Tag Archives: Lean

 

With Halloween just around the corner, we started thinking about nightmares that can occur to manufacturers. Is something bedeviling your productivity leading to more tricks than treats? Is there a ghost in the machine? Here are some of the most common “monsters” that haunt manufacturing managers, and ways to banish them from your operation for good.

Things that go bump in the night (or day). Every manufacturing plant on the planet has experienced an “unexpected shutdown” that seemingly comes out of nowhere. Something broke, wore out, went awry or otherwise seized up, causing production to grind to a halt. These unexpected dark periods, whether they last an hour, a day or longer until the problem is resolved, are extremely costly in lost productivity and revenue, delays in shipments and deliveries, and more.

Banish it! Regular shutdowns for maintenance need to be an essential part of your yearly calendar. Yes, these planned maintenance periods still mean downtime, but the point is, you build them into your schedule and plan accordingly for shift scheduling, delivery and other variables.

Zombies on the line. Unmotivated teams can bedevil companies in any industry. From the Great Resignation to Quiet Quitting, employee morale has taken a tumble since the pandemic. People are just going through the motions out there. Couple that with some spooky stats: According to a Gallup survey, only 36% of U.S. employees are engaged at work and 74% say they are actively looking for new jobs. Low morale costs companies in just about every way possible — increased absenteeism, dips in quality and efficiency, and rock-bottom motivation levels among them.

Banish it! There are many spells you can cast to break that zombie curse. Invest in training and development for your employees. Hold listening sessions to get ideas for improvements on the job. Walk the floor and talk to your people regularly, something management just doesn’t do enough. Build a promotion pipeline from your front lines. All of these will help increase employee engagement and get their heads back in the game.

Process poltergeists. Are you constantly putting out fires that seem to combust without warning? Human errors, unforeseen backups, supply chain bottlenecks, inventory imbalances (too much or too little), glitches on the line. It can feel like you have a firefighting mentality, and it’s counterproductive to, well, productivity. When you’re in a constant state of troubleshooting, you’re not efficient at doing the job today or laying the groundwork for tomorrow.

Banish it! A solid Management Operating System, which is a structured approach to your operations, will help stop trouble before it starts. This allows you to make adjustments and otherwise pivot so your operations aren’t adversely impacted. The best management operating systems focus on processes, systems, roles and structures to map out how the job gets done, and by whom. To learn about MOS in more detail, watch our short (and dare we say fun) video, Stop the Firefighting Mentality.

“20% of each dollar is wasted in manufacturing due to inefficient processes each year”

Wasting disease. Waste can hide on your shop floor like a monster under the bed. It hides where you least expect it, like time, energy, employee talent, productivity and more. Here’s a figure that will keep you up at night: 20% of each dollar is wasted in manufacturing due to inefficient processes each year, adding up to $8 trillion globally.

Banish it! Waste is such an enormous problem in manufacturing, Toyota (or Henry Ford, depending on who you ask) created a process methodology about it. Lean is all about identifying and eliminating waste in manufacturing operations. The classic Seven Deadly Wastes (we think it’s eight, but let’s not split hairs) include overproduction, waiting, transporting, processing, inventory, motion and defects. (People is our eighth.) Lean is the process to minimize or eliminate those, boosting your bottom line. Read more about it by downloading our eBook, “Lean Six Sigma: Do You Really Know These Methodologies?”

The invisible man (or woman). The loss of institutional knowledge happens when your best workers vanish (retire or quit) and take all their hard-earned, on-the-job know-how with them. It’s the tips, tricks and tactics that aren’t in the employee manual. The loss of this irreplaceable knowledge is a growing issue for manufacturing, because the workforce is aging, and there is a lack of skilled younger workers to take their place.

Banish it! Capture that knowledge before your seasoned pros retire or otherwise leave the workforce. Create mentorship programs pairing older workers with younger ones, ask those older employees to participate in roundtable sessions that can focus on “what’s not in the manual” knowledge, and solicit their advice on how to do the job better.

While this is a lighthearted look at manufacturing problems, these issues are no joke. They can seriously hamper your efficiency, productivity and ultimately, your bottom line. At USC Consulting Group, we’re the experts in helping companies reach operational excellence. If you’d like to learn more, please give us a call.

