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Quick Response Logistics
Who is Bill Gaw?
And why should we listen to him?

Quick Response Logistics

Auditing Manufacturing Systems 


PART II. 


   

Before changing the processes, people's jobs and the busi­ness strategy, it is critical that people change their mindset first. This will not happen because they are told to change or need to change or are forced to change. To make sure change is lasting and becomes part of the business culture, there is a change formula that contains four key elements:

Change = Vision of the future x discontent for the present x path of low risk x actions/results.

Each of the elements must have high numbers for change to be lasting. Since each element is multiplied, if any one of the elements has a value of zero, lasting change will not happen. The higher the value of each element, the greater the rate of change that will take place. Vision of the future is understood by answering two questions: Why is the company doing this? What's in it for me (the employee)? Discontent for the present doesn't mean the company isn't successful or making money. It is important to get into a proactive mode before the competition, marketplace or customer causes pain and fear. A discontent for the present attitude is having a Continuous Improvement/Kaizen fo­cus and attitude. Path of low risk is reassuring the people throughout the organization that the risks of change have been minimized and the chance for success maximized. Getting into a res«/te-mode versus an activities-mode lets people see the benefits to them and the company. The results build people's enthusiasm, confidence, buy-in, and ownership.

Why Change?

There are two key business objectives. They are:

1. Meeting the customer's needs 100% of the time with a flexible and synchronous flow process. This means answering the following questions:

• Did we focus on the external and internal custom­ers?

• Were the customers first in our thoughts about how we operate the business?

• Did we adjust the factory to the customer, instead of adjusting the customer to the factory?

While simultaneously:

2. Making money (profit) by using the company's critical resources in the most productive and cost-effective manner.

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Many companies have accomplished the first objective, but not both objectives at the same time. If your company hasn't achieved both objectives simultaneously, the time is ripe to take a major and quantum leap forward in improving every aspect of how you work with your customers and signifi­cantly improve the processes. Meeting these two objectives simultaneously is the reason your company needs to reengineer the existing business management processes. Reengineering simply means determining if each process is:

• Under control—producing the expected and desired business and dollar results.

• Simple—each process is simple and easily understood versus complex.

• Reliable—removing all the variability, non-value-add­ing activities, and unnecessary costs.

What Is Reengineering?

What does reengineering really mean? Reengineering is a process through which manufacturing companies identify the most productive way to manage their business. Its purpose is to align the company business strategy, com­petitive factors, processes, technology, and their people with the needs of the marketplace and their customers. Reengineering is not trying to figure out who is to blame, or what is wrong or right. Remember, if you called up your

external customer and explained who was at fault inter­nally for a missed shipment, guess what? They don't care who is at fault. They only want a high quality product, on time, where they receive value for the dollars spent. Reengineering is finding the most logical, simplest, and most cost effective way to meet your customer's needs and your business objectives. The company compares how the business is being currently managed to what it would take to manage it in an Ideal world, then takes the necessary steps to get there.

Who Is Involved?

Who is involved in the reengineering process? The owners of the process. They know more about the process than anyone else. Too often, success has not been achieved in the past because the focus on process improvement was done in a vacuum and without the involvement of the process owners. Crossfunctional involvement is needed to reengineer a process. Internal customers and suppliers have to be involved. The reengineering objective is not to focus on a given silo and suboptimizing the silo. All the departments must be involved in addressing most of the processes, from receipt of customer order until shipment. This means putting together a group of individuals from various func­tions and different levels within the organization. An action team needs to be formed. The action team's main objective is achieving results, not just doing a bunch of activities. The action team has the responsibility and accountability for the complete redesign of the process, which includes the strategic and operational elements of the process.

To be Continued


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