Monday, October 6, 2008

Business transformation and be counted

Business transformation and be counted

There may not be that many differences between September 2008 and September 1998 afterall.

In 1998, I was at the state of Pennsylvania USA, communicating with Dr. Alvin Gunneson about the Agility Methodology and how it could be applied to corporations based in Asia. Unfortunately at the end of the business trip, there was the dawn of the Asian financial crisis that caught many nations by surprise. Many nations collapsed and were later bailed out by the IMF.

In 2008, I was greeted in Liverpool with the bad news of Lehman Brothers and the collapse of the British XL Leisure leaving many of the travelers stranded in various parts of the world. When I moved over to Kansas City USA for the APICS International Conference, there was the big shocking news of financial trouble at AIG and other financial institution. The financial crisis has hit USA and Europe, and will this spill over to Asia?

Global economy getting turbulent

With the crude oil shot up to US$180 or so, the world was reacting frantically to knee jerks in the drastic increase in the price of petrol, food and other products and services.

Most people begin to change the lifestyle and managed to reduce the spending on petrol and others. The crude oil was forced to go below US$100 due the significant decrease in demand. The turbulence may have lasted one to two quarters, but the damages have been created in one way or the other.

Financial industry in US and Europe in crisis

The US government will have the bail out bill to prevent the collapse of the financial industry. This is going to be US$800 billion in the first round and then probably another US$800 billion some time later. With trillions of dollars needed to mitigate the potential damages, it will be critical that the US economy can withstand the test of time.

The EU government probably will take a different approach by not initiating the bail out but instead allow for other mechanisms to come into play so as to reduce the potential damages.

Recalling Dr. Jack Welch’s infamous “Cost Down or Close Down” directive

When Dr. Jack Welch was tasked with the transformation of GE, he did not hesitate to introduce drastic measures and directives, to ensure that the senior management of all the subsidiaries got the loud and clear message of “Cost Down or Close Down”.

The people might not have stomached the directives well, but then GE was transformed permanently. However, that was not enough for GE to be globally competitive, so the next directive was to be “number one or two, or out you go”. The rest is history.

Dr. Jack Welch was voted the most successful and famous transformist of the 20th century.

The destiny of some of the British great corporations

During my studies at the University of Liverpool, I had the opportunity to work with Pilkington Brothers and BICC Group of Companies. Pilkington was the world’s largest floating glass manufacturer but lost the competitiveness and was taken over by other manufacturing group. BICC lost the world’s number one position in cables manufacturing, and could not regain the former glory. Globalisation and internationalization have created new global giants and affected the conservative ones into sunset or takeover target.

Now that Range Rover and Jaguar have been taken over by the Indian Tata Group, we may see many more international takeovers and mergers.

The Internationalisation of the University of Liverpool

The rather conservative red bricks university has been going places. The on-line MBA has been a great success globally. The Suzhou campus is growing from 1,000 students to 2,000 students in a short period of time through a joint venture.

There will be a Graduate School being set up in India, and plans to have more of this in other strategic locations.

APICS’s New Product Introduction (NPI)

APICS has woke up from the over dependence of the decades old Certified in Production & Inventory Management (CPIM), and begin to develop new products. Certified Supply Chain Professional (CSCP) was launched in 2006. Lean Enterprise and Global Sourcing courses are launched in 2008.

This drastic transformation is the reflection of the need to ensure that professional certifications have to be customer-focus and demand-driven. This is in line with lean enterprise and supply chain management.

The Way Ahead

Business transformation seems to be the way ahead for every organization or enterprise in order to survive the impact of globalisation and internationalization.

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