Wednesday, October 22, 2008

Velocity

Supply Chain Velocity for Competitive Advantage

In physics, velocity is defined as the rate of change of position. It is a vector which requires both speed and direction to define it. Similarly, the flow of material from supplier to consumer in supply chain can be termed as supply chain velocity. Speed & direction applies here too.

We were working with a client company in an island country of Africa, which is into manufacturing of garments for European countries. Kaizen/ Lean methodology assisted the company in setting up manufacturing cells to improve the flow/ velocity thus reducing the throughput time by more than 65%. The benefits included reduced time to dispatch, reduced WIP, lesser rework and space utilization, etc. After the implementation, the client met us over dinner and said, “I am very happy about the improvements done at the Gemba (shop-floor). It has drastically crashed our lead times and reduced our time to market.” But he continued to add that the reduced manufacturing time is not really impacting his final customer! This was a shocker, as we were celebrating the gains on shop-floor! When quizzed he explained that the shipment did leave the factory much faster after all the Kaizen/ LEAN improvements, but then the goods had to wait for days on end at the port (both at the point of origin & destination) before reaching the actual consumer! This came as a revelation. It reinforced our understanding that the entire value chain needs to be improved, and not just the bits. Thus the importance of the entire, end to end supply chain velocity improvement becomes important. These piecemeal improvements will have no or minimal effect throughout the supply chain. Here, traditional measures like productivity and efficiency fail to capture the overall system efficacy. It is debatable how well our current policies at various stages of supply chain comprehend the importance of the overall supply chain velocity.

The supply chain from upstream to downstream should be capable enough to take care of the material flow wherein the material velocity is in alignment with consumer demand rate, at every point. Unfortunately in today's hyper-competitive environment, very few companies have a true working knowledge of the velocity of their supply pipelines on one hand and have little control on velocity of goods once it leaves their warehouses. Not to mention ports, roads, statuary procedures are totally out of bound when it comes to control! Thus one tends to dig away with Kaizen / LEAN tools on one’s own shop-floor, constantly wondering why there is no major impact to the their bottom line or why their final customer are not thrilled!
Thus, the need to partner with key suppliers (upstream) and customers (downstream) in improving supply chain velocity is critical. While the larger, more evolved (maybe top 10%?) of the global giants understand it and are working towards end to end supply chain velocity improvements, the bulk of the businesses can’t see or do not wish to see the opportunities beyond their shop-floor. As the supply channel spreads out, correspondingly grows in the importance of managing the material velocity.

It is true that, it is easier to start within one’s own manufacturing facility - one doesn’t need to be Einstein to understand that the material velocity in the manufacturing system depends on the basic material flow, which in turn is affected by the machine downtimes, change over and set up changes, rework, inconsistencies etc. The bumpy road full of diversions and obstacles traversed by the material is smoothened by tools like process flow analysis, SMED, cellular manufacturing, TPM and others. These days concepts like lean and just in time which can be supported by streamlined processes & robust systems have been cliché. The underlined theme behind it addresses supply chain velocity which is very well understood by today’s intellectuals. However, the actual implementation of the concept throughout the supplier-consumer chain calls for change management/ paradigm shift. The government has to understand that poor infrastructure for instance greatly reduces supply chain velocity! Each player in a supply chain has to take interest and be open to people taking interest in improving each other’s velocity! As the system velocity improves every part stands to gain!

Remarkable changes in the current way of functioning can be brought in only by change in the way of thinking where one considers the system in totality. The outcome of such cultural changes would be far reaching and beyond imagination. Another aspect to be considered while deciding material velocity is takt time. Earlier, we mentioned about the consumer demand rate which is synonymous to takt time. Upstream suppliers should manufacture the goods per the demand from the downstream counterparts where the demand rate should decide the production rate. This in turn will facilitate uniform material velocity eliminating issues like bull whip effect, missed deliveries, fill rates, etc.

Lastly, we would like the readers to appreciate the significance of flexibility – internal (systems) & external (supplier) flexibility. Flexible systems are essential to achieve reduced lead times and high material velocity, in turn. The basic philosophy to be understood is that industries should graduate to ‘made to order’ model from ‘made to stock’ environment (wherever possible). Competencies like delayed differentiation, process & product standardization can play a vital part in this transformational change which again can be supported by Kaizen/ Lean ideologies. External flexibility is function of channel management & transparent communication systems.

