Over the past decade, I have seen companies lose their drive and passion for manufacturing excellence and settle for mediocre performance. At the same time, they pursue philosophical and feelgood theories that have a minimal impact to the bottom line or the company’s competitiveness. Leaders continue to focus on labor, the smallest portion of product cost, while walking past a goldmine of millions of dollars in working capital. All elements of product cost are important, but labor is the one element that leadership can focus on without getting involved or making strategic changes to improve their current manufacturing business.
Often times management will claim to be following the lead of the Japanese or the Toyota pull production system with their own program. Then their program turns out to be a simple waste elimination, Kaizen, lean, agile or continuous improvement program. If that was their objective, why is their manufacturing still push-based, with ERP production scheduling, picking kits, departments, external inspection and labor tracking to an operation and scheduled quantity?
All of these push-methods are contradictory to the Toyota production system, which is a pull-based, Flow production process. It appears that Western management is just continuing with outdated techniques, mundane manufacturing objectives and the same old labor focus under a “new” name? On the other hand, with all of the philosophical theories and Japanese buzzwords currently in vogue, Western management may not understand the strategically different foundations and techniques required to make the transformation and become globally competitive.
If American manufacturing is going to become globally competitive, it must be driven in the direction of customer demand with in-process quality. The manufacturing foundation will be built on a responsive Flow production pull process with in-process total quality designed into every operation. Material will be pulled into production as well as from the supply chain and all scheduling is eliminated. The double-digit inventory turns, and PPM quality will far offset the cheaper offshore labor costs. Strategically, the responsive flow manufacturer will make it harder for offshore companies to compete without massive and expensive finished goods. Demand driven manufacturing with shorter and shorter product life cycles will become a strategic competency instead of a working capital nightmare.
My objective is to start by strategically defining the two manufacturing methodologies, pull verses push. Then explain and sort out the current Japanese buzzwords and use them as they relate to defining the path for manufacturers to design, manage, and perfect the Demand Driven Flow production process. Initially the focus is on manufacturing, but it will quickly expand to the corresponding pull material supply chain and support organizations and systems. Finally, it is time to define the future competitive manufacturing system to support the Demand Driven, pull production process. Formal pull-based manufacturing systems will simply replace the manufacturing part of ERP. The outdated pushbased scheduling and its regeneration techniques have no place in the competitive world. Without scheduling and work orders, pull production is very responsive to actual demand and formal systems must support and assist that response.
Philosophy and theory are great for creating awareness. We absolutely need them, and I enjoy reading books that create awareness. They open eyes to what may be possible if we get out of the current “business as normal” box. However, when it is time to transition from theory to performance, put the theory aside and use the technology and tools to achieve implementation success and results. Demand Flow Technology, DFT, is the technology and tools that take theory to results.
Demand Flow Technology is guided by mathematics and technology, it is not another type of Lean Philosophy. DFT results in a change to the bottom line, increased inventory turns, increased quality, and decreased inventory.
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