December 10, 2007  

Hi MBBP Subscribers,  

If your company is not receiving the benefits promised by the computer salesmen, I'll bet that the cause is neither hardware nor software design. My experiences have found that a lack of information integrity is usually the root cause of poor systems performance. Timely and accurate information provide the foundation for good decision making; and timely and accurate data provide the foundation for positive system results. MRP "take action" nervousness is almost always caused by inaccurate and untimely data inputs. 

If your company is struggling with poor system performance, be sure to read this weeks article, "The root cause of poor system performance." 

Have a nice day, and stay connected.

Bill Gaw
Business Basics, LLC
bg@bbasicsllc.com
760-945-5596    

THE ROOT CAUSE OF POOR SYSTEM PERFORMANCE 

MRPII/ERP System objectives cannot be achieved when day-to-day production and manufacturing control systems are driven by inaccurate, untimely and uncontrolled data and/or documentation. 

If your company is typical, you'll find that converting The monthly financial forecast into reality still Requires overtime, costly expediting, expensive "on-the-run" product changes and even a little "smoke and mirrors." With all the available sophisticated computerized systems, why is it so? 

The answer lies in what's missing and has nothing to do with the quality of the system designs. Like Vince Lombardi, who focused his team on the mastering of football basics ... we need to focus our teams on the mastering of business basics.

INFOTEGRITY

There are Eight-Basics of Kaizen Based Lean Manufacturing, but when it comes to improving systems performance, "Information Integrity" is the most important. We call it KBLM Basic #001, "Infotegrity" ... the ability to communicate data and documentation completely, accurately and in a timely manner.

Like blocking and tackling in football, it's not Glamorous and few want to do it ... but without tenacious and flawless continuous improvement and execution, manufacturing performance can never be optimized.

A CASE IN POINT

Infotegrity is crucial to computerized master scheduling and MRP computations. Excessive MRP rescheduling of released orders is costly and disruptive and is usually driven by poor input data. To improve the quality of MRP "rescheduling" messages, one materials manager focused on improving the integrity of MRP inputs. She reduced the frequency of their MRP "regeneration" and implemented amandatory weekly review/purge/reset of all purchase and production "open" order status.

The results were amazing; reschedule messages were Reduced by 85% and her planner/buyers gained time to do additional proactive parameter maintenance. Because of increased scheduling stability, there was a significant improvement in both supplier and shop "on time" deliveries, (87% TO 98%)

THE MRP PARAMETER CHALLENGE

A good example of the importance of Infotegrity is the "eye-opening" result of the cumulative effect of data inputs in a computerized order release and scheduling system such as MRP. There are at least ten data input files that drive such systems with data accuracy indexes varying between 90% and 100%. Statistically, their cumulative effect (the product of their values) could yield a devastating, order releaseaccuracy of 68.2%. That translates into a cumulative 31.8% error rate in the order release and scheduling process. In spite of this huge constraint, American ingenuity and energy still gets the job done ... but at what costs?

Although many business gurus have identified data Accuracy as important in the implementation of computerized systems, their message has been lost in the mania of systems sophistication. To remain competitive in the future, manufacturers must improve the results gained from their business systems investments ... to do this, the fine-tuning of Infotegrity is a "must do." How do companies Accomplish this task?

SOME OF THE "HOW TOs"

Here are a few of their techniques:

• Simplify data bases - making it easy and routine to keep data correct and up to date

• "Bulletproof" system parameter maintenance – helping to eliminate mistakes.

• Streamline and discipline the product documentation process - doing it right the first time.

• Real time auditing and corrective actions ... keeping information current and correct.

• Employ the right tools - point-of-use logistics, back-flushing, and the Internet.

• Establish the right mindset ... the quality of decision-making is dependent on Infotegrity.

THE COMPETITIVE ENVIRONMENT

Competition is getting tougher and tougher as each year passes. If we don't want our competitors to close in on our markets, we need to continuously improve product/service quality, increase productivity, lower costs and increase speed of new product introductions.

To maintain ones' competitive edge into the future, management's focus must be shifted from systems sophistication to systems Infotegrity. In short, its time to put the "horse before the cart." Information Integrity is no panacea, however, I'm convinced that a company with simple, unsophisticated systems and a high level of Infotegrity will outperform a company that has sophisticated systems and low Infotegrity. What about those company that have both? I buy their stock!

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