Management is the skill and expertise needed to realize the planned physical device or service. It is a highly discussed topic like leadership; however, management emerged in humans as far as making tools and fire. To achieve both, he had to plan first, such that he had to gather materials for tools and collect hemp and sticks for making fire. With increased options for making tools and fire and an increased population, demand management became complex without prioritizing the best option. Selecting the best option for making fire quick and efficient was the birth of leadership. Later, strategy came, and others followed.
Work-Management, Management Controls, Supply Chain, Customer Service, Supply Chain Management Integration, Risks, and Managing Black Swans are all examples of management skills and expertise. Management is the discipline that is required to bring the planned physical product or service into existence. You can find a synopsis of management in the embedded video.
Management Illustration
Figure 1: Supply Chain Example (Courtesy: Hartmut Stadtler)
Figure 1: Supply Chain Example (Courtesy: Hartmut Stadtler) diagram showing a series of supply chain steps: Suppliers, Manufacturing Firm, Distribution (Third Party), and Ultimate Customers. Materials flow from suppliers towards customers, while information (including demand) flows from customers towards suppliers.
Figure 2: House of SCM (supply Chain Management) (Courtesy: Hartmut Stadtler)
Figure 2: House of SCM (Courtesy: Hartmut Stadtler) diagram showing a house example of one foundation, two columns, and one roof. The foundation represents logistics, marketing, operation research, organizational theory, purchasing, and supply. One column is integration (including leadership), and the second is coordination (including planning). The roof represents customer care and competitiveness. This implies that the supply chain creates competitiveness from best customer service because of best integration (best leadership, collaboration, & partners) and coordination (plan, process orientation, and using IT). Logistics, marketing, operation research, purchasing, and supply support these.
Management
Introduction
A leader sets aspirations, motivates stakeholders of that organization, and realigns into true orientation if the situation so requires. We already discussed this in Leadership Link.
A manager pursues the quality of implementation, in day-to-day staff motivation and satisfaction, of budgeting and cash flow control. Leadership and management, however, are inseparable; anyone running an organization has to be both a leader and manager.
Therefore, we can define “management as the skills and activities needed to make the products and services and to bring them to market. It is the process to create tangible properties of the business.”
Work-Management
Work management is about building a benchmark controlling process (controls and control), quality, quantity, standards and exceptions during realizations of a proposed work. By definition, controls differ from control: “The synonyms for controls are measurement and information. Controls pertain to means, control to an end. Therefore, controls are analytical, concerned with what was and is. Deal with facts, with events of the past. The synonym for control is direction. Ideally, Control deals with expectations, with the future. Because Control is normative and concerned with what ought to be… For, in a manager, controls are purely a means to an end; the end is control.” 1 p. 339. These definitions succinctly illustrated and summarized in Table 1: Controls vs. Control.
Table 1: Controls Verses Control
| Controls (Logistics) | Control (Orientation, Standard and Specifications) | |
| Synonym | Measurement and information | Direction |
| Belong to | Means | An end |
| Processes | Analytical, – what was and is? | Expectations with the future |
| Result | Facts with events of the past | Normative, concerned with what ought to be |
Source: Drucker, Peter : (Words in brackets added)
Management Controls
Controls can be neither aim nor neutral.
Reciting Peter Drucker, “Management is doing things right; Leadership is doing the right thing” and “controls are a means to the end of better control. They are not – nor should they become – an end in themselves“.2
We extrapolate that management and leadership simulate controls and control, respectively. Control leads Controls; control gives direction for controls, the means. Deriving directly from Peter Drucker quote, “doing the right thing” is about choosing the true direction for the “Management to do things right”. This means the relationship between leadership and management is back-to-back, such that leadership shows the way for the management to realize. In the preceding discussion from link no. one (Personal Reinvention) we have Si, CiMi and Ei, CiLi, as Individual Spectrum (IS) and Public Spectrum (PS), respectively, In this context, leadership takes Si and Ei roles, while CiMi and Li are taken by Management.
With the current extrapolation in mind, the four clusters discussed in leadership link viz. Micro, Meso, Macro and Global levels of leadership apply for management as directions for managing. This means, all outcomes of the orientation taken by leadership are taken by management.
Controls need concentration on results.
Results here represent a business target–a profit generated when management satisfies customer’s desires (demands). Controls Designers have to accommodate entrepreneurship success in equal essence to management.
Controls demanded for measurable and non-measurable events.
Businesses are organization running diverse processes to achieve their objectives; some are measurable but others are non-measurable. Measurable events are like an introduction of a new product which traces its costs and sales easily to generate its profit.
