“Kanban Scheduling System”

Quarterman Lee

Management Services

Spring 2008, pp.28-31

Kanban is one of a number of methods for production control. Kanban systems are especially useful “when lot sizes differ between process steps, processes are unbalanced or when distance introduces time lag or variability.”

Other methods to coordinate multi-step processes are:

• Direct physical linking—“Here, each part in the process moves in synchronization and each step starts simultaneously. Processes must have the same lot size and co-location.”
• Broadcast—“The schedule is simultaneously ‘broadcast’ to upstream sub-assembly and supply operations. They build the needed pairs in ‘Line-Set-Order’ with a small time offset for delivery.”
• Materials Requirements Planning (MRP)—MRP “works from Bills of Materials (BOM), routings, inventory records and forecasts. It plans each process step for each product, subassembly and item.”
• Re-Order Point (ROP)—ROP systems “require steady and predictable withdrawal rates and predictable replenishment times. But these conditions are rare. Typical systems have very high inventories and experience frequent stock outs.”

Preparing for a Kanban scheduling system begins with formal analyses or with informal fine-tuning done on the shop floor. The article suggests the following steps:

1. Analyze product-volume for upstream work centers
2. Analyze downstream order patterns
3. Identify Kanban products
4. Identify appropriate lot sizes
5. Identify containers
6. Identify signal mechanism
7. Specify stock point(s)
8. Specify initial Kanban quantities
9. Develop an upstream scheduling algorithm
10. Operate and fine tune

Ways to determine the appropriate number of cards or containers include:

• Boundary analysis
• Predetermined formula
• Factor Analysis
• Computer simulation
• Trial and error

Back to top of page

“Up and Running”

Jill Jusko

Industry Week

April 2008, pp. 54-58

A recent Industry Week Census of Manufacturers study found that Total Productive Maintenance (TPM) occurs at 34% of all plants. However, TPM is more likely to occur at larger plants, with 58% of all plants with 500 or more workers reporting use of TPM. For plants with 250 to 499 employees, the figure was 39%. For plants with 100 to 249 employees, 31%. For plants with less than 100 employees, 28% reported use of Total Productive Maintenance.

Some experts feel that TPM is currently the weakest link in many companies’ lean manufacturing implementation efforts and this appears to be especially true for small and midsize manufacturers. However, some smaller plants are effectively using TPM already. The Raymond Corporation, a manufacturer of material handling solutions (including lift trucks), has reduced its unplanned downtime by 50% in the last year alone. The Raymond Corporation focuses its efforts on operator preventive maintenance, root cause analysis, and visual management. Metrics tracked at the factory level and/or machine level include:

• Percentage of unplanned downtime (vs. scheduled uptime)
• Ratio of unplanned to planned downtime
• Mean time to respond and fix an issue
• Mean time between failures
• Corporate-level cost metrics

Back to top of page

“The Eight Principles of Strategic Authenticity”

B. Joseph Pine and James Gilmore

Strategy & Leadership

Vol 36 No 3 2008, pp. 35-40

Using the history of the Walt Disney Company as an illustrative example, this article states that consumers “want to enjoy the experience of their purchase, and they won’t if it’s tainted by fakery, phoniness, and manipulation….Authenticity is becoming a critical consumer sensibility.”

To identify an appropriate “execution zone” when your company can operate authentically, the authors offer the following principles:

• Study your heritage—“You cannot take actions antithetical to your past and think people will view you authentic, for the easiest way to be perceived as phony is to repudiate your heritage.”
• Ascertain market and industry positioning—“Surveying your immediate environment provides an important context for devising a compelling, achievable, strategic direction for your enterprise.”
• Gauge your trajectory—“This lets you avoid both meandering around aimlessly and foolishly trying to go places your company has no possibility of reaching.”
• Know your limits—“You can best set the limits of your execution zone by defining the set of actions you will not do.”
• Stretch your execution capabilities—“…you should seek to accomplish a series of doable goals that successively stretch your capabilities, increase your speed and flexibility, and make reaching strategic positions at the far edges of your execution zone increasingly likely over time.”
• Scan the periphery—“Watch for new competitors who are innovating along three dimensions of competitive reality—offerings, capabilities, and customers.”
• Formulate your strategic intention—Stake out “that one future position among all possibilities that both meets those past imperatives and induces your customers to perceive your offerings and your company as more authentic than competitors.”
• Execute well—“If you apply the previous seven principles proficiently, then ‘all’ you have left to do is execute well, year after year.”

