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


Manufacturing Management Training

Management Technologies
Part 3 of 5 

For Individual and Company Success, Come Discover the 
World Class Manufacturing Library

Manufacturing Simulation Game
MRP vs. Lean Manufacturing

Manufacturing Simulation Game 


PART III. 


privacy policy

The horizontal dimension of the Resource Planning and Waste Reduction matrix is based on the star technology Just-in-Time/Total Quality Control (JIT/TQC), which seeks to change the current process to drive out the waste embedded in it. JIT/TQC suggests the creation of cells to reduce production and administrative lead time and to reduce work-in-process inventory and the space needed to store it. It also encourages flawless execution, to avoid the time and expense consumed for rework. By driving out these wastes from the process, JIT/TQC helps a company move closer to its "ideal," waste-free process.

In MRP/JIT/TQC, the crossing-point of the two dimensions is the activity of production of an individual item. The vertical (planning and control) dimension, classical MRP-II, shows when the item must be produced. The horizontal (change) dimension, Just-in-Time/Total Quality, tries to reduce the resources need to produce the item. Just using MRP will result in better control, but not in resource reduction. Using only JIT/TQC will reduce resources but will not bring any stability to the process and to the people running it.

In Cost Calculation and Cost Reduction, which has Activ­ity-Based Cost ing (ABC) as its star technology, the vertical dimension calculates true costs of products and of custom­ers so that costs can be better planned and controlled.

ABC's horizontal (change) dimension tries to reduce and/or eliminate the factors which create cost. Thus it seeks to change the existing process and to make it more like the ideal process with the lowest possible costs and the least possible consumption of resources. The initial idea for Three-Plus Integration came in fact from Peter B.B. Turney's matrix representing ABC.

In ABC, the crossing-point of the two dimensions is also an activity. The control view of ABC permits calculating the correct product cost based on the activity's consumption of resources and the product's consumption of the activity. The change view of ABC identifies the inputs and cost drivers of the activity and gives its performance measure­ments. Just using the control view will produce better product costs for say manual soldering but will not focus on why the activity costs so much. Perhaps poor product definition requires too much manual soldering as opposed to automatic flow soldering. The change view is required for identifying cost drivers and seeking ways to eliminate them, which means changing the process to make it less resource-consuming.

Although each management-technology family can be rep­resented by a separate plus sign, in reality the horizontal bars of the three pluses are all linked, because they represent the company's customer-driven industrial pro­cess, initialized the Voice of the Customer (see Figure 3). So the change-directing dimension of the different technolo­gies can be used to reduce the length of the linked horizontal bars, symbolizing reducing the length of the process.

To be Continued


STAY CONNECTED

To stay current on manufacturing competitive knowledge, please subscribe to our weekly bulletin, "Manufacturing. Basics and Best Practices (MBBP)."  Simply fill in the below form and click on the " subscribe button." 

We'll also send you our Special Report, "6-Change Initiatives for Personal and Company Success."  

All at no cost of course. 

First Name:
Your E-Mail:

 Your personal information will never 
be disclosed to any third party.

privacy policy

Here's what one of our subscribers said about the MBBP Bulletin:

"Great 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


Manufacturing Knowledge you’ll not find at offsite 
seminars nor in the books at Amazon.com


Lean Six Sigma Training  Balanced Scorecard Training  
Lean Manufacturing Implementation  Strategic Tactical Planning  
Manufacturing Simulation Game  Total Quality Management  
World Class Lean manufacturing Training Library
Lean Manufacturing Solutions


All at one Website. just click here--->:
lean manufacturing

Lean Manufacturing Training for anyone ... anywhere ... anytime
Business Basics, LLC
6003 Dassia Way, Oceanside, CA 92056
West Coast: 760-945-5596

Email: Click here  Privacy Policy