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2025年10月4日 星期六

From Products to T-Generators: Redefining the Roles of Operations, Marketing, and R&D

 

From Products to T-Generators: Redefining the Roles of Operations, Marketing, and R&D

One of Eli Schragenheim’s most thought-provoking insights is the distinction between what operations and marketing truly deliver. Operations, he argued, produce products. Marketing, on the other hand, sells t-generators—the tangible or intangible entities that generate throughput.

This distinction opens the door to a deeper rethinking of organizational roles. If marketing is not merely about pushing existing products, but about shaping and selling throughput generators, then the function of R&D cannot remain confined to “product development.” R&D must be integrated into marketing’s mission of designing and evolving t-generators—whether they take the form of products, services, or even innovative business models.

The Redefinition of Roles

  1. Operations: Builders of Capability
    Operations’ role is clear and stable. They are responsible for transforming resources into reliable outputs—whether physical products, digital deliverables, or service executions. Their success lies in efficiency, quality, and dependability. Operations are the foundation on which throughput potential rests.

  2. Marketing (including R&D): Designers and Multipliers of Throughput
    Marketing’s mission is not simply to promote what operations produce. It is to define and develop the t-generatorsthat maximize the organization’s throughput. This means understanding customer needs, market dynamics, and competitive landscapes to identify what kind of t-generators can create sustainable streams of value.

    R&D belongs here, not as a separate silo. Its task is not just to “invent” or “improve” products, but to co-create with marketing new and more effective throughput generators—be they subscription models, service packages, ecosystems, or platforms. This reframing aligns R&D’s creativity with the ultimate economic engine: throughput.

  3. KPI Realignment
    Traditional KPIs often measure marketing by sales volume and R&D by the number of new products launched. This misses the point. If marketing plus R&D is truly about generating throughput, their KPI must reflect the net throughput potential created by the portfolio of t-generators.

    • Not “How many products did we launch?” but “How much throughput capacity have we created?”

    • Not “How many leads were generated?” but “How effectively are our t-generators sustaining throughput growth?”

Why This Matters

Most organizations unintentionally limit R&D by tethering it to operations. The result is incremental product improvements that do not necessarily translate into stronger t-generators. By placing R&D under marketing, innovation becomes market-driven, strategically aligned, and directly linked to throughput.

This redefinition also clarifies the boundaries:

  • Operations excel at execution.

  • Marketing (with R&D) excels at conception and value creation.

  • Together, they form a coherent system where throughput is not left to chance but is deliberately designed and reliably delivered.

Conclusion

Organizations that adopt this perspective will unlock a sharper division of labor, a more focused set of KPIs, and above all, a deeper alignment with the fundamental goal of business: to maximize sustainable throughput.

When marketing and R&D unite around the design of t-generators, and operations delivers them with excellence, the organization as a whole achieves clarity of purpose and strength of execution.


2025年9月24日 星期三

Breaking the Cycle: How to End Supply Chain Chaos with a Single Rhythm

 

Breaking the Cycle: How to End Supply Chain Chaos with a Single Rhythm

In a typical supply chain, different parts of the network—like a manufacturing plant and a distribution center (DC)—often operate with independent goals. The plant wants to produce large, efficient batches, while the DC wants to hold safety stock for every product just in case. When each acts on its own, a problem known as the bullwhip effect takes hold. This is a common phenomenon where small fluctuations in customer demand at the end of the supply chain become wildly exaggerated as they move back to the plant. The result is a cycle of chaos: oscillations between feast and famine, with periods of overproduction followed by periods of stockouts.

This problem is a classic case for the Theory of Constraints (TOC), which provides a powerful framework to synchronize the entire system around one single constraint. By applying the Drum-Buffer-Rope (DBR) model across different parts of the supply chain, a company can replace this chaotic oscillation with a smooth, predictable flow.


The Problem: The Bullwhip Effect

Imagine a customer buys a few more units of a product than usual from a retailer.

  • The retailer, thinking this is a new trend, orders a larger-than-normal amount from the DC.

  • The DC, seeing a big order from the retailer, adds its own safety margin and places an even larger order with the plant.

