Measuring Forecast Accuracy

Supply Chain Forecast Accuracy is usually measured with Mean Absolute Percent Error or MAPE, the average of percentage errors. But there are several other metrics to consider. Here’s an example …

10 things to improve forecast accuracy

Forecasts are never right but you can improve your forecast accuracy … You can’t improve what you don’t measure Aggregate – individual plus or minus swings cancel each other out Measure forecast accuracy at the right time fences Review forecasts by exception only.  If the forecast deviation is within expected limits leave well enough alone… [Read More]

Kanban and Sustainability

Dear Larry, Andrew and Guanair; How are you doing ? I would like to share with you that We Won the Whirlpool award Sustainability-2013 , among 536 suppliers and 55 projects, With our project about plastic returnable box saving industrial waste (avoid 75000 cardboard boxes /2500 wood pallets /50 km of plastic wrap /40 ton… [Read More]

LeanSigma Tool Kit

Lean Sigma Behavior Other Customer & Process Focus Muda, Muri, Mura Value Stream Map Flow, Takt, Pull Visual Management Process Analysis Problem Solving Quick Changeover Standard Operations One Piece Flow Kanban Heijunka Respect for People Total Productive Maintenance Voice of the Customer Critical to X Project Management, DMAIC Statistics Data Collection Rolled Throughput Yield Cause… [Read More]

LeanSigma Green Belt Training

Flow Consulting clients have often requested us to put together a Green Belt LeanSigma class, and we now have enough demand to guarantee the minimum number of students.  So we are partnering with one of our key clients, Gulf States Toyota, to run the class this fall. Course Objectives: Provide a fundamental understanding of LeanSigma… [Read More]

Demand Segmentation – one size fits none

We know better than to try to force fit strategies yet time and again we find businesses planning and managing their processes with a ‘one size fits all’ approach.  Hospital services, insurance underwriting, pharmaceutical production, consumer electronics assembly, integrated supply chain services all struggle with finding the right balance of specialization and common process.  At… [Read More]

Lean Forecasting

Why can’t Sales give us a decent forecast?  Paraphrasing George E.P. Box, “All forecasts are wrong, some are useful.”  If forecasts are wrong, then why forecast?  Supply chain lead time is often much longer than the customer is willing to wait, and so the business carries inventory somewhere, and inventory is a waste.  The Lean… [Read More]

Safety Stock

Over time, inventory goes up and down.  As customer order shipments are made inventory transactions subtract the ship quantity from the quantity on hand.  When production is made or goods received into the warehouse the quantity on hand goes up.  This up/down cycle can be thought of as a ‘saw tooth’.  Except it’s never as… [Read More]

Lean Math

We would like to announce a new entrant into the lean blogosphere, it’s called Lean MathTM (leanmath.com).

We know what you’re thinking, “Lean Math?!” Now, that’s a subject that evokes passion in the heart of every lean practitioner…right?

But, the truth is effective lean transformations require some level of math, whether it’s the often deceptively simple takt time calculation, sizing kanban, calculating process capability, or anything in between. It’s hard to get away from math. There is no such thing as math-free lean and certainly not math-free six sigma!

Square Root Law – inventory in multiple locations

Got asked what would happen to inventory when the number of stocking locations change.  I thought for a minute and remembered a quick rule of thumb … The Inventory Square Root Law states that … Average inventory increases proportionally  to the square root of the number of locations in which inventory is held. X2 =… [Read More]