Operations Insight: Hurel – suppliers to the haute couture industry

I’m always looking to bring you something you may not have seen before, and trying to cover the broadest range of topics and industry sectors. So here is a fascinating 3 minute ‘factory tour’ video, showing the craft skills of embroiderers who supply many of the haute couture fashion houses in Paris.


Posted in Chap 03 Processes and life cycles, Sector: Manufacturing | Tagged , | Leave a comment

What worries CEOs in 2018?

PwC conduct have conducted a survey of CEOs for the last 20 years.  Their latest study reports on 1,293 CEOs from around the world.  I am going to focus on the “threats’ they identify and the extent to which these fit with the OM agenda emergent in this blog.

The first thing to identify that the relative importance of threats varies from one continent to another.  But overall the top ten threats for 2018 were identified as follows:

  1. Over regulation – this was also the top threat in 2017.
  2. Terrorism – this was not in the top ten in 2017.
  3. Geopolitical uncertainty – shifted upwards slightly in terms of concern.
  4. Cyber threats – up from tenth most significant threat in 2017
  5. Availability of key skills – down from fourth place in 2017.
  6. Speed of technological change – unchanged from 2017.
  7. Increasing tax burden – unchanged from 2017.
  8. Populism – not in the top ten in 2017.
  9. Climate change and environmental damage – not in the top ten in 2017.
  10. Exchange rate volatility – down from third in 2017.

In my opinion, the striking thing about this list is the extent to which CEOs are mostly concerned about external issues over which they have little or no direct control.  And there are very short term shifts in their importance probably based on recent events.  For instance, cyber threats have become more important due to hacks revealed by Equifax and Yahoo, as well as global hacks such as Wannacry,  Petya, and Bad Rabbit.

From an OM perspective, these threats emphasise the need for three things – security, agility, and sustainability.  I’ve blogged relatively frequently about two of these, but only rarely about security.  I fear this topic has often been neglected in the OM literature, or seen as somehow separate to operations.  I think this is wrong-headed (despite my failure to blog on the subject) as security should be imbedded into all aspects of operations – facilities, processes, employment practices, I.T., and so on.  So I’ll try to redress the balance in future blogs, albeit the dearth of material to draw upon…

Posted in Chap 14 Operations strategy | Leave a comment

Franchisees are business people not sector specific ‘operators’

Fascinating infographic about franchising, albeit from 2013.  But that’s not the point.  The urban myth is that potential franchisees gain experience working in a specific sector and then seek a franchise opportunity in that sector, based on the knowledge and experience they have gained.  This infographic suggests otherwise.  It identifies the top 25 franchise categories by search volume, ranging from ‘Restaurant/Food’ down to ‘Restoration’.  It also identifies that on average potential franchisees search through 8.6 different categories  when looking for a franchise opportunity.  Moreover many of them invest in a category that was not in their initial search, most notably in ‘Sports and Recreation’.

Posted in Chap 03 Processes and life cycles | Tagged , | Leave a comment

Flexible working and remote working are not the same thing

Saw this tweet from Citrix UK & Ireland today – “Despite today’s #technology, 1/3 of managers feel flexible working worsens employees’ productivity levels”.  My immediate reaction was that 1/3 of managers are not managing flexible working properly, because all the evidence from my own research is that does increase productivity.  So I went to read the article that discusses this and it turns out that they are not really talking about flexible working at all…

They are actually talking about technology and the opportunity this gives some employees to work remotely i.e. from home (or anywhere).  Now it may be that an employee working remotely does so in order to have flexible work practices, but that is not the same as ‘flexible working’ (which we discuss in our book pages 186 to 188).  We identify two kinds of flexibility – ‘numerical’ (which is all about the hours that employees work) and ‘functional’ (which refers to the range of task that employees do).  Remote working may provide the opportunity for numerical flexibility, but not necessarily so.

Posted in Chap 11 Jobs and people | Tagged , | Leave a comment

Project management: waterfall versus agile

Straightforward infographic that explains the pro and cons of the two basic approaches to project management.


Source: http://www.liquidplanner.com

Posted in Chap 13 Projects and crises | Tagged | Leave a comment

Element hotels – clever cost saving design

Marriott has opened 32 Element properties (mainly in the U.S.A.) and has a further 72 in the pipeline.  The Element concept is basically a studio hotel, that is to say a conventional hotel room that is slightly larger in order to accommodate a work space and a kitchenette (fridge, microwave, storage units and sink).