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The automotive manufacturing industry has been traveling a strange and bumpy road over the past couple of years. The pandemic created a traffic jam in the supply chain. At the same time, demand for new cars dried up. Who was driving? Everyone was at home during the lockdown. And on the heels of that, interest in electric vehicles began to surge. According to research by the International Energy Association, the demand for EVs is expected to rise 35% by the end of 2023 after a record-breaking 2022.

What did it all mean for auto manufacturers? Demand for traditional vehicles lowered as demand for electric vehicles grew, forcing auto manufacturers to do a delicate dance of balancing the type of production they’ve always done with the new processes and systems needed to produce EVs. The moving target of demand coupled with shaky supply brought about inventory uncertainty — how much was enough, but not too much? And then, there was (and continues to be) the labor shortage, with seasoned workers retiring and younger ones not exactly flooding through the doors.

Improving processes is paramount for the automotive manufacturing industry now. Here are a few ways you can do that:

Lean Six Sigma. If there ever was a need for auto manufacturing process improvements like the ones Lean Six Sigma can produce, it’s now. LSS is the blending of two efficiency methodologies, Lean and Six Sigma. It’s a bit ironic, because the Lean methodology, which focuses on efficiency and eliminating waste, was developed back in the day by Henry Ford… or at Toyota, depending on who you ask. It got its start on the auto manufacturing line, with the intent of eliminating the “seven deadly wastes”: overproduction, waiting, transporting, processing, inventory, excess motion and defects. At USC Consulting Group, we’ve added an eighth waste. People. Specifically, not using them to their fullest, not seeing untapped potential in great workers, and not training and developing people to rise through the ranks. Lean is about eliminating waste to produce more product quickly and efficiently.

Six Sigma, the other side of the Lean coin, is about quality control. Minimizing flaws and defects. But it’s deeper than that, rooted in data. The goal is to improve cycle time while eliminating or reducing defects.

Automotive manufacturing industry production line illustration

SIOP. It’s difficult to achieve careful, accurate planning for the future when the road ahead contains so many bumps. That’s why we take the usual sales and operations planning (S&OP) process to a different level by adding inventory to the mix. The goal is to look ahead, anticipating the inventory you need while also coordinating with sales, marketing, and finance to involve the entire organization in this process. A key to SIOP is using inventory as a strategic tool to help offset variation in either demand or production issues.

Predictive Maintenance. Yes, it sounds extremely basic, but we find that heading off trouble before it starts can eliminate the risk of bogging down your entire production line to fix what’s broken.

Skills Training. Investing in training is playing the long game, but in light of your best people on the line retiring and fewer people to take their place, it’s paramount. Training has advantages in addition to the obvious — your people being more skilled on the job. It also demonstrates in a very tangible way that you are committed to the growth and success of your employees. You gain loyal workers and create a pipeline for advancement. It’s a win-win.

Technology Investments. USC Consulting Group is not about coming in and asking manufacturers to invest in the latest and greatest technology in order to become more efficient. No, efficiency takes harder work than just installing a new machine. However, in some cases, it’s necessary to level up. Legacy technologies don’t have the same features and capabilities as newer models. And in the auto manufacturing industry, you’re dealing with producing an entirely new product with electric vehicles. It may be time to look at your technology and decide if it can take you into the future or keep you in the past.

Doing business in the automotive manufacturing industry is like driving a manual transmission. You are constantly shifting gears to keep pace with traffic – in this case, the consistent change of consumer demand. Operations consulting helps companies improve their processes and be prepared for what’s coming down the road. We help manufacturers become more efficient and profitable in this or any economy.

Is working with operations consultants an untraveled road for you? Please get in touch. We’d love to talk with you about it.

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With all the recent media attention about ChatGPT and other AI tools taking over our jobs (and our world), it’s easy to forget that technology — even AI — is a tool we can use to make our lives easier and our businesses more efficient.

At USCCG, we’ve been using software to help our clients harness and wrangle their data and transform it into usable insights in real time, and support their operational goals and aspirations.

The various software modules that make up our proprietary LINCS system, along with Microsoft’s Power BI, were designed to do just that. Here’s a look at the software we use to help you harness your data.

