Toledo: a city of three cultures

The Other Side | By Felix Validvieso, Director of Communication, IE Business School Operations and finance professor Alber Sabanoglu Segura comes from Turkey, and he is also a Sephardic Jew. Hence we decided that there was no better place to shoot this video than the ancient Jewish quarter in Toledo. When the Sephardic Jews were expelled from Spain…

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Wings

Professors talk about all kinds of issues. Issues are not, however, remarkable in themselves, no matter how hot the topic might be. What makes them remarkable is the way you talk about them. Operations professor Luis Solis is one of those people who truly believes not only in what he teaches but in whatever he is saying…

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Relocation, another opportunity for SMEs?

IE Focus | By Gamaliel Martinez, Professor at IE Business School

The tide is turning. After twenty years of delocation fever among Spanish firms, some of them are now bringing their manufacturing back to Spain. It is a particularly good option for SMEs. After twenty years of delocation fever it would appear that the trend is now reversing, as some companies start to bring their production plants back home, while many more are considering it.

Labour costs have risen in China. The increase in the price of a barrel of oil has impacted the cost of logistics, and some of the hidden costs, such as expatriation, were not calculated properly. Distance has constrained flexibility. Some companies have lost control over their know-how. Quality is uneven. Although manufacturing in Asia (or other places) seemed like such an interesting option only a few years ago, this often turned out not to be the case. According to Fedecon 15% of delocated textil companies have returned to Spain or to countries nearby, and we already have examples in the toy sector, such as Juguettos and Injusa. These are two sectors in which it was supposed that production costs were everything.

Labor costs are going down in Spain resulting in an improvement in levels of competitiveness in the international market. Bringing production  back to Spain is now a real option which would improve quality, response time, and enable greater control over processes, all this at a very similar cost. Coming back seems to be a simple choice, given that in the majority of cases, and particularly in the case of SMEs, the companies in question did not make enormous investments in production plants, preferring to subcontract production, to the detriment of local plants. Nevertheless it is entirely possible that those businesses that decided to delocate at the time have lost all or part of their know-how and may even have closed down their factories, making it very expensive for them to return to Spain.

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How to reinvent your company

Professor Zhijian Cui will be travelling through Asia in June to talk about “How to reinvent your company”. He will address questions like: Do companies lose their innovation drive? Why are start-ups more innovative than multinational companies? Can innovation be structured and institutionalized? Cui’s highlights the importance of innovating business models and developing a framework on…

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Beijing Opera

Although this video runs for just three minutes, it actually took six months to shoot from the moment Operations Management professor Cui Zhijian and I first talked about it. It wasn’t because I thought it was necessary for Prof. Cui Zhijian to go to Beijing to do it, or that we needed support of other actors or…

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MBA students participate in IE Consulting Project with Unilever

To mark the conclusion of the IE Consulting Project (IECP), sixteen International MBA students recently presented their final projects to senior management of Unilever.  The IECP is the latest example of the experiential learning opportunities available at IE Business School, which provides students with real world experience in identifying and solving problems in management.  “Not…

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Toyota, the just-in-time spirit is alive and well

IE Focus | By Daisy Escobar, Professor at IE Business School

Toyota has been shaken to its very foundations by the mechanical faults detected in some of its models, but it has managed to react fast, with improvements that are reminiscent of its just-in-time breakthrough.A company with faulty products is nothing new. Situations in which the fault affects its products en masse are not quite so common, but the business annals now contain several notorious cases, some of which have been solved more successfully than others.

The problem is therefore not a new one. The difference lies in that it is happening to Toyota, the company renowned for manufacturing fault-free products, that demonstrated the cost of ´no quality´ and that continuously works to eliminate any kind of wastefulness. Indeed, the concept of faulty product is what the company focuses on most in order to eliminate it from its plants. Toyota invented the famous poka-yokes, the alarms and controls that warn of errors so that they can be corrected before they become faults, in other words, before they are found by customers.

The mechanical problem affecting the accelerator pedals on some of its models and the brake pedals on others has struck the very heart of Toyota´s ideology: its commitment to quality. The company has not had long to wait to feel the effects of the problem: more than ten million cars recalled for a service; around two million dollars in costs (estimated figure); and a somewhat tarnished image as far as its customers are concerned

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