Just about everybody in business has heard the term “bandwidth”. But not so many can explain what “bandwidth” means when used in reference to business activities. I wrote The Importance of Expanding Bandwidth to organize my own thoughts at the time. For me, it serves that purpose again – to organize my thinking for part of a book I’m writing on operational excellence for smaller manufacturers. The Importance of Expanding Bandwidth is revisited here so that you need not wait until the book is ready. C.H.
The Importance of Expanding Bandwidth – From 13 February 2014
The Business of “Bandwidth”
“Bandwidth” is a communications term that refers to the rate at which information can be conveyed through a given channel. It’s roughly analogous to a pipe – the larger the diameter of the pipe, the more fluid it can carry. [i] Business borrows the term “bandwidth” to refer to flows of information into, within and out of the firm.
The internet sparked a change from a condition where access to timely information was limited to a condition where enormous quantities of information threaten to overwhelm us. The challenge for managers is more than how to gather more information. Rather, the challenge is how to order that information in such a way that it can be assimilated and made useful. This poses two situations: (1) choosing which content streams to admit into awareness, and (2) providing sufficient context for each content stream to make it truly understandable, hence actionable.
To make the term “context” clear, consider, for example, a Metropolitan Opera performance, presented as an AM radio broadcast, a stereo FM broadcast, and a high definition, enhanced sound quality color television broadcast. In each case the content may be the same. The increased aural and visual context, however, results in a much richer, more meaningful signal.
“Bandwidth” and Management
When the term “bandwidth” is applied to management, it raises several concerns:
>> How to assure access to all relevant information streams that might affect the business in today’s globalized economy?
Pragmatically speaking, a business needs to establish many “listening posts” that follow information sources, extract relevant bits and forward it to management in an organized fashion. The scope of “listening” is indeed daunting. The list extends from familiars like customer information, market information and information on new regulations to include the entire scope of 21st century business – a scope that this blog rather arbitrarily classifies as Globalization, Sustainability, Technology and Demographics & Trends.
>> How to decide which signals (information streams) should be admitted to management’s attention?
Establishing “listening posts” and defining the scope of each is management’s responsibility.
>> How to decide how much context is necessary for each signal?
One approach is to “headline” information items, then link to related information, so that management can expand the context of each “headline” as the manager deems appropriate. Exception reporting offers another, usually complimentary approach.
“Bandwidth” in Manufacturing
Applying “bandwidth” specifically to the factory, “bandwidth” can be thought of as the capability of a manufacturing facility to produce. Capability to produce involves the availability of productive resources, including equipment, technology, talent and money. Those resources can be deployed only to the extent that they are available at any given time. The effective available “bandwidth” can be improved through prudent management practices. For example, the productive capability of equipment can be improved through appropriate maintenance. Talent can be fostered through training and mentoring. Time and money can be extended through reduction of wastes.
Absent sufficient “bandwidth”, a manufacturing organization cannot adapt to abnormal circumstances, nor can it readily accommodate change. A lack of sufficient “bandwidth” helps explain why many improvement initiatives don’t succeed. “Bandwidth” also helps explain the usefulness of focusing on a small number of manufacturing activities. [ii] It is almost always necessary to increase “bandwidth” in order to move to the left on the Performance Curve. [iii] On the other hand, excessive management emphasis on cutting costs often has the unintended effect of impairing “bandwidth”, hence the organization’s intrinsic ability to compete.
Thoughtful comments and experience reports are always appreciated.
… Chuck Harrington (Chuck@JeraSustainableDevelopment.com)
This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.
[ii] See the Harvard Business Review’s classic article: Skinner, Wickham, “The Focused Factory”, HBR May–June 1974
[iii] For more on the Performance Curve, see Operational Excellence – The Performance Curve, this blog: http://jerasustainabledevelopment.com/2012/05/24/operational-excellence-the-performance-curve/