Profit Mapping: A Tool for Aligning Operations with Future Profit and Performance (Hardcover)

~ (Author), Adam Garfein (Author)
Key Phrases: management roller coaster, execution roadmap, excellence proposition, New York, Harvard Business School Press, Industrial Engineering (more...)

Editorial Reviews

Product Description

A wise manager knows that success only comes with operational excellence that is properly aligned with strategy. The challenge is knowing what actions to take and when to take them-navigating without knowing the impact of your actions on the bottom line is a risk you can't afford to take.

Profit Mapping delivers a forward-looking management decision tool that allows you to proactively navigate business strategy and execution. The authors' exclusive ProFITMAP method is a navigation system for operations that has been used successfully with leading businesses such as Ford Motor Company and General Motors. It enables you to test the impact of any number of factors on operational execution-from product demand and mix changes to process and technology changes to resource limitations-prior to taking any action.

ProFIT-MAP helps you make informed process and product decisions and reach your operational and product objectives by answering the following questions:

• Can it be done? Is it possible? If not, then what additional capabilities are needed?
• Will it be profitable?
• What is the impact of my particular decision across the product mix and the functional capabilities of the organization?
• How do I get to the desired future (the roadmap)?

With ProFIT-MAP, you'll gain the ability to change strategic direction with agility in response to changing market dynamics. ProFIT-MAP also allows you to enhance your existing approaches (including Six Sigma, Lean Operations, and Balanced Scorecard) by providing insight into which actions will be effective. Instructive strategic, tactical, and operational case studies illustrate its practical implementation.

Applicable to more than 30 unique operational areas and usable from the front lines to the executive suite, Profit Mapping enables you to control your operational destiny and deliver on your strategic goals.

From the Back Cover

Drive Operational Excellence with the Right Decisions

Praise for Profit Mapping

“In Profit Mapping, Anil Menawat and Adam Garfein marry the manufacturer's lean knowledge with their business intuition for lifelong success.”-Kathleen Mennillo, Product Development Manager, Membership Division/Conferences, Society Of Manufacturing Engineers

“Profit Mapping is a very valuable tool for the manufacturing industry. It combines process improvement initiatives with financial analysis for bottom-line improvements.”-Dr. Pulak Bandyopadhyay, Ph.D., General Motors R&D Center

“Profit Mapping is packed with management insights that are of value and immediate relevance across many types of business, including our own manufacturing operations.”-Shankar Kiru, Chief Financial Officer, Diversified Machine Inc.

“Profit Mapping should become a universal tool at the shop floor level; it's an integrated methodology for improving profitability in manufacturing and acquisition planning.”-Anthony F. Griffiths, Corporate Director and Independent Consultant

“Profit Mapping is a very thorough, holistic, and systematic approach to looking at your business as a dynamic evolving entity. An excellent read. A must for all senior executives, business managers, and decision makers.”-Jay Manouchehri, Managing Director, EMS Consulting Group

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Product Details

• Hardcover: 240 pages
• Publisher: McGraw-Hill; 1 edition (June 16, 2006)
• Language: English
• ISBN-10: 0071472282
• ISBN-13: 978-0071472289
• Product Dimensions: 9.1 x 6.1 x 1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.8 out of 5 stars  See all reviews (4 customer reviews)
• Amazon.com Sales Rank: #485,025 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

3 of 3 people found the following review helpful:

5.0 out of 5 stars The Cartology of ROI, February 15, 2007

By	Robert Morris (Dallas, Texas) - See all my reviews (TOP 50 REVIEWER)    (REAL NAME)

Anil Menawat and Adam Garfein provide in this brilliant volume "a tool for aligning operations with future profit and performance." To their credit, they explain with meticulous care how to drive operational excellence through profit mapping to create a sustainable edge which they correctly characterize as "the management roller coaster." In this context, I am reminded of the familiar assertion that "you can't manage what you cannot measure" and how important it is to "measure only what matters."

The maps with which Lewis and Clark began their journey of exploration in 1804 were crude and over time revised as the journey continued until 1806. The same is true of the documents with which - more two centuries later -- senior-level executives begin an exploration of their own organizations, in search of hidden resources and new opportunities. Following their Introduction to this volume, Menawat and Garfein, examine various challenges to business execution, present a "parametric framework" by which to "drive the system," and explain how to "win before taking action with a structured methodology," then shift their attention practical action steps in combination with two case studies in Chapter 10. The first examines a common dilemma of "doing no harm." The second illustrates ProFIT-MAP's potential to drive radical cost reduction without sacrificing quality or throughput.

With regard to ProFIT-MAP, Menawat and Garfein offer it as a "forward-looking management decision methodology" which enables senior-level executives to "navigate [both] the forests and the trees of business strategy and execution proactively." It consists of six phases: Project Objectives (please see pages 155-167), Process (pages 170-177), Resources (pages 177-180), Finance (pages 181-184), "What if?" (pages 184-187), and Business Execution Option Choice (pages 193-202).

With regard to the first phase, I am reminded of what Peter Drucker suggests in an article written for the Harvard Business Review (1963): "There is surely nothing quite so useless as doing with great efficiency what should not be done at all." Obviously, it makes absolutely no sense to create a totally accurate map - even if guided and informed by the ProFIT-MAP methodology -- to achieve an objective that will not increase profits and improve performance.

