Thursday, January 24, 2008

New “concepts of operations” and innovations in logistics

National Finnish Technology Agency TEKES has launched a new programme "Concepts of operations". The programme aims to fund development projects within this emerging area in Finnish companies and research institutes. But what are "Concepts of operations"? There has been lot of discussion about manufacturing plants moving to China, India and other developing markets, and the competitiveness western manufacturing has been questioned. New innovations on methods of sourcing, manufacturing and distribution are needed to compete in turbulent ever-changing markets. I am board member of the programme and recently been thinking some good examples of "operations concepts". Here's my two cents on this topic:-

  • Henry Ford benchmarked butcheries in Chicago and found the idea of conveyors great for moving heavy objects. This idea among his other great inventions (selling only black colour to improve paint drying process, specialization of operations etc.) changed the whole business of automotive industry. This is an excellent example on production concept.
  • Toyota Production Systems is a great philosophy how to manage production. No computers are needed and still all waste of time and resources ("muda") are minimized. Mr. Taiichi Ohno and the fellows developed the concept already half a century ago in Japan. Many other manufacturing philosophies such as Kawasaki Production System have spun off the similar concept.
  • Dell Direct - Michaell Dell's built-to-order concept is applied to personal computers, but the same thinking could work in many other industries as well. As matter of fact, make-to-stock is a very poor choice in many cases and just hides problems in the inventory.
  • Zara in Spain – Short distance suppliers close to single location production provides fast response chain for a global retail chain. The concept of Zara is a good benchmark for any European manufacturing company.
  • Leftfootcompany – Tailored high-end shoes, computerized scanning of feet and web-shop, made in Europe and exported to Asia. Finnish Leftfootcompany is nice example of personalized products.
  • Private labels - Brand labeling and OEM is everyday concept in electronics manufacturing. Another field that takes benefit from the same type of concept is food retailing where this mode of operations is called "private labels".

The list is just a draft of my thoughts, but I really think that there plenty of room to add bullets on this. The photo on this post is from a Singapore barber's shop – it shows the potential customers average waiting time – quite nice operations concept in my opinion. Anyway, innovations on logistics can present good possibilities for manufacturing industries.

BR, Petri


Georg Doll said...

Henry Ford, Toyota, Dell and Zara all have perfectly implemented new business ideas and are constantly improving them.
To put Leftfootcompany on the same level as these companies is a grave misjudgement in my opinion. As a company Leftfootcompany has lost partners as fast as they found them. In between 2002 and 2008 the opened and closed shops in the following cities: Vienna, Hamburg, Birmingham, Tokyo, Moscow, Copenhagen, Leer, Lippstadt, Stuttgart, Leipzig, Munich, Hongkong, Osaka and St.Petersburg. This truly is not a succes story.
Furthermore they knowingly advertise usiong the trademark "Left(R)".This trademark is not property of Pomarfin Oy and as a matter of fact cannot get registered at all.
In my opinion all this speaks ffor itself and the decetive business of this company. It is my opinion that this business idea should not be recommended.

Petri Helo said...

Thanks for update. I need to check backgrounds more carefully next time. I agree that Leftfoot company is an SME and in completely another size compared with the rest of example. My information is on this case based on:

Sievanen, Matti & Linnea Peltonen (2006). "Mass customising footwear: the left foot company case". International Journal of Mass Customisation. 1(4) / 2006. pp. 480 - 491.,6,9;journal,3,5;linkingpublicationresults,1:113632,1

and own personal experience of buying a pair of these shoes.

Another example of mass customized shoes could be laser sintered shoes mentiened in Frank Piller's blog:

BR, Petri

Georg Doll said...

Thank you for your reply.I also read that study and I sent the following comments by email to the authors on 23.10.2006:
"Dear M.Sievanen and L.Peltonen!
You did a case study about a Finnish shoe company called left foot company(Pomarfin Oy).I am curious how much research you did, where you recieved your information from and who you contacted to recieve your information. Did you actually any partners/franchise outside Finland?
Left foot company issued a press statement on September 27th,2005,stating that they made a break through in Europe.The press statement emphasized the growth of the German market.For yiur information,allmost all stoires outside Finland are closed.By any measurement,left foot company is far from being a world-leading provider with a unique system.It is my opinion all their partners outside Finland failed because their system did not deliver a perfect fit an their implementation/service was lacking.Furthermore,it is my opinion that Pomarfin Oy is knowling mis-representing their brand.They represent themselves under"Left(R)",but Left is not registered trademark.They oinly branded the world-color combination of the left foot company.They also use the slogan"perfect fit"in promotional material.They use a scanner to take measurement of each foot,however,the measurement are not used to sew a shoe with a perfect fit.In my opinion it is not necessary to scan the foot.Simply try on the test shoes.I think the whole system is a scam(a David Copperfield Show).The only customization in the process is the customer can choose between leather,sole,typ,color.The slogan is not accurate and is mis-leading.I am of the opinion that the left foot company(Pomarfin Oy)is a bad example for customization."