The 2:00 Minute Warning

Last week I had the opportunity to travel to Japan with my fellow members of the Young President’s Organization (YPO) Manufacturing Excellence Network.

Our group explored places like Tokyo and Kyoto, where we saw in practice how Japanese companies are using lean principles to improve their operations, serve their customers more effectively, and become more profitable.

During this trip I had some observations that I shared with fellow YPO members as well as Japanese executives.

Observation #1: Your ability to implement lean principles is limited by the strength of your supply chain.

If you don’t have a good supply chain that’s tracking key metrics in an accurate way, that’s a problem. Practically speaking, a lot of companies don’t have the kind of supply chain they need to take advantage of all the power offered by implementing lean principles.

That raises the question: Is your supply chain potentially an “Achilles’ Heel” for your company? When an organization is dealing with an Achilles' heel it means that they have an area of weakness that can make the company vulnerable or lead to issues despite having overall strength. If that's where your company's supply chain is at, don't let it be where you stay.

Observation #2: Transparency is key.

The companies we met with in Japan emphasized good communication throughout the organization that includes transparency about what’s happening not just on the production floor but also within the supply chain area.

As a refresher, the five principles of lean can help to build this communication. These principles are:

1. Defining Value
2. Mapping the Value Stream
3. Creating Flow
4. Using a Pull System
5. Pursuing Perfection

How good is your company at bringing people from multiple disciplines – sales, accounting, finance, purchasing, IT and other departments – together to discuss how the supply chain is impacting areas within that person’s sphere of responsibility?

Years ago, we addressed this issue and the need for better communication in our Breaking Down the Silos webinar series that's still available on demand.

Observation #3: Let's be honest...

If you really want to get better at supply chain management, be honest about what’s really happening. A lot of companies “talk” about wanting to have stronger and better supply chains, but truth be told, actions speak louder than words. For too many companies, investing in and building robust supply chain capabilities is not a high priority issue; these companies are willing to live with what they have.

Having regular communication in place is necessary but not sufficient. As one executive explained, if your company wants to have a strong supply chain, there needs to be an understanding of where the company is at, how it needs to get better, and the investment it will take to make all that happen. When I heard that, it was music to my ears because here at TranzAct we are all about helping people get better in their logistics and supply chain area.

We can be the catalyst that brings people together at a company for important discussions. For a long time we’ve been highlighting how tools such as the Rapid Assessment or other analyses we perform we can help companies understand:

A. Where they’re at
B. Where they could be
C. How a holistic group effort can help realize significant improvements in the supply chain

These improvements could pave the way for the lean principles or even put them in place. If you’re interested in learning more about these tools and assessments, simply give me a call, send me an email, or let’s get together for a one-on-one conversation. It doesn’t cost a dime, and an investment of 30 minutes can lead to getting some great results.

BY MIKE REGAN, CO-FOUNDER OF TRANZACT

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