To summarize, to improve supply chain velocities;
1. improve systems in totality – by being open to change!
2. understand demand rates and make as per demand by using delayed differentiation
3. create highly responsive & flexible systems at all points (leverage IT?)

In closing, let us get back to the garment manufacturer from the island nation. When we sat down and calculated his throughput time it was over 150 days! This is the time the product took to traverse through the yarn supplier, passing through the fabric supplier, passing through his own garmenting line, and then passing through the customs, ports before finally reaching his customer! The manufacturing throughput time (his dock to dock time) was only 10 day out of these 150 days in total! We were proud to crash these 10 days to less than 4 days, while he was forcing a smile for he knew that the actual improvement was 6 days shaved off over 150 days! Is it time yet to celebrate?

Monday, September 29, 2008

Excerpt Change


(Continuing campaign: Change)

There is nothing permanent in this world. Every thing changes except the law of change.

History is witness to all survived setbacks & defeats; to all joys & victories. All have passed away. If there are problems in the present, they too will pass away. If there were solutions in the past, they too have passed away. Because nothing remains forever. Things will change with the time.

We are witness of all this. We are the perceiver. Life comes and goes. Happiness comes and goes. Sorrows come and go.

This reminds me of one of my close friends who mentioned the golden words casually –
“This too will pass.”
May it be oil crisis, IT crisis, political/ economic crisis or quote latest topic of crisis in financial sector..!! Even the business statistics concepts are based on existence of cyclical waves. Thousands or at least hundreds of theories to back it up.

Think of the moments of joy and victory in your life. Think of the moment of Sorrow and defeat. Are they permanent? They all come and pass away. Life just passes away.

There were friends in past. They all have gone.
There are friends today. They too will go.
There will be new friends tomorrow. They too will go.

There were enemies in past. They have gone.
There may be enemy in present. They too will go.
There will be new enemies tomorrow and......they too will go.

If this too is going to pass, it is not yours.
The defeat was not yours, the victory is not yours.
You are just a watcher. Everything passes by…

You are just a witness of change. Experience it, understand it..!!

Friday, September 19, 2008

Subject Evolution


Let me continue with my Incredible India campaign.. (The experiences aren’t incredible as yet..!!)

The picture to your left is the newly packed police station of Satellite area, Ahmedabad where I live. As they say, never judge a book by its cover – pictures may be deceptive. Yesterday, I had an opportunity to visit (Quote me for visit. I am choked when I write this. Laughs.. I will not announce the reason for the visit in public forum) this so called state of art police station.

Indian police, I understand, is changing – improving like any other government department. However, like any other Indian patriot, I am not satisfied with the ‘pace’ of improvement. There is wide rift in the world class performance (recently coined jargon which is very much true) and the pace at which our systems are developing. (I am not complaining/ whining about the systems. It’s we, somehow, who are responsible for the entire system.)

Anyways, I was pondering if there is some way of putting the basic technologies to practice in our primitive systems. Forget technology, can we have better processes. Simplified procedures..!! Now here, I am not promoting my organization – Kaizen. But change is called for. You can coin any damn term for it – process improvement, process re-engineering, Kaizen. But the underlined concept here is Evolution (as coined by Charles Darwin). As it’s always highlighted change is the only constant thing in this universe. No one will dare to argue with it. My big question to you is can we have better paced evolution?

May it be any government department – police, education board, law and the list goes on. The entire system is full of redundancies, non value adding activities, erratic processes (again the list is limitless). I have seen departments maintaining ‘dual entry accounting systems’ –By dual entry, I am not talking about the traditional book keeping system but departments maintaining & updating the accounts on paper as well as on the computers. And if I may mention the reason it’s just due to improper change management systems or total lack of change management.

Out of all states, Gujarat is one of the most progressive Indian states. Recently (in quarter 1, 2008), it launched a novel concept of eFIR. Now if we consider this as the pace of improvement & development, it gives a unclear picture of the actual truth. The police stations are still following age old procedures, with hand written heaps of papers (should I dare to call it papers ‘cos most of them are hardly acted upon), carbon papers, etc. So, the next question that arises is the evolution uniform throughout the system?

