Risk Management Article

Mark Schmit’s picture

By: Mark Schmit

During the Sept. 18, 2020, session of the “National Conversation with Manufacturers,” our three West Coast manufacturing leaders on the panel kept coming back to their critical need for skilled workers.

The conversation was one in a series of 11 virtual listening sessions hosted by the National Institute of Standards and Technology’s Hollings Manufacturing Extension Partnership (NIST MEP). The purpose of the listening sessions was learning how small and medium-sized manufacturers across the country have been handling the near-term jolt from the Covid-19 pandemic and preparing for success in the long-term.

Multiple Authors
By: Lucca Henrion, Duo Zhang, Victor Li, Volker Sick

One of the big contributors to climate change is right beneath your feet, and transforming it could be a powerful solution for keeping greenhouse gases out of the atmosphere.

The production of cement, the binding element in concrete, accounted for 7 percent of total global carbon dioxide emissions in 2018. Concrete is one of the most-used resources on Earth, with an estimated 26 billion tons produced annually worldwide. That production isn’t expected to slow down for at least two more decades.

Given the scale of the industry and its greenhouse gas emissions, technologies that can reinvent concrete could have profound impacts on climate change.

Yoav Kutner’s picture

By: Yoav Kutner

Like business-to-consumer (B2C) ecommerce, business-to-business (B2B) ecommerce allows customers to purchase parts and supplies via an online portal. The difference is that in B2B ecommerce, both the customers and suppliers are businesses, and the customers may or may not be the end users of the product being purchased. In addition, a B2B solution needs to let customers submit a request for quote (RFQ), negotiate, and do more of the back-and-forth that occurs in business transactions.

Despite the fact that purchasing is done online—a digital solution for many B2B online platforms—a lot of the back-end processes are still done manually, not much differently than in a brick-and-mortar business. An online order might need to be copied and pasted into an Excel spreadsheet or even an enterprise resource planning (ERP) system, for instance. Ditto for getting customer information into a customer relationship management (CRM) system or generating quotes. This manual back-end work keeps both customer and supplier from operating efficiently, introducing errors into orders, or even delaying orders.

Jose Luis Alvarez’s picture

By: Jose Luis Alvarez

Alexander Hamilton, one of the United States’ founding fathers, famously called energy the most important characteristic of the executive branch of government. “A feeble Executive implies a feeble execution of the government,” he said in the Federalist Papers. “A feeble execution is but another phrase for a bad execution; and a government ill executed, whatever it may be in theory, must be, in practice, a bad government.” Contemporary corporate CEOs should heed Hamilton’s warning.

No matter how capable CEOs might be, they need the help of a trusted team: an executive committee of senior managers who report directly to them, meeting regularly to help shape the collective work of the enterprise. CEOs and their executive committees (excos) are the veritable energy reactors of organizations.

However, my counseling experience indicates widespread dissatisfaction with these committees among both leaders and members. Research shows that the problems faced by excos are so widespread that effective teams are rare, and work well only when they fit the CEO’s leadership style.

Multiple Authors
By: Aarti Gumaledar, Sameer Hasija, V. Paddy Padmanabhan

Globalization of trade and decades-long innovation in supply chain networks have resulted in significant benefits for all stakeholders—greater efficiencies, lower costs, and greater access to markets, to name just a few. Yet Covid-19 has exposed vulnerabilities in global supply chains. Dispersed supply chains offer more possibilities for shocks to penetrate and spread, and practices such as “just-in-time” and single sourcing can amplify shocks and lengthen recovery time.

Which begs the question: Why weren’t companies better prepared? After all, academics and practitioners have been stressing the importance of agility and resilience in the supply chain for decades. They have advocated for diversification so value chains can handle demand and supply shocks. The problem, however, is that in good times, companies are unwilling to make the larger investments that have always gone along with diversification, in the form of complexity and coordination costs. The choice is to either save money with a concentrated supply chain structure that increases crisis vulnerability, or build in expensive redundancies to prepare for a rainy day that may be a long way off. This cost-agility trade-off (figure 1) leaves conscientious companies splitting the difference between present realities and projected future demands.

