Mount Pulag the Magnificent

by Joseph Pangilinan

“Being drenched in nature and seeing the sky and the stars – without buildings, or wires, or pollution blocking your view – was refreshing. Having no phone signal was a blessing. It forced me to find happiness with people around me – my family – instead of people who weren’t there.”- Timo Pangilinan, Mount Pulag, May 2013.

EARLY 2013. It was my “middle-child” Kara who had “family adventure” in her bucket list.

So she Googles “Mount Pulag Adventure,” finds, and immediately sets up her dad (me) to attend the Briefing at Highlands Cafe along F. Ortigas (Emerald Ave.), Pasig.

The rest is history.

As summer 2015 fast approaches, allow me to share that this “guided weekend tour” to Mount Pulag turned out to be one of the best family adventures we’ve had in decades!

FRIDAY. Our tribe – Vicky, Gab, Kara, Timo, and I- met up  with co-owners-tour-guides  of Club Travel Now at the Victory Bus terminal in New York – the Cubao, Quezon City version – and took an airconditioned bus to Baguio, Friday evening. It was the summer of 2013, yet we had packed thick jackets, thermal underwear, thick hiking shoes: winter clothes!

The bus ride was relaxing, smoothly plying the NLEX-SCTex Expressway. Summer, is in fact the best time to do this, not because it is not as cold – that never bothered us anyway J – but because less rainfall meant a safer trip, and clearer 360-panoramic view from the mountain summit.

SATURDAY. We slept through the 7-hour trip and woke up in Baguio, in time for a decent Longga-log breakfast and Kalinga coffee, basking in the cool morning breeze of the solid North. Another 4-hour jeepney ride then took us to the DENR Ranger station – the Jeepney drop off point in Benguet, arriving around noon.

AMBANGEG TRAIL. Mount Pulag stands at 2,922 m, or 9,587 feet, above sea level, the third highest peak in the Philippines, next only to Mount Apo and Mount Dulang-dulang. There are four major public trails up the summit, from different entry points, but we took the more “family-friendly” although Ambangeg trail from Benguet. I recall we had two hikes up the mountain – with 15-20 minute rest in between- before Camp 2 prior to the Summit ascent; each hike approximately 1 and a half hours, through mossy forests, rocky trails, along some pretty treacherous cliffs. The cold, gusty winds and the brief downpours, did not slow us down, as we negotiated those winding trails, and enjoyed flora and fauna we’d never seen before.

RESPECT MOUNT PULAG. “Mount Pulag National Park, [retrieved from Wikipedia on February 1, 2015] “hosts 528 documented plant species. It is the natural habitat of the endemic Dwarf Bamboo, and the Benguet pine which dominates the areas of Luzon tropical pine forests found on the Northern mountainside. Among its native wildlife are 33 bird species and several endangered mammals.”

Out of a deep respect for the Mountain and the wildlife it serves and protects, very strict rules prevail, which pleasantly surprised us. No alcohol. No noise or rowdiness. No fireworks or merry revelry. Park authorities and the DENR strictly enforce its LNT (Leave No Trail) Policy throughout the national park.

At a relatively good pace, it took us four hours to climb to the Camp Site 2, where we pitched our tents to sleep over before the final ascent. Organizers graciously took care of our tents and food was part of the tour damage. We were instructed however to each bring two liters of clean water. To help us carry our bags, as we were packed to the teeth, we hired two local porters at the Ranger station, who proved most hospitable and helpful.

The only real down side of the trip was the lack of clean toilet facilities within the Camp 2 itself. Still, this came as no shock, as we came properly briefed and prepared.

A heavy downpour forced us to stay inside our tents, throughout Saturday night. Folks’ in nearby tents had their bags drenched inside-out by the flooding streams from the downpour, but we had been forewarned by our organizers, and we had everything wrapped in “garbage bags”.

SUNDAY. Wake up call time for that final one-hour hike to the summit, was 3:30 AM. Had we not prevailed upon Vicky, she would have stayed behind and slept. She was exhausted. More than that, it was freezing! Temperature had dropped as low as 3-4 degrees Cent that Sunday morning after the rains.

THE SUMMIT- “Every mountain top is within reach if you just keep climbing.” Barry Finaly, wrote in Kilimnajaro and Beyond. The Summit was the goal, and we were told we had to get there before sunrise, not knowing exactly why. Because it was there, we guessed.

Imagine, 4 to 5 o’clock in the morning, muscles aching from yesterday’s climb, still freezing at near zero, and we had to get up to attempt the final ascent to the Summit, the most challenging stretch at that. We literally groped in the dark, guided only by the LED flashlights we pointed at our feet, lest we fall off some rock or cliff or something.

Finally, as soon as we took our first step on top of the highest peak -Summit One – suddenly, out of the horizon emerged the most magnificent view ever: the Mount Pulag Sea of Clouds!

Somehow, with the confluence of elevation, wind, temperate climate, and the colors of the sunrise, God painted this absolutely stunning masterpiece, this breath-taking, exhilarating, sea of billowing clouds stretching out into the break of dawn, on this perfect summer morning.

Mountain weather is fickle, and we were never assured of   good weather, nor were we, a clear view. But this morning was good and clear and meant to be, if only to encourage our hearts after the torment of a stormy, frost-bite threatening night. Of course, the sky was clear above the clouds!

At that moment, my spirit felt drawn closer – not just to the playground of the gods – but to the very heartbeat of God, overwhelmed as I was with gratitude and incomprehensible worship. Somehow, I knew I would never be the same person again.

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De ja vu.   “Philippine Peso breaches the P45 mark anew.”

Nothing spectacular about this news headline, but personally, it gives me goose bumps.

In 1997,  the Asian currency crisis hit businesses in the region, and at that time, our family business had millions of dollars worth in export-orders-in-process and booked-orders  in the pipeline.   You’d think it would have been the best of times for us. We were shipping container-loads of furniture, gifts, and houseware to over 20 countries worldwide, and we were paid in US dollars.

They say leadership means having the audacity to decide and act to strike the eye of an approaching storm. We could have earned windfall profits on dollar proceeds. if only we had made the tough decisions needed to make good and deliver confirmed export orders. But we didn’t and instead, we lost our shirts in  that episode.  We lost a viable business that had created wonderful products and had been a blessing to thousands of people.

To those in the know, a currency devaluation is a reduction in the price of a particular currency, relative to another. Recalling my Economics 101 lesson on the Law of supply and demand, the US dollar is just like any other commodity in that when there is not enough of it, the price tends to get more expensive, and so you will need more of other currencies – like pesos – to buy U.S. dollars.

So for whatever reason — decreasing export receipts, less foreign investments, OFW remittances, payment of foreign debt, or when currency speculators hoard specific currencies — somehow, the US dollar became  conspicuously scarce in 1997, pushing up the price of dollars. The price being the exchange rate in Philppine pesos went up.  Thus the peso devalued.

Our export business – like countless others – was caught with the proverbial hot potato then: a US dollar denominated loan. To make matters worse, local collaterals were valued in pesos.

From 1997 , the PH Peso  rapidly devalued from Php25/ US$ to P31, to P38, P46 within a span of a few months, until it  hit rock bottom at around P56/ US$.  The peso value of our dollar loan more than doubled, and our collateral was suddenly insufficient to cover it.  Apparently in panic, our bankers froze our short term credit facilities, and insisted that we pay up the so called “technical excess” to cover the under-collateralized portion of our dollar loans.   We could not. And we refused to add collateral.


Worse than the bloated debt, were the export sales orders we were not able  to deliver due to the absence of working capital. We realized then how utterly dependent we were on packing credits. Penalties piled up as we began defaulting on payments. How could we collect what we were unable to deliver? The rest as they say, is history. The business never recovered.

At that time, I felt this treatment of exporters was unfair – we were virtual pariah’s to the banking sector – when in fact, like OFWs, exporters brought in millions of dollars (through export sales proceeds)into the econony. These were the same dollars banks lent to other borrowers – many with non performing loans- say to kitchen and capital equipment importers. No one – not bankers, regulators, politicians, economists, experts hired to give us sound advise – ever saw this coming. 
So why, should exporters – and all our stakeholders – be singled out to bear the full burden and brunt of this bizarre turn of events?

In hindsight, however, who was to blame? We borrowed in dollars and needed to pay in dollars. In the first place, was it not foolish to be totlally dependent on bank loans for our working capital financing needs? Did we not take on foreign exchange risks we did not undrstand? What about infusing equity? Was the situation entirely beyond our control? Certainly not.

In hindsight, we could have executed any of a host of strategies to prevent the problem then, or to mitigate its negative effects, not the least of which is the collapse of a good company and the loss of jobs of thousands if we include subcontractors and stakeholder institutions.

Knowing what we know now, the business could have paid the loan had it been enabled to deliver those orders coming out of its ears and not clip its wings or squeeze blood from it! All it needed was working capital financing, through other means than dolllar packing credits. I know of those who never ventured into dollar loans, and are thriving until today. There were those who did dacion en pago to erase part of their debt. Others just added collateral to continue business turnover. Was it not our choice to hold on to our properties defensively, and in so doing virtually surrendered on the business?

It was an emotional roller coaster ride, as you might imagine. I was half blind on what  was happening around the business and industry, and therefore too slow to react to what I had not seen coming. I lacked experience, knowledge and skill.

It was difficult enough to get out of debt then, with the high costs of doing business and the unstable external economic situations we had absolutely no control over.  Imagine our sleepless nights as the exchange rate rapidly took its free fall from P25 to P56. I recall money traders were jumping off buildings in those tumultous times! We simply could not think of how to monetize our orders as our hands were chained.

They say hindsight is 20:20 vision. The wisest amongst us sold property to pay off the so called “technical excess,” giving banks their windfall on exporters’ loans.  In hindsight, it was our choice to borrow in foreign currency, ignorant of the risks. While there is nothing wrong with that per se, we were caught with the proverbial empty bag because people panicked.

It is mission critical to seriously consider external events, in making strategic and tactical decisions.

Probably more difficult than the stress or worry, is panic from the fear of losing whatever it is we cling to regardless of what it is; say as simple as losing some real estate to sustain a more valuable going concern or strategic initiative. 

This courage and the audacity to decide to bite the bullet – to make the fast even bitter choices to address an imminent disaster and to resolve it permanently – is a trait that separates men from mice. This is what I believe young entrepreneurs need to learn today. In such crises, ask yourself what business are you in? Are you in exports or are you in real estate? Do we sell off our idle assets and pay debts, or dacion en pago for that matter, to keep our best businesses running, OR do we struggle at all costs to keep our property, but risk losing the business itself. Shall we allow the very goose that lays the golden eggs to die?

Such failures will  happen, and there are always ways to mitigate the effects of failure, after the sword of Damocles falls.

Rather than worry or be overly concerned, or wallow in defensive inaction, the better choice – in hindsight- is to pray for wisdom and courage, and then to bite the bullet. Talk to your financial advisers, bankers, and lawyers immediately and ACT and DECIDE even more quickly; and note you will get what you pay for in terms of legal and financial literacy and advice.

Balance leadership attention between internal and external concerns, highlighting issues which may pull the proverbial rug from under our grandiose plans. Stay agile and vigilant as somewhere out there are rivals, government agents, bankers, or even money traders crafting bullets with your business’ name on

R. Kipling proposes that one test of character is “if you can meet with Triumph and Disaster, and treat those two impostors just the same.”

When disaster strikes as it often will, grieve for a day, and then move on to solve the problem. When triumph happens, go celebrate for a day, but then again, always move on.

What I thank God for is how He uses these crises and failures to shape us into the persons He intends us to be, for His purpose and glory. And when He closes doors, He opens more windows. Today, I stand stronger and debt free. Now how that miracle happened, is subject of another story.

Joseph Pangilinan

GBR women’s teGBR Relay Teamam breaks the 4x100m world record, and stuns the world.

Good strategic management – the kind based on sound assumptions, and executed with clock-like precision –  is like being in a champion 4x100m relay team.  Every player runs her darnedest best – on the same track, and in the same direction. Every athlete aims to clock faster than she ever did before. And every player takes the least time she possible can, to pass the baton to the next runner, and takes special care not to drop it.

To win, however,  the team needs to have been prepared to a point that it can win, i.e. in the most advantageous competitive position, prior to engagement.  It  means yours needs to be the most prepared team – the most trained team, the best-equipped team, with the most inspired and outrageously determined players in the pack.  Ironically, it means to reach that level of preparation, we need the players who have done this 10,000 times. it is always a an artful choice between  the passionate but inexperienced and the experienced but aging.  However we achieve that balance, we need to put together the most skillful, again the-best-trained-and-best-equipped,  the most courageous, the most dangerous, yet least damaged athletes. We need  the team most ready to take on the pressures of a final heat, and the most determined, most hungry to win.

And 99% of this must happen prior to engagement.  Phenomenal challenge.

Watch this Video before you start your business,  foundation, or social enterprise.

Need there be conflict between business and advocates of social change? Must there be a trade off between commerce and the common good?   The awkward, frightening reality is that despite all the efforts of humanity, Michael Porter rightly reports that we are not solving societal problems fast enough, or substantially enough. Indeed social enterprises do wonderful things, except that they lack in the SCALE, that businesses can readily provide.

In this insightful TED-Talk, the author of “The Competitive Advantage of Nationas,” admits his bias for business, which has proven how it can provide SCALE through sustained profit. The problem, he says, is that the world sees business as the very cause of the social challenges we face today. And in many cases, rightly so. Think pollution, obesity and cancer, scarcity of natural resources these are all severe problems caused by socially irresponsible businesses. Gandhi broadens this in his “social sins” including wealth without work, commerce without conscience, politics without principle, even religion without sacrifice. Greed, or an inordinate love for profit at other people’s expense, is certainly a problem, and must be rejected.

Profit per se, however, provides not only a motive for business, but the vital resources necessary to sustain business. As the strategy guru points out, “Profit is the magic in business. It makes solutions sustainable.” And business must create profit only when it is able to meet a need – able to add value – which customers are willing to pay for; but not at a greater cost to society at large.

It has been proven time and again that  solving society’s biggest problems, can be done, even at a reasonable profit, say when government outsources clean water distribution to more efficient institutions.  And why not?  Providing access to clean water, reducing poverty, distributing renewable energy sources, providing access to health, homes for the homeless, or free education for the poor, are all solutions that need to  be and can be scaled up – but only when profit is part of the equation. Socially responsible businesses offer customers the privilege of contributing to changing the world, as they enjoy products and services of such  companies.  But social solutions only become self-sustaining, when the business that solve them profits from providing such solutions.

Strategy guru Porter admits his bias for business, which has demonstrated in history how it can provide SCALE, and resources gained through profit. The problem is that the world sees profit and business as one of the core problems, if not the very root cause of many  of the social challenges we face. Pollution, obesity, depletion of scarce resources, are all problems caused by massive irresponsibility in business.  Some social “foundations” unscrupulously leverage on this dichotomy, by soliciting donations from business as a form of philanthropic  guilt-trip — to donate to their supposed social causes. They, perpetuate the status quo, if you ask me.  Reminds me of what my MBA professor once declared,  “No philanthropy can compensate for social irresponsibility.”

An inordinate love for profit at other people’s expense, is certainly a problem.  Profit per se, however, provides not only a motive for business but the resources necessary to sustain it. Profit is – as Porter puts it – the magic in business. “It makes solutions sustainable.” And business can create profit, when it is able to meet a need and add value that customers are willing to pay for.

Social solutions become self-sustaining, when a business can profit from solving social problems; i.e. reducing poverty, distributing renewable energy sources, providing access to clean water, health, and education for the poor. With profit, such solutions can be scaled up. This is “Capitalism as it was meant to be” – Porter concludes. It is the very core purpose of business to deliver value – to meet important long term needs of society.

There need not be a trade off. As Porter suggests, If we can break down this great divide in our minds – between business and  social problems — and deliver true, sustainable value, even for a profit, then perhaps, business can change the world.

Uncommonsense101's Blog

Albert Einstein once  declared, “If you can’t explain it simply, then you don’t understand it well enough.”

What use is profound thought, if no one understands it? Of what relevance is a core principle or theory, if no one applies it?

I believe the world hungers for simple answers to life’s most difficult questions. And I believe the world’s problems and conflicts are far less complex than we make them appear to be.

We seem to thrive on busyness and complication, as though complexity validates us.  So we try to impress others with our entangled threads of noise, chaos, and “complicated-ness”.

IF so called leaders,  teachers, parents or mentors could simplify things, then maybe they’d make a little more sense; we might even learn something from them.

IF only we were more clear about our goals and roles, for example, then relationships, teams, institutions, even governments, might be more effective…

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As the controversial “midnight price increase” on MRT fares saturated the headlines on the first working day of 2015, once again, my son and I found ourselves stuck in traffic,  en route to Taft, Manila.  To be fair, it was not too bad this morning, except we had just come from a long holiday of “road bliss”, So on the road, I challenged myself to think of ways to avoid traffic in 2015.  I wondered – as I often do in traffic: “wonder” – if I could come up with of 101 Ways “to outsmart traffic together,” borrowing the slogan of this phenomenal phone app WAZE.

MetroTrafficHere goes. Feel free to contribute your own later:

1) Advocate for a moratorium on changing street names.

2) Advocate for bicycle lanes, walking lanes.

3) Advocate for police visibility and street safety.

4) Advocate mass transport systems that work.

5) Arrest counter-flowers and traffic violators.

6) Avoid travel during rush hour.

7) Ban ambulant vendors from major roads.

8) Ban commercial establishments from National Highways.

9) Ban fiestas, parades, and local events from city streets.

10) Ban pedicabs, tricycles from major roads.

11) Ban street markets and bazaars.

12) Carpool. Vanpool. UV Express.

13) Check gas, air, oil, water, BEFORE leaving.

14) Check official traffic sites before leaving.

15) Collect ticket fines upon license renewal.

16) Construct low cost residential condominiums close to work.

17) Copy Amsterdam’s and Venice’s flood control systems.

18) Decentralize, decongest National government.

19) Decommission old vehicles, and drivers.

20) Decongest, depopulate the mega-cities.

21) Deploy honest, competent traffic enforcers.

22) Develop and provide jobs in the countryside!

23) Disallow funeral motorcades, et al.

24) Do not blow your horn, except in life and death situations.

25) Do not drink and drive.

26) Do not text, FB, tweet, IG, PM and drive.

27) Educate drivers, commuters, operators, barkers.

28) Educate law enforcers and traffic aides.

29) Elect honest, competent, courageous politicians.

30) Enjoy reading, thinking, praying while commuting.

31) Exempt bicycles, running shoes from VAT.

32) Expropriate large private lands, to improve traffic flow.

33) Find a home for stray pets.

34) Find a home for the homeless, beggars, evacuees .

35) Fix the flood problem, permanently.

36) Get camera footage from all angles and exchange cards.

37) Google it. Google map it.  Google drive it.

38) Have patience and understanding. “Ang pikon talo.”

39) Hitch a ride. Offer a ride to others.

40) Impose bicycle and motorcycle insurance.

41) Impose stiffer penalties on idle construction projects.

42) Input Google map and Waze addresses ahead of time!

43) Jail corrupt and inept law enforcers. Jail law breakers.

44) Join a telecommuting service.

45) Keep Cool. Smile. Breathe deeply.

46)  Keep insurance payments up to date.

47) Keep right except when passing.

48) Know and follow rules on the Yellow Box.

49) Know where you are going, before you leave.

50) Leave early. Arrive early.

51) Legislate 24/7 work on city transport infrastructure.

52) Legislate vehicle owners to use Waze; outsmart traffic together.

53) Live near your place of work.

54) Love your neighbor as yourself.

55) Make Metromanila streets the cleanest, safest in the world.

56) Memorize and follow traffic rules, signs yourself.

57) No parking, no counter-flows especially for government vehicles.

58) On the road, listen to self-help podcasts.

59) On the road, listen to soothing music.

60) On the road, pray for our country and our leaders.

61) On the road, record your thoughts, or songs, daily.

62) On the road, search for ways to bond with loved ones.

63) Pedestrians are king, for a change.

64) Plan your trip. Plan your week.

65) Please learn how to drive! Really.

66) Practice road courtesy and ethics.

67) Prevent flooding. Plant trees in higher grounds.

68) Provide employees with a gym at work.

69) Provide the family a place of work, at home.

70) Rationalize and unify Metro-Manila’s traffic systems.

71) Reinvent the “police reporting system.”

72) Remove “transport terminals” from bottleneck areas.

73) Remove illegal shanties, structures.

74) Respect the position of traffic enforcers.

75) Revamp your life. Reduce your carbon footprint.

76) Reward law abiding citizens.

77) Start a river ferry, aqua taxi business.

78) Stay home. Call. Use your phone.

79) Stay home. Eat at home.

80) Stay home. Order food on delivery.

81) Stay home. Shop online; transact, pay bills online.

82) Stay home. Work at home.

83) Stay home. Work-out at home.

84) Stick to your lane except when passing.

85) Stop watering street plants during rush hour.

86) Subscribe to a towing-mechanic service.

87) Take a bus or a train.

88) Take CCTV footage of violations; bill violators

89) Tax entry into central business districts/ congested areas.

90) Tax parking space and extra vehicles..

91) Tow away illegally parked vehicles, tents, objects.

92) Transfer military camps, large public schools outside the city.

93) Transfer ports, airports outside the city.

94) Unclog street canals, sewage systems, rivers.

95) Update and enforce zoning regulations.

96) Use a bicycle, or a motorbike, on short trips.

97) Use your hand to signal. It is more effective than signal lights.

98) Use your phone camera to report traffic violators.

99) Walk, jog, run to and from work.

100) WAZE it. Leverage on GPRS, navigation technologies.

101) When all else fails, HIRE ROBOCOP. Bow.

IF it takes a village to rear a child, as you can see, it will probably take the commitment and active participation of a critical mass of the riding public and government to effectively outsmart the horrendous situation we face daily in our beloved mega-metropolis, Metro Manila ( And I imagine Cebu and Davao are not too far behind, now )..   Commuters, drivers, operators, traffic enforcers, the police, barangay officials, kagawad’s, city councils, mayors, legislators, the MMDA, LTFRB, LTO,  all other public and private stakeholders.

Sure, we can outsmart traffic, and we can only do this, together.  But it goes without saying, as improvement begins with “I”, then let us stop bickering, blaming, and whining and instead, make an unwavering commitment to do our part, as individuals, to be part of the solution, not the problem, regardless of what the darn jaywalker, or counter-flower, or corrupt enforcer are  mindlessly doing next to us.

Oh well, I should have probably included “Do not write blog articles while driving,” but I reached 101. It is finished.

Joseph Pangilinan

Synchronous Operations

 10 Ways to Make the Most Money in Operations –when Resources are Limitedinventory

By Joseph N. Pangilinan

Saying YES to what is most important, means saying NO to what is less important.  

When cash is tight, resources are limited, or where external funding is difficult to access, synchronize operations to operate at a level that you can afford to make the most money, internally, at the soonest time. In short, find ways to get the biggest bang you can possibly get for your limited buck.

In this situation, making money today becomes strategy-critical. It must be prioritized over investing in new product ideas or generating prospective inventory. Making money at the shortest time becomes a matter of survival.

Using Theory of Constraints thinking, the following are a few practical ideas on how to synchronize operations given limited funds, time, and resources:

  • Prioritize projects with the highest contribution margin over time, i.e. higher throughput. Since funds are limited, authorize just enough jobs to be worked on at a single time, especially those you can afford to complete with your limited fund.

Prioritize Job orders that will bring in the most money at the shortest time, without compromise of quality or time or cost. This increases Sales – what you gain from the value you deliver – and Throughput – what you make on Sales less what you owe suppliers.

  • When orders exceed capacity, machines are overloaded, with no assurance of making more money over time. Prioritize soon-to-be-paid projects over made-to-stock jobs. As with the earlier suggestion, this lightens the load on your production schedule – puts less burden on materials, equipment – making the schedule more realistic, reliable, and if I might add “respected”.
  • When production is the bottleneck, put limited funds in production. Wherever your bottleneck process or constrained resource is, make sure it is working all the time. This maximizes present throughput, and prevents actual loss of throughput (when a bottleneck is not working, we lose throughput forever.
  • In Scheduling, take away all “local time buffers” from your schedules. This limits inventory buffer everywhere, and puts constructive pressure on the system to complete finance material inputs of priority orders first. It eliminates stock out situations on your highest priority orders. Remove “artificial time buffers” or “provision for delays.” Artificial time buffers “allow” for queuing delays, waiting and mishandling delays, decision making and approval delays – making the master schedule a self-fulfilling nightmare. If all departments base their actions on this master schedule studded with “buffers”, then they do not need to bring in materials earlier, do they? When the a job can be machined for twenty minutes, then put twenty minutes as basis for scheduling, not one hour, or half a day.
  • Eliminate non-value adding times in the plan – Same as in the previous idea. When a throughput-critical document may be signed and approved in minutes, do not allot a week for “approvals”. Locate frequently used (stocked out) material beside a working unit, to reduce transport and handling time.
  • Add strategic Time Buffers to the master plan – Make schedules more reliable, by protecting them against usual problems or disruptions – only in 3 areas (1) before the Bottleneck operation (or the bottleneck chain of process), (2) before an assembly point (where outsourced parts or items need to be introduced), and (3) prior to shipment.
  • Ensure that materials, supplies and support services are funded, in the order of what is needed by highest Priority Jobs first, because these are the cash generators. This maximizes allocation of available funds and resources towards completion of job priorities. Good money will not disappear without an assurance that more money will first come in.
  • Synchronize quality and quantity inspection efforts to complete priority orders, FIRST. Monitor production and distribution units to resolve all short-term issues with one goal: to complete and deliver priority orders, FIRST.
  • With funds set aside, purchase materials of Priority Orders ahead of time. Release Materials just-in-time to complete priority orders, or just-in-time to keep the Bottleneck process/es working all the time. Bottlenecks must be prevented from starving, or the system loses big time.
  • Identify the most frequent and most significant problems and disruptions. With the money you SAVE from the previous nine ideas, PERMANENTLY solve the most frequent and most significant problems and disruptions, one by one.

When the bottleneck is no longer in production, then it shifts elsewhere in the Value Chain. Say it is in Sales and Marketing, when this happens, then interventions in production capacity has exceeded orders in progress, then you may put limited funds to constraints in Sales and Marketing. Wherever the constraint, make it a habit to maximize throughput – in every management action and decision – aligning the various business units and departments. Limited funds will be freed up and allocated towards jobs that will increase system throughput not just today, but in the future.

Priority Orders – by definition those with highest throughput contribution margin over time – will more likely be completed and delivered at minimal cost, with minimal disruptions (and corrective spending), with better quality, and on time.   Since only priority orders are ran, then work-in-progress inventory (including the firm’s inventory of cash, time, and other resources) will be kept to a minimum, to what can and will be converted into more money now, or at the soonest time.

Less inventory means less Operating Expenses. Only Operating expenses incurred that will create throughput – more good goods and value adding activity. The company with such good habits are those that make the most money it can afford to make at any given time.

Even managers, leaders will have more time to: to act and decide to solve more important concerns, bigger problems more quickly and wisely. People will generally be happier and less stressed than they seem to be today. Remember, when we say YES, to something of less importance, we say NO to something of greater importance. In deploying resources, whatever the situation, prioritize what creates more throughput now and in the future.


Joseph Pangilinan

Theory of Constraints is the management philosophy invented by the late Jewish physicist, Eliyahu Goldratt, author of “The Goal”.  Photo on shelved Inventory is from http://www.pdsinventory.jpg

Executing the Philippines’ Home Furnishing Design Hub Vision, by 2030

Crushed Banboo Coffee Table by Designs Ligna Philippines

Crushed Banboo Coffee Table by Designs Ligna Philippines

No strategies – no matter how grand in scale or scope – will succeed, unless executed. Sadly, most strategies executed also “fail” – i.e. to attain the objectives for which they were crafted – because wittingly or not, actions and decisions were not based on correct assumptions. And unless assumptions are based on a correct perception of one’s situation, even the most passionately executed  strategies will fail.

I suppose this is  a clue on why half of Startups die on their first year.  And only one in five of those that survive, do so beyond five years.  Correct strategies – that match any given situation –  must be formulated AND executed.  These stats apply to internal startups (say, projects) in any  institution or conglomerate.

About two years ago, the Design Center of the Philippines (DCP ) requested my assistance to facilitate a strategic planning workshop for the Homestyle Furniture and Furnishings Industry Sector, to explore opportunities for collaborative undertakings.   A major difference I saw in this specific workshop was that – the focus of the workshop was on EXECUTION, i.e. to draw out a set of sound, solid strategic interventions that might  help the Sector key players and stakeholders, execute the “2030 Philippine Design Hub” vision: i.e. to establish a solid basis for mapping out specific homestyle designs for designers and target buyers worldwide.

DCP’s mandate is  “to catalyze initiatives to increase competitiveness of Philippine products and services, improve SME Productivity, and to promote the Design culture nationwide, to pilot execution of strategies related to the goals and vision of a Global Design Hub, and execution of the National Design Policy.”   The Philippines’ homestyle and furnishings “industry sector “had then been, after all, one of the few remaining manufacturing-export sectors that remained persistent in its pursuits of this same “vision” – in the Chamber of Furniture Industries of the Philippines’ own words – “to make the Philippines a Global Design Hub by 2030.”   Participants of the workshop included Presidents, officers and leaders of the three (3) largest member-­‐furniture associations of the furniture sector, Design Center officers and staff, among others. Beneficiaries of the project, IF executed, extend not only to member-­‐manufacturers and exporters, but to all employees, customers, suppliers, service-provdiers, subcontractors, stakeholders of the industry, all families and institutions represented, and society at large.

Methodologies used in the workshop included a combination of structured brainstorming tools, thinking processes such as the “Theory of Constraints” authored by the late Jewish physicist, Eliyahu Goldratt, the tested TOWS Matrix, by Heinz Weihrich among other strategic management concepts and framework. Kinesthetic, group dynamics exercises, ice breakers, not-so-structured discussions, and multimedia presentations were liberally applied to ferret out root issues and concerns, generate alternative strategies that match the current situation as perceived by participating leaders of the sector, notably with the combined collective work experience of over 300 years by captains of the Home style and furniture industries.

Strengths of the Philippine Furniture Industry include a culture and heritage of Innovation, communication (English speaking) skills, positivity and resiliency of Filipinos despite man-­‐made and natural disasters, some sustainable indigenous materials   such as coconut, bamboo, gmelina,   plantation timber, et al. creativity in survival mode, and the strong working relationship and unity of industry leaders .

The vision was reviewed, and industry objectives restated for clarity, and reworded for “SMART”ness.   A Focused-Market-Differentiated-Design strategy was agreed upon. Unity among a critical mass of key implementers ­‐ in capturing their shared vision, objectives, and generic strategies– is absolutely necessary to execute the necessary “strategic initiatives,” with enough scale, scope, intensity, and resolve to attain corporate objectives.

The workshop zeroed in on four (4) pervasive CORE issues:   1) Lack of a designer/entrepreneurial mindset of “owners” and key implementers; 2) Lack of manufacturability of designs; resulting in production inefficiencies; 3) Lack of target market focus, thus spreading industry resources too thinly; and 4) Lack of Sustainability of Materials.; dependence on imported wood, and other material. Each of these key concerns unveil a host of internal weaknesses and external threats – the obstacles to success of the industry and its key players.

BSO and Industry leaders thus had their work cut out for them to simply, but comprehensively address the obstacles – perennial  excuses – to execute strateges, roadmaps decided and approved.  These were all viable, sound approaches to tapping Opportunities and Threats, leveraging on real competitive strengths, and resolving the root causes of core Weaknesses that give birth to countless “undesirable effects” year in and year out, – identified in a Current Reality Tree exercise or Root Cause Analysis.

From the base information, participants in the workshop submitted a list of Complementary and Functional strategic interventions, for potential support and funding by DCP and other government entities, through sectoral Business Support Organizations (BSO’s) .  To specifically and sufficiently address listed key concerns,  plans and programs were agreed upon, in consultation with DCP Executive Director , Myrna Sunico,

Private-­‐public collaboration projects with the Design Center of the Philippines, were clearly earmarked – with fundings committed.  Still only in actual execution and availment of these can we even test what sort of  breakthroughs these conceived ideas  really are.

Homestyle, furniture and furnishing industry  BSO’s have since submitted various proposals to the DCP, and to other government agencies, for consideration, funding, and co-execution.  Some of these are done, executed, Yet, I imagine, success stories would be anecdotal at best.  Sound strategies, even those planned to be sufficient in scale and scope, while necessary, are still insufficient. We need enough of such sound, comprehensive strategies, executed.

Industry leaders, company owners, government and private interventionists, must not stop at THINKING of new ways of doing things –  but more importantly must also innovate in EXECUTING sound strategy,  sufficient in scale and scope, to make any dent in improving performance of industry members.

One of Apple company’s most famous TV commercial ads, “Think Different” ended with a powerful message: that the open, radical thinkers – those crazy enough to think they can change the world – are those who change it.   Decades hence, we realize this to be true, but only part of truth. We also need to “Execute Different,” and implement the changes necessary to free our industries to succeed.

A decision on what to FOCUS ON is key  – in terms of leaders/ managers  time, resources, and energies.   Once actions and decisions have been made – and key implementers  resolve and commit  to execute these  – then everything else proverbially falls into place, and “the entire universe conspires” to make these happen.

Joseph Pangilinan

Professional Lecturer, Strategic Management

De La Salle University, RVR College of Business- Graduate School

Australian gov’t releases national strategy for cloud computing | Enterprise Innovation.

Leapfrogging the world.

It is a good time to re-invent government.

The Philippines has this specific window of opportunity to transform itself from being reputed “Text Capital of the World,” – at one time sending 2 Billion messages a day -to becoming “Mobile Cloud (computing) Capital of the World.”

Tall order? Not quite.  Recently, the ratings agencies have upgraded the Philippine economy to Investment Grade status, for the first time in history. This means interest expense on government debt will be if not already slashed by more than half. Note that annually, the PH government spends close to a trillion pesos to service its debt. This literally frees BILLIONS OF DOLLARS for more productive budget appropriations, like renewals in technology.

Knowing how measly the budgets of our government agencies are, with these additional funds, the possibilities are endless.

Progressive leaders know this.

TECHNOLOGY can help both national and local governments leapfrog their present difficulties in managing our 7,107 topographically-challenged islands.

Take cloud-computing technology for instance, particularly mobile-cloud computing. It allows people to be productive anywhere, anytime, using any device, like never ever before.  Do we realize the implications in a topographically challenged archipelago like ours, whose people hunger for even social inter-connection?  Where is the “Text Capital of the World” again? The Philippines has one of the highest penetration rates in mobile phones, worldwide. To date, our telco’s have close to a hundred million subscribers put together!