  • The plant, seeing a massive order, produces a huge batch to maximize efficiency, resulting in a sudden surge of inventory.

Then, when the initial demand spike subsides, the opposite happens. The DC is overstocked, so it places a much smaller order. The plant, thinking demand has vanished, scales back production dramatically. This cycle repeats, leading to too much inventory one month and not enough the next. This constant oscillation wastes money, time, and resources.

The TOC Cure: A Coordinated Supply Chain

TOC offers a structured, three-step solution to this problem by treating the entire supply chain as a single, synchronized system.

  1. Identify the Drum (The DC's Pace):

    In a multi-echelon supply chain, the constraint is often the final link that faces customer demand. Here, we make the DC's pace the Drum. The DC dictates the rhythm for the entire supply chain because its operations are most closely tied to the real, fluctuating needs of customers. The plant's production and release schedule will be set by how quickly the DC consumes and ships products.

  2. Harmonize Buffers:

    A "Buffer" protects the Drum from disruptions. Instead of each echelon having an independent safety stock policy, all buffers are harmonized. The plant's finished goods inventory is now a strategic buffer for the DC's needs. The DC’s buffer is sized not just for its own risk, but for the rhythm of the plant. This single, coordinated buffer strategy prevents the wild swings of the bullwhip effect and ensures that the DC always has just enough stock to meet demand without over-ordering.

  3. Set the Rope (The Plant’s Release):

    The "Rope" is the signal that connects the plant's production to the DC's pace. The cure is to set the release from the plant based on the DC's Drum pace. The plant only releases a new batch of product when the DC signals that its buffer has dropped below a certain level. This "pull" system ensures that the plant produces exactly what the DC needs, when it needs it. The bullwhip effect is drastically reduced, as the plant no longer reacts to large, inaccurate forecast orders but instead to the actual consumption of its downstream partner.

The Result: A Lean, Predictable Flow

By using DBR across echelons, a supply chain can transform from a fragmented, chaotic system into a cohesive, synchronized whole. Plants produce to the DC's rhythm, which in turn is driven by true customer demand. This focused approach reduces lead times, cuts down on excessive inventory and associated costs, and ensures that the right products are available at the right time. The chaotic oscillations of the past are replaced by a smooth, predictable flow that benefits everyone from the plant floor to the end customer.


Supercharging Your Warehouse: How to Pick Faster and Smarter

 

Supercharging Your Warehouse: How to Pick Faster and Smarter

In the world of warehousing and distribution, a common bottleneck that slows everything down is picking—the process of retrieving products from shelves to fulfill an order. When picking is the constraint, it doesn't matter how fast everything else is; the entire warehouse's output is limited by how quickly pickers can move. This problem leads to longer lead times, frustrated customers, and a general lack of efficiency.

This is a prime candidate for the Theory of Constraints (TOC), which provides a structured approach to identify and manage the single biggest bottleneck in a system. By applying TOC, a warehouse can transform its picking operation from a slow, chaotic process into a highly efficient, high-speed engine.


The Problem: A Bottleneck in the Aisles

Think of picking as the heart of the warehouse. All other functions—receiving, stocking, shipping—depend on it. When the heart is weak, the entire body suffers. A weak picking operation often looks like this:

  • Picker Delays: Pickers waste time walking long distances to find items, or worse, find empty shelves because replenishment hasn't happened yet.

  • Wasted Space: Poorly organized inventory means slow-moving products take up prime real estate near the packing stations.

  • Inconsistent Flow: The warehouse experiences rushes and lulls, leading to inefficiency and potential overtime costs during peak periods.

The TOC Cure: A Rhythm for the Racks

The solution is to apply TOC's Drum-Buffer-Rope (DBR) model, which focuses on synchronizing the entire warehouse to the pace of the picking process.

  1. Identify Peak Picker Availability as the Drum:

    The "Drum" is the constraint that sets the pace for the entire system. In this case, the peak picker availability—the maximum number of pickers and their most efficient picking speed—is the drum. All other activities must be scheduled around this capacity. Instead of having replenishment teams work independently, their pace is dictated by what the picking team needs, and when they need it.

