On Time, In Full: Achieving Perfect Delivery with Lean Thinking in Purchasing, Supply Chain, and Production Planning PDF by Timothy McLean

Contents

Introduction
The most fundamental requirement for a manufacturing or distribution business is to deliver to customers what they want, in the quantity they want, when and where they want it. It doesn’ t matter how good your product is, how much the customer likes your salesperson, or how slick your marketing campaign is. If your customers can’ t get what they want when they want it, they will get it elsewhere and your business is in serious trouble.

I spend most of my days out in factories and warehouses and find that the simple problem of delivering on time, in full every day remains a major challenge for a huge proportion of businesses. This even happens in many cases where the company has the most advanced enterprise resource planning* software. The costs to business and the economy are mind boggling, with billions spent on expediting, overtime, breaking production schedules, scrapping excess stock, last-minute replenishment, empty shelves, and lost sales.

It would seem straightforward enough. You take an order, you pick the goods, and you ship them to the customer. For very small businesses, it is often as simple as that. However, for most businesses the reality is that they handle dozens or even hundreds of orders per day and hundreds or even thousands of transactions and material movements every day to meet those orders.

Why Most Experts Don’ t “ Get It”
The difficulty for manufacturers and distributors is that most experts are focused on the solution rather than the problem. The area of supply chain management theory has become highly contested, with adherents to the different solutions believing theirs to be the “ one true way” to the exclusion of all others. Whether the proposed solution is the traditional supply chain management approach, with heavy reliance on forecasts, software, and complex business rules; the Lean approach; or the theory of constraints, most of the books I read will promote this one solution to the exclusion of all others. For example, many Lean purists will argue that you should never use a forecast for replenishment and instead use only Kanban or just-in-time supply. This is a great system, but what if your supplier is on the other side of the world and your lead time is measured in months? On the other hand, the supply chain management gurus mock “ low-tech” solutions like Kanban cards and insist building to a forecast is the only sensible and modern way to manage a supply chain. No wonder so many operations and planning professionals are confused.

My personal view is a little different. Every supply chain is unique, and while many of the symptoms of poor delivery are common (such as excessive inventory combined with frequent stock shortages), the root causes and the solution will vary from business to business. The aim of this book is to help you understand what is going wrong and select the best approach to solve the problems in your business. That solution may involve a combination of enterprise resource planning, Lean, and practical business common sense. It may borrow from the American Production Inventory Control Society* playbook or the Lean approach, it really doesn’ t matter. What matters is that it enables your business to deliver the right products to your customers at the right time and in the right quantity.