracking how much time in a day is spent in building client relationship, tracking what is the conversion rate of sales phone calls, etc. Net sales should also be tracked so that sales people will not game the system.
There are many other initiatives which can improve top-line growth, e.g. product differentiation, tied pricing, entering under-served or potential markets, building adjacent businesses (value added services) or new lines of businesses (like Xbox for MSFT). For the interest of your time, I would not go into details. Next let me touch on cost aspects.
Bottom-line improvement:
To be cost efficient, one has to look at the whole supply chain (preferably the whole value chain, but that may not be achievable in a short timeframe), starting from raw material procurement, through manufacturing to distribution.
Raw material procurement:
1. Getting to know the current: What is being purchased, from whom, how many, at what price?
2. Finding opportunities and solutions:
a. Material Specifications: see if all material specifications are out of necessity. If not, then change them. My assumption is: if competitors’ products can have a share in the market and are posing serious threats, then under-the-table practices/transactions may not be the only reason. Maybe their products are good enough. Or in another word, your products are over-engineered. The way to find that out is to let material managers reach out to Marketing and R&D to identify cost-driving specifications by doing specs/cost sensitivity analysis. For instance, if you lower material purity by 0.1%, what is the % of cost reduction in material cost. Once the most cost-sensitive specs are identified, the team can incorporate customers’ feedbacks to loosen some spec requirements, therefore to lower material cost.
b. Supplier Management: how many suppliers do you have right now? What percentage of suppliers are supplying more than 80% of your materials/components? What is your business importance to them, i.e. are you their biggest/smallest customer? How many potential suppliers are out there? All these questions can be easily answered by Purchasing department, and lead to how to form relationship with suppliers. Two extreme scenarios: if the materials are kind of unique and of strategic importance to you, and supply market is dominated by a handful players, then you’d better form strategic relationship with them, e.g. conducting Joint Process Improvement (by supporting supplier operations improvement and by sharing productivity gains), and restructuring relationship (by developing key suppliers and by employing strategic alliances/partnering), etc； on the other spectrum, if your material is of a commodity type with hundreds of players are competing, then consolidating volume and taking the lowest bid will work just fine. Have you ever tried online auctions?
c. Usually, efforts on procurement can lead to 20% of savings on purchase cost. And the above-mentioned approach also applies to SG&A categories such as office supplies.
Manufacturing:
1. Getting to know the current: Manufacturing is all about efficiency. Process quality is to contribute efficiency by reducing rework/scrap and to improve the reliability of the equipment. So how many facilities do you have, at what location? What products are being made in which location? What is the utilization rate at line/equipment level?
2. Finding opportunities and solutions:
a. Network design: Are those facilities close to supply or final customers? Are similar products made in adjacent locations, or even on the same production lines? Is the number of facilities carefully thought through? All these questions can be solved by a simple Excel model which even I am capable of doing.
b. Operating Equipment Efficiency (OEE): this is to find out where the losses are in production process. Losses can come from several areas: planned downtime, unplanned downtime, throughput, acceptance and etc. A truly exceptional manufacturing organization usually has more than 85% of OEE, which is calculated by dividing actual production by maximum demonstrated production. There are many advanced techniques on this matter, statistic process control, TQM and Kaizen (which in plain English and Chinese is simply to continuously improve) to name a few. Engineers and production people are smart enough to figure out how to use them. The key is to pick one or two techniques and stick to it. This requires disciplines and persistence. I had a lot of real world experiences in this field in the past.
c. If you find out you can not become the best-in-class in manufacturing, then outsourcing is an option. Maybe mama-papa shops are better.
Distribution:
Allow me not to spend too much time on distribution since it also involves carrier procurement, network design and outsourcing which were already mentioned. But it is very good transition to the next topic—customer relationship management.
Customer Relationship Management:
So you are making industrial products, therefore you are the supplier to OEM’s and final product producers. Take Automotive industry for example, collaboration between suppliers and OEM’s has become a increasingly mature practice. The collaboration starts from product design and ends in consumer delivery. There are countless benefits for both sides from the collaboration. The key benefits include being closer to end users, building entry barrier and sharing the pains and gains along the chain. It takes cross-functional efforts to make it work. But it is worthy. If you haven’t done so, then the conversation with your customers is a good starting point. You can also send your field people reside in customers’ sites. This is a usual practice for machinery manufacturers.
Epilogue:
I touched on different areas of an organization, some heavily some lightly, in exploring improvement opportunities. But there are some underlying enablers across all activities:
1. Disciplines and persistence: some people are too smart to accomplish anything, because important things are always simple, and simple things are always hard to do. Old-fashioned discipline and hardworking are critical for any initiative to be successful.
2. Right people: Right people are not necessarily the smartest ones. But they have what it takes to do the job correctly and they are passionate about what they are doing. I would not drag on on this topic. We may set up another time to exchange ideas.
I wish I could have touched some areas deeper, but it was such a profound topic which requires a great amount of time and energy to be fully thought through. Maybe being a COO is simpler after all, so that I can delegate others. Just a joke!
作者：高薪MBA 在 海归商务 发贴, 来自【海归网】 http://www.haiguinet.com
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