This article is related to my previous post Financial/ Investment Projects failure - Part I.
Recent news that have been there in the different industries in past few months:
• Dell computers recall a big number of faulty batteries supplied with their dell laptops
• A month later, another computer giant Toshiba announces similar problems with its laptop battery. Another big recall plan is in place
• Most recent one, Nokia recalls more than a crore of its faulty cellphone batteries
• Mettle Toys recall millions of its Chinese made products due to high content of Lead (Pb)
• And the latest, Honda – Japanese car known for its quality, recalls its Civic Cars for problems.
All the above listed recall plans have happened within less than a year – last 3 of them were in last one month.
The list includes all the reputed companies of the world, who are the market leaders in their segment. Each of them is known for their quality control and safety standards. Majority of them are listed on premier stock exchanges of the world and are parts of leading stock indices. Still, there are so many instances where the projects have failed.
Nokia’s battery problems were those identified with batteries supplied by the china based vendors. Similar is true for Mettle toys. Can we conclude that anything made in China is prone to faults? Definitely not!
What were the Quality check engineers doing when these products were being shipped out of the factory?
These are all circumstances which occur sporadically, resulting in huge losses. Recall process is not only costly, but it also tarnishes the image of the company. How much money of the investor would have been spent by the above companies for recalling the faulty products? How about the image that is built up? I will now think twice before buying a Nokia handset.
Another major one was the crash of the trading system at the Tokyo stock exchange. It was a few months back, when the trading system at the Tokyo Stock Exchange crashed miserably, because the no. of transactions happening on the exchange were too big, and the trading system could not keep up to manage those big no. of transactions. The result – trading halted on the exchange. It happened 3 times in a row, that too within a period just 2 months.
Something that is unbelievable. Second largest economy of the world, home to the best and quality brands like Sony, Honda, Toyota, etc to name a few and an economy of this scale does not have a competent system to support huge volumes of trading.
That’s why it is said: Projects whether for investments or for products, are highly prone to failures. We only end up looking at the survivors. No body can be sure of how and why a product will be taken up by the market.
Companies conduct surveys to figure out what is required in the market. By the time they develop the product are ready to launch it in the market, situation changes drastically.
Add to it the competitors, another factor of risk adds to it. How about the risk of vendors supplying faulty batteries?
Be it projects, products, investments or planning - Things work randomly.
Please read the comments and post your views and queries in the comments section which helps in open discussion and avoids duplicity of questions.
You may be interested in reading my previous articles. Here is the link to Table of Contents in a chronological order.
7 comments:
Shobit,
Thank you very much for your continous good articles.
Regards
Ronnie
Hi Shobit,
Can you please explain the reasons behind rise of 600 points on 19th Oct 2007.
As a common man, many are not aware how US Fed cut has affected indian sensex for 600 points.
Thanks,
Bhavik.
Hi Shobhit
Pls go through this link http://economictimes.indiatimes.com/Cost_structure_review_of_ULIPs_for_better_returns/articleshow/2417978.cms
Finally it seems IRDA is taking some steps to protect individuals interest in ULIP plans
Hi Shobhit
Pls go through this link http://economictimes.indiatimes.com/Cost_structure_review_of_ULIPs_for_better_returns/articleshow/2417978.cms
Finally it seems IRDA is taking some steps to protect individuals interest in ULIP plans
"Be it projects, products, investments or planning - Things work randomly. "
Just because we were able to get some reasons and quality check being missed in some companies, DOES NOT really mean that things work randomly. Rathar, when random people are put in for quality test, then things succeed randomly. Some failure and some success. In China,s toys recall case, it migh have been a known case. but when a country like USA is doing economical warfare and using media to support them, then all the other countries start recalling chinese made toys. I like most of your articles and I keep checking your blog for updates. Meaning to say that I'm not against you.
But when you decide to say that things work randomly even in product development, its not true. Apple did not invent so many good products like Mac, IMac, IPod, IPhone, OS X randomly. All the failures you have mentioned are technological. So, its not random failure. These are the failures acknowledged by companies. these are the failures due to human faults. If the quality testing was done in all the stages, then all these failures could have been easily avoided. One or the other test was missed so the failure.
In order to say "things work randomly" and give the failures of products and batteries means either you have given no thought before completing this article or you're not aware of technical things or quality test in detail.
Scribnar,
Thanks for your comments.
The fact is that every company uses and runs technology - be it electronics, oil and gas, textile, even fodder, sugar, any industry sector.
As long as the faults are committed, projects will keep failing. Nothing can stop or control failures - unless one keep all eyes open.
Reliance factory in Jamnagar caught fire few months back - obviously it was not planned, was it negligence, or something else????
That's why it is said, things work randomly.
Thanks for the prompt reply. It shows you are very active and sportive in taking comments. Its getting interesting now :-)
The examples you have given are below.
• Dell computers recall a big number of faulty batteries supplied with their dell laptops
• A month later, another computer giant Toshiba announces similar problems with its laptop battery. Another big recall plan is in place
• Most recent one, Nokia recalls more than a crore of its faulty cellphone batteries
• Mettle Toys recall millions of its Chinese made products due to high content of Lead (Pb)
• And the latest, Honda – Japanese car known for its quality, recalls its Civic Cars for problems
All the above examples are human controllable mistakes that could have been avoided if quality testing was done thoroughly according to the testing procedures and good amount of time was provided for the quality testing team. Since companies are always in a hurry to get the product released, the quality testers are robbed off their time to complete the work. In any technological product development, testing is the only area people think the time can be reduced in. If analysis phase goes for long they think its must. Even development phase is thought to be must. But when it comes to testing, they think since the project deadline is reached reduce the testing time period. It has happened in all the projects I have worked with and i have always seen the after effects being worse like the recalls.
Reliance factory getting fire can never be controlled by by quality testing :-) as anyone would agree. So it does nto fit in the context. The examples you have given were related to quality testing mistakes ; So your saying of things work randomly does not apply there. It could have been better if you finished the article saying something similar to "Products succeed randomly if random testing is done".
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