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Sep

Is there a compatible future for Lean and MRP?

Posted by: business901 | Comments (0)

There seems to be an element of distaste from Lean Supply Chain people about MRP. Not being a Supply Chain expert it is really not for me to comment. But I did ask Carol Ptak and Chad Smith to address a few of those issues in the Business901 podcast, and in the podcast, Is Orlicky’s MRP relevant today? Think DDMRP. Below is an excerpt from the podcast on one of those questions:

First of all, we owe Lean a huge debt of gratitude to getting some critical elements in front of industry. One thing that I think is very important is the Lean crowd, I think, unfairly gets branded as anti-technology. I think that that’s unfair because, up until now, technology hasn’t worked for Lean very well. If you look at the basic rules of MRP and how it works, it doesn’t work well for Lean. If you look at the Toyota Production System, even the critical points in the Toyota Production System about technology, I think, Liker’s book, I think it’s point eight.

It says, “Use only thoroughly tested and proven technological methods for your people and processes.” Well, up until now, there haven’t been thoroughly tested or proven technological processes.

So it’s forced the Lean community, it’s forced the TOC community back into manual systems. And those manual systems are breaking down. They’re too intensive. And for larger corporations, you really lose a lot of visibility across an enterprise. In fact, for larger companies, Joe, the idea of enterprise Lean really doesn’t exist. And why? It’s because we have limitations with technology.

Now, what Carol and I are doing here is we’re saying, look. Let’s not throw the baby out with the bath water. Let’s not just throw out the promise of technology and jump all the way back to manual re-order point systems. Let’s figure out how we have to change the formal planning logic to create new rules that then foster new tools that both the formal planning crowd and the Lean crowd can embrace.

And so far, we’ve heard really good feedback from both sides of the fence here that says, “Yeah, this seems to solve the things that we need to see” and from the Lean side, it also seems to be right in line and actually even facilitate their objectives.

Below is a transcription of the entire conversation:

Introduction to Demand Driven MRP –

Carol Ptak and Chad Smith were asked to co-author the new Orlicky’s Material Requirements Planning 3/E. Carol and Chad were on previous podcasts with me, In a Supply Chain, Where is more important than How Much! and Can MRP be a Demand – Driven Tool?. They can be found at the Demand Driven Institute.

This past week I had a good time applying a few of the DDMRP concepts to sales and marketing. Exercises like this helps me stretch my thoughts a little.

Related Information:

Can there be a marriage between ISO and Lean?

Posted by: business901 | Comments (0)

On the Business901 podcast, Lindsay Jackson Nichols discussed the business benefits of ISO Certification and how it can be used in conjunction with continuous improvement. Lindsay is the CEO of MOCG, a management consulting firm specializing in implementing process improvement and ISO based management systems.

When you first think about, you may think that Quality Management and a continuous improvement methodology like Lean are one in the same. You may also think that they are willing partners. Many disagree with that thought. My thoughts are that I find the ISO standards as a way to involve people from all departments to ask them how you do things. As a result, procedures and documentation are created to evaluate the current method of doing things (the first step in standard work) against the requirements of a standard (ISO). As a result, you develop performance gaps for continuous improvement. Others believe that this would hinder the development and flexibility of standard work documents and prefer that they are divorced from each other.

I probed this question with Lindsay and on a Lean Blog Post on Standard Work. The answer I believe to be correct is that ISO 9001 should not be the continuous improvement strategy just that it should be one metric by which continuous improvement is measured. However, I still believe using ISO as a standard to start the process for developing standard work is not a bad place to start.

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Download Podcast: Click and choose options: ISO and Lean or go to the Business901 iTunes Store

About LJ Nichols: Lindsay’s career has been entirely devoted to management consulting, working with Grant Thornton LLP ? the fifth largest accounting and management consulting firm in the nation, assisting them develop a ‘center of excellence’ for their quality, environment and regulatory practice, and P?E International plc/PE Handley Walker the largest management consulting firm in Europe, where she was integral in establishing their ISO presence in the US.