Lean Information Control System LINCS software

LINCS

A cornerstone of the work we do at USC Consulting Group, the Lean Information Control System (LINCS) gives supervisors, managers and execs the operating information they need, when and where they need it. LINCS offers state-of-the-art tools and software applications that facilitate fact-based decision making in real time from the shop floor to the boardroom.

LINCS includes modules for advanced planning, manufacturing and logistics, value-stream mapping, time-phased production scheduling, inventory analysis and more. These modules can be used in combination or alone, based on the needs of your business. That’s because of another of our cornerstones: no cookie-cutter solutions. You can pick and choose which modules and features are most useful for your particular needs.

LINCS is designed to be a sophisticated decision support tool kit that is adaptable, affordable, easy to use and easy to configure.

We’re fond of saying companies need to “manage by the numbers.” This is the way to do it.

Here’s a closer look at the modules.

Performance Analysis and Reporting

This module collects and analyzes operating and production information in real time. Seeing how the work is stacking up as it takes place gives operators and executives powerful information by which to make decisions, prioritize activities and pivot when things aren’t going according to plan. It allows management to view operations at a glance or drill down to examine specific areas of opportunity via an executive dashboard. And it’s easy to configure and use.

Key Features:

Flexsim

No modesty here — this is a really cool software program. It’s a 3D simulation of new processes or practices before you roll them out onto the shop floor. It’s an object-oriented simulation software for processes like manufacturing, material handling and workflow. It helps engineers, managers and decision makers visualize and test proposed operations, processes or systems in “cyberspace” before trying it out in real life. The goal, like everything we do here at USCCG, is to boost productivity, eliminate bottlenecks and ultimately enhance your profits.

Key Features:

Resource Capacity Planning

This invaluable tool gives you a realistic, real-time view of available versus required resources, including people, materials, tools and equipment. It helps you make sure you’re on track to achieve your production plan, each and every day and shift. It’s user friendly and can be customized for each client’s needs.

Key Features:

Microsoft Power BI

What good is the amount of data we have at our fingertips today if we can’t analyze it, interpret it and put it to use, right? That’s where Microsoft Power BI comes in. It creates news you can use. The program is designed to collect the various types of data generated within your business and coalesce it into useful, timely information by which you create actionable insights. It consists of a Power BI Desktop, an online software-as-a-service (SaaS), and mobile apps for Windows, Android and iOS devices. Together, those three components work to wrangle your data into insights you can share with your team.

Key Features:

By using the latest-and-greatest software out there, we help our clients enhance their operations, streamline their day-to-day, stay on top of inventory and create actionable decisions. It’s about managing by the numbers.

For more information about how this software technology can help streamline your operations, call us at 800-888-8872 or email us at info@usccg.com.

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There’s a popular phenomenon being shared online at the moment: “Instagram vs. Reality.” It’s two photos, side by side. One is doctored and photoshopped and filtered to look perfect. The other is what it looks like in reality. More often than not, there’s a big difference. Perfection is a far cry from reality, and not just on Instagram.

It got us thinking about operational excellence. Some operational excellence consulting firms might tell you their goal is to deliver optimal perfection in which your organization is running on all cylinders 24/7. But in our experience, reality is a lot more complicated than that. We find that operational excellence is a process. And sometimes it’s a moving target. It can change and morph, affected by myriad factors that may be out of your control, like the economy, supply chain issues, hiring problems and snafus, your best leader on the line quitting with a moment’s notice. The list goes on.

As an operational excellence consulting firm, we contend that operational excellence is a process of continuous improvement, not something static and perfect that stays that way in perpetuity. Does it exist? Absolutely. But it doesn’t stay the same.

What is operational excellence consulting?

The textbooks will tell you operational excellence is a process for improving a company’s effectiveness and efficiency — two things we happen to specialize in. The goals of operational excellence consulting read like a playbook of our typical projects: Improving productivity and throughput, reducing waste, focusing on quality and reducing defects, optimizing shifts, updating processes.

Often an end goal of Lean Six Sigma (LSS), operational excellence is a moving target. Striving for operational excellence means continuously improving, rolling with unforeseen circumstances, adapting to ever-changing tides. Here are some effective strategies we’ve honed in the pursuit of operational excellence that you can apply in your operations today.

