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Many manufacturers find managing the logistics of order and product flow extremely difficult. It seems that every day is spent chasing production bottlenecks and trying to solve them. The problem of the “wandering bottleneck” is particularly troublesome, since it is so difficult for production managers to identify the root cause of the problem.
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Organizational improvement programs have raised the requirements for winning the competitive race. In the same way that TQM and SPC changed the meaning of acceptable product quality, Lean Manufacturing tools and the Theory of Constraints (ToC) are making operations excellence a necessary condition for marketplace participation.
To win today, you need perfect execution. Perfect Execution means meeting the customer's expectation for delivery reliability 100% of the time. It means keeping your promises.
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Does supply chain
optimization matter? I’ve spent the better
part of my professional life preaching that it’s
process that matters while software is immaterial
(or at least secondary). Which is it? Process or
software? Software suppliers make very little
mention of business process. Management consultants
downplay the role of technology in business
improvement.
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In
early January, Computerworld magazine
reported on a study that concluded that few
companies achieved any return on their supply chain
project investment. More than 850 companies were
surveyed, including those that had highly publicized
supply chain failures. One of the authors of the
study, Vinod Singhal, said, “Much of the evidence
[for payoff] is anecdotal.” The article further
quotes Robert Austin of Harvard University, saying,
“Only a few lucky companies can prove that they
achieved any real payoff from their SCM (supply
chain management) efforts.”
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Could it be that the
most prevalent measure of manufacturing
effectiveness itself prevents the manufacturing
organization from improving? Who ever heard of such
a thing? The measurement of performance blocks the
system from improving performance? That it is
exactly what is happening in plants all over the
world.
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I have been
implementing ToC in organizations ranging in size
from $1,000,000 to $1,000,000,000 for 18 years.
Real world experience has taught me there are four
core elements in a successful implementation:
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