Almost since the introduction of computing systems for business, there has been a sort of underlying belief by many that there is a direct correlation between the volume of available data and the opportunity (at least) to manage more effectively. This belief system can be reduced to a simple, widely-held, axiom:

 

If we have more data, we can manage more effectively.

 

There is, however, a big problem with this assumption.

 

Dave Stenfort, Director of Operations at internationally recognized Anritsu, talked about this very matter. In an interview with Bob Bowman of Supply Chain Brain, Stenfort had this to say:

“It was really hard to get to the data—to what was the important data versus all the pile of data…. What we had to do… with our data was to get rid of all the data that wasn’t important [in order] to get to the data that was really important, so we could act just on the data to support our customer.” [Emphasis added.]

 

The better axiom

Carol Ptak and Chad Smith, writing in Orlicky’s Material Requirements Planning (Third edition) [1], point us to the first law of manufacturing:

 

All benefits will be directly related to the speed of flow of materials and information.

 

This first law of manufacturing was articulate nearly half a century ago. That, of course, was long before there was the absolute flood of information now made available to enterprises of every size and description through the IoT (Internet of Things) and low-cost, high-speed computers and data storage system.

 

Today, as Ptak and Smith have said, there needs to be a modification to the first law of manufacturing. The updated first law reads:

 

All benefits will be directly related to the speed of flow of relevant materials and relevant information.

 

Better, more effective management does not flow from access to more data.

 

Better, more effective management flows from access to relevant information. But, additionally, there needs to a sound, underlying theory upon which to base both management’s understanding and actions.

 

W. Edwards Deming [2] offered many strong admonitions to this effect:

“Information is not knowledge. Knowledge comes from theory.”

“There is no knowledge without theory.”

“Experience teaches nothing without theory.”

“We should be guided by theory, not by numbers.”

 

Got improvement?

We find that mediocre performance levels in many of the companies with which we come into contact stems from two crucial factors:

 

  • Management effectiveness is being stymied by an overwhelming flood of data—or, at least, access to data—but they are unable to sort out the relevant from the irrelevant amidst the flood
  • Management has no coherent and effective theory by which to make decisions and set priorities—everything they thought they understood, they have already tried, applied, and found it produced little or no improvement (sometimes they even found themselves moving backward)

 

We are able to help clients like these by introducing them to “new thoughtware.” [3]

 

Chances are we can help your enterprise and your supply chain, as well.

 

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[1] Ptak, Carol A., Chad Smith, and Joseph Orlicky. Orlicky's Material Requirements Planning. Third ed. New York: McGraw-Hill

[2] W. Edwards Deming is the man whose management theories revolutionized and revitalized Japanese industry following World War II. He went to Japan after his management theories had been rejected by just about every manufacturer of note in the United States. In his frustration at one point he said, “Export anything to a friendly country except American management.”

[3] The term “thoughtware” is not original with us. We owe that term to Debra Smith and Chad Smith and their excellent book Demand Driven Performance Using Smart Metrics.

 

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