Where is the path in Continuous Improvement for Sales and Marketing?

Posted by: business901 | Comments (2)

In the sales and marketing process we have always stayed away from a process. Things were just not consistent enough to enable us to install a process.

Very few people take on the challenge of bringing continuous improvement to sales and marketing and one of the reasons it is so difficult is that sales always has been about relationships and people. And when you are a “people person” you blame errors and faults on people not the processes. You just don’t consider a process at all. I would argue that you cannot improve a system without a process and that sales and marketing does things within the boundaries of a process.

In fact, I am going to paraphrase the Six Best Practices outlined in a book by Daniel Stowell, Sales, Marketing, and Continuous Improvement . And if you would like to know how large of a gap we have to close to bring continuous improvement to Sales and marketing read the one review on this book: “The author couldn’t lead a fly to cr*p, and the book is poorly written. Don’t waste your money.” Quite a significant gap because I think the author, considering it was written in 1997, lays out a good guideline.

The Six Best Practices needed:

Manage for change: Change, whether incremental improvement or radical restructuring, does not just happen. It requires leadership and management based on a foundation of a lasting commitment by everyone in the organization. Of all of the best practices, management commitment stands alone at the top of the priority list.

Listen to Customers: Sales and marketing need input from their current and past customers, prospects, and competitive users on which to have their continuous improvement activities. To be most effective, they need to use several complementary listening methods tailored to their specific customer set. Although listening to customers appears to be easy to do, there are pitfalls and barriers along the way. However, the input from listening will provide the requirements and feedback that they need to implement the other best practices. Without that information, they are just guessing.

Focus on Process: Leading companies have applied all five of these process improvement techniques to sales and marketing processes. As we have seen, when process improvement techniques are focused on the most important processes and used properly, they can make dramatic improvements in an organizations effectiveness and efficiency.

Use Teams: Teams are not appropriate for everyone or in every situation, but virtually every organization can benefit from expanding its use of teams. This is especially true of sales and marketing departments. They can apply teams in almost every combination of scope, size, mission, authority, and duration. These teams build on the synergy of the team members, improve communication and buy-in, increase productivity, raise employee morale, and provide a forum for personal development. To achieve these benefits from sales and marketing teams, organizations must be prepared to address both the critical success factors and the issues unique to teams in sales and marketing. When they do, they have taken another major step toward an open organization culture.

Practice an open Organization Culture: To be effective, all the elements of the open organization culture must be used together. Gathering information by practicing awareness and taking a global view is of no value if the organization does not share the information or take informed action. Reserving action for the top of the business does not support fast response or take advantage of the skills of the people who really get the work done. Taking action without questioning the organization’s underlying beliefs and assumptions may lead to repeating mistakes. It is when all the elements of an open culture work together that an organization becomes more effective and efficient, whether that organization is an entire company or a sales or marketing function.

Apply Technology: Of all best practices described in this book, applying technology is today’s most visible. It has reached this status within the past five years and it appears that it will continue to revolutionize the way customers buy and companies sell in the future. That makes it important to stay aware of changing technology, looking for ways to use it to address opportunities and resolve problems. It is the companies that find ways to use technology, frequently ways it was never intended to be used, that will create and maintain their competitive edge. The others will just be playing catch-up.

His book lays out a good foundation for the above practices. Granted it may be dated but it reinforces not so much the ideas that I have been writing about but just how wide of a gap that we have bringing continuous improvement to sales and marketing. To have a chance resides in the power of Deming’s concept and its simplicity. The concept of feedback in the Scientific Method is firmly rooted in education and well understood. The tools used in PDCA process are very visual and deceptively simple to start with (as you understand them, they tend to get harder ;)). And for the “people person”, Lean is all about people; training, empowering and respecting.

This is why I believe the Future of Marketing is Lean!