Management creates benefits, and management creates miracles
There are several typical cases in the history of management: the division of labor has increased the output by 240 times; the cost decomposition has made a loss-making enterprise turn a deficit into a profit in that year when the whole industry generally suffered losses; task assignment enables a project which usually takes several months to be completed in 4 days; the decomposition of the contract makes the enterprise with more than 30 thousand people care about the market.
These miracles all apply the idea of decomposition.
Work decomposition in Production Management
The first example is Adam Smith's discussion about needle making. In the past, one of the most excellent workers who made buttons could produce at most 20 needles a day. Later, the whole manufacturing process was divided into 18 processes, such as straightening the iron wire, cutting, sharding, polishing, installing round head, coating White, packaging and so on. The Daily production soared to 48000 pieces, per capita labor productivity jumped to 240 times of the original.
In the modern assembly line production, the selling price of Ford's T-type car is 30% lower than that of its competitors, and the profit margin is 20% higher at the same time. Toyota in Japan takes off a new car every 8 seconds.
Complex work is divided into simple parts. Even new employees can be qualified after certain training. Obviously, division of labor improves labor productivity. While the increase of labor productivity often directly means the increase of profit margin.
Task decomposition in project management
The second example is the management of construction projects. On 1993, the President of Turkey passed away. The government required to build a permanent cemetery for thousands of descendants to admire, which must be completed within a few days.
The assigned project team divided the work into raw material preparation, location survey, foundation excavation, drainage system, concrete pouring, marble decoration installation, lighting equipment installation, flower bed installation, final sanitary cleaning, etc. 27 activities, arrange the sequence and duration of parallel or serial work of each activity, and strictly follow the schedule of the project. 20 engineers and 40 construction workers worked day and night to build 15000 m² tombs which were both in accordance with religious beliefs and of high quality. It only took 78.5 hours!
One of the quintessence of project management is to decompose work, assign appropriate people and distribute various resources. This is why the project team can challenge difficulties and create miracles.
Cost decomposition in financial management
The third example is the backward Cost of Handan Iron and Steel Company. At the beginning of 1990s, the whole country carried out the rectification work to reduce the capital construction investment. The steel market was weak and the price of raw materials and fuel increased sharply, which caused the cost of steel to rise sharply, at that time, there were 26 kinds of losses of 28 kinds of steels produced by Handan Iron and Steel Group, and there were losses for 5 consecutive months. The company adopted the method of cost decomposition. Starting from the market price of the product, subtracting the target profit, according to the opposite direction of the process in the factory, analyzing the potential profit step by step, and gradually pushing out the target cost which is decomposed to each person. Moreover, the cost index rejects the capital, without any objective reasons. If the index is not completed, all the capital will be exempted, thus the cost pressure becomes everyone's working motivation.
From 1990 to 1995, Handan Iron and Steel Company simulated the market accounting, implemented the cost veto, reduced the expenditure by 0.26 billion yuan, and reduced the total investment by 0.35 billion yuan. The labor cost is less than 10% of the total cost, which has become the model of reducing costs for metallurgical enterprises and even enterprises in the whole country.
The cost decomposition layer by layer is a good way for enterprises to pay attention to financial management and put an end to "run, run, drop and leak.
Contract decomposition in operation and management
The fourth example is the contract decomposition of Haier company. Haier company divides an external contract into thousands of small internal contracts according to several nodes in the big process of procurement, production and sales. The relationship between the upper and lower processes and the lower positions becomes the relationship of contract, market and service. The workers, funds and wages of the previous process come from the effect of his service for the next process. If the service is effective, the payment can be claimed according to the contract; if the service is not effective, the other party can claim for compensation, and the bonus and salary will be ruined. The salesmen should meet the demands of external customers, and the internal staff should meet the demands of the salesmen one by one, and try their best to do their own work well, or they will suffer claims. The pressure of the external market is distributed to every working procedure and everyone through the internal market chain of "compensation claim, claim and trip.
The decomposition of external contract into internal contract is actually to decompose the responsibility power represented by the contract to every internal employee.
These examples show the charm of decomposition thought. Splitting tasks can refine the work; splitting costs can quantify indicators; splitting responsibilities can unite all employees.
To sum up, decomposition has two functions:
The first function is to decompose tangible work.
After the whole work task is divided into several parts, the complexity of each part is reduced. Originally, a single employee can't do or can't do a good job, but now he can finish it excellently. In addition, if an employee is engaged in a specific task for a long time, his or her working proficiency will increase, and the labor productivity will also increase accordingly. This is one of the magic weapons of management: division of labor improves labor productivity.
The second function is to decompose the intangible responsibility. It is equivalent to establishing a clear system of responsibility and power within the enterprise. This system effectively transmits and spreads the market pressure and operational risks which were only deposited in the top level to the grass-roots employees, making them generate a strong sense of hardship and establish a firm market concept. Moreover, this system of power and responsibility is also equipped with corresponding salary distribution scheme to ensure that the responsibility is put in place.
In the period of planned economy, although there were tasks assigned, the fundamental economic interests could not be touched if the work was done well or not, "the Iron Bowl could not be broken ". Although the publicity work hard, but the effect is not good, can not make the staff "love factory as home ". Some enterprises produce more, Overstock more and lose more. Therefore, some people deduce that the way of work decomposition to improve labor productivity is out of date, and even think that the idea of decomposition is out of date. Actually not. In the past, it was the task assigned by the superior, but now it is the task assigned by the market. The truth is the same. The key is that the enterprise should not only decompose the tangible work into the position, but also set up the power and responsibility decomposition system which is suitable for its own actual situation and equip it with corresponding management system according to local conditions, only in this way can the invisible market pressure and the concept of "The prosperity of the factory and the decline of the factory" be put on every employee.
The environment is changing, and the ways may fall behind, but thoughts can always enlighten us. Decomposition is a sharp weapon of Management Thought.
