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Lean Logistics Lean – Green – The Future. Process and the Supply Chain. “Brilliant Process Management is our Strategy” “We get brilliant results from average people managing brilliant processes”

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process and the supply chain
Process and the Supply Chain

“Brilliant Process Management is our Strategy”

“We get brilliant results from average people managing brilliant processes”

“We observe that our competitors often get average (or worse) results from brilliant people managing broken processes”

Toyota Motor Manufacturing

Oh No ! What happened !

certainty 1

Non-Value Added

Business-Value Added

Value Added

Adds value to the output and customer is willing to pay for.

Does not add value to the output, and customer isn’t willing to pay for.

Does not add value to output, customer will not pay for, but is necessary.

(Legal, Safety, Etc.)

Certainty # 1

Process

Eliminate

Minimize

Optimize

certainty 2 processes want to fall apart
Certainty # 2Processes Want to Fall Apart

In a system, a process that occurs will tend to increase the total entropy of the universe.

Second law of thermodynamics

  • Entropy
  • A measure of the disorder or randomness in a closed system
  • A measure of the loss of information in a transmitted message
  • Inevitable and steady deterioration of a system or society

System: A group of interacting, interrelated, or interdependent elements forming a complex whole.

certainty 3
Certainty # 3

Lead Time is Only Made of Two Things!

Customer Consume

Product Design

Supplier Build

Manufacture

Waiting

Inventory

Rework

Value

Waste

Value

Waste

Value

Waste

Value

slide7

Certainty # 4

Overproduction is the King of waste…Make to order is utopia

+

<

= MTO

Customer LT

Supply LT

MLT + OL

<

+

= Forecast

Customer LT

Supply LT

MLT + OL

cash to cash cycle
Cash to Cash Cycle

Certainty # 5

All we are doing is looking at the time line, from the moment we get an order, order material from our suppliers ( and pay cash to our suppliers )… to the point where we collect that same cash ( and a little profit) from our customer.  And we are reducing the time line by reducing the non-value adding activities.

Cash to Cash = Accounts Receivables + Inventory – Accounts Payables

Inbound Supply Chain

Manufacturing Lead Time

Outbound Supply Chain

I

I

slide10

What Does The Future Hold ?

Who is going to blink first ?

Who is going to lead and/or follow ?

Is it about incentives or disincentives ?

Why do we need to wait…is green not obvious ?

slide12

A Quick Look…

  • Let’s examine transportation variables. Drawing assumptions from data that has been released by several organizations, we conclude that it is possible that in North America our truck load transportation system has the following characteristics:
  • Truck Load carriers ( and private fleets ) run from 5% to 15% empty (unpaid) miles to service their customers
  • Average truckload shipment sizes range from 20,000lbs to 28,000lbs when measured by weight and 40% to 65% when measured by trailer cube utilization
  • For purposes of discussion, let’s assume average empty miles are 10% and average trailer utilization is 60%. This means that theoretically, on any given day, with proper coordination (we eliminated all empty miles and had fully utilized trailers), we could move all freight in North America with 50% of the existing trucks
lean green systems thinking
Lean - Green & Systems Thinking

All New Products every year with 100% new components…

The defining characteristic of a system is that it cannot be understood as a function of its isolated components. First, the behavior of the system doesn't depend on what each part is doing but on how each part is interacting with the rest ...

Kofman and Senge,

1993

You’re a fool if you don’t focus on BOM costs

What we need are more sales promotions !

I love it when a plan comes together…did it ?

lean and green just make sense
Lean and Green Just Make Sense

Forcing More Work Through a Broken System…No Way!

Growth

Raise Efficiency Through Continuous Improvement…Yes Way!

Growth