The Need of a Customer Driven Logistics
MRP has been the method of choice to support the MM business
function for more than a decade now. All these years of MRP usage,
in a way, have instituted a distinctive and specific cultural
environment that spreads beyond the individual boundaries of
Improvements to the MM function throughout this time have been
primarily "modifications" and/or "enhancements" with no significant
deviation from any of the basic initial concepts upon which MRP was
Despite the fact that products, customer expectations, competition
and general market conditions of the 90's are significantly
different from those in place when MRP was created, many companies
and consulting firms are still desperately trying and promising to
improve the execution of the existing MM systems.
These "improvements projects" can rarely predict, far less
guarantee, the benefits to be drawn from the efforts. Numerous
articles have recently appeared loudly voicing that a radical and
fundamental change is needed. The "new demands of the 90's have been
repeatedly sited, but no clarification or specifics have been
provided as to what the change should be.
The western business world has found itself preparing for the 21st
century with a "fantastically well rooted MRP-culture" which is at
the stage where huge investments are required to draw only marginal
At most businesses, very powerful MRP/MM organizations have also
been created during this time. These organizations, in a way, run
the company and unfortunately in many cases, their members are very
reluctant to try, much less change to anything that deviates in any
way from the basic fundamentals that we all worked hard to implement
for the last 20 years.
The lack of practical and real-experience-data, as well as, the
total absence of any meaningful non-MRP success story, is mainly due
to a "strong resistance to change", and also to the fact that MM
professionals truthfully, in general, simply just do not have the
available time to try anything different.
The typically extremely large MRP supporting staff is normally and
genuinely overwhelmed with mountains of urgent and "always-critical"
tasks. A constructive examination of these tasks, however, can
clearly and rapidly reveal: first, that these activities do not add
any real value to the customer, and second, that they all are mainly
created and routinely generated by the now huge discrepancies
between the MRP basic and outdated principals and the market
characteristics and business conditions of today.
The facts just discussed, could and will be both the reason for the
failure of many businesses in the 90's, and also the reason for
success for those who make "the drastic change" to something more
customer focused. These companies will benefit from an earlier start
during these highly competitive times.
There is no doubt that MRP will give a strong and long fight against
any and all challengers. This highly predictable event could, in
fact, be one of the most important strategic advantages against
competitors in the remaining part of the 90's.
3C was launched in late 1993 as new way of running the MM functions
of the 90's. 3C is new because it is the first "full-stream"
Logistics Flow completely and solely driven by the (real-final)
Customers of the business.
3C focuses on the complete process, not on the functions like MRP
What Is 3C?
3C was first presented to the public in 1993 (1). The complete logic
of the theory was documented in 1991 (2)(3) and some of the basic
concepts during 1990 (4).
3C supports all the MM objectives with a strong focus on Customer
satisfaction and Cost-Control. These objectives are accomplished
through the installation and use of a chain of physical stock
control points, production lines, transportation and distribution
providing the link between our customers and our suppliers. 3C
guarantees the service of materials at all points of the chain at
the minimum cost.
All MM actions under a 3C controlled environment are unquestionably
linked to or based upon one of the following 3 concepts: the maximum
selling CAPACITY of the business, the maximum exploitation of the
COMMONALITY content present in the end-products being sold by the
business (the commonality among the subassemblies that make-up the
end-products is also exploited) and lastly, the self-control of the
system through the CONSUMPTION activities triggered by the paying
customer and taking place throughout the entire Logistics flow.
Consumption occurs when materials or subassemblies are used, or when
units of finished goods are sold. Under a 3C environment, these
events "automatically" and "almost instantly" trigger "replenishment
messages" mainly in the form of "prenegotiated" blank purchasing
orders to suppliers or physical "kanban cards" to the
"top-performing" and "extremely fast" manufacturing lines. These
cards represent the only mechanism used to start manufacturing
actions, thereby eliminating the need for the expensive "production
meetings" today practiced routinely in many businesses.
The new focus introduced by the three characteristics of 3C produces
the elimination of the main root causes of "MATERIAL SHORTAGES" and
significantly improves "Customer Service Performance."
To be Continued
For balance of this article, click on the below link:
Lean Manufacturing Articles and go to Series 01
stay current on manufacturing
please subscribe to our weekly bulletin, "Manufacturing. Basics
and Best Practices (MBBP)." Simply
fill in the below form and click on the " subscribe
also send you our Special Report, "6-Change Initiatives for
Personal and Company Success."
no cost of course.
personal information will never
be disclosed to any third party.
what one of our subscribers said about the MBBP Bulletin:
articles. Thanks for the insights. I often share portions of your
articles with my staff and they too enjoy them and fine aspects
where they can integrate points into their individual areas of
responsibilities. Thanks again."
Kerry B. Stephenson. President. KALCO Lighting, LLC
to Basics" Training for anyone ... anywhere ... anytime
6003 Dassia Way, Oceanside, CA 92056
West Coast: 760-945-5596
© 2001-2007 Business Basics, LLC