Challenge
As COVID-19 has so clearly reminded us, supply chains are inherently dynamic! No doubt you experience unplanned events on a regular basis, such as sudden demand changes, canceled customer orders, inbound shipment delays, supplier quality issues, etc.
In addition, you will also be all too familiar with miscommunications between departments, causing delays and missteps. For example, the quality group not prioritizing items needed to prevent production shutdowns, or purchasing placing a large material order for an item whose demand has just been drastically reduced due to its removal of the bill of material.
I’m sure this type of problem would never occur at your company, right?
Solution
There are 2 approaches to solving this type of problem:
- The first involves innovation – applying the latest technology, such as state-of-the-art computers and other tools, and investing a great deal of money. I’m sure if you discuss this topic with a software salesperson, they will recommend an expensive software that would solve your problem with a wave of the magic wand.
- The second uses commonsense tools, checklists, and techniques that do not cost much money. This approach is called Daily Visual Management.
With this approach, the impact of these inevitable supply chain disruptions can be minimized almost immediately.
Topics could include the following items:
There should be visual management boards, so employees and management can recognize immediately how well the area is performing, and what problems exist. The boards are the focus of the team meeting.
The key is open, honest discussions to understand the situation and collectively reach a consensus on appropriate actions. They should be led by area leaders, who must know what questions to ask, and how to ask them. It is critical to create an environment where employees feel comfortable discussing problems, and don’t feel it is necessary to hide them.
Through daily management, recurring, chronic problems will be uncovered. Many problems can be solved quite readily, in real-time and on the spot. Other problems require substantial planning to solve, which may become the subject of kaizen events, to understand root causes and countermeasures.Once a problem has been solved, the new procedure needs to be standardized, otherwise, people are always fire-fighting. In this way, “process muscle” is built and performance is improved.
These meetings are also great opportunities to develop employee capabilities, by improving the way that people tackle problems and work in teams.
Results
We led an initiative to implement daily visual management at a bioanalytical instrument manufacturer within the materials management group. Since these instruments often had 600+ parts, preventing line-down situations was always a challenge. As a result of the adoption of these daily meetings focused on material management topics, such as late purchase orders etc. we reduced line-down events by 32% within 2 months, which also significantly improved their revenue attainment performance.
