Posts Tagged ‘APICS Magazine article’

apics_astlCustomers and readers know that our firm is a long-time proponent, booster, member and champion of APICS (the American Production & Inventory Control Society).  They are, as noted in the organization’s vision statement: “the world’s leading community for end-to-end supply chain excellence.”  APICS chapters nationwide boast 43,000 members in an organization that has been building supply chain excellence since 1957.

Recently, APICS merged with the American Society of Transportation and Logistics (AST&L).  The merger is an illustration of the importance that logistics maintains in the overall supply chain.  As a recent article in APICS Magazine pointed out, the original APICS logo consisted of a stylized representation of a car’s rear axle and differential – an appropriate symbol of today’s merger in illustrating the importance that the movement of product from point A to point B holds even today, as transport remains an integral part of supply chain and operational management.

The key message, APICS notes, is simply this: “Production and inventory control is not an island.”  The productive functioning of the inbound/outbound supply chain is critical to delivering customer value, and transport and logistics thus occupy a key piece in the global supply chain puzzle.  The focus shifts over time from the plant to the supply chain as a whole.  This is merely a broadening of the definition of the term supply chain, and it simply recognizes that what a customer buys is not just a product but an entire experience.

As the APICS Dictionary itself points out in defining the ‘perfect order’ – it’s “an order in which the ‘seven Rs’ are satisfied: the right product, the right quantity, the right condition, the right place, the right time, the right customer, the right cost.”  As the APICS article notes: the plant can’t do that all by itself.

And so, just as APICS has recognized this simple fact in its merger with the AST&L, all manufacturers do well to remember that success comes from catering to the customer’s perception of value, “and anything we can do to enhance that customer value will encourage sales, revenue growth and satisfaction.  Products aren’t purchased strictly on the value inherent in the physical item all by itself.”

Price, promotion and place all play crucial roles, and so too as we deal with internal issues like planning, scheduling and materials availability, it’s important to remember that we’re all part of a global supply chain – from production through transport, and often back again.  It’s all about coordinating and collaboration across all these lines – whether you’re a national organization like APICS or just a small business like yours, or ours.


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dbrAs a recent article in APICS Magazine points out, “while containing an issue and eliminating an issue are different things, containment does help keep the problem from getting worse.”

And that pretty well sums up the simple concept behind the long-touted Drum-Buffer-Rope (or DBR) theory first espoused by Dr. Eliyahu Goldratt many years ago, and brought most notably and literally to life in his best-selling book, The Goal.

DBR, as APICS points out, has held its own for a good while now as a method for scheduling and managing operations that have internal constraints or a capacity-constrained resource.  That constrained resource with the least capacity will always set the pace for the entire production line.  Thus, providing it with a “buffer” of inventory is the simplest way to prevent starving that constraint and thus creating a full stoppage due to lack of work.  Simply put, make sure your “constraint” has plenty of inventory in front of it and you have effectively eliminated it as your worst constraint.

From there, the Theory of Constraints tells us, one moves on to the next most critical constraint… and so on, gradually working one’s way through a cascading series of constraints in the never-ending search for continuous improvement.

The idea of DBR then is to put a single information link – the “rope” – between the constraint and production starts.  Because it’s a single link, a DBR production control system becomes simpler even than kanban, which requires communication across many workstations, whether that takes the form of production cards, empty containers or empty spaces for inbound materials.

Of course, variations in processing and material transfer can dash the best of plans.  Here again, DBR can help.  As APICS points out (in an article by William Levinson titled “Completing the Link, Mar/Apr ’15 issue) “If no containment action is taken, inventory accumulates the same way.”  The author gives the example of a traffic jam in a highway operating near capacity when a driver slows down.  Everyone has to slow down, and no one can make up the resulting loss.

Likewise, in a “balanced factory” where each workstation has the same capacity, variation can cause inventory to accumulate and reduce throughput to less than the expected rate, and time lost at any work station theoretically can never be made up.

If all workstations but one (the “constraint”) have excess capacity, “then the problem is limited to that one workstation.  It therefore is necessary to keep a buffer of protective inventory to shield that workstation from starvation.”

The size of that buffer depends on the variation in the system prior to the constraint, notes Levinson.  So while this form of containment may not be a genuine solution, it does eliminate the effect of most of the variation.  Simple, but effective.


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(Now that our picture has drawn your attention…)

Recently, APICS Magazine published an article by Sam Tomas called “The Meaning of Lean.”  In it, Mr. Tomas, a retired supply chain and operations management professional whose career included 35 years at Motorola, elaborated on the fact that if you ask 12 people “What is lean?” you’re likely to get 12 different answers.   Tomas’ belief is that it is “necessary to have a common framework” (especially within a single company) so that two people can be sure they’re talking about the same thing.

To achieve that objective, he outlined five steps he believes are essential to the process:

  1. Perform an annual company review.  A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis is a good place to start, along with an examination of the company’s recent (prior year) successes and failures.
  2. Determine the company’s goals.  These include correcting specific weaknesses, countering threats, determining performance goals (earnings, sales, etc.) and so on.
  3. Decide what steps must be taken to achieve the company’s goals.  This includes evaluating your customer’ needs and expectations, and analyzing your competitors’ offerings.  Customers have ever-changing needs, and rapid design and development innovation are essential.
  4. Use lean techniques to meet goals.  Emphasize agility and flexibility in pursuing the company’s goals, and throughout operations.  Ask yourselves… What can be augmented or streamlined to improve sales and sustain competitive advantage?
  5. Write a company statement on lean.  Include a definition and the benefits the company seeks.  Broadcast it to all employees.  The CFO at Boeing once said “Our entire enterprise will be a lean operation, characterized by the efficient use of assets, high inventory turns, excellent supplier management, short cycle times, high quality, and low transaction costs.”  This presented a clear message to employees about Boeing’s focus on growth and creating value.

 Concluding thoughts?  Lean is most relevant when viewed in the context of a particular environment.  Developing a common language is useful to an organization so that members can communicate effectively with each other and avoid ambiguity, as well as reinforcing company strategies and goals.  And it’s always evolving, of course, in the spirit of continuous improvement.


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