Euclides A. Coimbra and his associates at the Kaizen Institute have created a wonderful and detailed work on the application of continuous improvement to supply chains.  Here is a full exploration and application of lean from end to end of the extended value stream.  Two thumbs up!

Some of the graphics look to once have been powerpoint and when reproduced are to small and grainy to be able to read.  There isn’t an index so finding topics is limited to the table of contents.  The book is hard bound, and printed on good paper.

Some of the vocabulary is odd; “border of line” might be better said as” interface” or “borderline”.

Economic Order Quantity, or as referred to in this book, Wilson’s Formula, is treated in a refreshing way.

We can say that Wilson’s formula still applies today.  The only problem is when people assume that changeover time (or, generally [...]]]>

Euclides A. Coimbra and his associates at the Kaizen Institute have created a wonderful and detailed work on the application of continuous improvement to supply chains.  Here is a full exploration and application of lean from end to end of the extended value stream.  Two thumbs up!

Some of the graphics look to once have been powerpoint and when reproduced are to small and grainy to be able to read.  There isn’t an index so finding topics is limited to the table of contents.  The book is hard bound, and printed on good paper.

Some of the vocabulary is odd; “border of line” might be better said as” interface” or “borderline”.

Economic Order Quantity, or as referred to in this book, Wilson’s Formula, is treated in a refreshing way.

We can say that Wilson’s formula still applies today.  The only problem is when people assume that changeover time (or, generally speaking, ordering cost) is rigid and cannot be reduced.  Many people don’t think to do Wilson’s calculations because they are still misled by two strong paradigms: flow at any cost and efficiency at any cost.

The ‘flow at any cost’ paradigm is a rising paradigm that is currently gaining in popularity.  People hear about the wonderful Toyota Production System (TPS) and start to increase the flow by reducing the batch sizes blindly, without looking at Wilson’s formula.  What happens is that the CAPEX requirements explode, because the small batch sizes together with big changeover times decrease efficiency.  The result is that flow is indeed achieved – but at the expense of capital expenditure, not by internally reducing the changeover time and increasing equipment flexibility.  You can see this effect in many rich companies that are implementing Lean manufacturing and the TPS.

For a more in depth review check out Jon Miller’s posting on Gemba Panta Rei,
Review of Total Flow Management by Euclides Coimbra.

Hot off the press from the Lean Enterprise Institute …

Page 12 & 13 have a brief description of Coefficient of Variation and a SKU Scatter Diagram (weekly volume vs. SKU stability).  10 weeks usually isn’t sufficient for meaningful or statistically significant calculation of standard deviation.

The guidelines given need to be tempered with the granularity of the data.  While a coefficient of variation of less than 1.0 can be considered stable for weekly data, it would be considered very noisy when using monthly data and quite stable when using daily demand.

This small quibble aside the authors Martichenko and von Grabe do a wonderful job describing lean principles for the supply chain, or as they prefer, the fulfillment stream.

Combining the questions of green and sustainability with the application of lean thinking to supply chain and logistics I offer these current publications for your consideration.

Hot, Flat, and Crowded, by Thomas Friedman, author of The World is Flat, presents two cases 1) the impact of global warming, population growth, rise of a global middle class through globalization, and 2) America’s loss of focus and national purpose since 9/11, combine to ever greater instability.  The rise of new powerful economic nations is completely changing the way the world works.  Whether you buy in to the doom and gloom you might give some thought to how solving these problems present the greatest economic opportunity of our time.

Streamlined: 14 Principles of building & Managing the Lean Supply Chain by Mandyam M. Srinivasan stresses systems thinking. It integrates two management philosophies: the theory of constraints and lean thinking, and illustrating how they [...]]]>

Combining the questions of green and sustainability with the application of lean thinking to supply chain and logistics I offer these current publications for your consideration.

Hot, Flat, and Crowded, by Thomas Friedman, author of The World is Flat, presents two cases 1) the impact of global warming, population growth, rise of a global middle class through globalization, and 2) America’s loss of focus and national purpose since 9/11, combine to ever greater instability.  The rise of new powerful economic nations is completely changing the way the world works.  Whether you buy in to the doom and gloom you might give some thought to how solving these problems present the greatest economic opportunity of our time.

Streamlined: 14 Principles of building & Managing the Lean Supply Chain by Mandyam M. Srinivasan stresses systems thinking. It integrates two management philosophies: the theory of constraints and lean thinking, and illustrating how they complement and reinforce each other to create the smooth flow of goods and services through the supply chain. Thought provoking.

End-to-End Lean Management by Robert Trent describes a broad array of waste that affects all supply chains and shows how to make lean performance improvement a reality across your entire supply chain.  Trent he explains and details key lean objectives, including standardization, flow, optimization, and waste elimination.  An easy read.

