Approach

Explore the various aspects of a post-industrial business, with a Customer Driven Product Cost Compass.

The Product Cost Compass may be described as a staircase, describing a company's structure (the steps), interdependence and how to manage and control your business.

Your customer and market decide what products or services your company produces. Your production is based on an efficient refinement process from suppliers, flowing through your company, to reach your customers.

Organization is a consequence of the above steps with the task of controlling in-depth activities in your process. Human Power is in turn a consequence of the skills the organization's organizational structure requires.

IT carries the flow of information that connects the different steps and the Product Cost Compass and the financials are the setpoints and actual values ​​you need to manage and control your business. In a Relationship Economy, these setpoints (such as KPI:s, Quality, Time and Amount) and actual values also need relations to each other and a connection to money to be useful.

The Haystack Syndrome (Eliyahu M. Goldratt, 1990) points out that "Non-financial measurement are equivalent to anarchy. You simply cannot compare apples, oranges and bananas, and you definitely cannot relate them to the bottom line (result). The goal is to make money. Every measurement must, per definition, have a dollar sign in it”.

The New Digital Economy (revision of the books chapter by chapter)

Chapter 1: Introduction

The orienteer runs according to the compass bearing. Consequently, if the compass shows errors, the orienteer gets into trouble. The income statement and product cost calculation are the compass of a business.

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