Controls Specifications
To give the manager control, controls must satisfy seven specifications: they must be economical; meaningful; appropriate; congruent; timely; simple and operational.
Controls follow a principle of economy.
Controls established to gain control of a business; which means poor controls create wrong business control. However, easily gained control implies sound controls design; similarly, fewer controls to control a business denote the sound controls effectiveness.
Controls must be significant.
Events measured must be meaningful either in themselves, e.g., customer’s aspiration, concrete cube destructive test; alternatively, they must be symptoms of at least potentially significant developments, e.g., abnormal cattle death in a ranch or company staff resignations.
Measurements have to be harmonious with the events measured.
Designing controls harmoniously (within a same range of precision) to events measured is important because it is underlines misuse of resources.
Controls have to be timely.
Timing on taking measurements to event matters because frequency of measuring does not improve control.
Controls need to be simple (but not cheap)
Simplicity is always the best move to business performance.
Controls must be operational.
Controls have to focus on action, rather than information, like reports, studies, or figures, must always reach the person who can take controlling action.
Control
Control is about orientation relatively to the operational Paradigm, comprising Individual Spectrum (IS) and Public Spectrum (PS) already discussed. It concerned about the direction, which guides controls as essence (magnitude).
This is the conclusion for controls and control section, which will not function without the tools, plants, labor and materials flowing steadily–Supply Chain. We discuss next.
Supply Chain
By definition, Supply Chain Management is a complex process bearing diverse definitions, some given below; conversely, we adopted from M. Christopher.
“Supply Chain Management is a network of organizations that are involved, through upstream and downstream linkages, in the different processes and activities that produce value as products and services in the hands of the ultimate consumer,” 3 -p.15
Figure 1: Supply Chain Example depicts an example of the manufacturing company, showing all fundamental elements adopted from Hertmut Stadtler and Christoph Kilger 4.
The supply chain example is a complex system showing interrelated convergent and divergent flows from operations, such that it is not necessarily by one company alone -p.11.
The House of Supply Chain Management
Supply Chain Management comprises varied facets as depicted by Hartmut Stadtler et al. 5 p.11, and depicted on Figure 2: House of SCM and detailed as follows the roof stands for competitiveness as the ultimate purpose for SCM, while customer service is the means for achieving it.
SCM Integration
Integrating SCM comprising, first, forming a supply chain requires the choice of suitable business partners (observing synergy potentialities) for a mid-term partner-ship. Second, in order for the business to become an elective and successful network organization, comprising legally separated organization’s demands for practicing inter-organizational collaboration. Third, for an inter-organizational supply chain, sound leadership aligns strategies of the partners involved so that organizations work harmoniously.
SCM Coordination
The coordination of process flows along the supply chain can execute efficiently by utilizing the latest developments in information and communication technology. These demand process formerly executed manually upgraded to automation.
Customer Service
Customer service is the fundamental driver of business, meaning that without aspiration of serving the customer the business industry disintegrates. Reference made from a study conducted by LaLonde and Zinszer (quoted in Hertmut Stadtler et al. 3 pp. 12) depicts three elements of customer service, namely pre-transaction, transaction, and post-transaction elements. These elements oscillate around Madison Avenue Techniques, which states that “… people do not buy attributes; they buy imagined experiences”. Deciphering particular imagined experiences is Pre-transaction. Transaction is delivering these experiences to customers, and post-transaction is about scrutinizing customer’s satisfaction with an intent of committing an improved alternative.
Integration
As from an adopted SCM definition, implied autonomous organizations collaborating in products or services creation, by integration we affirm to a special attribute supporting long-term partnership, namely choice of partners, network organization with inter-organizational collaboration, and leadership.
Choice of Partners
Choice of Partners: start with scrutinizing the activities associated with generating the products or services, resulting in three possibilities. One activity jig-sawing member’s competences within the Supply Chain–precisely assigned to them. Second, activities involving standard local supplies (products and services) having small deviation from customer’s desire, optimize by outsourcing. Third, the rest activities made or bought decisions1. Partnership selection procedures have to follow the Personality Tetra Receptor (PTR). Network organization with inter-organizational collaboration: Network organization customers may regard a supply chain as a unique (virtual) entity. The term virtual companies, however, used for a network of companies collaborating only in the short term, sometimes only for fulfilling a single customer order.
Coordination
The use of information and communication technology, process orientation, and advanced planning are the three pillars that make up SCM’s second main component—the coordination of information, material, and financial flow.
