Decision to set up of a new company diversified into downstream business

Once there was a large organization supplying a lot of raw material to its customers who were then make use of such material to produce their products and supply to the end user market. The organization was very good in controlling its quality and being a leader in the market, it took a major share of the market.

New companies appeared and getting into the same business as the organization and the market become more competitive. One of the major problem faced was that those new companies do not manage to achieve as good quality of product as the organization, and for capturing the market, those new companies started to cut down in their price supplying to their major customers who were once the customer of the organization.

As a leader in the market, the organization will then have to make a serious decision on what they should do. They basically had only two options:

1. To slash down their profit and sell at cheaper price to their long timer customers.
2. To maintain their market pricing, in which they will most likely lost their customers who are looking forward for cheaper supply to those newcomer.

This is a very important decision and it includes a lot of inter-related complication. The organization, however finally decided to maintain their market status and decide to get into setting up new business which is downstream of their existing business so that they can be their won customer. This can only be done if the organization is large and very rich. As this is the fact and thus they manage to set up a new company.

Beside financial stability, human resource is one of the major prerequisite. As the organization was supplying material to its customer and they have a great lab which carried out various study and analysis to help their customer developing their product, there were quite a number of technical staffs who are familiar with technical requirement of the downstream products. Thus the organization finally picked one of their competent staff from technical department and started their process to set up a new company.

Moral of the story:
This is same as one of the teaching in 5000 years old I-Ching teaching which sound as "Qiong ze Bian, Bian ze Tong"(穷则变，变则通).
Literally, it means "once you come to the end of a certain path and found to be no way out, change your self and somehow there is a hidden path waiting for you.". To make it simple, it means "Think out of the box" whenever you run out of idea.

2013 Oct 5 - Decide to change the blogging concept

The following was the original description of this blog:

Started off as a consultant, knowing that it was the company trying to get a trial prior to permanent employment, I decided to take up the offer.

With the so-called Commercial Secret, I decided to keep myself in very low profile.
With the trust provided by the company, I am now building a dream towards organizing a world class company.

It has to be replaced now:
My initial thought was to keep a record on the real life situation on how I build the world class company. But due the the competitiveness in the actual commercial world, there are a lot of "secrets" and thus I should not disclosed and thus did not post much.

Now that I have more chance to provide consultancy to more organization, Hence I think it is time for me to modify the concept of this blog and make use of it to share general management and leadership idea rather than paying too much attention on one single company.

In my coming posts, I will make them General and combining all the real life conditions that I face in all companies, with some of the same opinions from my friends who have the same interest.

A surprise to note the change of new generation employee.

After more than 15 years of free and easy life, when I decided to get back to manufacturing environment, I was really proud of myself as my skills were not left out over time.

Within one to two months time, I did manage to overcome few of the engineering problem that was faced in the plant which was irritating and causing frequent production down time from time to time. By overcoming such problem, the production process had become stable and more time can be allocated to setting up of various operation standard.

As university graduates is now more common and thus there are quite a number of university graduates in my existing company. It was to my surprise that the education had been very much diverted, to the extend that mechanical engineering graduates do not understand how a coarse and fine tuning mechanism is designed and function. It was another shock to noticed another mechanical engineering student graduate does not know normal bolt and nuts should screw in with clockwise or anti-clockwise rotation.

On checking how the practical training was done during university time and it gave me another shock to know that the practical was done with arrangement for the students to watch video.

Beside the engineering graduates, I noticed U graduates in other departments too with the way they handle operational issue with "pure theory" method of application.May be there are still too fresh and thus very lack of experience, but the problem is whenever an issue was brought up and opinion provided, they tend to have "very good reasoning" of why they are doing a certain thing a certain way.

With the thought that they are fresh graduate with no experience, I started to look into other non-educated staffs who had been working there and had been in the same industries for many years (some of them had been in the industries for twenty over years) even though the company that I am working in is still new. It is again a surprise to note that the working attitude had been very much changed compare to what I had been knowing of.

After more than a year back to the industry I was in and contacted with various old time friends, I started to realized that after quitting for so many from the industry, I am still one of the pioneer and many of those who had been trained by me are now holding the senior management position in various organisations.

By re-looking into my history in this industry, I started off solving engineering problem and introducing modern management method in the first company. Various Standard Operating Procedures were setup during that time. The personal computer was not common during that moment of time, nevertheless I had started of by using spread sheet program to set up various standard forms with built-in function and formula to some extend of automation.

After leaving the first company, I had been in other industries for years before being called to help to rescue the second largest company of the same industry. Beside overcoming their engineering problem by design and upgrading the then 35-years old swing tray oven turn over problem, I proposed to the management on how to introduce varieties in the market to buy time for market development. This proved another success in my carrier.

After a 2+1 years contract as expatriate in China for the same industry, I decided to come back to Malaysia when grand mother gotten old and sick frequently. Since then, I was on my own business of both engineering services and trading, with some diversification to tourism fields.

I was called by an old friend to be a consultant in this new company and helping to solve their engineering matters. After familiar myself with their existing system and getting to know better in the employee attitude and organisation behavior, I am now setting up another dream to help in building a world class manufacturing organisation.

Good manager should work within constraint and lead all fellow subordinates towards the common aim to achieve optimum organisation achievement. Hence I have to paint a big picture to the whole team on how I want the company to be.

This "Big Picture" will be elaborated in future posts, and just for now, I will do it posts after posts to share the steps on how am I going to build my dream.

The beginning of consultancy process

It had been a long time since I posted my first post in this blog. There are quite a number of reason for such a delay. the first of all reasons is I have to adjust and re-position my thaught so that whatever I post will be generally sound and do not mislead the reader. Secondly, I would have to make sure I am not only referring to one single company, and thus do not leak off trade secret, if any. Of course finally I have to make sure all comments given are not only related to a small group of personnel.

In one of the company I offered my consultancy, the top manager is a long term staff in its mother company. In view of quite a number of "politics" in his old company and considering on various unwanted treatment he faced over the old company, he had decided to make full use of the opportunity given and set up a company with a compassionate environment.

With a lot of background technical knowledge learnt through his carrier, and with the full financial support from the rich owner, he and his partner had decided to employed fresh graduate to support them on initial set up of manufacturing plant.

One of the major advantage of employing fresh graduate is for ease of managing. The industrial related knowledge is gained through detail discussion with related vendors. This had come to a certain success in few years time.

It is not easy to set up and run a company. but it will be more difficult to set up proper system so that the success can be repeated. This is when they finally decide to obtain my consultancy.

The first task I have done in the company, not really related to consultancy, but more towards solving various equipment they faced and not able to solve over the one and a half year of operation.

To be frank, this is not difficult task but it need a very strong analytical mind and sharp technical observation to trouble shoot those problems. This was completed in two to three months time. After settling of those most urgent problem, now it comes to time of actual consultancy job and I will share them, starting from my next post.

The beginning of my consultancy record

After many years of experience in manufacturing environment, with my graduation in Marine Engineering, I had been carried out consultancy jobs on part time basis over the last ten years.

Few months ago, I decided to take up an offer to be inhouse consultant for a new wholesale bakery and a flour mill. I take this as a challenge to try instilling a world class manufacturing environment.

Prior to any progress, I would have to understand the organization behaviour (OB) of this organization. With different OB, some variation would have to be carried out for achieving final mission.