To me, some of the most interesting and most valuable material is provided in Chapter 4 as Menawat and Garfein explain how and why the Parametric Activities-Based Framework (pABF) offers a practical approach to measuring the right variables in any enterprise in order to reconstruct the whole system. One of the greatest benefits of the pABF is that it eliminates the need for patches or workarounds. On pages 101-102, Menawat and Garfein cite eight specific reasons why the pABF is a better estimation and reconstruction framework than others which lack a methodology or a process for applying one.

It seems appropriate to conclude this brief commentary with a brief excerpt from Chapter 1 in which Menawat and Garfein duly acknowledge various challenges to profitability and competitiveness. However, although "managers may not be able to do anything about high fixed costs in the near term, they can do a lot more operationally to increase effectiveness and quality while striving to reduce cost. In order to overcome changes in demand and financial constraints, organizations must learn to be become cost-competitive; price competitiveness is not enough. Industry leaders win by focusing on operational execution, cost management, and customers. The devil is in the details, and they understand that success happens only when the plan is grounded in reality, as opposed to invalidated expectations." This is precisely what Thomas Edison had in mind when asserting that "Vision without execution is hallucination."

Congratulations to Menawat and Garfein on a brilliant achievement.

2 of 2 people found the following review helpful:

5.0 out of 5 stars What's next in business improvement?, October 26, 2007

By	Albert Hulley - See all my reviews (REAL NAME)

I know that everyone is anxiously waiting for the next approach to business improvement. My own journey started with Ollie Wight himself and the refrain that the days of the expeditor were over. I'm not sure if I was an expeditor at the time but that was my first job and in the week before I retired I did the exact same thing I had done 33 years before. One of our salesmen called me (VP Operations) to make sure we would be making a shipment as the customer's unit was down. The biggest change was that we had received the order in the morning, manufactured the product, and had the product delivered before midnight, to Freeport, TX from Chicago. In the old days we would have told the salesman no, he would have called his boss, who would call my boss who would call his boss, and so on until it reached the top of the company and we were told to do what the customer wanted. Of course by this time we lost a couple of days and no one was happy.

Reading Anil Menawat and Adam Garfein's new book Profit Mapping brings back a lot of memories and the realization that along this path of continuous improvement that some things worked but nothing seemed to be the solution that was advertised. A lot of us have seen great benefits to the lean journey but along the way it always seemed as if we just were not quite there. There are those examples where On-time delivery is 100% and inventories approach zero and analogies of reducing the level of the water to find the rocks drives the next level of improvement but the net result seems that while the business is better, a lot of times the individual improvement projects do not meet expectations or drive the business to the next level.

The book drives the concept that everything in business is a set of processes and that changes to each of the process need to be evaluated for the consequences both intended and unintended. This can be done theoretically before you take action by integrating a financial analysis (income statement) with the various scenarios. It provides a roadmap on how this can be done but to me the biggest value is that it drives the logic that there are no absolutes but that with the facts you can pick and choose those actions dynamically that will have the biggest impact on the business. It may even support the position that it is better left alone but that has its own political complications. The example in the back of the book shows that there are times due to equipment and demand profiles that having inventory in queue is more realistic and better for the business. Some of this is dangerous territory....

For everyone who has been through the mill, this is more than just another book. It hopefully sets the stage for all of us to realize that rules of thumb are just that and to drive a business one needs to do what is right for the customer and concentrate on those things that are proven to truly impact the business and are not just another notch on the belt of completed projects. This book is a keeper.

2 of 2 people found the following review helpful:

5.0 out of 5 stars The end of the "Load, Fire, Aim" production system?, July 12, 2006

By	Seamus O'Sullivan (Limerick, Ireland) - See all my reviews (REAL NAME)

This book is a "must read" for managers who rely on "rule of thumb," and "best guess" methodologies that have held sway in every business that I've ever been associated with.

The authors set out clearly how you can take control of your future, and test the results of an action or strategy before you commit resources and potentially set off down the wrong road. But first you've got to take on board the idea that simply projecting past results is no way to forecast, because those results came from different demand and capability circumstances than you face now.

I thought that the authors argued convincingly that you must understand the factors that affect your business, and which of them you do and don't control. The ProFIT-MAP methodology then lets you test those factors for sensitivity, so you can concentrate on the things that really matter to the overall goal.

Now you need to know the dynamics of your process. The authors break the business into 3 areas, Processes, Resources and Finance, and urge us to make sure that an "improvement" in one area doesn't result in major disruption elsewhere. (I could never figure out why cost savings in a production process, was rarely reflected in the overall bottom line.) Now I know, "tunnel vision".

Having followed the 6 Phases detailed in the book, you can generate different scenarios and analyse the impact across the board.

It might sound like a lot of work, but you're already doing a lot of work - guess work mostly, and once you've done it the first time, it's easy to continue. Remember, to make the broadly correct decision, you don't need to know the minutiae. But every time you reiterate, you add better data for tomorrow's decision support.

Speaking of figures, the authors offer a specification for real-time data collection and software integration that I have yet to see in the real world. However, help may be at hand, I notice that the Menawat & Co's website now makes mention of something called "ProFIT-MAP Dashboard", which promises integrated analytics. I will be watching this space.