A lengthy post today that’s been in the pipeline for a while. The Lean Enterprise Institute have published an English translation of The Birth of Lean, recounting the experiences of the early Toyota practitioners, and how their experiences shaped what became Lean methods and thinking. The introduction and first chapter are available as a free download, and they are well worth looking at.
The review below is based entirely on that first chapter, an interview with Taiichi Ohno. I found it enlightening and thought-provoking, and it raises issues that are still relevant for improvement programmes today.
Kanban serendipity
Pull production by capping WIP is such a neat concept with far-reaching and consequences that I’ve often wondered whether it’s creation was something of an accident. Taiichi Ohno makes some comments that confirm my suspicion. At one point he places Kanban in the context of a general visual management approach: “We developed kanban … as a means of making the flow of work visible.”
He mentions another of the inspirations for using Kanban:
“A big reason for adopting kanban was our desire to reduce the administrative burden of running a factory. We were looking for ways to reduce paperwork.”
Flexibility in production planning was important too. The following sounds like something the Toyota team realised after they had got Kanban working:
“Here’s an example. Let’s say you need to revise your production plan. Working out all the necessary changes on a computer would take a couple of weeks, and you’d fall behind in your production control. Even if the computer could handle all the calculations in an instant, you’d still fall behind because accommodating the changes in the workplace would take time.
“With kanban, all you need to do is adjust the number of kanban in circulation in accordance with your needs. When kanban start arriving slower than people had expected, they understand immediately that the company has reduced the production plan. As long as you keep your production leveled, changes in the production plan will take effect the next day.”
Note that there’s nothing here about the prevention of WIP explosion and reduction of cycle times, the novel benefits of Pull. It’s just speculation, but I don’t think they played a part in the invention of the system. The only hint of something like that comes when Taiichi Ohno says that he “told people that the kanban were like money and that anyone who withdrew parts without depositing a kanban was a thief”. Read more »
Trying to present statistics in an interesting and engaging way is terribly challenging. In the supply chain world, we often have to communicate rather dry numbers that imply significant conclusions for how our business should be run.
This has been kicking around the internet for some time now, so apologies if you’ve seen it before. In 2006, Professor Hans Rosling gave the following presentation at TED. It’s primarily about international health and development, but it’s also a bravura display of communicating some complex numbers in a way that gets across a clear message.
You can play with the data and charts for yourself at gapminder.org.
It’s a classic technique: follow an order from receipt to fulfilment. Shapiro, Rangan and Sviokla wrote an influential article on the subject in HBR in 1992 (Staple yourself to an order).
Now, with more humour, a YouTube version. An outfit called Business Process Excellence in the US have posted an 8 minute animation on the theme. They’ve disabled embedding, so I can’t show it here, but here’s the link. Be aware, the puns are appalling.
Here’s a great set of half a dozen slides that does just that. The use of freely available images is very neat, and the definition is concise but descriptive. Thanks to my colleague Paul James who made this available via his Linkedin page.
Paul acknowledges his sources (a textbook I couldn’t track down – Ganesham and Harrison anyone?), but I note that a forum question for one of the Linkedin groups on just this topic got a huge number of responses, none to my mind as good as this.
Sometimes people tell me that 5S only applies in factories, and if they’ve been exposed to the “inactive banana” school of dim-witted implementation I can’t blame them. But here’s a cautionary tale that might persuade you that the principles – intelligently applied – are sound.
Supply Chain View has been “off air” for a while now. I have been fighting a running battle with hackers for months. I would find strange files in my webspace, and other files would contain strange extra bits of code. It was quite hard to spot – I have some technical knowledge but I’m no web developer, and I don’t have the time to trawl through looking for suspicious stuff all the time. But I mostly managed to delete the dubious files and fix the code. I also changed passwords for various things, but somehow the vandals were able to continue. Read more »
I enjoy making useful things freely available on Supply Chain View, so it’s good to find other people doing the same thing. There are 57 useful business statistics Excel files to download from the McGraw Hill website (to accompany the book Complete Business Statistics by Aczel and Sounderpandian).
Among others, there are calculations for testing difference in means, linear regression, exponential smoothing, t-tests and (as they say) many, many more.
This is basic stuff, but as usual there is a lack of clear and concise explanations of this on the web. It is also very important, as most methods of inventory control can be reexpressed as some form of reorder point method. Hence this simple introduction. I have also prepared a Reference Sheet that summarises the tutorial and a spreadsheet calculator that you can play with.
Meet Mr Li
Among other things, he sells widgets. I’m not sure what kind of widgets, but he usually sells about 5 each week. Sometimes a few more, sometimes a few less, but usually about 5. Every Friday before he closes up shop, he checks how many widgets he has and then calls his supplier to place an order. The widget supplier is reliable, but it takes him 4 weeks to fulfil an order. Mr Li generally receives delivery of widgets on a Monday morning. Because he orders every week, Mr Li’s average order consists of 5 widgets (though it varies from week to week).
In the normal supply chain inventory management jargon we would say:
Forecast weekly demand (D): 5 units
Supplier lead time (LTs): 4 weeks
Planned order size (Q): 5 units
With such a long lead time, Mr Li gets nervous if his stock drops too low (if he runs out his customers will go to Mr Zhang down the street). So he doesn’t like to end the week with less than 10 widgets in his store-room. Read more »
There’s a commercial profile of Aricia Limited in this month’s Logistics and Transport Focus – I’d not heard of them, but it appears to be a micro-consultancy in the supply chain field, run by Kirsten Tisdale who wrote the Focus article.
It ranges from the obvious (write off and dispose of old stock), through the general (analyse stock cover levels – yes, but how to reduce stock and maintain service…?) to the indirect (label your racking clearly – yes, for all sorts of reasons, not least so you avoid a warehouse clogged with stock you can’t find or don’t know you have) and the off-the-wall (play some upbeat music – I can see where that’s going, but it might make the warehouse seem smaller).
I forgot to mention in my post yesterday about last week’s HELP Forum meeting that Mike Whiting has also written about the air operation during Nargis, both the air-bridge from Bangkok and the helicopter operation in-country. Mike was OiC for Aviation for the Logs Cluster, so this is an authoritative account. You can find his article in the November 08 issue of Logistics and Transport Focus, available online too if you are a CILT member.
The CILT‘s Humanitarian and Emergencies Logistics Professionals (HELP) Forum met again on Tuesday last week (28 Oct 2008). It was another interesting session, so I thought I would post a brief report (with a long title). My apologies if I have mangled any of the following in transcribing my notes. For those that don’t know, HELP aims to increase the professionalism and profile of logisticians working in the humanitarian and emergencies fields, and is supported by people working in NGOs, academia, various UN agencies and the private sector.
Update 18 Nov 08 – pdf copies of all the presentations for this forum meeting are now available on the CILT website at http://www.ciltuk.org.uk/pages/nargis
Cyclone Nargis
Matthew Hollingworth of the WFP, but now heading the Global Logistics Cluster (for which WFP is the lead agency), gave a very lucid account of his team’s work in Myanmar in the aftermath of Nargis in May this year. The Logs Cluster is independent of the UN, “owned” by a body called the Inter Agency Standing Committee, and its purpose is to “augment and supplement” logistics capabilities, both on the ground during an emergency response and also by developing preparedness.
In Myanmar this meant setting up a logistics hub in Yangon together with five further transit stores closer to the affected region. Read more »