Strive for process optimization

The cornerstone of LSS, process optimization means finding opportunities to ramp up efficiency, eliminating bottlenecks and waste, enhancing productivity, reducing defects and glitches in both the product and the process, and the whole nine yards of LSS. To read a deep dive into LSS and what it can do for your organization, download our eBook, “Lean Six Sigma: Do You Really Know These Methodologies?”

Get the right people in the right jobs…

Is everyone from the front lines to the corner office in the right jobs? Assess skills, provide training if necessary and listen to feedback so your team is ready to tackle their roles with a great work ethic and enthusiasm.

…and then empower them to do the job right

Many times, the people who work on the shop floor know a lot more about the job than the people in the C-suite. Give them the power to do their jobs and to act quickly when unforeseen situations arise.

Develop KPIs

If you’re not already establishing and monitoring key performance indicators and metrics, get on that. It helps your people know what’s expected of them, and helps you evaluate the quality of the work they’re doing. They also show opportunities for improvement.

Develop standards

Hand in hand with KPIs, standardized operating practices and procedures can ensure you’re getting the consistent results you need.

Manage by the numbers

It’s an oft-used phrase here at USC. Decisions need to be driven by data and hard numbers, not what’s “always worked in the past.” The data can tell you where to improve, what’s working and what needs to change.

Keep the customer in focus

Sometimes, companies can get so caught up in process improvements they lose sight of the end customer. By keeping their needs, expectations and wants in the forefront, you can be assured you’re hitting the mark.

Encourage a culture of continuous improvement

Culture change is easier said than done, but it’s a necessary component to operational excellence. Encourage innovation and ideas for improvement, and reward employees for finding ways to do their jobs better.

Above all, remember it’s a process, not a single achievement. Yes, you may have achieved operational excellence… today. What about tomorrow?

 

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In most business settings, time is measured by hours and days — how long will it take to receive a proposal, mockup sheet or important presentation. But in the manufacturing world, time is measured in product cycles. From sourcing materials to testing to packaging, how long will it take to get one product from conception to full completion?

That is the essence of manufacturing cycle time.

Not to be confused with lead time, cycle time is how long it takes to complete a unit of product, from the beginning of the manufacturing process until the product is ready to ship. In this article we will detail how to calculate cycle times, and the ways you can improve it in your organization.

How to calculate cycle time

The manufacturing cycle time is different for every organization and every product run, and it’s important to constantly check on this variable to ensure productivity benchmarks are being met. The formula to determine cycle time is actually fairly simple:

Total amount of goods produced / Time of production = Cycle time

Once a baseline is determined, manufacturers can try a number of different things to decrease cycle time and increase profitability.

Manufacturing cycle time

Knocking a few seconds from key areas of your cycle time can have a dramatic impact on productivity.

How to improve cycle time

There are a number of ways that a manufacturer can decrease cycle time, such as:

Streamline production process as a whole

By identifying and eliminating any bottlenecks or inefficiencies during the production process, manufacturers can reduce cycle time by improving the system as a whole.

Take a detailed look at your operations — are there issues associated with the production layout of your floor? Are there certain tasks that could be automated or otherwise simplified? Is there an opportunity for you to implement lean manufacturing principles? Evaluating your operations is a great way to identify inefficiencies in your organization.

The key is to reduce the time required in order to increase overall capacity, all while ensuring that nothing gets missed, as shortcuts can lead to quality control issues and dissatisfied customers.

Improve equipment and systems

Is your equipment up to date? Or are you using outdated machinery and legacy technologies?

The more outdated the equipment a manufacturer works with, the greater opportunity for preventable delays in operation. Take an assessment of physical equipment and the software your businesses utilizes on a daily basis. If you find that your systems are more than five or ten years old, it may be time to set aside profits to update your manufacturing facility.

Invest in employee training

Well-trained employees are more likely to work efficiently, produce high-quality results and create ways to optimize operations.

Develop a culture of employee development and make sure they feel comfortable giving suggestions. Doing so can increase morale — leading to higher retention rates, a growing concern of manufacturers — and improve the quality of operations as a whole. The more high-quality employees a manufacturer has, the more efficient the business will run.

Utilize analytics

Manufacturers should take an even deeper look at operations, utilizing analytics to alert them to any inefficiencies in the process.

On the surface, production could seem to be running smoothly, but perhaps there is an area of production, for example, that is taking 20% longer than expected. Create and gather data points wherever possible, because you never know what inefficiencies may be lurking under a normal-looking production cycle.

