Does cost reduction always foster reduction of Working Capital Needs?
By Xavier Perrin (xperrin@xp-consulting.fr) Working capital represents the difference between a firm’s current assets and current liabilities. This financial definition isn’t really useful for operations’ managers. However, managing working capital is of foremost importance for companies, as when Working Capital Needs (WCN) increase, cash flow is reduced, and the need…
Good Use of Gemba Walk
By Xavier Perrin (xperrin@xp-consulting.fr) “Go See, Ask Why, Show Respect”. The words of former Toyota Chairman Fujio Cho, as reported by John Shook in one of his insightful letters on the Lean Enterprise Institute website, sum up very well the principle of “going to the gemba”. Gemba means “the real…
Master Scheduling in Short-Medium Volume Environments
Par Olivier Carré, O2C (olivier.carre@o2c-sc.com) My colleague, Olivier Carré, presents here different approaches for developing a master schedule in low-medium volume production environments. – XP Production planning for short or medium production runs is highly difficult today. Just as it is simple to schedule recurring products, it is just as…
Just-In-Time Swept by COVID-19?
By Xavier Perrin (xperrin@xp-consulting.fr) The sanitary and economic crisis we are living for several months have tremendous effects on supply chains worldwide: disruptions in supply, insolvencies, stockouts of strategic supplies (protective masks, respirators, hydroalcoholic gel, etc.). Entire sectors of economy are jeopardized and will probably never recover the conditions prior…
Do you really pull your production?
By Xavier Perrin (xperrin@xp-consulting.fr) When I am working with High-Mix / Low-Volume (HM/LV) manufacturing companies for helping them to improve their dependability, reduce their lead times, and reduce their working capital need, a frequent misunderstanding comes from executives about pulling production from customer demand. As they produce only what their…
Client is King. Really?
By Xavier Perrin (xperrin@xp-consulting.fr) I often read posts on professional social networks which recall us that “Client is King” or “Client is the Boss”. Most of the comments describe situations where it was missed to serve the client as a king, which is considered as a scandal. I’m always very…
Respect, Isn’t It ?
By Xavier Perrin (xperrin@xp-consulting.fr) Many articles, mostly related to lean principles, insist on “respecting people” as a necessary behavior of managers and leaders. This is often highlighted by quoting Toyota’s leaders, like former president Fujio Cho and is famous slogan “Go see, ask why, show respect”. Showing respect sounds obvious…
The Essence of Muda
By Xavier Perrin (xperrin@xp-consulting.fr) Different mnemonics are used to help people remembering the 8 muda. Recently, I discovered a video using the acronym DOWN TIME for Defects, Overproduction, Waiting, Not utilizing talent, Transportation, Inventory excess, Motion, and Excess processing. TIMWOOD is another tip for recalling the 7 wastes of Toyota: …
A Nice Example of Muri
By Xavier Perrin (xperrin@xp-consulting.fr) In a recent issue of the newsletter of the French Supply Chain Magazine (#2600 ; 20/11/2017), I found an interesting topic for illustrating the principle of muri. Muda is a well-known concept of lean, which is translated by “non-value-added activity”. Lean thinkers also learn to identify…
Forecasts are always wrong. So what?
We are teaching that “forecasts are always wrong”… and this is true! But, some people take the opportunity of this truth to assert that forecasting demand is useless…