Feb 16 2016
“Ohm’s Law” for WIP — Little’s Law Explained in Russian | Holz Expert
Sourced through Scoop.it from: holzex.ru
Translated from Russian: “Every production manager knows that the amount of work in process (WIP) — stacks of parts lying between machines waiting for processing — should be reduced. In contrast to the raw materials in the warehouse, work has already been done on it, and its cost increased by the amount of value added. This makes it an illiquid asset – in contrast to raw materials and finished goods, it cannot be sold. In addition, WIP costs extra space, heating, transportation and personnel. But, before reducing WIP, it is necessary to properly evaluate it…”
Michel Baudin‘s comments:
Even though it has a German name meaning “Wood Expert,” Holz Expert is a consulting group based in Moscow and specialized in the furniture industry.
I had not heard of them before, but Oleg Novikov pointed out this article to me on Facebook. It is well done. If you can’t read Russian, check it out with Google translate. They explain all the assumptions needed for the formula to be applicable, and give examples from furniture manufacturing. They even include a smiling picture of John D.C. Little.
Working with Russian clients, I was surprised that they insisted on mathematical formulas in consulting reports. To them, it was essential to the credibility of the recommendations, a feeling that I have never encountered among their counterparts anywhere else.
See on Scoop.it – lean manufacturing
Bodo Wiegand heads Germany’s 
Mar 2 2016
Sorry, But Lean Is About Cost Reduction… | Rob van Stekelenborg | LinkedIn
“It seems to be popular these last years and more recently to explicitly state that Lean is not (only) about cost reduction or cost cutting. See the recent posts by Mark Graban or Matt Hrivnak. So let me be somewhat controversial in this post (which I think is allowed to spark the discussion) and drop a bombshell: I think Lean is about cost reduction.”
Sourced through Scoop.it from: www.linkedin.com
Michel Baudin‘s comments:
I know that much of the TPS literature is about “reducing costs,” but it never includes any discussion of money! Ohno is even quoted as saying “Costs are not there to be measured, but to be reduced.” On the face of it, it makes no sense, because cost is an accounting term intended to represent the monetary value of all the resources spent to achieve a result.
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By Michel Baudin • Blog clippings 2 • Tags: Accounting, Cost, Lean, Muda, Ohno, Toyota, TPS, Waste