Available at Amazon and CRC Press

In most warehouses the material handlers travel empty more than 60% of the time.  Long pick paths and poor product placement can make labor even more inefficient.  Slotting your warehouse based on travel distance and customer demand can save 5-10% on labor.  When handling issues, product groups, order patterns are factored in an additional 3-5% labor productivity can be had.  Also increasing storage density can create free space for additional opportunities; more efficient put away, right sizing bins, promotions and new product roll outs.

Finding the warehouse ‘squatters’, the slow moving stock that’s sitting in the wrong place, isn’t too difficult.  Squatters force the pickers to travel further to get to the active product locations.  Over time squatters increase and migrate forward forcing longer and longer hunting trips.  A quick and dirty way to find the squatters is to take your picking transactions and count the number of transactions and sort [...]]]>

In most warehouses the material handlers travel empty more than 60% of the time.  Long pick paths and poor product placement can make labor even more inefficient.  Slotting your warehouse based on travel distance and customer demand can save 5-10% on labor.  When handling issues, product groups, order patterns are factored in an additional 3-5% labor productivity can be had.  Also increasing storage density can create free space for additional opportunities; more efficient put away, right sizing bins, promotions and new product roll outs.

Finding the warehouse ‘squatters’, the slow moving stock that’s sitting in the wrong place, isn’t too difficult.  Squatters force the pickers to travel further to get to the active product locations.  Over time squatters increase and migrate forward forcing longer and longer hunting trips.  A quick and dirty way to find the squatters is to take your picking transactions and count the number of transactions and sort by location.  A low number of picks in a location right next to one with high picks is a clue.  Depending on your location address naming scheme this sorting can be confusing.  Also, unfortunately spreadsheet slicing and dicing can only take you so far, typically only to making one pass on the product velocity.  When you add other factors besides distance and velocity you need a better tool than Excel.

Slot3D by IDS Engineering is a warehouse slotting tool that combines AutoCAD with an economic algorithm that is highly visual, flexible, and powerful.  Slot3D translates business rules into configuration parameters and along with SKU and order history calculates  the picking, replenishment, and storage costs for each item and slot in the warehouse.  The system recognizes different material handling equipment capabilities and location sizes and characteristics.  Rules and restrictions provide mechanisms to prioritize areas of the facility to produce golden zones, bulls eyes, and hot zones.  By allowing the user to structure the rules the software is flexible and not locked into a set of preconfigured algorithms. 

The 3D capabilities of AutoCAD allow you to see the overall slotting optimization by providing a heat map of the facility.

Supply Chain design studies often target understanding the impact of new sourcing options such as switching suppliers, opening or closing facilities, new product line introductions, or business acquisition integration.  Each opportunity has potentially great financial advantage, but also carries risks as well.  The task then is to understand and quantify the risk – reward trade offs of operating cost vs customer lead time, inventory vs. service, fixed vs. variable cost.  Unfortunately the various business goals need to be balanced and the complexities managed of customer demand, product dimensions, geography, shipping modes and rates.  Sometimes a spreadsheet will do, often you need a more robust tool.

One complaint of modeling and simulation often heard is that the only one who understands the model is the modeler.  Fair enough when the math is dense and the model a bunch of programming code.

Supply Chain Guru by LLamasoft is one of the best of [...]]]>

Supply Chain design studies often target understanding the impact of new sourcing options such as switching suppliers, opening or closing facilities, new product line introductions, or business acquisition integration.  Each opportunity has potentially great financial advantage, but also carries risks as well.  The task then is to understand and quantify the risk – reward trade offs of operating cost vs customer lead time, inventory vs. service, fixed vs. variable cost.  Unfortunately the various business goals need to be balanced and the complexities managed of customer demand, product dimensions, geography, shipping modes and rates.  Sometimes a spreadsheet will do, often you need a more robust tool.

One complaint of modeling and simulation often heard is that the only one who understands the model is the modeler.  Fair enough when the math is dense and the model a bunch of programming code.

Supply Chain Guru by LLamasoft is one of the best of the many logistic network optimization and simulation software packages on the market today.  With SC Guru model building is very visual.  Sure there is a ton of data to manage; addresses, sales orders, shipment details, product dimensions, sourcing, inventory, and transportation policies.  With the visual modeling native to the package you can display and interact with your data easily.  As a user you can quickly create views of the supply network based on product or customer groups, geography, shipping lanes.  Building the network diagram is as easy as with Visio or any other flow charting tool.  Geo maps are easy to populate with built in longitude and latitude lookups.  Distances come easily through the PC*Miler functionality.

Making the analysis more visual opens up the network study to greater team participation and leadership comprehension, and hopefully a better business result. 

