“Efficiency” can cost too much

See Henrik Mårtensson’s “The Cost of Queues” on how an extreme focus on “cost effectiveness” can damage an organization. (Thanks to Jack Vinson for the referral on his blog “Knowledge Jolt with Jack.”)

If you try to become more cost effective by reducing capacity, and thereby capacity cost, all will be well at first, from an economic point of view. (The people who are let go are usually of a different opinion.) The catch is that this will increase the queues in the system. This increases lead times. Consequently, cost associated with lead time will also increase. (In manufacturing there is also a considerable storage cost due to increased inventory, but we will ignore that for the purposes of this blog post.)

Leave a reply

Other recent posts

End of one-size-fits-all data stories

This appeared originally on the TDWI site in September behind a paywall. It’s still there, but today they’ve had the 90 days of exclusive use that I agreed to. Survey after survey reveals that about 80 percent of business users don’t use data analysis—despite all the marketing and “easy to use” tools. As if in… Continue Reading

Qlik finally set to leapfrog Tableau?

Who’s your rival? I carelessly asked a Qlik person at the company’s annual analyst reception Monday night in Miami if she hadn’t once worked for Tableau. Her revulsion was immediate. “No! Never!,” she said. We smiled. There was so much more to talk about. For one thing, how will private equity change things? Qlik wasn’t… Continue Reading

Five Tips for Better Data Stories

Originally published on September 22, 2015 in BI This Week, a TDWI publication. A “data story” sounds like such a great idea. You just mix data with storytelling and you’re done — except that most data storytellers get one thing wrong: they drown out the story with data. Such storytellers, I believe, assume that audiences… Continue Reading

Bohemian Grove a la BI

The Bohemian Grove of the BI industry convenes for the fifteenth time in just three weeks. Naturally, you ask the obvious question: Are you serious? The Grove? A summit? The answer begins with a fond recollection of the Grove. If you’ve never attended the Bohemian Grove yourself — I haven’t, though I live in the… Continue Reading