Most production companies acknowledge the importance of batch sizes. They realize that batch sizes directly contribute to inventory levels, costs, working capital and even capacity. A one-size-fits-all solution, for instance to give every item a batch size of a month, is without a doubt not optimal. There is room for optimization. There are two...
Back in the early nineties, Steve Jobs already realized that a well-designed, effective supply chain was paramount to Apple’s success. Hence he actively participated in managing it. Last year he was succeeded by the man who had been responsible for the supply chain for years. Apple’s story shows that supply chains need not merely be a source of...
Recently I was invited by a production company in the south of The Netherlands. The reason was chronic lack of grip on the production process. This was far from a new problem. However, increasing pressure on cost and reliability, forced the plant manager to take action soon. All efforts to date, including attempts to introduce Lean and Six...
It’s two minutes to twelve, and we continue navel gazing!” said one of the participants during the S&OP mini-seminar recently held at ArlaFoods in Nijkerk. Just before Lourens Schouwink, CFO Samsung Benelux, had talked about their ambitions and approach. Leaving part of his audience behind in wonder and despair. Samsung continues on the...
Recently I was fascinated by the splendid documentary about Hema, a highly successful Dutch retailer, in which CEO Ronald van Zetten was closely followed during a full year. It shows a great example of leadership, this time with supply chain management at the centre of attention. Fast fashion to be exact. The documentary starts with an...
At the time Mr Taiichi Ohno, architect of the Toyota Production System, stated we should no longer make large amounts of stock and then try to sell it (push), but need to be aware of the market (pull), this meant a turnaround in our thinking. Nowadays, “push” and “pull” are two of the most used terms in SCM. So far, so good. Nevertheless, what...
Lean is still misunderstood by many. While large groups use Lean largely as a toolbox, others will consider it as a change philosophy. Both views unfortunately do not do justice to the Lean concept. The group that supports Lean as a change philosophy justly refers to the unexpected forces that it can release on the shop floor. Now I will be the...
Without doubt, S&OP has been one of the most popular management buzzwords of the past decade. Gurus, consultants, blog writers and recently also software suppliers have claimed the topic. S&OP is hot and everybody wants to get a piece of the cake. Rightly so, because S&OP is a powerful concept with huge potential. Potential, that more often than...
‘Logistics is logical thinking’ is a statement that I often hear. Tempted to agree, I start to wonder that if this is true, how can it be that I am so often confronted with very different solutions to very similar problems. Could it be that logistics is not as logical as we often seem to think? In case of increasing lead times, one logistics...
When asking a financial director what he thinks the cost of inventory is, he will undoubtedly give an answer like the Return on Capital Employed (ROCE) or the Weighted Average Cost of Capital (WACC). When asking a logistician the same question, his answer will be the sum of interest, storage space and risk. Unfortunately both are in the wrong,...