Month-end Madness March 1, 2007
Posted by Lawrence Loucka in : Consulting, Lean, Lean Sigma, Supply Chain , add a comment
Do you have a “hockey stick”, where most of your bookings occur right at the end of the month, quarter, year? If you have a “hockey stick”, it is very hard to have consistently predictable revenues. Growth, profits and market value suffer when revenues are not predictable. Many companies experience 50% or more of their quarterly sales coming in during the last week or two of the quarter. The V.P. of Sales loses a lot of sleep, the CEO gets irritable and the rest of the executive staff loses confidence.
When orders look weak midway through the quarter, management applies pressure to “pull next quarter’s orders in”. The reps’ only choice may be to offer a discount to entice customers to cooperate. Whether or not they are successful in the current quarter, there is a reinforcing effect and customers learn to hold orders to the end of the quarter to get a lower price in the future. The net effects are a "hockey stick" and lower prices which can lead to significant profitability and cash flow concerns.
Vicious Cycle: With constant pressure to manage operating expenses the supply chain can end up reinforcing the month or quarter end splurge as supplies are expedited to meet the spike in demand, or replenish the stocks that shipped out all at once. Expediting or pulling in digs a hole creating future shortages; a self perpetuating cycle of feast and famine.
What to do? Change the systems - discounts, incentives, compensation, culture. A tall order but it can be done.
Mentoring December 10, 2006
Posted by Lawrence Loucka in : Consulting, Definitions , add a comment
Supporting another person by sharing knowledge and experience in an area is mentoring. For example, an experienced executive might coach a new manager in the art of leadership. Mentoring derives its name from Ancient Greek mythology when Odysseus left Mentor to look after his household while he fought the Trojan wars. Mentor was charged with raising Odysseus’s son Telemachus in the ways of wisdom. Mentors:
- Focus on helping the learner to develop their abilities
- Act as a knowledgeable friend
- Listen and challenge assumptions
- Question to encourage a wider view and range of learning and experimentation
- Provide openings for change and autonomy
- Let the learner own and direct the relationship
- Help someone, having no hidden agenda, with their personal or, professional career development
- Create a safe arena in which a trusting relationship can develop
- Maximize the learner’s internal resources
- Can learn to be more effective
Here are a few good references:
Simplified Systematic Layout Planning October 22, 2006
Posted by Lawrence Loucka in : Consulting, Lean, Lean Sigma , add a comment
The process of arranging a work space for a factory or office is often done informally. The people working in the area all have opinions about who should be where or what equipment goes here or there. Here’s a better way, Richard Muther’s Simplified Systematic Layout Planning:
- Chart the Relationships
- Establish Space Requirements
- Diagram Activity Relationships
- Draw Space Relationships
- Evaluate Alternative Arrangements
- Detail the Selected Layout Plan
Let’s dig in … To chart the relationships make a list of each activity involved on a relationship chart and code and score the interaction between pairs as so :
- A - Absolutely necessary = 16
- E - Especially important = 8
- I - Important = 4
- O - Okay = 1
- U - Unimportant = 0
- X - Undesirable = -80
Current layout 
Propsed layout 
Here’s the math…
Cell Layout by Committee August 18, 2006
Posted by Lawrence Loucka in : Consulting, Lean , 4comments
One of my roles as sensei is to observe and critique. On Thursday I made close observation of a manufacturing cell layout workshop. The project leader had two teams of workers and support personnel set up with paper cutouts of the equipment, furniture, benches, racks and asked them to “rearrange the deck chairs”. The teams had previously developed a list of guidelines – clear line of sight, material flow, rooms and big equipment on the outside of the area, etc. Then the two layouts were critiqued by the “expert”, pro/cons listed, and a ‘consensus layout’ created. My problems with this approach are: a) Who says either of the two proposals or the consensus layouts are lean?! They certainly aren’t optimized, although the future cell residents did have design input into their new home; and hopefully have achieved some level of buy-in. b) The process the team used makes no attempt at flow affinity (frequency of neighbor interaction – the Muther Simplified Systematic Layout Planning method, or any other layout optimization tool). So we see amateurs deciding to put the break room and lockers closer to the cell exit and in between incoming inspection and CMM. The residence leave or enter the cell a few times a day, while parts move between inspection and CMM many many times a day. Go figure …
Little’s Law Redux June 17, 2006
Posted by Lawrence Loucka in : Consulting, Lean , add a commentRecently I had the opportunity to sit in on a desk top simulation of a manufacturing cell design. The process is called HOCUS. Hocus stands for Hand Operated Capacity Utilization Simulation. Its purpose is to identify constraints and opportunities in the proposed new manufacturing cell layout. With a group of workers and support people the flow and relationships between operations, and wip, throughput, queues, and flow days are studied in a virtual world. Routing job sheets are created for each of the mix of products running through the cell. In virtual fifteen minute increments work is ticked off and jobs moved around through the routing and process flow. Once each virtual day work-in-process inventory at each work station is collected and total cell throughput is counted and recorded on a production chart hanging on the wall. Operators and cell designers then discuss and tweak the model to address constraints with changes such as adding or removing work stations, adding shifts, changing equipment size or batching rules. The process is very interactive and uncovers issues not brought out in the earlier design stages of process mapping and interviews.
While running the recent event we noticed that throughput was as expected and wip was piling up at several operations. OK so add more capacity, someone said, and we did and after several more iterations the backlog queues stopped growing but didn’t decrease. We achieved steady state. But start to finish throughput time was still too long, what to do?
Well how about some selective overtime at the two bottleneck operations?