  2. Synchronize Replenishment (Buffer):

    A "Buffer" is a strategic inventory placed in front of the Drum to ensure it never runs out of work. For a picking operation, this means the shelves must always be full. The cure is to implement synchronized replenishment schedules to prevent picker waits. This means replenishment teams are not just stocking shelves; they are filling them just in time for the pickers. Adding temporary buffer zones for fast-moving items can also help ensure pickers always have access to what they need without having to wait.

  3. Subordinate to the Pick Rhythm (Rope):

    The "Rope" is the signal that ties the pace of all other operations to the Drum. This means you subordinate other warehouse functions to align with the pick rhythm. The core of this is better slotting of inventory. By placing fast movers near pick faces, pickers spend less time walking, which directly increases the "drum's" speed. Picking schedules themselves are adjusted to flow orders through the system at a constant, manageable rate that the pickers can handle.

  4. Elevate Capacity (When Necessary):

    Once you've exploited, buffered, and subordinated, if picking is still not fast enough to meet demand, it's time to elevate the constraint. This is where you invest in new capacity, but only where it matters most. This might involve short-term capacity elevation, such as adding temporary picking teams during peak seasons or creating dedicated pick lines for specific product types.

The Result: A Lean, Fast Warehouse

By applying these TOC principles, a warehouse can transform its picking operations from a chaotic mess into a lean, fast-moving system. They stop focusing on simply keeping shelves full and start thinking strategically about how to ensure pickers are always in motion. This leads to reduced labor costs, fewer errors, and a significant boost in overall throughput, proving that by optimizing one key area, you can improve the entire system.


Clearing the Choke Point: How to End Warehouse Chaos and Ship On Time

 

Clearing the Choke Point: How to End Warehouse Chaos and Ship On Time

In the bustling world of logistics and distribution, there's a point of frequent chaos: the outbound dock. This is where finished shipments are loaded onto trucks for delivery. A common real-world problem is that this area gets overloaded. Trucks stack up, carriers are delayed, and a frantic, last-minute rush becomes the norm. This "choke point" prevents timely deliveries and hurts customer service.

This scenario is a perfect application of the Theory of Constraints (TOC), a management philosophy that focuses on identifying and managing the single biggest bottleneck in any system. By applying TOC's principles, a distribution center (DC) can transform its operations from a chaotic mess into a smooth, efficient process.

The Problem: A Bottleneck at the Loading Dock

Think of a distribution center as a river of products flowing toward a single exit: the loading dock. If the dock is too small or too slow, it acts like a dam. Products, now in the form of packed pallets and shipments, begin to pile up behind it.

  • Carrier Delays: Trucks scheduled for pickup are forced to wait, leading to wasted time and frustrated carriers. This can result in financial penalties for the DC.

  • Last-Minute Chaos: As the deadline for a truck's departure approaches, workers rush to find misplaced documents, finish packing, and load the truck, leading to mistakes and increased risk of damage.

  • Poor Customer Service: All of these delays ultimately affect the end customer, who doesn't receive their order on time.

The TOC Cure: A Smooth, Controlled Flow

TOC offers a structured, three-step solution to this problem, centered on the idea of Drum-Buffer-Rope (DBR).

  1. Make the Dock the Drum:

    In a DBR system, the "Drum" is the constraint—the part of the system that dictates the pace for everything else. Here, the outbound dock's capacity is the Drum. Instead of letting all parts of the warehouse operate independently, the entire operation's pace is set by how much the dock can handle. The cure is to schedule loads around the dock's capacity. If the dock can only handle 10 trucks an hour, you don't schedule 15. This simple change prevents the dock from being overwhelmed in the first place.

  2. Pre-Stage Upstream (Buffer):

    A "Buffer" is a strategic inventory of work in front of the Drum. Its purpose is to ensure the Drum is never starved for work, even if there are small disruptions upstream. For a loading dock, the buffer is crucial. The cure is to pre-stage ordered pallets and documents upstream. Instead of waiting until a truck arrives to collect and organize everything, pallets are picked, packed, and moved to a designated holding area near the dock beforehand. Documents are prepared and filed, ready to go. This ensures that as soon as a dock bay becomes free, the next shipment is ready and waiting, eliminating last-minute chaos.

