Be A Perfect Supplier; Be A Perfect Customer

Operations that work to the “push” are well known for complex and interdependent problems. What looks like a problem in one area often has causes, or parts of causes, in other areas. Quality problems, delivery problems (late, too much, too little, wrong stuff), sub-optimizing attempts to reduce local cost.. all of these things propagate unchecked through the plant. To fix one area means having to fix almost all of the others at once. This initial improvement gridlock is pretty common.

When you start talking about implementing JIT in an environment like that, the pushback is visceral and, to be honest, legitimate. The only reason they get anything done is because the system runs to sloppy tolerances and doesn’t expect much. JIT demands a degree of mutual vulnerability, at least it seems that way when it is first presented.

The other really big psychological issue is that lean is often presented as a solution to all of these problems. Quite correctly, the survivalist shop floor supervisors don’t see that. And they are right. The problems do not go away when you implement flow. I sometimes find it surprising how many people don’t get that. All they see is fewer problems in operations that have flow, and they mix up cause and effect. Good flow is the result of solving the problems. Not the other way round, but I digress.

If you are dealing with this problem gridlock, where do you start? The first step is to contain the problems as close as possible to their sources.

The objective is to apply what temporary countermeasures are necessary to appear as a perfect supplier to your downstream customers; and the appear as a perfect customer to your upstream suppliers.

So what is a “perfect supplier?” That is probably the easier of the two logical questions to answer. A perfect supplier is capable of supplying what you need; when you needed it; with perfect quality; one-by-one; at takt.

What is a “perfect customer?” This one is a little harder, but it is good to look back at what makes a perfect supplier. Ask yourself – what things does the customer do that makes it difficult to be a good supplier? What does a bad customer look like?

  • They order or demand things in batches.
  • They give no advance notice about what they need.
  • Their demand is unpredictable and inconsistent.

A lot of this seeming unpredictability actually originates in the supplying process. I recall a case where the manager of a fabrication shop swore that his customer’s demands were totally random. At the assembly plants, though, they operated to takt with a steady mixed-model schedule. There was very little change from one day to the next. Why the big disconnect? The fabrication ship ran things in big batches, and set up big batch pull signals. Naturally those big batch pull signals would go a long time between trigger points, so they would seem to come back at arbitrary times, for huge amounts. Self-inflicted gunshot wound. Once they took the simple step of shipping things in smaller containers, a lot of that seeming instability went away. Smaller containers meant more frequent releases of pull orders, which gave them a cleaner picture of the demand picture. Think of it this way: The smaller the pixels on your screen, the more resolution you have in the image.

So that does the perfect customer look like? Level, predictable demand at takt with no major fluctuations.

Think of the purpose of heijunka or leveling production. Because customer demand arrives in spikes, batches, lumps, the leveling process is necessary to make that demand appear to be arriving exactly at takt time.

Although the books, such as Learning To See say there is only one pacemaker process or scheduling point, non-trivial flows frequently require re-establishing the pulse.

This is especially true if orders are batched up either through the ordering process itself or the delivery process. An example of this is a manual kanban process between an assembler and the supplier. Even though there is a paced assembly line and good leveling, kanban cards are collected and delivered to the supplying process in transportation-interval “chunks.” The supplier needs to have their own heijunka board to re-level the demand and pick at takt from the supermarkets. The alternative is that the demand arrives at the production cells in those same batches, and the smooth takt image is lost.

In a Previous Company we were working a project to establish pull on a trans-continental value stream that had five major operations, all in different geographic locations. To use the word “monument” does not even begin to describe the capital infrastructure involved, and there were a lot of these assets shared with other value streams, so relocating and directly connecting flows was out of the question. There were unreliable processes, big batches, transportation batches, end-using customers’ orders in huge, sudden surges based on their surge based business cycle. Step by step we isolated inventory buffers and ended up putting in heijunka to re-level the demand at nearly every stage of the process. It was big, ugly, cumbersome, but it worked to isolate problems within a process vs. pass them up and down stream.

