In Helmer’s Process Power mechanism, embedded organizational practices improve cost or product attributes and cannot be replicated without extended development.

Evidence 3 passages

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  Process power. The TPS exemplifies a rare power type, process power. Let me characterize process power more formally using the usual benefits and barriers dimensions of the seven powers framework. Benefit. A company with process power is able to improve product attributes and or lower costs as a result of process improvements embedded within the organization. For example, Toyota has maintained the quality increases and cost reductions of the TPS over a span of decades. These assets do not disappear as new workers are brought in, and older workers retire. Barrier The barrier in process power is hysteresis. These process advances are difficult to replicate, and can only be achieved over a long time period of sustained evolutionary advance. This inherent speed limit in achieving the benefit results from two factors. 1. Complexity Returning to our example, automobile production, combined with all the logistic chains which support it, entails enormous complexity. If process improvements touch many parts of these chains, as they did with Toyota, then achieving them quickly will prove challenging, if not impossible. 2. Opacity. The development of TPS should tip us off to the long-time constant inevitably faced by would-be imitators. The system was fashioned from the bottom up,

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  trial and error the fundamental tenants were never formally codified and much of the organizational knowledge remained tacit rather than explicit it would not be an exaggeration to say that even Even Toyota did not have a full, top-down understanding of what they had created. It took fully 15 years for instance, before they were able to transfer TPS to their suppliers. GM's experience with Numi also implies the tacit character of this knowledge. Even when Toyota wanted to eliminate their work processes, they could not entirely do so. This benefit-slash-barrier combination allows us to place process power on the 7 powers chart located in the supplementary PDF. Which brings us to our definition of process power. Embedded company organization and activity sets, which enable lower costs and or superior and which can be matched only by an extended commitment. Process Power and the Discipline of Strategy Process power has important intersections with the evolution of the discipline of strategy. By characterizing these, we can better understand the nature of process power and why it is so rare. Strategy vs. Operational Excellence Professor Michael Porter of Harvard created quite a stir with his long-ago insistence that operational excellence is not strategy. His reason for doing so, however, completely

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  aligns with the no-arbitrage assumption of this book. Improvements that can be readily mimicked are not strategic because they do not contribute to increasing bar M or bar S in the fundamental equation of strategy, as these are long-term equilibrium values. But wait a minute. Aren't the step-by-step improvements that drive process power exactly what much of operational excellence is all about? Yes, they are, but this represents only the benefit side, which brings us to an power. The type of benefit it cites, evolutionary bottom-up improvement, stands at the heart of operational excellence. As such, it is quite common. The rarity of process power results from the infrequency of the barrier, an unyielding, long-time constant are the improvements in question. No matter how much you invest, or how hard you try, the desired improvements are constrained by a boundary of potential that is tied to time, as seen in the NUMI experience of GM. Perhaps the best way to think of it is this. Process power equals operational excellence, plus hysteresis. Having said that, such hysteresis occurs so rarely that

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