At USC Consulting Group, we can help your manufacturing business decrease manufacturing cycle time and increase efficiency and productivity. Contact us to find out more.

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Leo Tolstoy once said: “Everyone thinks of changing the world, but no one thinks of changing himself.”

How true that is. Sure, he was talking about the Russian Revolution, but the words of the author of War and Peace, considered by some to be the greatest novel ever written, are just as applicable in today’s manufacturing workplaces as they were back then. It’s especially true when manufacturers are going through the process of implementing Lean Six Sigma.

When you’re talking about a culture change as big as Lean Six Sigma (LSS), it can feel a bit like your company is going through a revolution. And as Tolstoy so astutely pointed out, changing the “world” — your workplace culture, processes and procedures — is all well and good, but changing oneself and one’s role in it? Is that really necessary? As hard as it is for many managers and top leadership to hear, the answer to that question is “yes.”

It’s hard to hear and even harder to accept because, inherent in the concept of change is the notion that you were doing something wrong. People who have been on the job awhile, from the workers on the front lines to the people in the corner office, are resistant and, dare we say, defensive about that notion. But it’s not about companies doing something wrong. It’s about finding opportunities for greater efficiency, throughput and, frankly, profit.

At USC Consulting Group, we help companies implement LSS. Our Lean Six Sigma Master Black Belt, Dr. Frank Esposto, leads many of these implementations. But as Frank tells companies, LSS isn’t just about a new set of tools and operating procedures. It’s about culture change, too. And managers and top brass embracing that change is crucial to LSS success.

Lean Six Sigma 101

Here’s a quick rundown of Lean Six Sigma.

The whole concept of Lean started with either Henry Ford or Toyota, depending on who you ask. The idea was identifying and eliminating waste in manufacturing operations. Toyota called them the “seven deadly wastes” and that term stuck. At USC, we added an eighth. They include:

The goal is to create greater efficiency on the line.

Six Sigma is a set of techniques aimed at reducing (in a perfect world, eliminating) the probability that an error or defect will occur in the process.

Together, as Lean Six Sigma, the two methodologies pack a punch of efficiency and perfection. LSS enables companies to produce better product faster, increasing throughput and quality.

Learn more about LSS in our eBook – Lean Six Sigma: Do You Really Know These Methodologies?

Why culture change is so important to LSS success

There’s a perception out there that Lean Six Sigma is simply a series of process improvements designed to eliminate waste and increase quality. It is that, for sure. But it also requires the aforementioned culture change. A change in attitudes and behaviors. Everyone, from frontline employees to the corner office, needs to be on board or this change won’t stick. You’ll slide back into your old ways.

It’s vital for the workers performing new processes to embrace those changes. But it’s just as vital for managers and supervisors and the top brass to change, too. Remember, you can’t change the world without changing yourself first.

What managers can do to embrace change

In order for the LSS changes to be sustainable, managers and executives need to demonstrate to employees that they’re on board. And that doesn’t mean sending out a memo of encouragement. It means changing daily work habits, just like employees are expected to do. A few ways to do that:

Walk the floor. This is arguably the most important piece of this puzzle for management. Get out of the office and onto the shop floor. Get into the trenches with your frontline employees. Show them you’re all in.

Ask senior employees for advice and input. You know who we’re talking about. The men and women who have been on your frontlines forever. Shift supervisors. Trusted workers. The people actually doing the job day after day. When you’re in the process of implementing LSS, their input is vital. Not only to the success of the project, but to their buy-in as well.

Roll up your sleeves. If it’s crunch time and you’re shorthanded, take off that suit coat, roll up your sleeves and help out any way you can.

Over the years, we’ve seen how companies that embrace change will succeed in becoming more efficient and profitable. Those that don’t may simply slide back into their old ways.

For leadership teams leading the charge for culture change, we lean on advice from Mahatma Ghandi, “Be the change that you wish to see in the world.”

Lean Six Sigma - Do You Really Know These Methodologies eBook

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With a potential recession looming, inflation and interest rates rising, and the post-pandemic surge in consumer confidence slowing, productivity is stepping into the spotlight. Amid all of this economic uncertainty, manufacturers are turning their focus toward their own operations and processes, making sure everything is running like the proverbial well-oiled machine. Lean and mean. As efficient as possible.

