t has been said that stress is
the fear of the unknown. So when you have to make business decisions
without all the appropriate information it becomes a stressful
event.
Many times the information available makes the decision crystal clear, but many other times this is not the case. And, as managers and executives, our task is usually much easier if we have the necessary information to make decisions.
Over and over we hear the comment, I can't spend all my time making the computer work - I have a business to run.
OK, but what are your competitors doing? They are using every trick in the book to gain an edge over you and others.
The trick is to have more information than your competitor. And then to display and manipulate the data in a meaningful manner quickly.
Knowing the market, up- to-date prices, sources of supply, product trends and so forth, and being able to access this information on demand are some of the tools used by firms around the world to gain an edge on the competition.
Invariably, the facts you want or need is out there somewhere, but you do not know where or how to get them. Fortunately, for most businesses, the information they need may be right under their noses.
Take, for instance, the information every
legitimate business has - the basic records of checks written
for accounts payable and checks received against invoiced goods
shipped or accounts receivable.
Unless you are in a cash business and carry your funds in your pockets, these records can tell you a lot.
You may say, Yes, I have the records but I am not spending all day to study them or write them down in another way.
This is where technology comes into play. If the transactions are entered into a database and stored in a computer you will then have the data available for whatever analyses that may be required later. There is a fundamental set of data that must be kept somewhere for tax purposes and audits.
Today, most organizations have some kind of computer system, at least to handle the accounting effort. And, with a little thought you will discover that market information and intelligence already exists within the organization - it is the ready access and display that is missing.
You dont even need much, a personal computer or even your present system is the key to unlocking the database and helping you make sound decisions.
For example, suppose you are in a situation that you must decide the standard colours you are going to keep in your product line and what new colours you are going to add to your manufacturing process next year.
Colours are "faddish," if you guess wrong you must dispose of unsold inventory at discount prices, hardly the way to run a business.
This therefore becomes an important decision for the future of your company, but many times this very important decision is made in a causal manner. This is to be avoided. Rather, develop a system, a technique, or method to provide facts that can become the basis for selection.
An interesting aid is having more than one person involved in the decision process.
Perhaps a colour selection team who could aid in the fact gathering and surveys for the final choices.
Also, many times the selection of products or colours to offer the market are ego driven by the most forceful personality in the organization.
Using the PC or system database and various data display techniques when making these types of decisions also has the added advantage of allowing the data to speak for itself.
The result is an objective selection, rather than just an educated guess.
For a quick example, consider the information below which the Boss did on the back of a envelope while drinking coffee.
He indicated that they should have another Red Rose type and eliminate Ruby Red.
Well, we all know that its not that easy. Lets put Information Technology to work and study the data in another way i.e. by colour groups: Greys, Reds, & Blues. The data can be sorted rather effortlessly by the PC into a group rank. A prime example of adding information with technology.
If you omit the 2500 units of Really Red to G- J Mfg as being single purpose and not part of the stock line - the numbers change to:Greys 43%, Blues 30%, Reds 27%, an entirely different selection. The PC was simply instructed to recalculate by subtracting the Really Red from the red group.
Now we see an entirely different picture. It is the Greys your customers are buying and that is what the colour preferences are trending towards. Your data is indicating a preference that you need to validate through other sources such as customer surveys, competition, studies, etc.
This technique can be used now and in the future whenever you have to make informed decisions. Not only for situations using products to add but also for products to drop from the line, production quantities to adjust, etc.
An added benefit is that you get to evaluate your decisions as well as approach decision, making from a different viewpoint.
Information Technology should be a way of life. A routine tool for problem solving.
It all comes from an existing database accessed by your commands to the PC or your system computer. How did you do with your last new product introduction? Do you think the PC might have helped?
Tom Nunn is a Manufacturing and Productivity Improvement Consultant. He holds a degree in Industrial Management and a Masters degree in Business Administration. He is a member of the Institute of Management Consultants and he regularly travels through the Caribbean. Tel:(410)675- 5105 Fax:(410)675- 7299