When asked recently to recommend reference books on Kanban here’s what I came up with…

Kanban for the Shopfloor is a straightforward implementation instruction manual.  The language is plain and simple.  The implementation checklist is complete.  Kanban Just-In-Time at Toyota is a translation of a book published by the Japanese Management Association in 1986 and is based on the seminars given by Taiichi Ohno to Toyota suppliers.  The language is a bit rough in places, but the concepts are presented in logical manner.  The philosophical parts may not play well with factory workers, the prior book would be a better choice.  Custom Kanban by Ray Louis comprehensive, detailed, and well written.  The methodical approach offers some 20 design options for adapting the kanban tools to a variety of situations.  This work is invaluable for implementers.  All three works can be found at Amazon and Productivity [...]]]>

When asked recently to recommend reference books on Kanban here’s what I came up with…

Kanban for the Shopfloor is a straightforward implementation instruction manual.  The language is plain and simple.  The implementation checklist is complete.  Kanban Just-In-Time at Toyota is a translation of a book published by the Japanese Management Association in 1986 and is based on the seminars given by Taiichi Ohno to Toyota suppliers.  The language is a bit rough in places, but the concepts are presented in logical manner.  The philosophical parts may not play well with factory workers, the prior book would be a better choice.  Custom Kanban by Ray Louis comprehensive, detailed, and well written.  The methodical approach offers some 20 design options for adapting the kanban tools to a variety of situations.  This work is invaluable for implementers.  All three works can be found at Amazon and Productivity Press.

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 [...]]]>

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."

Check out Annals of Medicine: The Checklist by Atul Gawande in the Dec. 10. 2007 edition of The New Yorker for an insightful exploration of the medical application of one of the most basic of quality tools – the checklist.  I was astounded to learn that checklists aren’t a common practice in one of the most complex industries, the emergency room.  Setting up a machine, preparing for an audit, readiness reviews, planning a kaizen all have routine lists.  Flying a plane, launching a rocket, preparing for battle all have checklists.  Gawande describes how in 2001 Peter Pronovost, a critical-care specialist at Johns Hopkins, developed a simple five step checklist for inserting central line IV’s that dramatically reduced the odds of line infections, and the resistance he faced in implementing something so simple and yet so effective. 

First on my summer reading list was Hoshin Kanri for the Lean Enterprise by Thomas Jackson.  Tom Jackson explains how you can implement, identify and manage the critical relationships among your markets, design characteristics, production systems, and personnel to satisfy your customers and give you a competitive advantage.  Developed in Japan and practiced by Toyota, US companies like Bank of America, Acuity Brands, HP, Raytheon, Honeywell, Texas Instruments and others have [...]]]> At long last we now have a number of recent readable guides for understanding and implementing policy deployment in your organization.  My introduction to policy deployment was as a middle management participant feeding data and ideas into the cascading Catch Ball sessions we would have as new policies and strategies came rolling down the mountain.  Over the years I’ve been looking for good reference materials to offer to others as they struggle to comprehend the power and simplicity of the methodology.

First on my summer reading list was Hoshin Kanri for the Lean Enterprise by Thomas Jackson.  Tom Jackson explains how you can implement, identify and manage the critical relationships among your markets, design characteristics, production systems, and personnel to satisfy your customers and give you a competitive advantage.  Developed in Japan and practiced by Toyota, US companies like Bank of America, Acuity Brands, HP, Raytheon, Honeywell, Texas Instruments and others have institutionalized this robust tool set with dramatic results.

Jackson’s book is really a workbook with many examples, forms, checklists (on an accompanying CD), team exercises, road map, and a case study.  This would be a perfect self study guide for a motivated leadership team ready to embrace policy deployment and change management.

The basic premise behind the hoshin plan is that the best way to obtain the desired result is to ensure that all employees in the organization understand the long-range direction and that they are working according to a linked plan to make the vision a reality.  To accomplish this are a number of tools starting with the Shewhart Cycle (Plan Do Check Act), affinity (house of quality) diagrams, the X-matrix lean “balanced scorecard”, and A3 presentation/communication style.

Also known as Policy Deployment, this methodology was first documented by Yoji Akao in the late 1960′s and first seen in the West in the mid ’70′s at Japanese subsidiaries of western companies such as YHP, a division of HP.  Quality Function Deployment , QFD is a related tool set useful in group decision making in product and service design, brand and product management.  QFD transforms customer critical requirements into engineering characteristics.

Getting the Right Things Done by Pascal Dennis is much the same as the two other works presented here but makes its approach at a slightly higher altitude.  This book chronicles the journey of the company and its President, an experienced lean leader who was hired several years ago to steer Atlas in the right direction. While Atlas had already applied some basic lean principles, it had not really connected the people and business processes so that the company could dramatically improve. Being good at point solutions doesn’t make a lean transformation.  Atlas’ challenge was to find a a way of focusing and aligning the efforts of good people, and the new delivery system, something that would direct the tools to the right places.  Enter strategy deployment.  The parable continues with the ins and outs of deploying Hoshin.

Jackson’s book is more tactical, Dennis’ perhaps more strategic, although both are implementation guides.  Pick one and give it a go!