In the beginning, I honestly had the expectation that operations wouldn't be largest cost for our products. Advertising, PR, R&D, and honestly Finance I thought would've topped me. Here I sit after the second rollover, costing our team millions of dollars every rollover for MikesBikes. What's going on?
Within articulation of the problem, I came to the conclusion that I spend millions of dollars more than I should into Operations, comparatively with the rest of the team's spending.
While I noticed what I was spending on was justified (Plant SCU and Quality Control), it was usually millions of dollars more, compromising what was spent in other departments. We didn't do effectively as we wanted to in the Marketing department after the first rollover, and having Marketing cut down on that was in order to purchase more SCU, even tho this rollover we had 29% idle time. I feel responsible for the lack of performance and calculations, and am striving to change
Management decisions of big numbers such as Operations, it is crucial that the numbers are calculated and precise to match what the objectives and subjectively, what the strategy of the team is. The familiarity that lies with numbers and the predisposition that is involved with it is discussed in my last journal, so moving forward, it was prevalent to move away from the unconscious biases, and focus on future predictions and how to calculate the most effective, efficient, and precise result to achieve them. Under precise analysis, it is clear that the calculations I thought were correct were being mislead to incorrect outcomes. I found that the biggest difference is through predicted bike sales - I will calculate for an X amount of SCU, however when we don't sell as many bikes, we struggle to fill our SCU capacity. It was so significant, Peter commented on it during his weekly reviews of the rollover. While this will help for this rollover, I found that the unfamiliarity is a struggle in my decision making.
Finding relation in the readings, Kim and Mauborqne (2004) discuss how demand is often created, not found in the familiarity of fighting the market. While this is difficult for MikesBikes having set market, this blue ocean strategy gave me insight in how to the market expanded into racers immensely. It is not only this that is discussed, but how the familiarity of fighting the market is turned into traditional views that aren't ambitious, as seen as all competitors in our world entering the most similar to Adventurers market - Racers. Key insight here lies in the prediction of other competitors, rather than what seems the most effecient and effective use of our market penetration - How likely are we to encounter other competitors? How do we get high performance but not drown in the market? The opportunities that in the 'blue ocean of market space' per say, are key sales that my team missed out on, and I feel I wasn't prepared to respond to as Operations Manager. In future it is key to consider that we can not win every battle, and me realistic with our market share through providing insight in the blue ocean strategy.
Daudelin, W. M. (1996). Learning from experience through reflection. Organizational Dynamics, 24(3), 36-48.
Kim, W. C., & Mauborgne, R. (2004). Blue Ocean Strategy. Harvard Business Review, 82(10), 76–84.