But Marriott have also designed some regular bedrooms without the kitchenette, adjacent to a ‘private’ but ‘shared’ living/kitchen space. It is private because it is shared only with a small number of bedrooms, all of whom could be accommodating a family or small group.  This is clever because not only does it appeal to groups/families, but it is also cheaper than installing kitchenettes in every room.  For a virtual tour of what these rooms look like go here.

Posted in Chap 04 Location and design, Sector: Hospitality & Tourism | Tagged , | Leave a comment

i4.0 means 14% of the global workforce will need to retrain by 2030…

…but who’s going to do it?

As many as 375 million workers will need to be reskilled as a result of digitisation and automation, according to this article from the McKinsey Global Institute.  This is on the same scale of the first industrial revolution, when agricultural workers shifted into industrial work.  But this shift took place over decades.  The global impact of i4.0 however is taking place over the next few years. Never before have so many people needed to be retrained/reskilled in such a short space of time.

The article reports specifically on a survey of 300 executives in companies with an annual turnover of $100 million or more.  It reports that they believe the challenge must be taken up by them, rather than the public sector.  It also states that the executives have a “sense of urgency” about this issue.  But that is not how I would interpret the data.  One third of the sample does not see it as a top priority or a priority at all.  Nearly 40% see it as a “top ten priority” but not a “top five priority”.  Only 7% see it as the top priority.  It seems the article’s authors regard this as reflecting a “sense of urgency” because it is a higher level of prioritisation than five years ago.  Frankly, it would be amazing if this were not the case.

The article goes on to explore this issue in more detail and provides links to other material McKinsey & Co have published or will be publishing.

Posted in Chap 10 Processes and technology | Tagged , , | Leave a comment

Turning the taxi into a convenience store

Great story from VB (venture beat).  Cargo is a US-based marketing company that develops new channels of distribution for confectionary, cosmetics and electronics manufacturers.  One such channel is the “ride-hailing” sector i.e. taxis.  More specifically Cargo has partnered with Uber to enable its drivers to promote and sell items in their vehicles.  They have designed a display case that fits any car in order to promote items and set up an app that ensures drivers get paid for the items sold.  Drivers get a flat fee of $0.10 for every item sold, whilst Cargo makes a margin on each item, as well earns income from major manufacturers for promoting their products.  It is estimated that drivers earn an additional $130 a month from in-vehicle sales.

The concept has a great deal of potential.  For instance, the purchase process could be automated.  Also the stock held in each vehicle could be customised to reflect the pattern of sales in specific locations around a city.  Finally, the concept could be extended into other forms of transportation such as buses and trains.

Posted in Chap 04 Location and design, Sector: Retail | Tagged , , , | Leave a comment

Seeing is believing – at least when it comes to fresh produce

Walmart has applied for a patent on the 3D imaging system it has developed, which they call ‘Fresh Online Experience’.  Research has shown that by far and away the most significant deterrent to buying fresh produce on line is customers want to see and select items themselves.  So the Walmart system enables their employees to scan in a 3D image of the item they have selected for a customer’s order and provides the opportunity for the customer to accept or reject that item on line.  Once approved, the item is ‘watermarked’ to assure the customer it is the item selected.

I suspect this will be highly effective, as it is a good example of ‘nudge psychology’.  Customers will initially use the system as it is deigned to be used, but when they find they are rarely rejecting items, they will start to accept them without actually examining the images in detail in order to speed up the whole process.  Eventually they may not use that system at all.

Source: http://uk.businessinsider.com/walmart-applies-for-3d-image-patent-for-online-grocery-2018

Posted in Chap 09 Quality, Chap 12 New products and services, Sector: Retail | Tagged , | Leave a comment

2017 was safest year on record for commercial passenger air travel

Earlier this month Reuters reported that 2017 was the safest year on record for commercial passenger jet air travel.  There were no accidental deaths last year (compared with 16 accidents and 303 deaths in 2016).  This means on average there is one fatality for every 16 million flights on jet aircraft.  This is a truly extraordinary safety record.

However there were 10 fatal airliner accidents, with 44 fatalities onboard and 35 persons on the ground, involving commercial passenger turbo prop aircraft or cargo airplanes.

Posted in Chap 09 Quality, Sector: Hospitality & Tourism | Tagged , | Leave a comment