Promoting manufacturing in the UK

This is an interesting (and lovely to look at) campaigning video from EEF – the manufacturer’s organisation.

Posted in Chap 01 Introduction, Sector: Manufacturing | Leave a comment

Thoughts on innovation

See what four entrepreneurs have to say on this topic in this video here.

Source: Fast Company

Posted in Chap 16 Innovation and CI | Tagged , | Leave a comment

Managing performance in the UK hotel industry – productivity, multi-skilling & migrant labour

Earlier this week I co-chaired a one day conference centred around an ESRC research project conducted by former colleagues at the University of Surrey.  This research had used data from a cloud-based labour scheduling system* used by two mide-scale hotel chains to manage their performance.  Data on every hour worked by every employee in over 40 hotels, going back five years and more, was analysed.  I am going to share with you what I regard as the main headlines from the conference (the Surrey team will be publishing their findings in a series of articles in relevant research journals over the next few months).

  1. The main driver of productivity in hotels is demand.  80% of productivity performance is explained by this factor.  This has two main implications.  First, hotel operators must focus on managing demand as effectively as they can, and the use of revenue management systems plays a central role in this.  Second, even though managing the workforce has significantly less impact on productivity than demand, it is is still essential to manage this, as – unlike demand – managers have complete control over this.
  2. Two workforce strategies emerged from this study.  The research teams were able to differentiate between three types of employee – those on permanent contracts, those on flexible contracts (often referred to as zero-hours contracts), and other forms of contract (such as agency staff).  Overall, it was clear that Hotel Chain A employed predominantly permanent staff, with some flexible contract employees; whereas in Hotel Chain B only around 50% of all hours worked were by permanent staff, and significant use was made of staff on other contracts, along with some on flexible contracts.  It was also clear, that these two different strategies were modified over time, especially with regards the different proportions of staff on each type of contract.
  3. Chain strategy and policies do not always create homogenous practice across all hotels.  Despite there being a clear chain wide strategy for deploying staff on different contracts within chains there was a wide range of practice.  This suggests that strategy implementation is strongly affected by each hotel’s location and the nature of the local labour market.
  4. Workforce deployment is more complex than imagined.  There is a relatively simple model of how hotel operators should manage their workforce is situations of fluctuating demand.  This proposes that the operation is staffed by permanent employees to the level required for the lowest periods of demand, and additional staff (on flexible contracts) are added to cope with periods of higher demand.  This is further refined by giving the flexible contract employees more or fewer hours, according to the level of demand.  This study showed that in practice it is more complex than this.  Most notably, it showed that in most hotels the number of hours worked by permanent staff varied quite widely over a year.  In other words, permanent staff could be deployed quite flexibly.
  5. Zero-hours contracts do not exist.  No staff member, employed on a flexible contract, had no work hours in any week.  Indeed the average number of hours worked by such staff was more than 12 hours a week.
  6. Multi-skilling had no measurable impact on productivity.   Some employees in most hotels were multi-skilled, working across more than one department.  This did not appear to affect productivity.  However this does not mean that multi-skilling is unnecessary, as it may have other effects such as improve employee retention, raise service standards and positively impact on staff morale.
  7. Migrants were employed extensively, but this appears to have no influence on productivity.  The hotel industry in the UK has always had a workforce made up of people from many different countries.  In recent years, there has been controversy over the idea that migrant workers, especially those from eastern Europe, are more hard working and conscientious than British staff.  There was no evidence from this study that showed any discernible difference in performance between hotels with high levels of migrant workers versus those with low levels.

*see my previous blog about eproductive.

Posted in Chap 01 Introduction, Sector: Hospitality & Tourism | Tagged , , , , | Leave a comment

The utility of big data, forecasting and research

I enjoyed Martyn Jones’ (no relation) blog on the Contradictions of Big Data.  He argues that the digital economy’s ability to generate a large amount of wide ranging data very quickly (so-called high volume, variety and velocity) does not change how data should be managed.  It prompted me to think about a couple of things I’ve learned over the years.

The first is how new ideas emerge that appear to assure any business’ future success.  Over the years total quality management, lean, outsourcing, six sigma, big data, etc. etc. etc. have all been touted as ‘golden bullets’.  The mechanism that hypes these concepts would be fascinating to explore.  My guess it is a combination of the publication of a book or a series of articles on the concept, these being actively promoted by the authors or publishers or consulting firm(s), effective marketing at airport book stores, public appearances but the author(s) at influential conferences and events, an insatiable appetite by business leaders for better ways to manage their business, and catchy terminology.  Personally I’ve always liked the adage that business is about doing the right things and doing them right. Many of the business fads may be right thing, the hard bit is always in the doing of them right.

My second thought relates to business leader’s other insatiable appetite, which is to know what will happen in the future.  This is one of the reason that industry practitioners and business academics do not always get on.   Most academic research, almost by definition, is based on historic data, so it tends to explain what has happened  in the past.  Managers are not interested in this, they want to know what will happen next week, next month and next year.  Which is where we come back to big data.  It does not matter how much, how wide ranging, or how quick data becomes, if it’s not turned into information of value to the firm.

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Operations Insight: Warby Parker

Warby Parker design, manufacture and retail spectacles (eyeglasses), mainly on the internet.  They only started just over four years ago and have already sold more than 1 million pairs of glass, with an annual turnover estimated to be more than $100 million.  This article about the company at first appears to be about why an commerce company has just opened its ninth retail store – explaining that the physical presence of shops reinforces the life-style image of the brand.  This makes the servicescape and design of the stores extremely important.