We get it. At USC Consulting Group, we’ve been helping manufacturers become more efficient and productive for 50+ years. Process improvement is our wheelhouse. We can’t do anything about the economy, but we can help our clients increase their productivity so their companies can be at their fighting best to withstand any economic headwinds that come their way.

In the end, it’s about striking that delicate balance between increasing throughput and maintaining quality. Too much speed on the line can indeed increase throughput, but quality could suffer. So, finding that sweet spot between optimal throughput and optimal quality is the key.

Here’s some of the advice we’ve been giving to our clients to do just that.

Focus on the Five M’s

One of the first steps we take when evaluating process improvements in manufacturing companies is to focus on the Five M’s. Many times we find it all starts and ends with this. It’s a tried-and-true management tool — with some debate as to where and when it originated. And now, people put their own spin on the M’s, as they relate to their own operation. At USC, we call them Machines, Methods, Materials, Measurements and Man and Woman power.

  1. Machines. Evaluate your machines on the line. Do they need maintenance? Do you perform regular maintenance or wait until something is “broke” before you fix it?
  2. Methods. This step involves evaluating the process of getting the job done. Are there any opportunities to make the workflow more efficient?
  3. Materials. This is a big headache for manufacturing today — supply chain issues are messing with the ability to have enough material to get the job done when it needs to get done.
  4. Measurements. Are your metrics and measurements for success and profitability on target?
  5. Man and Woman power. Do you have the right people in the right jobs? That’s the ideal. But increasingly the question is: Do you have enough skilled people to get the job done, or enough people, period?

Focusing on these five elements of your operation can illuminate a host of opportunities for improvement. Let’s look at some of those in more detail.

Schedule regular maintenance

The old adage “if it ain’t broke, don’t fix it” does not serve manufacturing very well. We recommend regular maintenance. Yes, it causes a work stoppage, but it doesn’t take you by surprise. You’ll know the line will be stopped for a certain amount of time on a certain day rather than having things grind to a halt unexpectedly because of an unknown problem you’ll have to ferret out and fix. It’s also important to talk to your people on the line about the troubleshooting they’ve been using when things go wrong. It could be they’re on to something.

Look at the 7 Deadly Wastes

It sounds rather dramatic, but this is a concept initially pioneered by the Toyota Lean manufacturing model. It’s aimed at identifying and eliminating waste in manufacturing operations. We’ve added one additional “waste” to that list. Here they are in detail.

Examining all of these areas of “wastes” in your operation will help you become more efficient and ultimately more profitable.

→ For more information about Lean, download our free eBook, Lean Six Sigma: Do You Really Know These Methodologies?

Upskill Your People

About that eighth “waste.” There may well be hidden potential working on your lines every day that is being underutilized. We see it all the time in talking to frontline workers, who usually know more about the ins-and-outs of the day-to-day than their supervisors do. Is anyone on the line ready to move up? It might take some classes in management training, but so be it. Promotion from within is a powerful motivator for your workforce and in this market, where retaining good people is so difficult, it can be a lifesaver. There’s also another part to this. It’s about not being able to find skilled workers to do the job. This is a big problem for manufacturing industrywide. The solution just might be to invest in training courses for new hires to get them the skills they need.

At USC Consulting Group, we’re committed to helping manufacturing companies improve their processes to become as efficient and productive as possible. In this economy, it’s a must. Give us a call to find out more.

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Remember the familiar line from an old TV cop show: “There are 8 million stories in the Naked City”? As USC Consulting Group’s Vice President and Senior Operations Manager Paul Harker likes to point out, the same could be said about your inventory.

Like most dramas, the story of your inventory management can take unexpected turns. It’s very easy to get lost in the din of safety stock levels vs. Lean principles, order quantities, reorder triggers and the lead time to replenish the stock. Supply chain disruptions and shortages haven’t helped matters over the past few years. The plot unravels when these stories don’t add up to a single coherent tale.

Major characters in this inventory management drama:

Operations, which sees inventory as a buffer against fluctuating demand. But how much is too much? They don’t want an excess of stock, which would fly in the face of the popular “just in time” or Lean operating method, which, admittedly took a bit of a hit during the pandemic when people panicked about shortages and bolstered their safety stock.

