Taiichi Ohno is the long accepted Japanese initiator of the western version of the Toyota Production System called Lean. There is growing recognition that his initial ideas, while powerful in an isolated context, were only a portion of his systemic view of a complex supply chain.
In any case, history can now chronicle the rise of his ideas in the west, all packaged in a compelling narrative and condensed down to tools that can be easily conveyed to front-line workers ….. a dream for consulting businesses.
But, in our quest to keep things simple and packaged, have we lost some of the foundational information that made these ideas work in the first place?
This process of well-founded insights being transformed into packaged consulting offerings continues today. Six Sigma was grounded in a framework designed by statisticians Edwards Deming and Walter Shewhart, codified and branded by Motorola and marketed by General Electric (notably Jack Welsh) among others.
Theory of Constraints (TOC) was the brainchild of Dr. Eliyahu Goldratt who found a way to package and market a compelling set of tools and ideas based around his physicist’s understanding of systems dynamics and statistics.
A Modern Toolbox
Now, like scenes from a good World War One movie, we arm our front line soldiers with these great tools and inculcate them with a reassuring mantra of well-worn sayings such as minimise changeover times and minimise waste.
This soldiers’ code, whether it is born of Lean, Six Sigma, TOC or others, brings with it an aura of scientific credibility and a link to a broader font of leadership that helps the foot soldier to rise above the parapet at the aggressive and unforgiving front line of business operations.
A well trained workforce able to meet the challenges of complex supply chains is, and always will be, a powerful competitive weapon.
But we must also ask the question, where is the return on investment? To continue the metaphor, are we inadvertently sending our troops over the wall only to be recast as one of the 7 wastes? Is there a better way to direct our forces so that the results of their efforts can be directly linked to needs of the entire supply system? Is there a better way to relate our lean and Six Sigma efforts to an verifiable increase in profits?
The answer is yes and the solution may be at the very heart of what is required to increase manufacturing productivity in Australia.
The complexity of our supply chains, particularly food and beverage, is increasing at a stunning rate. Therefore the need to minimise the wasteful action of limited front-line resources is fundamental to minimising supply chain volatility, maximising productivity and maximising customer service.
A New Old Science
The solution lies at the very foundation from which Lean, Six Sigma and TOC originated; the immutable laws of supply chain science. The originators of these packaged improvement methodologies had an intimate and sophisticated understand of this supply chain science.
In fact Edwards Deming was a staunch activist for the need for scientific rigor in improvement efforts and publicly ridiculed the modern managers over-reliance on simplicity. He embodied Einstein’s mantra “Everything should be made as simple as possible, but not simpler”.
The science of supply chains does involve mathematics, particularly drawing on the domain of calculus and statistics. But the good news is that over the last 5-10 years we have witness an increasing academic commitment to the area of Industrial Engineering and we are now seeing the technical complexity being converted to accessible, robust laws that can be used to enhance the intuition of senior supply executives.
This sophisticated intuition, can be used to guide the use of big data from high technology supply chain platforms and answer hard questions such as what is the optimal order frequency, where do I locate and size inventory for optimal supply chain resilience and responsiveness, the list goes on.
Where to Next?
The problem is that every supply chain system is different and high-impact interventions need to be understood and ratified at the senior executive level. They should be created and moulded with the individual needs and characteristics of each supply chain.
While the science is broadly applicable it needs to be customized and cannot be condensed into pithy tools or slogans, particularly in the context of todays complex supply chain.
If complex supply chains are managed with an intuition borne of robust supply chain science then leaders will be better able to link the actions of their front-line supply chain troops with fundamental business expectations such as profit. They will also make leadership decisions and model behaviours that reinforce the narratives created by the packaged improvement methods.
Consequently, supply chain performance in a post-Lean and Six Sigma world is just as much about creativity and reinforcement as it is about analysis. It also moves beyond the current, formulaic constraints of Lean and Six Sigma, embracing all that is good with these methodologies and moving towards a new level of business performance and productivity.