Be Succinct

FreeImages.com/sanja gjenero

I recently saw a blog post that discussed taking notes electronically, on an iPad, rather than on paper, in order to reduce handling and administration. I tried that approach a few years ago, but I’ve now found that a simple 3 by 5 note card is even more effective for several reasons.

First, I walk around manufacturing and distribution facilities a lot, and often see things that I want to remember. Carry an electronic note taking platform and trying to actually take the notes can be problematic, but writing down a brief memory-jogger type of note on the card allows me to act on the observation when I’m ready to deal with it.

Second, I tend to restrict my note taking to only those points that drive objectives and change. Even in my interviews with executives during my projects, instead of trying to capture every word, I write down only those points that are highly relevant to the issue at hand. I find now that I’m much more efficient, and more importantly, I remain in the moment and actually hear those few important points that can lead to major improvement.

Stay in the moment, focus on objectives and key points, and only write down those things that really drive change.

© 2019 – Rick Pay – Al Rights Reserved

It Doesn’t Work If You Don’t Do It

FreeImages.com photo by Jennifer Marr

Recently I was working a project for a client and I checked several references I’ve used over the years for manufacturing and distribution improvements. Four of the books I often refer to are:

These books guided many of the World Class transformations I worked on in the mid-1990s and beyond. They’re 25 years old (or more)!

The interesting thing is that many companies still aren’t doing what these books (and others) suggest. The ideas in them are extremely effective and produce extraordinary results, so why aren’t more companies using them?

  1. You can’t learn things by simply reading a book – you need guides to help you along the way and experience from trying things with the resulting mistakes/learning and successes. Would you want to read a book on how to ski and then go hit the black diamond slopes?
  2. It takes intentionality – you have to have a strategy and then execute.
  3. It takes leadership – What all of my successful clients have in common is an upper-middle level manager/champion who is driven to accomplish extraordinary things.

The foundational ideas of process and productivity improvement are immutable, but they only work if you use them.

© 2019 – Rick Pay – All Rights Reserved

3D Printing in Wholesale Distribution?

3D printing is rapidly changing the manufacturing landscape. Companies are using it not only to speed up new product development by allowing engineers to print prototype parts on demand, but also for lower volume production. The technology is moving rapidly in both plastic and metal applications.

I wonder if 3D printing might be a disruptive technology for wholesale distribution as well. Perhaps it’s the ultimate in Just-In-Time fulfillment for distributors. They could have printers right in the warehouse and when they get an order for a lower volume part, just print and ship. Inventory would be low or perhaps at zero stocking levels. As part specifications change, distributors could update the program and not worry about obsolete parts.

Going one step further, what if wholesale distributors or manufacturers provided 3D printing as a service directly at the customer location. They could lease the machines, keep them programmed and maintained, and provide the raw materials as needed on a Vendor Managed Inventory basis. This reduces the inventory in the total supply chain, provides the shortest possible materials lead-time and is a win/win for customers and suppliers.

Developing a supply chain framework using 3D printing could transform your business model. Using disruptive thinking is key to accelerating profit and growth. Are you considering disruptive ideas?

© 2015 – Rick Pay – All Rights Reserved

To Automate, or Not To Automate…

According to an article in Industry Week, The Boston Consulting Group estimates that use of robots will increase by 10% a year in the top industrialized nations. Why? Labor costs. A typical robot costs $4 per hour while a skilled worker runs $24 per hour.

While using robots has advantages such as highly productive repeatable work, there are several disadvantages. First and foremost, any piece of equipment can quickly become the bottleneck. Many companies use automation to increase productivity before removing waste from processes, when in fact the process they’re automating shouldn’t be done at all.

Once a process is automated, it becomes economically and emotionally difficult to remove the automation as part of a waste reduction effort. Companies should always follow this order when trying to reduce waste – eliminate, simplify, automate. In other words, processes should be eliminated or improved first.

The second major disadvantage is eliminating jobs. Most robots are installed to cut labor costs and reduce head count. While a robot makes perfect sense for a repeatable process, there’s nothing more flexible than a human being when it comes to process improvement. If products are new, processes are being improved and supply chains are changing, it’s best to hold off on automation until the process stabilizes and is repeatable.

In today’s political climate, there’s a push to increase the minimum wage. While there may be some social benefit from doing that, increasing the minimum wage has the unintended consequence of encouraging automation that takes away jobs and may be premature within the organization’s processes.

If you’d like to develop a strong strategy for automation in your manufacturing or distribution company, call me to explore the possibilities before you leap.

© 2015 – Rick Pay – All Rights Reserved.