  3. Subordinate to the Drum's Rhythm:

    The "Rope" is the final piece. It's the signal that ties the pace of the rest of the operation to the Drum. This means you subordinate picking and packing shifts to align with the dock's cycles. Instead of picking products all day and letting them pile up at the dock, picking and packing are scheduled to feed the pre-staging area just-in-time for loading. This prevents inventory from stacking up and allows the entire warehouse to move in a coordinated, rhythmic flow.

The Result: On-Time Departures

By implementing these TOC principles, a distribution center can achieve remarkable results. They stop trying to rush and instead focus on a controlled, efficient flow. This targeted approach avoids the common last-minute chaos, dramatically improves on-time departures, and boosts carrier and customer satisfaction. The DC is no longer a chaotic mess of piled-up shipments but a well-oiled machine where every action is synchronized to the rhythm of the single most important part of the operation: the loading dock.


2025年6月6日 星期五

Navigating the Business Universe: A Small Business Owner's Guide to Physics


Navigating the Business Universe: A Small Business Owner's Guide to Physics

In the complex, often unpredictable world of small business, finding a stable footing can feel like an impossible task. However, Christine McKinley, a mechanical engineer and author of "Physics for Rock Stars", offers a unique and powerful framework for success: applying the fundamental laws of physics to daily issues and their solutions. By understanding how the universe operates, business owners can gain clarity, make informed decisions, and cultivate a more balanced and successful professional life.

The Physics of Business Strategy and Operations:

  • Embrace the Scientific Method for Iterative Growth Just as a scientist approaches a new problem, a small business owner should adopt the scientific method for business strategy. This involves a structured process: asking a clear question, conducting background research (market analysis, competitor studies), constructing a hypothesis (your business strategy or new initiative), testing it with an experiment (a pilot programme, a new product launch, or a targeted marketing campaign), analysing the results and drawing conclusions, and finally, reporting these results. Crucially, if your initial conclusion doesn't align with your hypothesis, you must be prepared to return to step three and construct a new hypothesis, much like Gregor Mendel meticulously refined his understanding of pea genetics. This iterative approach fosters continuous learning and adaptation.

  • Strategic "Space Making": Nature Abhors a Vacuum Recognise that "nature abhors a vacuum". When you create a void in your business – perhaps by streamlining inefficient processes, delegating tasks, or consciously freeing up time on your calendar – be proactive and swift in filling that space with something productive and aligned with your strategic goals. If you neglect to do so, McKinley warns that "nature will do it for you" with "anything available," which could lead to unproductive distractions or unwanted commitments. Taking control of both the vacating and the filling ensures that newfound capacity serves your business's advancement.

  • The Indispensable Nature of Numbers: Keep It Real Cultivate strong mathematical literacy because "math was the only language we could use to accurately describe bacteria growth, air pressure, and waterfalls". Similarly, it's the only language to accurately describe your business reality. Equations, like E=mc², offer a "succinct or sexy" way to encapsulate complex ideas. For a small business owner, mathematical literacy is vital for understanding finances, analysing market trends, comparing deals, and confidently graphing business performance. It allows you to become an "inventor rather than scavenger, designers rather than slaves to trial and error". Remember to keep your units straight and use dimensional analysis to ensure your calculations make sense and avoid "nonsensical results".

  • Optimise Energy: Don't Spin Your Wheels Apply the first law of thermodynamics (conservation of energy) to your operations: "energy is neither created nor destroyed, but it can change forms". You possess a finite amount of energy (time, capital, effort). Therefore, McKinley advises avoiding "wheel-spinning activity" such as excessive worrying, fussing, complaining, or over-explaining busy schedules. These convert potential energy into unproductive kinetic energy. Instead, alternate between intense, productive work and genuine rest, mirroring a runner who alternates "gut-busting race pace" with "true rest". This approach ensures greater efficiency and helps prevent burnout.

