Resolving Diseconomies of scale

Resolving Diseconomies of scale

 by

Manoj Kumar Trivedi

Founder Director & Business Mentor

iGlobal Research and Analytics

Fourth Industrial Revolution (IR 4.0)  through digitisation may accelerate production but cannot ensure productivity. Though by default it will reduce cost through labor, predictive maintenance and energy management to form a new standard,competition will continue to prevail in this VUCA world.

UNIDO (United Nation Industries Development Organisation) has conceded the limitation of smart factory to accept, Smart Factory & digitisation cannot frame business strategy and manufacturing strategy. This makes them to suggest a major characteristic of IR 4.0 which has not been practiced or followed to its full strength by industries across globe.

In not following Economic Value Engineering, following questions will continue to haunt Organisations, CEOs & Business Leaders across globe: 

a) Why Savings achieved across operation does not reflect in 

    Balance Sheet ?

b) Why Profit does not commensurate change in sales/TO?

c) Why Increase in production reduces margin of output?

d) Why Average Total Manufacturing Cost is variable across each         batch, days, weeks,months & years?

The answer is Diseconomies of Scale. Unless these production factors are dealt with production cost will remain high depleting profitability. 

Productivity analysis measuring real time performance weighing decisions against real time cost is mandatory to neutralize macroeconomic implications at micro level of operation and Economic Value Addition across operation.

Business transformation has to represent a fundamental and risk laden reboot of a company with the goal of achieving a dramatic improvement in performance and altering its future trajectory. It can no more be limited to conventional norms of selective improvement. A transformation is not a series of incremental changes. Rather, it is a fundamental reboot that enables a business to achieve a dramatic, sustainable improvement in performance and alter the trajectory of its future.

Economic Science with Econometrics have long been ignored through commandement of heirarchy and objective principles of Management across organisations. Economic Value Engineering through Economic Reasoning Skill is fast replacing all skills of 19th & 20th Century for analysing Big-Data being generated by machine.

Such skills are already being valued at US$ 0.29 Millions per annum. At such a high salary, none of the organisation will be able to survive. As such it is mandatory to re-skill all white collar employees across organisations.

Whereas, SMEs being limited by their finance, neither can hire costly & qualified talents, nor, can they invest in smart factory. But have equal right to grow as pillar of national economy & engine of growth to any nation. They have to compete looking beyond new standard. The only way to beat the competition is unlocking the mystery of production factors for being competitive.

Economic Value Engineering has to be practiced across all the activities, functions and operational segment at tandem.

As an Expert retained by International Economics Consulting Ltd, Mauritius engaged by Govt of EU & UK to develop industries across African & ASEAN countries facilitating trade & investment, we offer Unique & Exclusive off-site service to the benefit of SMEs with an Annual Turnover up to US$ 14.93 Millions across globe by way of special mentoring program of two hours on on-to-one basis per telephone/skype at a much discounted rate of US$ 1200 for a limited period of 15 days commencing 31st May'2018.

Additionaly, for holistic improvement alongside large entities,taking backward integration route, we offer our unique & exclusive on-site two days educative discourse for capacity and competency building to develop vendors/business partners of large entities comprising 90% of vendor master who are bound by their limitations, to the benefit of both, large and small entitities. Value chain of dymanics of Supply Chain must be strengthened. Imagine, if all the vendors across organisation could reduce price of supplies by atleast 5% !!

We are second to none for practical application of Economic Science with business mainstream of operation using Econometrics to address Diseconomies of scale.

To book your slot for customized solution rush your mail at trivedi.k.manoj@gmail.com,or, call us at (91) 9433013863.