Volume 7 Number 10 - October 6, 2009

If you know a company — customer, supplier, friend, or your own — that could benefit
from improved operations, please email a link to this site or let us know.
Your best interest is our best interest.

The Finish Strong® monthly e-newsletter is for business leaders who recognize Operations as a strategic function that creates competitive advantage, profitability and brand loyalty to the marketplace.


Anyone with more than 6 months in manufacturing has heard of "economies of scale." That concept is the basis of large lot sizes, as well as many equipment recommendations and costing decisions.

Not a manufacturer? The concept, perhaps under a different name, likely permeates your business nonetheless. Is work processed through stations / people in batches, or one-at-a-time? If in batches, economies of scale thinking is intertwined with your processes.

The "economies of scale" concept says we will reduce costs by processing large batches to spread out high fixed costs to a larger number of units. But the unrecognized costs of economy of scale thinking can be more significant than any alleged savings. Instead, consider economies of flow.

Any time product (whether in the form of physical product or in paperwork or computer information) sits waiting, lead time is being lengthened and costs are being increased. Faster lead times on existing products/services and reduced time-to-market with new products/services improve cash flow, profits, customer satisfaction and market share. The quality advantages are equally significant.

Ask yourself, why do we process in quantities greater than one?

Your answers give you the list of problems you need to solve to move from economies of scale to economies of flow.


General Motors recently announced that their prior policy of issuing supplier payments once per month has hurt them. They recently discovered that as a result of their bullish treatment of suppliers, they have not received technology developments and other favored interactions with their supply base as quickly as other automotive companies. As a result, they have been at a competitive disadvantage.

Wow. Rip Van Winkle's snooze was brief by comparison. Make sure you're not increasing costs and harming product development by how you interact with suppliers


The Society for the Advancement of Consulting (SAC) is a professional society for consultants who have passed muster via client recommendations, ethics, and success and longevity in the profession. Rebecca Morgan is the SAC featured consultant for the month of October, 2009. Check it out.


The Starting Pistol
Eric Hoffer:

"In a time of drastic change it is the learners who inherit the future. The learned usually find themselves equipped to live in a world that no longer exists”

The Tape

Rebecca Morgan:
"...which is why commitment to learning is much more important than commitment to knowing"


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For reprint permission, just give Rebecca a call at 216-486-9570
or e-mail her at [email protected]