Goal: “detect and fix any problem in the production process at the lowest value stage possible.'Ĭhapter 2: Managing the Breakfast Factory Keep a reasonable (if expensive) raw materials inventory in case you need to reject future deliveries. Quality is also maintained through incoming or receiving inspection of raw materials. checking the temperature of the water used to boil the eggs). Quality is maintained through functional tests (of the actual product itself, which may be destructive) or in-process tests (especially of the equipment, e.g. a continuous 3-minute egg boiler) can dramatically lower costs, increase throughput, and improve quality … at the expense of flexibility. Throughput can be increased by a) asking for help (increases dependencies, lowers predictability) b) hiring specialists (increases overhead ) c) adding capital equipment or d) building up finished-goods inventory (carries risk of not being sold).Ī continuous operation (e.g. Production operations come in three main types: a) process manufacturing (which changes the material) b) assembly (when components are put together in some way) and c) testing (what you have is examined to make sure the customer’s demands are being met). The limiting step is whatever takes the longest to prepare. The basic requirement of production is to “build and deliver products in response to the demands of the customer at a scheduled delivery time, at an acceptable quality level, and at the lowest possible cost.' Key concepts: Useful prompts for a curious manager to ponder: a) Are you adding real value or merely passing information along? b) Are you plugged into what’s happening around you (both in your company and the industry) or do you wait for a supervisor to interpret whatever is happening? c) Are you trying new ideas, new techniques, and new technologies? PART I - The Breakfast Factory This is especially true for vital “know-how” middle managers who are sources of “knowledge, skills, and understanding to people around them.” Real work is done by teams, not individuals, and their output is all that matters, not their activities.

Increasing competition and speed of disruption requires all managers to develop a high tolerance for disorder. ”Įmail has begun to transform how information flows and is managed, leading “a lot more people know what’s going on in your business than did before, and they know it a lot faster than they used to.” Globalization has taken over business, meaning that “every employee will compete with every person anywhere in the world who is capable of doing the same job.” Also, “When products and services become largely indistinguishable from each other, all there is by the way of competitive advantage is time. In the 1995 introduction, the author recognizes two major trends: High Output Management was originally written in 1983.

Crucial conversations chapter 1 summary