Win the Fight Against Overstocks and Surpluses

I wanted to share a new article in tED, the Electrical Distributor Magazine. Author Bridget McCrea interviewed me about getting rid of excess and obsolete inventory (and how distributors can prevent it from building up in the first place) and quoted me in her article. There are some new ideas in this piece: for example, have you ever sold your obsolete inventory online?

I hope you enjoy the article, and as always, please feel free to share it with friends and colleagues.

© 2013 Rick Pay – All Rights Reserved.

Supply Risk – Managing for Confidence

There have been a number of recent issues that have increased attention to supply chain risk.  The volcano in Iceland, the riots in Greece, and the political unrest in Thailand all have had significant potential negative impact on supply chains.  The more typical issues of buildings burning down, labor strikes and weather all are cause for concern in maintaining a free flow of materials from your suppliers.  So, what are the vital things to do to help prepare for such situations?

First, identify your critical suppliers.  These may certainly be the ones where you spend most of your supply dollar, but they may also be suppliers that provide critical parts, parts that are hard to find, or parts where the supplier has some Intellectual Property interest.  Normally, this may be 10 to 25 suppliers.

Second, meet with the suppliers to explore what their risk management plan is.  Explore how they plan to maintain or restore your supply chain.

Third, review it periodically to be sure it stays updated.  Regular meetings should occur with key suppliers anyway, and part of the agenda should be review of the risk management program.

Managing supply risk is a critical yet often overlooked part of strong supply chain management.

© 2010 – Rick Pay – All Rights Reserved

How Do You Start a Lean Journey? Paint the Lunchroom!

When many companies begin a Lean journey, they wrestle with where to start. Some will begin with training, trying to help employees understand the basics of Lean. Others start with 5S (work place organization) because it is fairly easy to do and demonstrates visible results. Still others will establish new policies such as no lay-offs (due to the Lean process).

I suggest you start by painting the lunchroom! What has this got to do with Lean? Actually, several things – first, it shows you are really serious about changing the environment of the company to one of quality. Second it shows you really care about the environment in which the employees work. How can you expect them to go the extra mile to produce Lean processes and then allow them to eat in a dump? Painting the lunchroom says 1) we want quality, 2) we support you and care about your work place, 3) we are serious about culture change. You could also get new microwave ovens and a refrigerator! If your lunchroom is already in good shape, find something else that will make a statement to the employees.

The first critical step for a Lean Journey is to convince yourself and the employees that things are going to be different; that the culture is going to change. A great way to demonstrate that is to paint the lunchroom!

To See, First You Must Look

I watched Sherlock Holmes recently. I noted that he had an unbelievable ability to see details that helped lead him to the solution of the crimes. That ability to see is vital for process and productivity improvement. Seeing waste is the first step to eliminating it, and believe it or not, that is one of the weakest capabilities I find in many operations environments. People get so focused on the work at hand, that they don’t see the waste that has developed over time. It is like the infamous boiled frog that did not feel the heat coming up because it was so slow. Unfortunately, the waste that develops over time can be so great that it eventually will pull the company down either through poor cost/cash flow management or through service/quality failures.

Take the time to see. Go stand in the middle of the operations, where the action is, and look for the waste. You may not notice immediately, but soon it comes in to focus. You may find low hanging fruit, or so much of it that it might as well be laying on the ground, waiting to simply be picked up.

© 2010 – Rick Pay – All Rights Reserved

Know Parkinson’s Law to Reduce Waste

Parkinson’s Law – work expands so as to fill the time available for its completion, first appeared in 1955 in an article in The Economist. This law applies to almost every manufacturing and distribution company I have toured. If times are slow, people seem to be working just as hard as if times are busy. They can be masters at this to help save their jobs.

I have also seen the law apply to inventory. Just the other day I was touring a plant and there were gas bottles in a rack. The rack was filled by the supplier and the key word is filled. The rack was big enough to hold about 15 bottles, yet the usage was about one per week. Thus, when filled, there was 15 weeks’ worth of bottles. The supplier visited the plant weekly to resupply various items. Why should the company buy so much when two, maybe three would do? Clearly, being careful to size storage containers correctly can contribute greatly to inventory reduction and matching of expense to activity.

Watching for Parkinson’s Law in any company should help reduce waste and increase profitability.

© 2010 – Rick Pay – All Rights Reserved

Welcome to Operations Payoff

I am beginning this blog as a means to share ideas on the strategy and tactics related to Operations and Supply Chain in manufacturing and distribution environments.  I plan to post two to three times a week on issues I see as I deal with clients and others.  The world of operations and supply chain is exciting yet complicated, and strong leadership, people and processes are all critical for success.  Please join me as we explore how to improve.