Everyone is aware of the snail paced Indian judiciary system which is one of the pillars of Democracy. The number of pending cases almost exceeds 4 million. The system calls for improvement, change for betterment – rather than following traditional methods which were inherited from the British rule. Many of which suited their way of working or needs amendment with consideration to changing times. Can we question the age old practices/ procedures? Can we have better improved processes in place? I can continue writing, but let me cut it short. I understand, it’s easy said than done. But something should be started from somewhere.

(I understand, it would appear that I am contradicting my thoughts in the earlier post. However, the previous post is correct in the context and this one is extension to it. I am speaking about government departments ‘cos I feel (which will hardly be questioned) that they lag way behind in terms of change management)

The entire post reminds me of George Bernard Shaw who said - People see things; and say, 'Why?' But I see things; and say, "Why not?"


Monday, August 25, 2008

Incredible India

It was early morning, when I left my place at Baroda to reach my new office in Ahmedabad which hardly took me two hours. I still remember when the Ahmedabad - Baroda was at least 4 hour bumpy drive.

Today I couldn't get my quota of sleep, reasons being;

  1. the FM channels uninterrupted feed throughout the stretch of expressway.. (Mind you, the music was good. Unlike masses, I need noise to put me to sound sleep. Perhaps, its sign of being classified into class!! Laughs..)
  2. I was talking to my brother & friends in the States.
This made me ponder about 'Mera Mahaan Bharat'..

India, world's second largest democracy (often compared to an elephant), has carved a upward trajectory, slowly & steadily, in all fields and aspects of life... (Every coin has a flip side, but I am kinda believer in Optimism..!) Would like to quote a few that made me pen down these thoughts.

The Infrastructure:

The new expressways, affordable airborne travel options, every day rail-travel matching the comforts offered on airplanes (Indian Rails, which already had television options, is about to launch newer facilities like internet on the go, beautiful hostesses serving you. Just imagine hostess in blazers serving you on Lalu’s rail. Will talk about it in coming posts) have revolutionized the way India travels.

The Technology:

I am sure; you haven’t forgotten those yellow booths reading STD – ISD – PCO...!! Today, India is 3rd largest mobile population in the world with the cheapest phone to global i-Phones dying to grab the market share.

Needless to mention, the journey from Doordarshan era to 24X7 multi-channel digital worlds.
The list is long..

The Supply Chain:

This is the subject of my interest. Gone are the days where one had to wait for months after booking an automobile. In current age, we talk to clients about Lean and JIT concepts with optimum level of inventories, least lead times, maximum number of variants, and the least costs. Today's consumer is very sharp and needs to be treated as king. I remember an incident where one friend of mine was out to buy a Hero Honda CBZ and came back with Bajaj Pulsar. Reason being blue colored CBZ was unavailable for next week. The scene has changed drastically.

Let me cut it short. (Subject is vast and needs more justice to describe.)

This post reminds me of my favorite commercial of our very own legendary brand - 'Humara Bajaj'. The commercials aired in two different decades aptly mark India's prosperity march. (the commercial also conveys different hidden messages)

Truly 'buland' - Incredible India...!!

Watch the videos to judge for self..!!

Early days..


video

Today..

video








Details

Welcome people (donno whom i welcoming..!!)

At the outset, let me use & revise Mark Twain's statement - 'If I had more time, I would have thought of a shorter link to the weblog.' However, it won the race of randomness and struck my mind when the box popped up.

Anyways, this page which I wish to call 'Reflections' was on my mind for quite some time and today, somehow, I got over the procrastination bug. Its the reflection of my random/ chaotic mind, which keeps on wandering from outrageous to sensible thoughts leaving me in pandemonium.

Perhaps, the page might look uninteresting to some of you, but undoubtedly you are lucky to have reached here.
So anyways, lets hope the reflection is clear enough or clears the chaos, and adds value (to author as well as to the viewers)..!!

Signing off,

P.S. Chaos is at peak on Sunday eve..!! Think coming days should have better content.