How scheduling can help save time, reduce inventory and be on-time
Mike Liddell, CEO of Lean Scheduling International and Author of “The Little Blue Book On Scheduling”
Traditionally the economies of scale have made it difficult or even impossible for smaller companies to break into industries that have been dominated by large monolithic organizations. But fundamental shifts in the market are wreaking havoc and leveling the playing field. When Bob Dylan wrote, “The times they are a changing.” back in the sixties he probably didn´t realize that it would be just as true almost 50 years later. This article attempts to explain why things are changing and how change opens the door to smaller, faster and smarter competitors, and what you should be doing about it.
In the past, size meant power so what went wrong? Over the years, large companies created layers of mid-level managers who learned that the only way to survive is to set up rigid procedures, avoid decisions and cover their rear ends. They buried themselves in data and systems that were no longer relevant when dealing with customers. In recent years, economic trends have led to the demise of mid-level managers in large numbers. Unfortunately, even though their herds have been thinned, they left behind a legacy of antiquated systems and procedures which are still blindly followed by their successors.
If manufacturers are to survive, they must create infrastructures that are less dependent on size and more dependent on systematically delivering speed. Companies that adopt these new systems give themselves a massive competitive advantage because they can improve efficiency and reduce waste.
It appears then that the driving force behind this change is well… CHANGE. It´s also all about TIME and SPEED and customers who are completely unreasonable and expect you to react quickly when they change their minds. The rules are simple, if you can´t accommodate your customer; they will find someone else who can.
An expensive penny
Let me give you an example that may seem just stupid to you but to me it perfectly illustrates my point. Not long ago, when I decided to change (there´s that nasty word again) my mobile phone supplier, AT&T sent me a final invoice for $ .01. Sensing an opportunity, I immediately mailed them a check for $ .02 which predictably, put them in a position where they had to send me a check for $.01. This check is now proudly displayed in my office as a constant reminder of what happens when companies stop thinking.
If you take this example and multiply it by thousands every day you will start to understand what goes on in big companies who, over the years, have added layer upon layer of red tape to avoid making mistakes. Focusing internally on their own administrative mistakes has crippled their ability to understand the needs of their customers who don´t really care if you over charge them by $.01 because what they want is speed. In fact, they will often pay more for speed, but nobody ever asks.
Systems Designed for Speed
So how do we get from where we are to where we want to be? Instinctively we already know that running around faster and faster, creating an illusion of speed, only creates confusion. But if that is true, what is the answer?
We believe that the answer is to implement systems and procedures that are specifically designed to deliver speed. We are talking about completing an activity in 1 minute that previously took 24 hours. This kind of speed provides a significant advantage. We not only can pass decision making down the managerial ladder to the knowledge workers, but we can also give that knowledge worker all the information he/she needs to make even better decisions. If you provide these people with the authority to think for themselves and override the system when it makes sense, you have fundamentally changed the game.
For this to work, companies must provide their decision makers with better tools to make it easier to improve efficiencies and reduce inventories. Once a decision is made, new systems and procedures must be implemented that quickly re-synchronize the plan so everyone is working together on the latest priorities.
For manufacturers, none of this can be done without adopting an APS (Advanced Planning and Systems) system. Companies that continue to rely on ERP planning tools, will no longer be able to compete.
You can find more about this topic and others in Mike Liddell´s book “The Little Blue Book on Scheduling”. Or contact Mike at email@example.com.