Ashley Y. Metcalf’s picture

By: Ashley Y. Metcalf

Lean supply chains are designed based on several key principles. First, the general philosophy of lean is to reduce or eliminate nonvalue-added waste. The concept of reducing waste is always beneficial to organizations. We should continuously strive to reduce things like wasted time, wasted effort, wasted processing, wasted travel, and wasted packaging. So, even in times of disruption or crisis, efforts to reduce wasted steps or processing can actually benefit the organization. This efficiency is a good thing.

A second key principle of lean supply chains is where it gets tricky regarding the risk of disruptions. This principle is just-in-time (JIT) supply. The JIT principle means inventory and supplies are delivered just when they are needed. So instead of holding weeks or months of inventory, an organization might get daily deliveries, just as needed. When things are running smoothly, this is a great system because it significantly reduces the amount of money spent on holding inventory. Lean can even reduce losses due to perishable inventory or obsolescence because there are no warehouses full of dusty redundant items. But, of course, in the case of supply chain disruptions, the same lack of inventory can be devastating to ongoing operations.

Steven Ouellette’s picture

By: Steven Ouellette

What is the most important thing for your business to be working on right now? Would everyone else working there agree? Is everyone working toward the business’s goals? How do you know?

Most businesses in my experience cannot answer these questions. There may be metrics, but they are not translated down to individual contributors or integrated with each other. They may be incomplete. Management may announce every year that this is the year we are all going to work on profit, or customer satisfaction, or some metric they read about in an article, but they never translate what that means for individuals, and nothing seems to change. There is often an idea that we should be doing something as a business, but different opinions as to what that might be. There is internal competition rather than cooperation.

You need a process to not only be able to answer these questions, but also to answer them with data. Everyone in the company needs to be able to show how they contribute to the organization’s goals.

Philippe Aghion’s picture

By: Philippe Aghion

Imagine a ship at sea, at risk of sinking in a tempest. Is it better to empower the crew to do whatever it takes to save the ship, or should every decision be made by the captain and top officers? Similarly, what should the optimal form of firm organization be during a severe downturn? The need to make tough decisions—including layoffs—may favor firms that concentrate power at the top. However, the turbulence and fast-shifting conditions magnify the value of the information held by local managers.

The two views can be compelling. Indeed, in the depths of the Great Recession of 2009, a survey of executives by The Economist’s Intelligence Unit revealed that decision-making had become more centralized in the C-suite. The rationale: to emphasize “projects that provide benefits across the enterprise rather than individual units.” But in another report three months earlier, the same publication argued that “companies have to deal with dramatically more uncertainty, complexity and ambiguity in the current recession. Success does not come from centralization.”

So who should be in charge: the crew or the captain?

Corey Brown’s picture

By: Corey Brown

Lockout/tagout (LOTO) procedures are common in industrial and manufacturing environments. Despite this, failure to adequately train employees on LOTO procedures continues to be one of the U.S. Occupational Health and Safety Administration’s (OSHA) top 10 most frequently cited violations during federal inspections.

To write an effective LOTO procedure requires both an understanding of OSHA’s guidelines, as well as good communication and training practices. By combining these strategies, manufacturing companies can ensure the health and safety of their workforce while maintaining operational efficiency.

Matthew Bundy’s picture

By: Matthew Bundy

Untitled Document


Burning plastic cart carrying a fax machine, a laptop computer, and a three-ring binder. Click here for larger image. Credit: FCD/NIST

Several centuries ago, scientists discovered oxygen while experimenting with combustion and flames. One scientist called it “fire air.” Today, at the National Institute of Standards and Technology (NIST), we continue to measure oxygen to study the behavior of fires.

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