Utilization of information and communication technology
Utilization of information and communication technology: Hertmut Stadtler et al. 1 posits, “Advances in information technology (IT) made it possible to process information at different locations in the supply chain and thus enable the application of advanced planning”. This is part of Synergy Techniques already discussed in Synergy Link; it is a very important phenomenon in empowering business operations. Using tools like ERP (Enterprise Resource Planning) businesses can perform diverse operations precisely enough to gain a strong competitive advantage. Process orientation is a second coordination building block, aiming at organizing all the activities involved in customer order fulfillment in the most efficient way. The building block process orientation is like business process re-engineering already discussed in System Logistics (Job Analysis and Job Design).
There several tools fulfilling the Supply Chain Management discussed in this Seven Links. Management is implementing the proposed business theme in physical (tangible) inputs liable to risks discussed next.
Risks
Risk is the possibility of something terrible happening in the future; a situation that could be dangerous or have a dreadful result. It is the possibility of something terrible happening in the future; a situation that could be dangerous or have a dreadful result. “They render job-design control, and supply chain worthless and therefore, invalidating organization’s control, sometimes-total failures might occur if no sound intervention measures implemented”.
From this definition, the business experience identifies three different risk-categories :
- Known Risks
- Known–Unknown Risks and
- Unknown-Unknown Risks–The Black-Swans6
Known Risks
These are risks that are predictable with high accuracy and occur with regularity; examples include insurance renewals, broker compensation renewals, Third-Party Administrator renewals, etc. These respond to a set of strategies that include appraising the required services, benchmarking (to measure the quality of something by comparing it with something else of an accepted standard), competition, linking value to cost, etc.
Known–Unknown Risks
These are bad outcomes with some expectations to happen, but with a fuzzy probability of happening regarding frequency, severity, or a combination of the two. They have a history of happening, thus threatening to come in the future, in a known-unknown prediction of when and how big.
Unknown Risks—The Black-Swans
Unknown or Black Swan events are unimaginable and unpredictable, occurring with little time to react, and the risk factor involved is very high, far beyond expectations. Nothing from the past can accurately predict how a Black Swan event will emerge; rendering forecasting impractical, and certainly nothing from the past can tell the public exactly how it resolved. Business life is full of surprises, sometimes negatively and sometimes positively with similar intensity (magnitude); when it is a negative organization, call it Black- Swan; otherwise, they call it opportunity. Therefore, we categorize positive and pessimistic Black-Swans categories as discussed below.
Managing Black Swans
Nancy Green 7 proposed a vital analysis worth discussing in this topic, where proposed several key sub-topics given below. Use Survivor Psychology to Counteract Shock: When a Black Swan hits, it is paramount for company leadership to take emotion out of the equation. This is rekindling the Personal Influence Scanner (PI-Scanner), because the Black-Swan shock has realigned the score to the lowest in both IS (Individual Spectrum) and PS (Public Spectrum).
Black Swan Preparedness
This is not preparing for a particular type of event, but rather for the impact and strengthening the ability of an organization to expect and detect trends before developing into a full-blown Black Swan event. Regular training for maintaining a sound score in Personal Influence Scanner (PI-Scanner) is worth spending because individuals with a high score in PI-Scanner possess very high and firm shock-resilience due to the IS (Individual Spectrum) power of deep reasoning and interpreting life meaning.
- Courtesy by: https://informalcoalitions.typepad.com/informal_coalitions/2007/02/drucker_on_cont.html accessed on 18-06-2021 ↩︎
- https://informalcoalitions.typepad.com/informal_coalitions/2007/02/drucker_on_cont.html accessed on 18-06-2021 ↩︎
- Martin Christopher, Logistics and Supply Chain Management. Strategies for Reducing Cost and Improving Service, ©1998Financial Times, Pitman Publishing, London ↩︎
- Martin Christopher, Logistics and Supply Chain Management. Strategies for Reducing Cost and Improving Service, ©1998Financial Times, Pitman Publishing, London ↩︎
- Hartmut Stadtler, Christoph Kilger (Eds.), Supply Chain Management and Advanced Planning Concepts, Models, Software and Case Studies, Third Edition, ©Springer Berlin Heidelberg 2000, 2002, 2005 ↩︎
- Courtesy of http://www.aon.com/attachments/risk-services/Manage_Black_Swan_Even_Whitepaper_31811.pdf, accessed on 1/11/2012 ↩︎
- Nancy Green, Keys to Success in Managing a Black Swan Event, from http://www.aon.com/attachments/risk-services/Manage_Black_Swan_Even_Whitepaper_31811.pdf, ©2011 Aon Corporation. ↩︎
