How data will transform business (video)

Earlier, I wrote about warehouses. Today, I'll show you a TED Talk in which Philip Evans of BCG talks about data in supply chains.

Enjoy!

What happens inside those massive warehouses? (video)

It's a long time since I posted here. Well, I've been busy. Who isn't these days? ;-) Among other things, I've been teaching and developing a course in Logistics. So, why not cover some topics on Supply Chain Management on this blog?

Are you shopping on the web? Do you know, how these purchases  are delivered at home? If not, watch this TED Talk of Mick Mountz of a company called Kiva which is now part of Amazon.

Enjoy!

Visit to Scania

Picture: Scania

Last week, I visited a Scania truck assembly plant in Zwolle (The Netherlands). Although I knew it was nearby, I hadn't visited this factory before. As you maybe know, I've worked at several logistic service providers. Al of them owned Scania's.

You may or may not know that Scania is called the King of the road. My last employer in logistics, transported and stored King peppermint. He owned two trailers with a long role of King peppermint on each side along with the text King of the road. Of course these trailers were towed by Scania's.

Beforehand I knew Scania's are designed modular. They built all kind of heavy trucks out of as less as possible components. In all cabs for example, the same windshield is used. Nearly every chassis can be combined with every motor and cabine. This gives the customer a huge number of possible configurations to buy and reduces costs for the manufacturer and dealers.

During the visit, I learned about Scania's lean way of working. Each truck is made by several teams working along the assembly line. Each team is responsible for several activities. They decide themselves how perform these tasks. The management assists the employees to get their tasks done. Incremental improvements are made constantly. Do you notice the difference with the management style of many other companies?

These efforts result in a smooth operation. I saw people working concentrated but no one was in a hurry let alone in panic. We were told the plant has a high presence percentage, i.e. low absence through illness and many longtime employments. Well, that looks very healthy.

I really enjoyed the visit. It was well organised and we were given opportunity to ask any questions which were answered honestly. The plant is orderly and clean. And above all, I learned about their lean way of working!

Cheaper by the dozen (book review)

Cheaper by the Dozen
Frank B. Gilbreth jr. & Ernestine Gilbreth Carey

Harpertorch, 1948

Recently I reviewed Mind performance hacks and suggested how to learn Morse code. In that post, I mentioned Cheaper by the Dozen by Frank and Ernestine Gilbreth which I'll review now.

This book is about Frank Gilbreth sr. and his family. He and his wife Lillian were blessed with twelve children. Gilbreth was an early scientific management advocate and efficiency expert. He started his career as a bricklayer. Within a year, he designed a rack which made him the fastest of his colleaguaes. Later on, he became a building contractor. He was always looking for opportunities to turn down unnecessary movements. His personnel worked so efficient that after building a factory, many companies hired him to optimise their business processes.

Gilbreth often took along his children to his office and even to his customers. He applied his efficiency principles also at home turning his family life in sort of a laboratory. He filmed his descendants washing the dishes to optimise this activity. He also taught the kids to wash themselves in one (!) move and to tighten the buttons of their clothes from below to the top which is quicker then the other way around. Every child had to do some odd tasks which should be administered on labour cards. There were committees for services, purchasing and utilisation in which the children were responsible for some aspects of the household.

When working for Remington, Gilbreth brought home a white type writer. He coloured the fingers of the eldest kids and let them exercise on a dummy keyboard. After some practise, he allowed them to the machine. As the keys were plain, the kids were on their own. On every mistake, he 'hit' the young ones with a pencil on their head. He organised an inhouse competition and would have taken the winner to a national contest if mother hadn't objected. However, he filmed the kids - conscientiously avoiding the pencil - and soon they appeared  in cinema journals.

Cheaper by the Dozen contains many examples like these mentioned above. It's humorous and easy to read. It's also a business book with a wink, containing nice insights.

Later on Frank and Ernestine Gilbreth - two of the children - wrote also Belles on Their Toes in which they describe their family live after their father had passed away. There are also several movies about this family. I like the eldest.

Happy reading!

The Goal (book review)

The Goal: A Process of Ongoing Improvement
Eliyahu M. Goldratt
The North River Press, 1984

My first (public) book review! As you'll understand, I'm a bit nervous. ;-) But let's move on. Why The Goal by Eliyahu Goldratt? A business novel of almost three decennia ago? Because I think it's an important book. First of all to myself. I received it when I started my APICS course, years ago. It motivated me to complete the course which was probably the reason for giving it us. It also introduced me to the world of manufacturing. Secondly, I believe it's an import book because Goldratt learns us to focus on throughput in stead of cost reduction, efficiency, suboptimization or whatever.

The book is about Alex Rogo, a man in trouble, both in business and in relationship. Since six months, he's manager of a poor performing production plant. Everything is late in there. One day, Alex finds his boss telling him to close the plant unless they increase the results dramaticly within three months. Alex and his team start analyzing the situation they're in.

At an airport, Alex meets and old study mate called Jonah who is now a consultant. Alex talks proudly of his work, the efficiencies of robots and the cost decreases he has gained. Jonah asks if the net results are improved and what the goal (!) of the business is. Alex has to admit that overall performance is bad. Before answering all his questions, Jonah has to catch his plane.

During a hike with boy Scouts, including his son Dave, Alex makes an important discovery. On a tight path, the boys are walking one by one. The distance between them diverges as they're walking at different speeds. Alex directs the fastest boy in front of the troop and the slowest, a thick boy with a heavy backpack called Herbie, in the rear. Now the Scouts are not longer slowing down each other. However the lenght of the group extends and the troop will not arrive any sooner. Therefore Alex puts Herbie in front and the fast boys in the rear. As the boys start complaining about Herbie's speed, Alex encourages them to help Herbie speeding up. The boys lighten Herbie's backpack by taking over items to theirs. As a result, the speed of the whole troop increases and they arrive on their camp site in time.

Back at work, Alex discovers there is 'a Herbie' in his plant too. A machine called the NCX-10 seems to be the bottleneck in their production process. They increase the ouput of this workstation by allocating operators permantly to the machine so it will produce continuously. They also add a safety buffer in front of the machine so production will not be interrupted by short of supplies. They also manage to add an old machine similar to the NCX-10. However it produces less then the newer one, it adds up production capacity of the whole plant. By taking these measures, Alex increases the throughput of the plant and the net results according to his instructions. As a reward, Alex is promoted to his boss' job. By applying the new acquired principles, he also tries to save his marriage. Will he succeed here too?

In his book, Goldratt explains his Theory of Contraints (TOC). All processes, not only those in production plants, have a bottleneck. In Alex' plant it's the NCX-10. By resolving the constraint, the throughput will increase. As a result there'll be another bottleneck as there's always one. Then the process of finding and resolving the new bottleneck starts again. Goldratt learns his readers to focus on throughput because this generates revenues. He does so in a captivating and entertaining way. This novel is easy to read.

Back in 1984 Goldratt caused a paradigm shift from cost accounting, which he calls detailed bullsh*t, to throughput accounting. He caught both admiration and aversion as he was not very subtle about his ideas and opinion about management.

By reading the book, I understood how to examine business processes. Therefore I recommend The Goal. Did you read this book? What's your opinion about it?

For those interested: I also reviewed  Critical chain. In this book Goldratt applies the TOC on project management.

Happy reading!