Just-in-time and disasters


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Every time a natural or human-made disaster occurs, there are journalists and bloggers to see in the resulting supply chain disruption evidence that just-in-time (JIT) is wrong and should be abandoned as an objective.

This is based primarily on the perception that JIT means zero inventories. Since zero inventories means zero production, it is obvious that not all inventory is waste. What is waste is unnecessary inventory, which is a bit more subtle because it requires you to tell what is necessary from what is not. There are telltale signs, like thickness of dust or the inability of anyone to tell you what materials are for, but that is the easy part. Beyond that, you have to figure out experimentally what you really need.

What JIT really is about is protecting yourself against shortages by vigilance rather than inventory. This means keeping accurate inventory data, monitoring the in- and out-flows, monitoring the disruptions that can be anticipated, and responding quickly to events. The reason to pursue this strategy is that , while protecting yourself against shortages by inventories works with crude oil, it does not when you are dealing with thousands of items. If you try, you end up with full warehouses that happen not to contain the item you need today.

When a disaster hits your supply chain, the quick response cannot be yours alone. You need your suppliers’ help, and that is why you cannot be in adversarial relationships with them. Long-term, single-source agreements, the regular exchange of business and technical information, and collaborative problem-solving are all necessary to cement the relationships that make a joint emergency response possible.

See on blog.kinaxis.com

Should Lean efforts focus on the supply chain or within the plant? Comments on an Industry Week article

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This article quotes Paul Myerson as saying that manufacturers preferred to “lean out within their four walls before working heavily with customers and suppliers.”

While I have heard this from many sources, I do not believe it is true. Having worked both within the four walls of plants and on their supply chains, I have repeatedly seen manufacturing managers conclude that their manufacturing needed no improvement, and that all the problems were with suppliers.

Before Paul Myerson, I also wrote a book on Lean Logistics. In 2005, it was the first on this subject. But I also wrote books on Lean Assembly (2002) and Working with Machines (2007), both of which deal with what happens “within the four walls.” Guess what? Lean Logistics sells more copies than the other two combined, and I don’t think it is a better book. To me, it just means that its subject is getting more attention.

Actually, it is getting a disproportionate amount of attention, and too early. Manufacturers should  focus on what happens within their walls first, and fix it. The vast majority, including many claiming to be Lean, have not. Until they do, they have no credibility with their suppliers and no business telling them how to improve.

See on www.industryweek.com

IndustryWeek : Manufacturing and Trust: A Prescription for What Ails Our Industry

Via Scoop.itlean manufacturing
I also wrote on the subject in Chapter 19 of Lean Logistics. Adversarial relationships between suppliers and customers are stable because each side perceives a collaborative attitude with the other as unilateral disarmament: any information they share can be used against them in a future negotiation. And there is no shortage of examples of such fears being justified. So how do you defuse this situation? Rob Olney’s article points the way, but some of his recommendations assume trust is already there. How do you get them to that point?   “Distrust fuels the need for extra time, inventory, paperwork and more, ultimately building more cost and inefficiency into the supply chain.”
Via www.industryweek.com