Warehousing that’s Lean and Mean

Hi Moose, The leanest of the lean in manufacturing warehousing is called Kan-Ban (also known as a pull system) and it is intended to produce product at the lowest rate possible to meet demand. On the purchasing side, another system is used, Just-in-time or JITfor short. Basically the customer calls only when he needs an actual delivery, the supplier ships either from stock or from flexible production cells with rapid delivery capability. Most likely you already know this but if not FYI.

best

The Just In Time concept sounds good on paper but from my experience is a disaster waiting to happen. I spent a great deal of my professional life working in the service industry and when you have a production line down and 3,000 people sitting around because the Just In Time wasn't you will never use it again. The airline business have tried it many times but when you have a $300,000,000 aircraft grounded due to the lack of a part it rapidly become uneconomic. For critical applications you need to use the Murphy's Law philosophy that if it can go wrong it will and at the worst possible moment and needs to be planed for by having the parts immediately available.

I agree with Masu's comment entirely, I work in Distribution and I can tell you Murphy's law applies on a regular basis, running a lean operation is fine providing you have all angles covered, when you work on a just in time supply basis its guaranteed the ---- will hit the fan its just who gets covered in it.

I agree with most of the comments so far. The fact is that, in most cases, lean and JIT mean that the inventory problems are shifted downstream to the supplier who holds the inventory. If your organization can be paid to do so, its not so bad, however if you are living from hand to mouth already it is a recepie for disaster. As far as companies who do it right, take a look at Dell Computer's JIT system. The company carries about 45 minutes of inventory based on projected use. The details can be found in "The World is Flat" by Thomas Friedman. It seems that the time where you could afford to carry millions of dollars of inventory is past. I noticed that most of the responders are materials types. Having material in the inventory is the hold grail for matierials folks, but if you talk to a CFO or CEO the story changes. The writer above is correct in that certain industries have special needs that must be accomodated, but in general INVENTORY IS BAD!!

Hola Masu. You are right. You plan for when things go wrong... most of the time for the worst scenario depending in how critical is your operation. A bakery worst scenario may be a power outage or a short supply of flour, in a power plant maybe short of combustible or process or governor control IC or pump/motor damage. You need to have those little things that may cause the worst damage to your operation. Regards.

Luis

It amazes me that a country that used to lead the world in manufacturing and all other aspects of business so readily scraps ideas that have been used successfully in Japan and other countries in the far East. Have we become such a defeatest group here in America that we readily suceed to other Countries who will work hard and use resorces to make an essential tool to competing in the world market a reality. No wonder we bow our heads and send our manufacturing over seas. Have we become so self satisfied that we are willing to watch the rest of the world literally fly by as we claim and wring our hands that it can't be done?

I just remembered an example where some wise guy decided that he would split the store in two. Each store would carry half of the inventory and the idea was 50% of the time the part would be where you needed it and that only 50% of the customers would see any sort of delay. Trouble was that the way the parts were distributed you nearly always needed parts from both stores to fix a just about every fault that occurred. The result was 100% of the customers getting pissed off. The guy that thought of it was promoted for his lateral thinking and moved to another company shortly before his ideas bore fruit ant the company ceased to exist. The thing that worries me is that idiots like this get away with it and are still out there circulating spreading their ideas of disaster.

I agree with the comments so far, the one critical thing that most lean implementers fail to realize is that the successful lean companies sit at the top of the heap. i.e. Wiremold, Porsche, Lantech They then will dictate to the entire supply chain how they want their products and when they are going to get them. That's great for the one company but it leaves everyone else with large inventories, inconsistent scheduling, extremely high shipping or expediting charges, and really pissed off employees. The auto industry is notorious for this and we all see how well the domestic car companies are doing. Toyota has had great success with this only because they will go into their supply base and set up the proper systems to allow lean manufacturing. Again, one company controlling the entire supply chain. My 2 cents would be use only what you have to to control cost and keep tight inventory controls. You don't need RFID if your warehouse is 10,000 sqft. Kan Ban is a great visual tool but can be labor intensive. Utilize the KISS method and don't reach farther than the goal. We're currently updating our warehouse by labeling racking, utilizing white boards for locations, and having the rack locations in our MRP system. The next step is to make sure that employees are recieving things correctly and holding them accountable.

Ahhh! How refreshing to hear such wisdom...simplicity (SIBKIS), otherwise you'll spend most of your time working on the tools and not on the product.

Always maintain at least two vendors, preferrably 3 for each critical part (and ensure each has a different source).