I received pair of questions about lean logistics over the past few weeks that prompted this article. The questions were “What is the milk run method?” and “What is the role of the water spider?” 

The milk run

The milk run is an example of time-fixed, quantity-variable replenishment of materials. This means that delivery is based on a timed schedule regardless of actual usage. The milk man comes every morning and replaces empty bottles with full bottles. The timing in this case is fixed at daily, but the quantity may vary; if no empty bottles are returned, there will be no milk bottles dropped off. The time-fixed milk run is used when distances between processes make frequent material delivery impractical.

The opposite method—quantity-fixed, time-variable—works best when conveyance distances are short and processes are clearly connected by pull (not connected by flow). The reason for quantity-fixed conveyance may also be due to large lot size production upstream caused by changeovers or mixed models.

In July of 2008, I stepped out of an engineering leadership role and into an operational role. The transition was exciting and overwhelming. While I had been in and around manufacturing for a little more than a decade, I had never operated as a part of supply chain or production management. The closest I had really been to this side of the business was as a program manager, but even that role was predominantly engineering-based. My initial marching orders were simple: Turn the business around. For the month of July, our on-time delivery (OTD) was 64 percent, our scrap per earned hour (total dollars scrapped divided by total hours put to stock or earned hours) was $15, and our quality failures were hovering around 40,000 parts per million (PPM). While margin was not terrible, all other indicators were. If you did not catch the date above—July 2008—we were starting this initiative just before the great global recession.

Today’s challenges in the turbine industry to meet the ever growing requirement to manufacture parts faster, on schedule, and at reduced costs, have made it apparent to industry experts that traditional inspection methods are too slow and inadequate to achieve the required results. With the increasing complexity of air foils, nozzles, and impellers, simple methods of inspection are no longer acceptable. To overcome these challenges, casting and forging companies are now turning to digital inspection using automation. Until recently the accuracy demand within the power generation industry precluded the use of such data collection devices. Now, with the release of the ATOS II and ATOS III measurement systems, both the accuracy and automation needs have been addressed.

Ok, men. Leave the room.

Today, I want to discuss fulfilling customer requirements as they relate to one particular product: The bra. For those men who’ve not heeded the warning to leave, you may, by the end of this article have discovered, one of the perennial reasons for your spouse’s grumpiness. Quite frankly, shopping for and procuring a comfortable and functional bra is a feat requiring the specificity of an engineer, the undaunted persistence of a bloodhound, the time of an idle trust fund brat, and the patience of a saint. And consider that this is a multibillion dollar industry.

I’d like to take a look at the processes related to the production of this undergarment in terms of the requirements of ISO 9001 and pose questions relative to the level of conformance vis-à-vis the design and manufacture of the product and any analysis of customer satisfaction.

Let’s take the last one first: Customer satisfaction. ISO 9001 has multiple requirements relating to the need to measure and analyze customer satisfaction.

5.2 Customer focus states: “Top management shall ensure that customer requirements are determined and are met with the aim of enhancing customer satisfaction.”

How a country copes with a brutal economy depends in no small part on how well its people maintain their confidence in their own personal financial future. Will consumers be confident enough to spend? Will investors be confident enough to buy? Will employers be confident enough to hire?

Managers might also need to consider ways to bolster employee optimism, particularly if their company is forced to lay off workers and cut pay. That’s because, as Fred Luthans and other management scholars have found, confidence and hope tend to make workers more productive.

As economic conditions worsened during 2008, U.S. workers’ confidence in their economic futures also declined, according to Gallup (see figure 1). In January 2008, 60 percent of employees felt that their standard of living was improving. By October, when the extent of the financial meltdown was becoming clear, that figure had dropped to 39 percent; in October and November 2008, employed Americans were more likely to say their standard of living was getting worse than to say it was getting better.

After years of focusing on the pharmaceutical industry and establishing better controls for reviewing the safety and efficacy of pharmaceutical products prior to approval, the Food and Drug Administration (FDA) is now directing its attention to the medical device industry.

On Feb. 18, the FDA held a day-long meeting to address the 510(k) system, which it has used for more than three decades to review and clear medical devices to be sold in the United States. The 510(k) refers to the section of the Federal Food, Drug and Cosmetic Act that requires manufacturers of medical devices to notify the FDA of their intent to market a medical device at least 90 days in advance. Also known as premarket notification, the 510(k) process is intended to be applied to devices that are similar to products currently on the market.

Therein lies the crux of the issue—as ever-more sophisticated and complicated medical devices are being created, more and more “high risk” devices (those that are life-sustaining and/or implanted in the body) are slipping through the cracks and being approved under the 510(k) process, even though they may share only a trivial similarity with a device already being sold.

A management system is the framework of processes and procedures used to ensure that an organization can fulfill all tasks required to achieve its objectives. A lean management system consists of the discipline, daily practices, and tools that you need to establish and maintain a persistent, intensive focus on process. It is this process focus that sustains and extends lean implementations.

Peter M. Senge, is an influential systems thinker from Massachusetts Institute of Technology. He is the author of the book The Fifth Discipline: The Art & Practice of the Learning Organization published in 1990 and a revised edition published by Broadway Business in 2006. In Chapter 4, “The Laws of the Fifth Discipline,” Senge suggests 11 systems laws that help us understand systems better. The laws are:

The following words of an anonymous poet as he (or she) immortalized the lessons from Deming’s funnel experiment.

“Tamper, tamper is the game, try to make all the same. Squeak and tweak it every day, off we go to the Milky Way.” 

—Anonymous 

I offer a corollary that may help understand the underlying problem:

 
“We love to tamper with our processes. We cannot help it. We are hard-wired to tamper with our processes!”

For many years, I have examined in-house and customer-generated specifications. Often, I have seen something curious called “action limits.” Action limits always fall somewhere between the target value and upper and lower specification limits.

The following is an example:  

A mechanical engineering firm was contracted to install new cooling equipment in a municipal ice rink’s mechanical room. The challenge was to design the equipment installation without tearing out the old equipment first, and to install some elements and piping that housed the refrigerant around the current equipment configuration to limit downtime of the facility when the cooling unit was actually disconnected.

The challenge

As an incentive, the municipality offered the engineering firm a bonus for every day they finished ahead of  schedule, or a penalty for every day the rink was out of commission past the projected timeline.

“Our corporate mission is to deliver the ‘Best Value in Energy and Related Services,’” according to a large Midwestern electric and gas utility company. This is a mission statement, which after a minor modification (just change the industry), could be posted on any boardroom wall and inserted into any number of CEO speeches. But this company actually put its mission statement into practice and reaped the rewards by becoming a superior value provider. Six Sigma marketing was the tool the company used.

Six Sigma marketing is a fact-based, disciplined approach for growing market share and top line revenues in targeted product/markets by providing superior value. It uses a modified define, measure, analyze, improve, control (DMAIC) process, similar to the one employed by traditional Six Sigma, to focus on people, products, and processes to enhance or improve value.

Define

The company began by focusing on the key markets or segments that it was serving and the products that these segments use. The intersection of a product and market is the competitive arena in which organizations compete for revenues and market share.

This utility served a number of different markets with electricity and gas: