Five Frogs March 5, 2008
Posted by Lawrence Loucka in : Consulting, Reviews, Supply Chain , add a comment
Five Frogs are sitting on a log. Four decide to hop off. How many frogs are left?*
It doesn’t take much for good intentions to end up in disaster. It’s been my recent fate to be involved in two failed mergers, one a postmortem, the next a trainwreck-in-progress. Integrating distribution, logistics, information, management and financial systems; oh, and the people is a tough tough thing. The deal makers fall in love with the potential synergies and then all too often with out a plan or a process hope that magic will happen once the deal is done.
"Five Frogs on a Log: A CEO’s Field Guide to Accelerating the Transition in Mergers, Acquisitions, and Gut Wrenching Change” by Mark Feldman and Michael Spratt is a great guide, and not just for mergers and CEO’s but for any organizational change event and those who are caught up in the maelstrom of clashing cultures. A little light on methodology, this book will let you know what to expect from the merger/acquisition, encourage focusing on execution, the importance of communicating even when in the fog, it’s a virtual project plan for you and your leadership team.
Read it! Hopefully before, not after the chaos starts.
*Five. Because there’s a difference between deciding and doing. "Execution," the authors tell us, "is always more difficult than it seems."
Muda in the Warehouse September 25, 2007
Posted by Lawrence Loucka in : Consulting, Definitions, Lean, Lean Sigma, Logistics, Supply Chain , add a comment
Although created in the manufacturing environment of Toyota by Taiichi Ohno, the Seven Wastes can be found almost everywhere, if you learn how to see them. Here’s some lean thinking for the warehouse:
Overproduction - Think about the consequences when consumers, retailers, wholesalers, distributors, and manufacturers justify "just in case" or Murphy stock as a hedge against unplanned demand. Money, time, people, physical assets, the environment have all been tied up for something that isn’t needed.
Waiting - the ‘hurry up and wait’ of trucks sitting idle or drivers killing time awaiting their turn at the dock, or DC workers or lifts standing by waiting for tools, instructions, materials to arrive or to be taken away. Waiting comes from poor layout, lumpy demand, system batching. Then once the blockage is cleared we hustle.
Defective Product or Service - from picking errors, incorrect order quantities, misplaced stock to shipping on the wrong carrier or the wrong mode these errors consume resources of time, people and materials to no useful end. Worse yet, additional resources, often 2 or 3 times the original, are usually needed to correct the error.
Overprocessing - how about dock audits, redundant approvals, pick/pack/ship audits, cycle counting? Another example of overprocessing the the warehouse is the failure to rationalize the supply base and concentrate relationship management on a few top-tier suppliers. What about rationalizing the carriers? Both result in inefficient duplication of resources, decisions, and communications.
Moving Product - like overproduction, the unnecessary movement of product can occure both within the warehouse and throughout the entire supply chain. Too many steps, too many stops, unnecessary movement from suppliers though master DC’s to regional DC’s for further deployment to customers can be deadly drivers of cost and time, labor, and space.
Moving People - in the warehouse an enormous percentage of people’s time is devoted to movement, such as picking, put-away, and replenishment. If a facility isn’t well laidout with easy access to "A" items an enormous amount of time can be wasted in traveling empty. When good aren’t where they’re supposed to be the movement to the wrong location is both a defect and a waste of human motion.
Ineffective Inventory Control - creates waste a several levels. Excess inventory based on bad inventory data diverts limited capital into creation and maintenance of waste. Excess inventory results in consuming valuable storage space to hold unnecessary goods. A scarcity of items, on the other hand, results in stock outs, expediting, or lost orders.
PowerPoint and other miscommunications August 5, 2007
Posted by Lawrence Loucka in : Consulting, Lean, Lean Sigma, Sigma , add a comment.gif)
Recently read Edward R. Tufte’s The Cognitive Style of PowerPoint: Pitching Out Corrupts Within and initially dismissed his thesis as troglodyte. Now sensitized, I’ve been watching for evidence of PowerPoint Abuse. Found an unfortunate example with two parallel teams during a strategic capital equipment review. Both teams were given the same mission and access to data: scrutinize the new capital equipment plans, challenge assumptions, collect new data and define cost reduction and risk mitigation plans. Both teams were staffed with bright industrial, process, manufacturing, quality engineers who pulled on other subject matter experts in their data gathering. Leadership effectively facilitated and guided both teams through the current state to future state diagnostic journey. Significant productivity, utilization, overall equipment effectiveness opportunities were identified and tested over the two week full-time exercise.
One team plastered their "war room" with all of their data, continuously rearranging their wall, retelling their story. The other team began typing their findings and abandoned their wall after a couple of days. Individual leaders would visit with the teams randomly throughout the study period but never "walked the wall", instead expected PowerPoint slides for the daily out briefs. Attempts were made to reconcile the two teams leading up to a joint presentation to senior management.
Bottom line - what’s the new equipment price tag to support the new 5 year strategic operating plan?
One team argued for showing both the prior and new estimates as side by side stacked bar charts, the other team just a table listing the $9.6 million delta.
Despite coaching challenges the delta display won out. Too bad because the Executive VP had remembered "the number" and misinterpreted the table. Had the first team taken the EVP on a tour of their wall the message would have been clearer.
Supply Shortage July 26, 2007
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- Long Tern Agreements & relationship intimacy (get in bed)
- Prepay for process capacity, schedule item detail later
- ITAR Waivers – allow offshore supply
- Repatriate offshore supply
- DPASS – jump to the head of the queue
- Invest in building capacity; at suppliers, set up new suppliers
- Lobby politicians
- Redesign product
- Reduce scrap in-house and at suppliers
- Supplier process improvements (to free up capacity)
- Supplier development (lean and six sigma)
- Stockpile now
- Go down a level in the suppliers BOM and buy up supply
- Create a Strategic Supply Czar – integrate and leverage
Hansei April 30, 2007
Posted by Lawrence Loucka in : Consulting, Definitions, Lean , add a comment
Hansei is a concept that Toyota uses as a practical improvement tool. Toyota actually conducts Hansei events, like Kaizen events, to improve products and processes. The hansei improvements are fed back into the organization and disseminated. Hansei means to reflect on one’s failings or misdeeds, with the idea that this self-reflection will cleanse the individual and result in self rehabilitation. The individual absolves himself or herself of responsibility for any misbehavior. Taiichi Ohno said "Check is hansei" when referring to the third step of PDCA. In fact, Toyota does hansei even when things do go as planned (things go too well); even then they are asking "why?" as if there was something wrong. In fact, there is. At Toyota they say "no problem is a problem".