Sales wants product at the ready at a moment’s notice, not “just in time,” but “all the time.” They’re not overly concerned with storage space, inventory investment or production efficiency.

Finance looks at inventory as a double-edged sword. They want to reduce inventory in order to free up cash and minimize carrying costs. But inventory is also collateral. High levels of production, whether the goods are sold or not, can absorb overhead and drive better month-end results, which are Finance’s Holy Grail.

Executives are focused on achieving quarterly corporate objectives and view inventory in terms of dollars.

At a fundamental level, all of these decision-makers speak different languages, have different perspectives and conflicting messages. Of course, everyone has the same goals: efficiency and profitability. But they may be at cross purposes getting there.

The Hero: SIOP

You might be thinking: “Is that a typo? Don’t they mean S&OP?” Yes and no. No, it’s not a typo. And yes, S&OP, the business management process that involves sales forecast reports, planning for demand and supply, and other factors, is the foundation of all of this. We just think S&OP is missing something: Inventory.

When you’re focusing on inventory, it elevates the entire planning process up a notch. When your inventory is optimized, things tend to fall into place. But it is not an easy mark to hit in these days of supply chain disruption and the sometimes conflicting goals of key decision-makers. With SIOP, you can circumvent these challenges and make your inventory work for you.

“A key to SIOP is to emphasize inventory as a strategic tool to help offset variation in either demand or production issues,” explains David Shouldice, Senior Vice President and Managing Director at USC Consulting Group. “One lever of control in the SIOP process is to make inventory harder working as a strategic tool.”

As Shouldice notes, it’s about having the right conversations about the right topics at the right time.

This isn’t a one-and-done process. The SIOP planning horizon should be at least a rolling 14-month period. We recommend that our clients update their plans monthly. Some do it more often than that. The point is covering a sufficient span of time to make sure the necessary resources will be available when you need them. The plans take into account projections made by the sales and marketing departments and the resources available from manufacturing, engineering, purchasing and finance. All of that together works toward hitting the company’s goals and objectives.

Using SIOP for inventory management

Sales, Inventory and Operations Planning helps your company get departments in sync, ensures that everyone is on the same page and realistic about the process, helps you manage and roll with changes, and measures performance.

One powerful component of SIOP is that the process involves all of the key players in your inventory drama.

Here’s who we typically see take part in the SIOP process:

Different languages? You bet. But getting them all working together cuts down on the noise of those different languages. One reason SIOP is such a critical management tool is that key players from many departments are working from the same plan, and able to compare actual results to plan, evaluate their performance, and prepare updated plans going forward. SIOP: The universal translator, or C-3PO, for your business.

It is a powerful tool to help you wrangle your inventory management, achieve the optimal balance between not enough and too much, and settle back into Lean (or just in time) manufacturing principles that can eliminate waste and help ramp up your efficiency.

If you’d like to learn more about SIOP, download our (free) eBook, “Sales, Inventory & Operations Planning: It’s About Time.”

Sales Inventory and Operations Planning eBook

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If you’re in manufacturing, you’ve certainly heard of two process methodologies, Lean and Six Sigma. Lean, which has been around forever and has recently migrated from the manufacturing floor into other industries (they’re even talking about Lean HR methods) and Six Sigma, a newer technique. Two sides of the same coin, Lean looks at making processes more efficient and reducing lead times, while Six Sigma focuses on cutting down on defects. Both are useful goals when aiming to optimize your processes, throughput and ultimately, your bottom line.

Lean vs Six Sigma, which is better? Which should you be investing in if you’re coming up against inefficiencies in your production, and can they be used together?

Let’s take a closer look at both methodologies to see who comes out on top in this operational improvement matchup.

Lean

The whole concept of Lean started with identifying and eliminating waste in manufacturing operations. Pioneered back in the day by Toyota… or by Henry Ford even earlier, depending on who you ask, Lean manufacturing is about cutting costs, eliminating waste in both processes and products, and generally becoming as “lean and mean” as possible to reach optimal efficiency. The heart of the process is identifying and eliminating what Toyota called the “seven deadly wastes.” (We happen to think it’s eight.)

Examining all of these areas of “wastes” in your operation will help you become more efficient and ultimately more profitable. In other words, lean and mean.

