Michael Sinnochi posted a great summary of a conversation he had with Derek Singleton, an ERP consultant who writes for the website Software Advice. Michael’s post highlights the tension between Lean and MRP-driven materials planning and the proper role that manufacturing software should play in an effective lean transformation. Highlights:

1. Make Value Stream Mapping a Core Software Component 

2. Monitor Cycle Times Intensely

3. Locate Key Places to Add or Remove Inventory 

We don’t think we could have said it better ourselves. Indeed, these are the rules that we strive to live by. Read the post and tell us what you think.

Our friend, colleague and mentor, Josette Russell (Principal at Dynamic Lean), pointed out to us an interesting statistic mentioned in a recent post from Industry Week’s Continuous Improvement Newsletter. Apparently, approximately 30% of the IW Best Plants winners and finalists since 2006 have implemented “widespread” Kanban/JIT inventory management programs with their suppliers. Seeing the numbers, and being the data junkies we are, we decided to plot the yearly numbers and see if there is a trend. (Click on the image for a larger view)

Questions of statistical significance aside, it appears that there is, indeed, a growing percentage of the Best Plant winners and finalists who take an “all-in” view of this transformative methodology.

With our breakthrough approach to Dynamic Resizing, we are seeing many of our plants take this same “all-in” approach, moving parts in and out of specific replenishment methodologies as demand and supplier requirements change. The key is to be able to identify which parts should be on Kanban and which should be on, say, ROP.

How about you? Has your plant jumped into the deep end of the JIT pool? Are you still driven primarily by MRP strategies?

There is an interesting article today over at DC Velocity (http://bit.ly/ihRvKd) pertaining to IT outsourcing. Though many of our customers have no in-house development team, they do have IT staff and are always on the lookout for solutions that can enhance that asset base without driving up costs. This article points out that the real benefits of new platforms that make outsourcing core development and programming work to talent in Eastern Europe or Asia is not so much in the cost savings but in the ability to plan for expansion and innovation with a variable cost resource.

We could not agree more. In-house IT talent is a critical resource when it is utilized as a strategic asset and leveraged accordingly. The internal process and business knowledge that most manufacturing IT staff possess is invaluable and can spur significant innovation and continuous improvement. However, thanks to the rapid expansion of broadband and cloud computing infrastructure globally, the coded implementation of the insights from this deep knowledge base can be managed and delivered by distributed, virtual resources. This means that many of the “standard” elements of development work (coding, testing, etc.) can be put out for bid. Accordingly, it makes little sense to continue layering on a lot of tactical demands on internal IT talent that can increasingly be sourced by significantly lower-cost providers.

On the ride home yesterday, I heard a great interview with Gary Vaynerchuk, who turned his parent’s liquor store in NJ into a $60M/year online wine retailer. What was almost serendipitous was that, over the weekend, I had fired off a message to another online wine retailer, wtso.com bemoaning the tone and content of their email response to my concern about their site security (it’s all good now…and they remain my personal favorite, thanks in no small part to the personal phone call I got after my message). Here’s the interview.

What’s most interesting is that Gary has published a book called The Thank You Economy, and he really hits the nail on the head. I’ll defer a full critique until after I’ve read it, but for now, I’m very interested in how his concept of customer “over-caring” can result in richer, less wasteful customer experiences. Gary points out that, before social media and the self-documenting business medium of the Internet, we spent most of our time on our most demanding customers, not necessarily our most valuable, simply because they demanded it. What happens when we use information and different modes of communication to add specific value to each customer’s relationship with us? I believe that this critical element of lean thinking applied to time and customers (do not waste a single minute of your customer’s time) is rich for exploration. We are working hard to implement new tools and systems that automate much of our interaction with our customers data so that we can have more time for interaction with the actual customer.

What if we applied that same principle to suppliers? How about to parts? In the end, good ones are both a lot like customers – costly to find, challenging to keep and hard to replace when they’re gone. And, unlike the old adage, you cannot have too much of that good thing.

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