September 14, 2010
by Richard Kunst
Marketing creates a need, sales sells the solution to fill the need, operations fulfills the requirements and finance will tell us if we made a profit. All businesses follow the same model but where is lean applied most?
Typically, operations is the first area to apply lean because that’s where “waste” is the most visible. High piles of inventory or a lack of inventory become easy targets for improvement followed closely by labour. But is this the good place to start your lean journey?
Sure, but you can actually apply lean through your entire value stream from supplier community to your customers.
Let’s look at the typical product/program realization methodology:
• Commercial viability. Does it complement our vision, mission and capability?
• Product definition. Define the product/program to satisfy customer needs.
• Process definition. How are we going to make or service the product/program?
• Validation. Test our hypothesis to insure rate and profit projections are met.
• CI & feedback. Reflections to improve the process/product.
The process definition phase is an excellent opportunity to engage the sales organization. Sales does have to sell solutions, but it has another important task: eliminating buyer stress. Purchasing departments have been impacted by the economic conditions. They’re looking for more value for their purchasing dollar, reduced lead-times and stress-free relationships with suppliers. And they’re probably significantly understaffed so if you stress the buyer, you’ll probably be tolerated briefly before being terminated.
So how do we reduce buyer stress? Your client is busy reacting to customer demand and doing its best to satisfy their requirements, which at times appear to be unrealistic. One of the reasons kanban tends to work better than an ERP system is its fast reaction time and synchronized to customer demand.
Here is a great opportunity to showcase your lean achievements. Begin by educating your sales team on the various attributes of your lean toolbox, then add the tools as part of a selling strategy.
Customer kanban may not be suitable for all of the products or services you provide, but it may provide calm to a significant portion. Offer to place some of the products on kanban, which you will monitor from a remote location.
Be innovative. In one case we used a web-camera that viewed the customer’s inventory. We were able to get a jump on production even before the purchase order arrived at our facility. In many cases the customer decided to work some additional shifts and we were able to react quickly to the change in demand. And if we had unusual demand from another customer, we were able to increase inventory to support customer “A” while satisfying customer B’s requirements.