The objective was simple: Use inventory buffers and heijunka to make each process in the chain appear as a perfect customer to its suppliers – always pulling exactly at takt. The consuming process “owned” the inventory buffers necessary to do this. Reason: Simple. The problems that cause them to be a less-than-perfect customer are theirs, so they own the inventory that is necessary to protect their suppliers from those problems. Likewise, that process owned whatever inventory was necessary them to appear to be a perfect supplier. They had to enable their customer to pull one-by-one, exactly at takt, from them, even if their problems kept them from producing that way.

Never mind that the downstream process didn’t actually consume at takt. THEIR inventory buffer translated their spiky signal into one which reflected the takt time.

All of this was very sophisticated and complicated, but in the long haul it worked. Megabucks of inventory came out of the system. Megabucks remained, but we knew exactly why it was there, and who had to solve what problems to reduce it.

If you can’t be a perfect customer, create the illusion that you are.

If you can’t be a perfect supplier, create the illusion that you are.

Then you own the problems yourself, you own the inventory-consequences of having those problems, and you control your own destiny.

Takt Time and Leveling – What’s The Point?

A few days ago I wrote about asking “What is your takt time?” and the likely responses to that question. But in my list of common responses, I left one out – “What’s the point? We get everything out by the time the truck leaves.”

Here’s a real-life example: In a high-volume consumer goods factory we had a daily transportation cycle. Shipments left once a day. Parts and materials arrived once a day. Although the operation was not without its glitches, the process itself incorporated a lot of automation (another story entirely), and the time through the machinery was pretty quick.

We were trying to implement the production leveling (heijunka) into the enterprise flow between the factory and the distribution system. While the mechanics were very straight forward, leveling the model mix during the course of the day encountered a logical question: What’s the point?

And what is the point? With or without model-mix leveling the same stuff ended up on the truck at the end of the day, and the total amount of inventory in the factory was not going to dramatically change. So why go through the trouble, especially of working changeovers on the packaging equipment, when there was apparent no net effect?

The question is a logical one until we understand that takt time (or pitch in this case) is not a production quota. It is part of a standard.

What’s so important about standards?
Without a standard, you can’t detect a problem.

Daily management is about rapidly detecting, correcting and solving problems. This is much easier to do when dealing with small problems before they grow into big ones.

The “What’s the point?” question even gets asked in the course of many lean manufacturing implementations. The operation reaches a level of performance that is “good enough” – for example, everything makes it onto the truck by the end of the day – and they are satisfied with that level of performance. This is when continuous improvement stops.

Have all of the problems been solved? Has all of the waste been removed? Of course not. But the next level of problems, and therefore the next level of performance, is under the radar.

In the factory I described above they had more demand than they could handle. They were already working 24/7, and were working to add capacity. They wanted to speed up the automation, and possibly even add additional lines. Yet, during the course of a day:

  • They lost many units to defects.
  • The lost production to machine stoppages and slow-downs.
  • They had part shortages and frequently substituted one product for another in the shipments, and made it up tomorrow.
  • Because they were “behind” they relentlessly kept the lines running, only to find defective product in final inspection.

The list goes on. They are all familiar things.

So what is the point of applying leveling product mix and establishing the discipline of a takt time or pitch?

Honestly, there isn’t any point unless they also implement a leadership process to immediately call out and respond to any slippage or deviation from the intended pace and sequence of production.

So – what started out as a question about a common tool or technique in the TPS has come around to what the core issue really is when that “What’s the point?” question is asked: Lean manufacturing is not about the tools and techniques. It is a system to assist a proactive leadership culture that is almost obsessed with finding and fixing the problems that keep them from achieving perfect safety, perfect quality, perfect flow, with zero waste.

A “problem” is any deviation from the standard. (And if you don’t have a standard, that is a problem.)

Two key questions:

Are we meeting the standard? If the answer is “yes” then:

Are we looking at perfection?

One or the other of those questions is going to drive you to address the next level of problems.