Whoosh…THUMP!

Whoosh…THUMP!
October 6, 2011 Joseph Paris

Stuff….

Wikipedia defines “stuff” as “items, things or matter”.

It goes on to say that; “Stuff” can also refer to a particular woolen cloth woven in the United Kingdom and – somewhat disturbingly – “stuffing” is referred to as a “substance” often placed in the cavities of food items. A “substance”?  Like it’s otherwise unidentifiable?  I don’t know if I can enjoy a Thanksgiving Turkey ever again.

Industrial Engineers and Continuous Improvement Professionals devote a lot of energy – and look at many ways – to make stuff better, faster, cheaper and more reliably.  We use the various approaches, procedures and methods available in Lean Six-Sigma – collectively known as the Lean Six-Sigma Toolkit – to help us improve making our stuff.

We use Value Stream Mapping (VSM) so that we can map the processes used to make our stuff and to identify the value-add steps, the non-value-add steps and the non-value-add but necessary steps.  Then we go about eliminating the non-value-add steps so that we can make our stuff cheaper and faster.

We use 5-S to organize our work-place so that all of our work-stuff is precisely where it should be at all times – thereby eliminating the losing of our work and speeding the process for producing other stuff.

We use Single-Minute Exchange of Dies (SMED) so that we can minimize non-production time by pushing or pulling actions required to change a production line from
making one kind of stuff to another kind of stuff.

We use Kaizen to try to figure out ways of improving the way we make stuff – and Kaizen Blitz’s when we are really serious about improving the way we make stuff.  Then we Poka-Yoke the new process to make it impossible for a defect in the production of our stuff to occur.

We also use various graphical tools such as Pareto ChartsHistograms and Ishikawa Diagrams to afford us a pictorial representation of our stuff and the related processes so we can see the stuff without actually having to look at it on the shop floor or in the various places we might place it.

The ultimate goal is to eliminate all sources of friction and to create a continuous flow where the creation of our stuff goes WHOOSH through production straight through to delivery.

THUMP!  What was THAT?!

That was the sound of your stuff – which was produced at supersonic speed in a frictionless vacuum without a hint of wasteful activity – hitting your warehouse where it comes to a screeching halt just like Wiley E Coyote going from Acme Rocket Propulsion to hitting a cliff wall.  Bam – full stop.  Here, your stuff may sit for up to eternity idly and wastefully.  However long it sits, your stuff will certainly sit for a spell – that is for sure.

In fact, much of the benefits in inventory gains such as: reductions in Work in Process (WIP), quicker turn-around times to customers and turning inventory into free cash-flow from operations are diminished when the product reaches the warehouse.

George Carlin described how we are comforted by our stuff.  How we like to accumulate stuff (never getting rid of it).  How we will build monuments to our stuff (shelves, curios).  When we run out of room for our stuff, we will buy a larger home just so we can fill it with all we have – and then go out and accumulate even more stuff.  There is an industry devoted to renting space so we can store our excess stuff.  We like to take our stuff wherever we go, dividing it into ever smaller piles as we get further from the main storage unit.

To a large extent – and certainly more than anyone cares to admit, our personal habits extend into our professional.  We build warehouses to store our stuff and used distribution centers to help absorb the overflow on its way to the final customer (end-user or retail).

I had a client several years ago.  When I got involved with them, they were a $25m per year enterprise.  A decade later, they were a $300m per year enterprise.  Then a Private Equity Firm got involved and decided – against the advice of those who knew better – that they needed to increase the volume of production of their stuff to meet expected customer demand (ie. “sales forecast”).  Soon they were making their “stuff” at such a rate that they got ahead of their customer’s ability to consume.

The company’s clients wanted the stuff, but had no place to put it.  So my client decided to build warehouses to store their stuff.  And when they filled their new warehouses, they began storing their more durable stuff outside in the parking lot.  When the recession hit, my client’s customers cancelled the orders and all that stuff just sat there.  An unbelievable waste with the result being that a once prosperous company now struggled to survive because all of its cash was sitting – as stuff – in storage and in the parking lots.

Their cost to produce the stuff was way down, but their cost to carry the stuff was way up (including capital expenditures to build the storage infrastructure) nearly crushing them out of existence.

At an Association for Corporate Growth (ACG) event a few years ago, Ralph Keller from the Association for Manufacturing Excellence (AME) spoke about “forecasts”.  He said, “There are two types of forecasts – lucky ones and wrong ones.  And of these two, the one that almost always comes true is the wrong one.”  Truer words have rarely been spoken.

The goal of a company should be such that they make stuff and it goes directly on the truck to the consumer as soon as it comes off the production line.  I realize there are a thousand reasons (maybe more) why this might not be able to occur in real life.  However, that is not to say that this should not be the goal we set for ourselves – and work diligently every day towards incrementally achieving that goal.  “The moving of the mountain begins with the picking up of the first stone, you can’t move the mountain for the mountain” – Unknown

In the end, we should strive to “make the customer what they want for when they want it”.

… and not, “make the customer what they want, and hold it until they need it”.

A special recognition and “thank you” to Dirk Van Goubergen, Professor at Ghent University and a long-time personal friend, for giving me the inspiration for this article. 

 

Joseph F Paris Jr is the Chairman of the XONITEK Group of Companies.  With over twenty years as entrepreneur, academic and professional instructor, and strategic consultant – he is a champion of Operational Excellence (Lean Six-Sigma and Leadership) who has devoted himself to increasing stakeholder-value for his clients and constituents.

Contact him at parisjf@xonitek.com

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