Operations Management 10.12.08

Sunday morning. I woke up at 5am in Napa and was in class at 8am in San Rafael. Operations Management. 

Apparently we are suppose to really get into the meat of our main book. Note: Get this Lean Book. I thought I had it but don't.

Value stream= Provision Stream + Consumption Stream

E.g. airlines, internet retailer, automobile purchase, restaurant.   

If there is a system don't fight the system. Render a new system to make the old system obsolete. 

Value Generation - If you are a customer focus entity this is where you are looking

Customer value drives business model considerations

Business model consideration drive shareholder value

Requires a careful design and management of :

• Demand Chain
  
• Supply Chain 
  
• Value Network

You want to put your money into not stabilizing your organization but growing your organization.  

Tacit/Experiential Value

• emotional experience
  
• physical experience- 
  
• intellectual experience- universities
  
• spiritual experience - spas
  

Consumer Criteria for Value

• Asset management- financial advisors
  
• time management- mechanic
  
• cost management- Walmart
  
• performance management- taking your car in for a tune up 
  
• information management - 
  
• risk management - insurance, security alarm systems

Prosumerism

• IKEA - customer participates in product assembly  (my teacher says this weird)
  
• DIY Kits
  
• Threadless.com - customers design, select, market, and buy T-shirts "Classic example of crowd surfing" people vote for the best design and they sell it. Web 2.0 like 
  
• Web 2.0/Enterprise 2.0 - full participation and integration of customer and business
  
• crowdsourcing
  
• social networking
  

Enterprise Value

Value of Assets

• Facilities
  
• Inventory

Premium Value

• competitive advantage of product/service
  
• barriers to entry created
  
• market share - first to market, greater market share

Latent Value

• Future value of business model and products - crowd sourcing and social networking can increase your value to 10x, want can be done in the future. What are you doing to bring value to your customers.  

Consulting firms are typically 1x, one times revenue. You are going to be valued at 1x, if someone buys you it will be for 1x your revenue. You are also looking at premium value. 

Adding value to your business can help you attain credit during financials during down turns.

Asset Management Migration

• Recent expansion from purely owned assets to accessible, or total managed assets
  
• Focus on value net vs. value chain assets
• Partnerships & Alliances
  

Dell Computer

Cisco

Nelson Staffing - temp agency  

YourEncore

 

David Maister - "Managing a professional service firm" "True Professionalism" Note: Look up these two to learn more about my energy division contractors. These are some of the main books relating to consulting. Don't keep consultants on the bench, keep them out in the field. 

Value is one of our most important drivers. 

Knowledge as an Asset

Knowledge - information, context, access, timelines

Knowledge Types:

• Tacit - get to know who is good in the field
  
• Process
  
• Technology - add web 2.0 
  
• Relationships - 
  

Ability to generate new knowledge (Autopoiesis) - develop knowledge towards your mission statement. Learning/teaching organization. 

Customer vs Product Focus

• Customer focus (focused on customer experience)   e.g. 

Threadless.com

Spas

• Product Focus 
  

BASF - "you dont know us but we make your plastics better"

Weyerhauser - wood cutter

7-10 consumers know about sustainability to brand. And the others just are behind. 

Energy policy will proactively drive countries towards war. Russian China is buying oil companies right now to get over peak oil bridge. 

People want better choices they want more sustainable options but they don't know how and they don't have choices. You must give them a choice and options. Marketing is best at oil and coke companies, why not bring this knowledge to the main stream.