  • Understanding Attraction and Bonding in Partnerships: Know Your Type Think of business relationships and partnerships in terms of "atomic identities" and "bonding behaviours". Just as atoms seek "full outer orbitals of electrons" to bond and form stable compounds, businesses and individuals seek fulfilling partnerships. Understand your business's "atomic identity" (e.g., are you a "noble gas" content working alone, or a "covalent bonder" seeking equal partnerships?) and seek partners whose "bonding personalities" complement yours. Ensure shared goals and a common direction to avoid a "twisted mess of parts at a total standstill". Forcing incompatible "bonding" can be "terribly energy-consuming, explosive, and likely to leave dangerous leftover parts".

  • Managing Pressure with the Ideal Gas Law: Something Has to Give The ideal gas law (PV = nRT) demonstrates how variables like pressure, volume, and temperature are interconnected in a closed system. In a business context, this means that when one variable (e.g., a fixed deadline, limited resources) is constrained, something else must adjust. Instead of panicking under pressure, McKinley advises you to "decide right away what resources are available to you and what you can realistically achieve". This allows for a more controlled and effective response to challenges, preventing you from ending up "answering the door in your underwear".

  • Analysing Forces with a Free Body Diagram: Clearly State the Problem To solve any problem, McKinley urges you to first state it clearly by drawing a "free body diagram". This simple sketch helps visualise the "direction and magnitude of each force pushing or pulling on a body". For your business goals, identify the "virtual vectors" of lift (confidence, enthusiasm), weight (caution, realities), thrust (ambition, action), and drag (competing projects, distractions). By examining these forces, you can strategically "shrink or grow the arrows" to apply force where it will be most effective, making your actions less emotional and more "doable". You need all four vectors balanced for "stability" and to avoid "sitting on the tarmac for years".

  • Leveraging Mechanical Advantage: Use a Crowbar or Two Adopt the principle of "working smarter, not harder". Identify the "crowbars" in your business: tools, processes, or relationships that allow you to exert "modest force" to achieve a "larger force" outcome. This could involve delegating effectively, utilising technology, or seeking expert advice. Be willing to ask for help, as "people around me can't know what I need if I don't tell them". Remember that "with enough mechanical advantage, you can move anything".

  • Learning from "Rough Spots": Love Your Friction Understand that "that which does not kill us gives us traction for the next time". Just as friction provides grip for a runner, past setbacks or "wipeouts" can create "rough scars and calluses" that provide the "grip you need for your next try". Instead of dwelling on failures, McKinley suggests you "make mental friction tables" to analyse them and improve your future performance, allowing you to "squeal around corners faster than we ever could without them". When you hit "black ice" (unexpected major setbacks), you'll know to "pump the brakes. Find your traction. You're not driving off the road, not this time".

  • Clarity of Direction and Momentum: Check Your Direction Momentum is defined by both size (mass) and speed (velocity), but crucially, also by direction. Ensure that your business, and everyone involved, is "headed in the same direction". A team with common goals will create "powerful collective pushing in the same direction". Even a "tiny person" (or small business) "with a big running start" can have enough momentum to "push a bowling ball," illustrating the power of focused, directional effort. Conversely, heading in "different directions" can result in "a twisted mess of parts at a total standstill".

  • Prepare to Float with Strong Foundations: Buoyancy Success in business, much like a floating iceberg, requires a large, "invisible structure underneath the waterline". This represents all the quiet, unglamorous efforts of research, planning, organisation, and hard work that create your business's "buoyancy". McKinley stresses that "more practice, workouts, and studying are required than we thought". Do not be "tempted to... put off the needed preparation", as a lack of it leads to "sinking".

  • Control Your Chaos: The Second Law of Thermodynamics The second law of thermodynamics states that "disorder is always increasing". While you cannot prevent chaos, you can "cultivate the right amount and type". Identify "good chaos" (e.g., creative brainstorming) versus "dangerous, unproductive chaos" (e.g., disorganisation, unfocused effort). By choosing "an inconsequential place for entropy to gather" (like Einstein's messy car floor, allowing his mind to focus on organising the universe), you can direct inevitable disorder away from critical business functions, allowing you to "reign over chaos" in your business and life.

By consistently applying these physics-based principles, a small business owner can gain a "firm footing in a squishy world", make more astute decisions, and navigate challenges with greater insight and confidence, ultimately leading to a more "glamorous future".