Especially for SME – 2: Resources.

25 August 2021

SME



We call resources as 7 M’s in Management: Man, Material, Machine, Measurement, Mosphere (atmosphere or climate), Methods and of course Money.

Whereas our Mr. Lowe does not dispute these at all as resources, he further stipulates that it is the time you spend on each of them multiplied by the amount of the resource on which you spend your time that produces results.

Result = Resource x Time spent on the resource. One SME: What do you mean by time spent on the resource?

Mr. Lowe: One interpretation could be the effective utilization- the time for which you are actually using the resource effectively – the opposite of for whatever time the resource is idle for whatever reason. I see material idle ahead of the receiving inspection areas waiting to be inspected, idle in the raw material stores, idle in the work-in-progress in all the manufacturing shops and finally in the finished goods stores also. I see machines idling waiting for the next job to be loaded. Of course I see men idling in practically all departments- direct and indirect, front office and back office.

The other interpretation of time spent especially by the owner CEO’s like you on a resource is to consider what value the resource-either existing or about to be added - adds to the end result and how to increase this value added on a daily basis. This is awfully lacking in SME’s.

SMEs look at a sophisticated machine for example and think if only they can afford it!

One SME: yes, that is true; my friend, working for a large organization, takes pride in telling that they have the latest equipment only.

Mr. Lowe: Oh, what a waste! I visited a Japanese organization for a client of mine who had full technology transfer contract with the Japanese firm. I was imagining that they should have robots all over to turn out the consistently good quality of the sophisticated products that they were turning out. To my surprise, I found they had just the general purpose machinery like lathes, milling machines and grinders. And that too they were at least 10 years old. I asked them why? Are they not upgrading their technology?

One SME: That is quite surprising.

Mr. Lowe: Yes but the answer he gave me was even more surprising. He said they have found that the cost per piece with the old machines they have which, of course, they maintain in good condition, (and even this maintenance cost has been included in the cost calculations) is always lower than the latest high cost equipment! So in effect he was telling: old is gold! ………contd.

SME

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