Back to top of page

“The New Science of Superperformance”

David Guerra

Industrial Engineer

March/April 2008, pp.20-25

This article is based on a recent book written by the author. Company “Superperformance” is defined as “industry-outperforming return on investment (ROI) sustained over time, at least 12 years.” Ten companies that met the criteria were identified and studied:

• Berkshire Hathaway
• Harley Davidson
• Johnson & Johnson
• Microsoft
• Southwest Airlines
• Sterling Bancshares
• SYSCO
• Tiffany & co.
• Toyota
• Wal-Mart

Over a 20-year period, these companies outperformed the S&P 500 by a margin of almost 5 to 1.

Eight “rules of superformance” were identified through study of these companies:

• Process x culture = superperformance—“Superperformers leverage the unlimited potential in this core interaction.”
• Superperformers superperform over time—“Superperformance is a second order steady state sustained over time.”
• The paradigm shift of superperformance is from machine to organism—“Organizations are living, complex adaptive systems, not machines.”
• Superperformance is created by super management and super leaders—“In superperformance theory, management and leadership act as the left and right brain of the organization.”
• Superperformers transform flow—“Process optimization is flow optimization.”
• Superperformers unleash passion—“Culture optimization is liberating the superhero inside every person.”
• Superperformance requires metamorphosis—“Metamorphosis is a dissipative structure, trading old paradigms and habits for new paradigms and habits.”
• Superperformers oscillate to continue superperforming—“Because they are polar-complements, process and culture live in natural tension, eternally shifting back and forth between two poles.”

The author also includes some initial steps towards transformation:

• Institute the new paradigm of optimization, with "manage process, lead people" as the core strategy.
• Shore up quality.
• Integrate change into every process.
• Stop rewarding individuals and start rewarding teams.
• Ask, don't tell. Superperformers treat people like volunteers.
• Be a community builder.
• Take off the mask of professionalism. Be authentic.
• Integrate cultural factors into performance scorecards.
• Stay in the sweet spot of superperformance.

Back to top of page

“Safety: Raising the Bar”

Karen Wilhelm

Target

Volume 14, Number 2, 2008, pp.16-22

Toyota’s Taiichi Ohno said that Safety comes before everything else. Today, safety and healthcare are a key part of Toyota’s current sustainability strategy: “In FY2005, Toyota addressed basic steps to raise workplace safety levels and to increase the visual representation (mieruka) of all accidents, including minor ones. It implemented new ergonomic measures to prevent musculoskeletal disorders and promoted stronger measures against noise and dust. To pull all its actions together, it introduced a comprehensive occupational safety and health management system (OSHMS).”

In 2006, Toyota began a program to standardize the creation of safe and healthy workplaces through a PDCA (Plan, Do, Check, Act) cycle. Toyota is also serious about extending safe work environments throughout its supply chain. Toyota does its own checks, as well as training “safety guardians”. Top executives from Toyota’s suppliers association are being trained in the importance of executive management; personally checking safety on-site and presenting a strong management commitment to safety.

Back to top of page

Slightly Somewhat Super: Excellence for the rest of us

John McNeil, GP

Guerra is a popular speaker and author who promotes the benefit of focusing simultaneously on process and culture. He notably excludes GE under Welch from his list of superperformers because of GE’s policy of relentlessly weeding out under-performers. In Guerra’s view, GE’s focus is too strictly on process alone. By the same token, many of our clients don’t have the luxury of endless lines of excellent candidates willing to take the place of their lesser performers or retirees. And the new hires that come on board don’t enter a stellar, team-based, measurement-driven culture with seamless, continuously-changing processes. So our clients often feel hampered in their ability to build success based on culture. How then should we proceed; the less-than-super?

GP has long advocated the combination of people, process and technology. For most companies, a focus on process involves a clear-headed assessment of the current and future (waste-free) processes that will meet customer needs and the steps needed to move between the current and future states. For most companies, a focus on people involves a clear-headed assessment of the skills, knowledge and abilities required to run the current and future processes, the current levels of those knowledges, skills and abilities, and the steps needed to close the gap. For most companies, a focus on technology involves a clear-headed assessment of the tools needed by the current and future staff to run the current and future processes, the current levels of those tools and the steps needed to close the gaps.

Our tools of choice in guiding the steps referred to above invariably include Lean and Six Sigma. When we combine the two, we find ourselves advocating a standard set of improvement steps, followed by a standard routine regimen. The standard steps are:

1. Select a process and define its flow
2. Define customer-critical measures of success which drive the process
3. Identify controllable process variables
4. Interfere with the process to improve it
5. Contril it with standard work processes

Of course these steps mirror the standard six sigma DMAI and C. The control phase works best when it explicitly includes daily and routine management steps.

These steps may seem pedestrian and concrete rather than inspiring and people-centric, but they work. They provide a clear path from our current humbling realities to performance that may not be super but is clearly superior. And Guerra would approve of that.

Back to top of page