Six Sigma

Six Sigma, at its most basic level, is about quality control. Minimizing flaws and defects. But it’s much deeper than that. Six Sigma is data driven, statistical and aims to improve cycle time while eliminating or reducing defects in manufacturing. It’s about using stats, data analysis and also project management techniques to improve the whole process.

The Six Sigma process is defined by an acronym: DMAIC. Define, Measure, Analyze, Improve and Control. First, you define the problem that you want to improve. Then, the team measures the process and analyzes it by using data analytics to get to the root of the problem. From there, it’s about creating improvements and fixes, and setting up controls to make sure it doesn’t happen again.

Six Sigma requires rigorous training to get the process right, so rigorous that practitioners need a certification in the process. The certifications are ranked with a belt system similar to martial arts, with white belts being familiar with the basic process, up to black belts who become masters of the process and are certified to take on complex problems and projects, and to train others in it.

Lean Six Sigma: Better together?

Should it really be Lean vs Six Sigma? Or rather Lean AND Six Sigma? Can these two powerful methods be used together? Yes indeed. In fact, they’ve joined to become one methodology in some circles: Lean Six Sigma, or LSS, which aims to cut defects and shorten lead times.

But, here’s the tricky part.

Ironically, Lean and Six Sigma can clash if not deployed correctly. Defects can be reduced by slowing processes down — reducing speed. On the other hand, you can increase the defect rate by speeding up processes.

Getting it right, striking that perfect balance is imperative. That’s why it requires training and certification in the techniques. At USCCG, Dr. Frank Esposto is our Lean Six Sigma Master Black Belt and Senior Director of Quality. He is also a certified LSS instructor.

Dr. Esposto states, “When we employ the Lean Six Sigma methodology to help our clients’ operations, we don’t simply come in and do it for them. We train clients in these techniques so they can employ them long after we leave.”

The training course Frank teaches is rigorous and hands-on. When participants complete the course, they are certified. Being certified in Lean Six Sigma is a highly sought-after skill.

To summarize, it is not Lean vs Six Sigma, but rather Lean Six Sigma – two complimentary methodologies that when balanced properly reduce operating costs, increase throughput, and achieve overall improvement to your bottom line.

Are you interested in learning more about how these powerful methodologies can work to optimize your processes? Give us a call today. In the meantime, read much more about LSS in our eBook: “Lean Six Sigma: Do You Really Know These Methodologies?”

Lean Six Sigma - Do You Really Know These Methodologies eBook

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How well do you know Lean? The concept is nothing new. Pioneered back in the day by Toyota… or by Henry Ford even earlier, depending on who you ask, Lean manufacturing is the art of maximizing customer value while minimizing waste. It’s about cutting costs, eliminating waste in both processes and products, and generally becoming as “lean and mean” as possible to reach optimal efficiency.

Another, newer term is often bandied about when talking about Lean: Six Sigma, a methodology designed to tackle defects in manufacturing and product/service development. Two sides of the same coin, while Lean looks at making processes more efficient and reducing process lead times, Six Sigma focuses on cutting down on defects. In fact, they’ve joined to become one methodology in some circles. Lean Six Sigma, or LSS, which aims to cut defects and shorten lead times. What is it? Are they stronger together? Could they clash? Who should use it? And who shouldn’t?

For answers to these questions, read USC Consulting Group’s eBook Lean Six Sigma: Do You Really Know These Methodologies? We’ll look deeper into Lean Six Sigma through the lens of Dr. Frank Esposto, USCCG’s Lean Six Sigma Master Black Belt and Senior Director of Quality, and a certified LSS instructor. You think you know Lean Six Sigma? Download the eBook below to find out.

Lean Six Sigma - Do You Really Know These Methodologies eBook

Dr. Esposto discusses Toyota’s classic Lean manufacturing model that identifies “seven wastes” and he recommends you expand your mind to add one more. Furthermore, he will advise you on the best strategies for LSS training, the key challenges you will face, and the factors that lead to successful LSS implementation in your operations.

Applying the Lean Six Sigma methodologies effectively in your processes is not a one-size-fits-all and may require help. Dr. Esposto elaborates on the tools, techniques, and methods to use and the benefits you will gain from it.

So, how well do you know Lean Six Sigma methodologies? A whole lot more once your read this eBook.

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