By 2015, research giant Gartner purports that 80% of these mobile phones will be “smart gadgets.”  100 Million powerful devices in the hands of the Filipino.

Technology has been democratized, and everything government – or business for that matter – can potentially do, can be done now, at a fraction of the cost.

Take online services for instance. You’ve probably heard of Infrastructure-as-a-Service,  Software-as-a-Service. Platform-as-a-Service and so forth. Cloud-computing allows XaaS, which means “Anything or Everything-as-a-Service” and mobile technology allows access to any one  with the right device.

The problem – of course- is that government is usually way, way, way, way too slow in adopting such enabling technologies, and more so in HELPING the common good through these technologies.

In the attached article, at least one government – AUSTRALIA – is playing leap-frog in governance, applying cloud-computing technology. Australia’s strategy will open up the government’s annual $5 billion a year spend on ICT to cloud computing by requiring federal government agencies to consider cloud services for new information technology purchases.

Minister for Broadband, Communications and the Digital Economy, Senator Stephen Convoy (not the 7Habits guy), sums it up well, “Cloud computing is fundamentally changing the way we think about technology — it allows software and data storage to be delivered online and be consumed as services, on demand, across your computer, tablet and smart phone,”

“Cloud computing gives us the anywhere, anytime technology that will help Australia to foster innovation and boost productivity,” Conroy added.

The strategy is expected a create “a vibrant cloud services sector through competition, a highly capable technology workforce, and regulatory settings that promote growth and foster innovation.”

I know.  We are way behind. Technology however, has a way of leveling the playing field. It is not what you’ve got, but how you use it. The Philippines has this window of opportunity to transform itself from being “Text Capital of the world,” to becoming “Mobile Cloud Capital of the World.”

It is time to leapfrog the world. Technology is money. We have this money. And our techie kids have grown up.

The solution is literally in our hands.


Anyone who  walks  the streets of Japan, will notice how a street vendor, say, in Nagoya, will render exactly the same level of quality service as their counterpart chefs at plush Sushi restaurants in Ropponggi, Minato-Ku, or Teppanyaki-Yas in Kobe.

So much has been written about KAIZEN, Total Quality Management, Lean Operations, or Six Sigma and how to build quality into organizations. The quest to understand determinants of Service Quality particularly in business-to-business situations, nearly always leads to  Customer Care issues.. or wrong assumptions (and thus, decisions) about customer perceptions and preferences.

Which Vendor is easiest to work with? Who has the best quality contact person? Which vendor makes me feel better, more secure, more wise? Who looks most professional? I summarize some “findings” here by  coming up with a list. Here we go: The ABC’s of Quality in Customer Care.

A-llocate time and money for Customer Care

B-uild quality into people & processes

C-lean your bathrooms and receiving areas.
D-o it right the first time all the time.
E-xceed customer expectations
F-eedback of customers must drive Innovation.
G-et your facts straight before reacting.
H-elp Customers save time, money & energy.
I-nnovate on value, not just product.
J-ust Do it – help the customer solve problems.
K-eep your promises &commitments always.
L-earn what works for Customers & what doesn’t.
M-onitor determinants of Service Quality!
N-ever violate your values nor your customer’s.
O-ver-respond to Customer requests.
P-lan Quality improvements constantly
Q-uality is not expensive. Poor quality is.
R-eply to emails & return calls promptly!
S-ave money to add Value, by reducing Non-Value.
T-reat customers with courtesy, respect always
U-nderstand your Customer’s business inside out.
V-alue is equal to Customer benefits less costs.
W-in-win or no deal, is the best policy.
X-traordinary suppliers put in that “extra” effort.
Y-es. we can (do this)!
Z-ero Defects begin by eliminating the first Defect.
It is always a pleasure to witness that Japanese salesperson in Akihabara, or an oden vendor in the streets of Shibuya. Their fascination for excellence is awe-inspiring. Perhaps it is their Bushido warrior ancestry, or their Samurai DNA, but trust a typical Japanese worker to deliver consistently high levels of service quality, without hesitation. Simply put, quality customer care and service seem par for the Nihon-jin’s course.

Aristotle was alleged to have written, “Excellence is not an act, but a habit.” Humbly, we have a lot to learn from the Japanese. Caring for customers is not a requirement of the job, or a result of a set of “slogans” or Six Sigma campaigns. Customer care must be welded into an organization’s DNA, its culture, and turned into a collective habit; whether through environmental change, or recruitment, training or incentive schemes, regurgitation and mastery need to be fostered and supported.


Former Scandindavian Air CEO, Jan Carlsson referred to close encounters of employees with the customers, as “Moments of Truth” of companies. What we do during those moments – to care or not to care – spell the difference between excellence and mediocrity. Ultimately, in their every action and decision, people and systems, will either care for customers, or they will not.What do customers have to say about those “moments of truth” with you and your company?


Joseph Pangilinan is CEO of Arrowhead Consulting, Inc. and Professional lecturer of Strategic Management and International Business at the De La Salle University, Manila, Philippines.