Around the Curve
by Ken Cowman, Managing Director,eMerging commerce inc.

While attending my first APRA International Big R Show in Las Vegas, a few events came together that form the basis for the writing of this article. First, I sat in on the General Meeting on Sunday morning and during the panel discussion learned that there are several forces at work that are shaping the competitive landscape for remanufacturing organizations in North America. Later, we had a number of people come by the Vertical Systems Inc. booth and I spoke to quite a few of them about the status of their readiness for change. Not uncommon was the answer that the ability to manage change in their business based on the external challenges was fairly low and that the overall increase in business activity for many was posing serious challenges.

If we liken the managing of an organization to driving a car we might think of it as the fact that we often drive the same roads frequently but occasionally we take a trip to somewhere new. Sometimes that trip is planned well in advance and we might even have friends that have made the trip before and can give us travel tips. This would be similar to the daily managing of tasks within the business but with some slowly forming, well defined changes in competitive methods or organizational growth.

However, sometimes we also get a call and have to move in a hurry. At this point, we’re going to be travelling unfamiliar roads without the benefit of knowing the best places to go or, more importantly sometimes, where to avoid going. In other words, we don’t necessarily know what’s around the next curve in the road. Similar in business would be the uncertainty surrounding the forces at work outside of the organization or knowing how long and how large will be the change in corporate fortunes.

In following up on those discussions, what I’ve found is that there seems to be a difference in this industry versus other like industries that perform operational functions using primarily metal, electrical and plastic components. Whereas these other industry verticals have embraced Continuous Improvement (CI) methodologies and closed-loop enterprise management technology (commonly known as ERP), a number of the people that I spoke with either weren’t aware of various CI methods or thought that ERP either wouldn’t add value or couldn’t support the remanufacturing organizational requirements. In the month that has passed since the show, I’ve had a number of additional discussions with attendees and have found that there is a thirst for additional knowledge of methods, technologies and strategies for becoming more competitive. Using my car analogy, it would appear that some organizations would like to learn how to install a GPS unit and other on-board systems to get a vision of what might be around the next curve and what action to plan for and/or take when they get there. So, with the kind assistance of the APRA people, I’ll be submitting some articles that may give members of the APRA community some ideas on how get a view of what’s around the curve.

As a starter, let’s take a look at what CI is. According to the APICS? Dictionary, 9th Edition, CI is: “A never-ending effort to expose and eliminate root causes of problems; small-step improvement as opposed to big-step improvement”. There are three parts italicized and I want to take these sections and explore them.
“Never-ending” in the context of CI, is the “Continuous” part of CI. Essentially, an organization embarking on the CI road is undertaking to never stop looking for methods of improving themselves and providing increased value to all stakeholders in the organization.

“Expose and eliminate root causes” of problems is more problematic than simply looking for processes or metrics to improve. For instance, how many times have you heard the phrase: “We have an inventory problem”? Inventory is not a problem…it is a symptom. If an organization has too much inventory the root cause will be something like lousy forecasting or manufacturing run amok.

“Small-step improvement” is a warning. Organizations that try to accomplish too much too soon fail miserably to accomplish much of anything…except to cause frustration amongst CI team members and waste resources. Setting an initial target that is too large creates two issues: (1) the timeline is too long; and, (2) there may be multiple root causes that cannot be attacked simultaneously. In fact, some of the lesser root causes may not be found until later. Small-step improvement means setting a goal that can be quickly achieved with the identification of one major root cause.

CI is not only for manufacturing and inventory management operations improvement. The application of CI projects can include reducing: customer order cycle cost and time; purchase order administration cost; average days aging of accounts receivable; time to market; and other processes that are not directly involved in the manufacture or distribution of products.

Within CI is a broad range of methodologies that are employed. In future columns we will explore topics such as: Quality-At-Source (QAS); Vendor Managed Inventory (VMI); Just-In-Time (JIT); Lean Manufacturing; Single Point Of Contact Service (SPOCS); Total Quality Control (TQC); Total Productive Maintenance (TPM); and many more. We’ll also explore the requirements of employees and management in making the journey successful.
 

About the author: Ken Cowman has over 11 years experience working in manufacturing and distribution operations management and has been providing continuous improvement and business management consulting services since 1983. Ken is Managing Director of eMerging commerce inc. the Master Distributor for Vertical Systems Inc. and can be reached via email: kjc@e-mergingcommerce.com or by telephone at: 905-949-5005.


APRA Global Connection / January 2007

Additional APRA Supported Websites

AutoElectricPro.com
 

Heavy Duty Remanufacturers Group

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