McKinsey on Manufacturing growth and resource productivity

Here is the story in favor of operations management and process improvement to make your firm do better.  McKinsey summarizes the essence of the approach we are teaching about.  We see that a new stage is emerging, beyond things like lean and  employee involvement.

Manufacturing growth through resource productivity | McKinsey & Company.

The authors’ point 1, Think Lean, is old hat by now.  Their point 3, Think Profit per Hour is also an old point, about productivity measures, but ties closely to the notion of productivity economists use to evaluate labor (or any input).  You can’t make a profit if your profit per hour is negative. For a while you might be able to if you have deep pockets; but eventually you will fail if it continues.

Their points about stretch goals and circular thinking are both in line with the modern design school of improvement.  We have to find ways in operations to be truly innovative, and these are two directions to look.

The fourth point about holistic thinking shows how technologies, behaviors, and management practice must be aligned to genuinely create value.  No one is a silver bullet.

It’s a good article that operations management students should read and contemplate.   The book the blog article is based on might be a good investment.


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