One of the joys of being in the world of operations management is dealing with consultants. There are two major categories: the software consultant and the operations/strategy consultant. They are different animals and must be handled with care and wisdom, but you can survive the experience and even prosper.
The Supply-Chain Council (SCC), a global not-for-profit standards organization, announced the release of version 9.0 of its Supply-Chain Operations Reference (SCOR®) Model. This major update, formally launched at SCC’s Supply-Chain WorldConference & Expo, includes expanded risk management capabilities, as well as new features to guide companies’ environmental sustainability efforts—the latter of which incorporate and expand the capabilities of GreenSCOR, formerly a standalone variationof the SCOR model.
This question have been asked by many practitioners from all three schools. Before we deep dive into this discussion, a few introductions into each of the above methods is in order for the benefit of those less familiar with either or all of those.
Pundits will continue to predict economic recovery or decline. But the only certainty is that economic conditions will change in the future (for better or worse). How manufacturers react to such changes can have a significant impact on the service levels provided to their customers and the amount of working capital they have tied up in finished goods inventories (FGI). Periodic and practical reviews of FGI levels, based on item performance can yield significant benefits to manufacturers and their customers. Given the impact this can have on customer service levels and a company's balance sheet, it goes beyond being simply an operational best practice and deserves the attention of senior management.
The crux of managing inventory effectively is to ensure that our distributor will be able to at least meet or exceed his customers' expectations in order to maximize his profits. Customers' expectations differ - some will demand immediate delivery of an ordered item but some are prepared to wait longer. But what is relevant is to examine if customers are always this demanding. Surely there must be some items demanded that can be delivered in a certain time without negatively jeopardizing the customer service levels?
I once read the following quote from Eli Goldratt, the author of The Goal:
"Tell me how you will measure me and I will tell you how I will behave. If you measure me in an illogical manner, do not complain about illogical behavior"
Nothing drives change like a well-designed set of performance measures. And as business guru, Dr Michael Hammer observed, "There will be more change in the supply chain field in the next 5 years than in the preceding 15." Clearly, few activities are more important to implementing supply chain strategy than the design of new performance metrics that promote process-oriented behavior. A supply chain should satisfy 10 performance measures.
The kanban system from Japan speeds up production by pulling inventory through the work center instead of pushing up to the next workstation where it sits in a queue. In Japan, kanban systems often use display cards as the visual signal to tell a workstation to begin operations. The idea is to keep the lot sizes as small as possible to optimize use of space and labor. Many plants have adopted the system and modified it to use some appropriate signal rather than a card. An empty space can do for a signal to begin production. In Energizer's version of kanban, for example, components are placed in special containers. An empty container signals the need for more parts.
The 5S system is designed for organization and standardization of any workplace, including offices. It is a pre-requisite to the implementation of any other improvement method. By implementing 5S, you will:
Supply-chain and manufacturing professionals have always used a large number of metrics to measure the health of their functional areas, because these areas tend to create most of the value for their companies, while also generating most of the company’s total expenses. These metrics were standardized and codified by the SCOR (The Supply-Chain Operations Reference-model) effort in the 1990s and early 2000s. So, the idea of measurement is not new to these professions. But how do traditional supply chain and manufacturing metrics fit into today’s emerging strategic dashboards? That is, how does SCOR fit with scorecards? First, a quick look back at the history of SCOR.
Operational excellence is no longer a competitive advantage. Globalization, access to technology, sophisticated communications and highly demanding and knowledgeable customers make it a competitive necessity. If your company is not world class now or becoming world class, chances are it won't be any class in the not too distant future. The good news is that world class business tools and techniques are available and affordable for virtually any company. The brutal truth, however, is that operational excellence has as much to do with the will, drive and focus of the company's leaders as it does with scientific management. Here are a few of those key characteristics that go hand in hand with operational excellence, along with some tips on how to make them work for you.
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