But then the article goes on the explore why this company appears to be outperforming other similar ecommerce ventures.  And here it seems that their brand management and marketing skills play a key role, as does the leadership skills of the company’s two founders.  So what is the OM angle?   The answer is that the article then explores Warby parker’s approach to customer service.  This has some distinctive features.

First, their call centre staff are all young, recent college graduates.   Being a call centre operative is the entry level position for anyone wanting to go into management in the company.   Being graduates, these staff are well paid, but this expense is justifiable for two reasons.  Warby Parker needs bright, intelligent customer service staff to reinforce their life-style brand, and their spectacles are a medical product that requires a reasonably sophisticated understanding of the biology of the eye and the technical aspects of the product.

Second, there is a strong organisational culture, with the founders setting the tone.  It is very much performance driven.  Every employee completes a report every week on their performance and plans for the following week., Every six months they have a performance review, which includes rating their manager and some co-0workers on their performance.

Finally, although this is an internet-based company, they encourage dialogue with their customers – hence their 100-strong call centre.  But this is reinforced with “customer-response videos”.   These often on a few seconds long and posted to the customer on Twitter.  Their social media team has produced 2,000 of these so far.


Posted in Chap 02 Winning Customers, Chap 14 Operations strategy, Sector: I.T. & ecommerce | Tagged , , , , , | Leave a comment

The beauty of 3D printing

This small story about biologist Adele Bakhtiarova setting up a company called Voir Creations to 3D print customised eyelash curlers caught my eye.  It illustrates a number of interesting points…

1.  Entrepreneurs often emerge due to an obsession they have with a particular product or service.

2.  Despite having no product specific technical or commercial skills, this obsession drives them to acquire the expertise they need.  In Adele’s case she learned how to design using CAD, 3D print prototypes and develop an app.

3.  3D printing is greatly facilitating the development of prototypes.

4.  Crowd sourcing websites are enabling such start-ups to develop their market at the same time as they secure the financial resources they need.  Adele is raising $30,000 on Kickstarter.

5.  Everything (it seems) can be customised – even (or especially) eyelash curlers.

6.  Smart phones and apps greatly facilitiate customisation.

Posted in Chap 12 New products and services, Sector: Manufacturing | Tagged , , , | Leave a comment

Which country in Europe can hope to rival California’s Silicon Valley?

The answer it seems is none.    No European tech hub comes close the powerhouse that is Palo Alto.  But this article on provides a neat infographic that compares eight European countries with the USA based on five criteria:

  • high tech exports
  • ICT services exports
  • R & D expenditure
  • internet usage
  • secure internet servers.

On those criteria it seems that each country has a different profile, with its own strengths and weaknesses.

Posted in Chap 01 Introduction, Sector: I.T. & ecommerce | Tagged , | Leave a comment

Is Japanese innovation an oxymoron now?

A thoughtful article on innovation in Japan on the BBC Business website suggests it is a lack of marketing expertise that is holding back Japanese companies and their ability to innovate.  Also the innovative companies of thirty years ago have no become big corporations, and hence become risk averse and bureaucratic.

Posted in Chap 16 Innovation and CI, Operations Management | Tagged , | Leave a comment

Healthcare provision may be more efficient than we think

Measuring productivity is always more challenging than it might appear.   The concept is simple to state – it’s the relationship between inputs and outputs.  But identifying all the inputs and outputs is not always easy, nor is actually measuring them.  One of the more challenging areas is any healthcare system.  There are many different reasons for this, but a major one is the extent to which any medical intervention has long term outcomes.  For example, hospital A may treat 10% more patients for a particular medical problem than an identical hospital B.  But if 50% of hospital A’s patients require further medical intervention five years later, and only 5% of the hospital B’s patients require this, then B is clearly more productive.

This is a particular problem in the US since their Affordable Care Act funds Medicare provision on the basis of the sector’s productivity performance.   Using data from the U.S. Bureau of Labor Statistics, it seems that productivity in the sector is falling, and hence funding will go down.  But researchers from USC have found that adjusting the data by taking into account the relative severity of patients’ illness and the quality of outcomes, productivity has risen.  More details can be found in this article on the Modern Healthcare website.

Posted in Chap 15 Lean and agile, Sector: Public Services & Charities | Tagged , | Leave a comment

The attack of the coffee pods

I’m not a great coffee drinker, but we do have a Nespresso machine at home.  It provides two things – a tasty cup of coffee for me and variety for our visitors, so they can have a cup of coffee that is to their taste too.  Used pods seem to accumulate fairly quickly, but since Nespresso have a collection service I have always assumed that all coffee pods were recycled.  Indeed this is how the recycling process works, according to the Nespresso USA website.

Hence I was slightly confused by this article that identifies used coffee pods as being an environmental menace, leading to the production of YouTube video called “Kill the K-cup” and a Twitter hashtag ≠KillTheKCup.  But it seems that this type of pod is not recycled because, unlike the Nespresso pod which is made from aluminium, the k-cup pod is made from ≠7 plastic that requires specialist facilities to recycle it.   In 2014 9 billion K-cup pods were sold – which is an awful lot of landfill.  Keurig, the company that makes the product, is trying to address this issue but says it will be 2020 before it is resolved.  It will be interesting to see if public opinion accelerates this process.

So I guess you want to see the video now…


Posted in Chap 17 Internationalisation and CSR, Sector: Manufacturing | Tagged , | Leave a comment