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Lean Manufacturing, Basics, Principles, Techniques
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The customer order processing and fulfillment core process consists of actually processing the customer order as well as the planning and execution processes necessary to position the company to accomplish this. The planning processes include operations planning, resource requirements planning, master scheduling/rough-cut capacity planning, and materials planning. The execution processes include shop floor control and purchasing. The planning processes are designed to create a level load. A number of years ago, I remember hearing a wise person say that if you execute the plan every day, you make the week, if you make every week, you make the month, if you make every month, you make the quarter, and if you make every quarter you won't get help from corporate. Operations planning is done on a monthly basis, master scheduling/rough-cut capacity planning is done on a weekly/daily basis, and materials planning is done on a daily/hourly basis. The execution processes are then charged with performing at a hourly/daily/weekly/ monthly basis. The operations planning process extends 12 to 18 months into the future and is utilized to establish' a monthly rate of supply by product family/line that matches the monthly demand profile and is within acceptable inventory as well as backlog levels. Performance to the operations plan is reviewed and updated monthly. Performance to the master schedule/rough-cut capacity plan is reviewed and updated weekly/daily. A monthly operations review (sales and operations review) is utilized to review last month's performance to plan for the business, demand, operations, inventory, and backlog plans. In addition, the business, demand, operations, inventory, and backlog plans for the next 30-60-90 days are reviewed, discussed, and agreed to. DATABASES The databases necessary to support the business processes must be absolutely accurate, period. PERFORMANCE MEASUREMENTS Performance measurement provides the "voice of the process." It is essential that we know if the business processes are performing to the criteria that were established in the strategy development and business planning core process. The focus of these measurements should be balanced between financial and operational. To only look at the financial measures is like driving your car with the windshield blacked out, and only using the rearview mirror. You can sure see what you ran over, but it's too late and there is nothing that you can do about it. Operational measurements that track hourly/daily/weekly/monthly performance allow you to get your arms around the areas that are not performing while you can still do something about it. Your performance measurements should track performance to plan as well as rate of improvement. CONCLUSION This new business model has several significant differences from many of the models that have dominated publications over the last 25 years. The biggest one is the prominent presence of the customer. The second one is the essential emphasis on the empowerment of the people that take care of the customer. How does your company match up? STAY CONNECTED To stay current on Lean Management Basics and Best Practices, subscribe to our weekly MBBP Bulletin... and we'll send you our PowerPoint presentation "How to Survive in an Entirely New Economy." All at no cost of course. Your personal information will never be disclosed to any third party. privacy policy
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