Factories prioritize value creation – the flow analysis from a factory determines the company’s ability to respond to its markets.
When you visit a factory, beyond the state-of-the-art machines, the impressive technologies, and the exemplary 5S (or not), try to understand how these flows are connected to the needs of the company and its customers.
A visit is quick – an hour or two – and you should quickly try to extract a few key elements from it.
When I visit a factory for the first time, I ask, if possible, to start at the end of the process, and work back upstream / to the raw materials.
We’re used to starting from the receipt of goods and following the processing stages, in the direction of the flow.
Starting with finished products, and the way they’re shipped to customers gives you a better understanding of your business model. This includes asking simple questions: do you manufacture to stock or to order?
Surprisingly, the answer to this question isn’t always clear – you’ll have to investigate if, as I heard recently, the answer is “we manufacture to order based on forecasts” … I’ve also heard “we manufacture to order, based on the orders placed by our distribution network”. Hmm.
By starting with finished products, we can ask questions about customer demand, the lead times they expect, load leveling options, and product variants to be delivered, and shed light on the upstream flow by giving it meaning – this flow has a purpose.
This approach will facilitate the identification of existing or relevant decoupling points to be inserted, differentiation stages, constraints in the flow – and the impact of these constraints (capacity, series changeover, campaign, sequencing, etc.) on the ability to meet customer requirements.
An industrial operating model is not there to run machines or keep operators busy efficiently. It’s there to respond to customer demand and generate profit in that process. The primary meaning of “Demand Driven” is this: driving a flow to meet a customer demand, efficiently.
If, as you work your way up the factory flow, you see work-in-progress that bears no relation to your understanding of the customer’s request, or if you notice production schemes that don’t seem to be in line with expected lead times or changeover frequencies, ask questions!
In each workshop, a few key questions:
-Are we early or late here? How do I see it?
-What are we going to make next? Why make this? Are we ready for this next production run? How do I see it?
If you have the opportunity, before you visit a plant, gather information – the visit will be brighter if you’ve been able to prepare data-based questions beforehand.
In my experience, two types of data are invaluable:
-Daily sales or demand histories for the company’s finished products. By analyzing them and running simulations, you’ll be able to get an early indication of the signal to which the plant needs to respond – and your questioning will be more incisive.
-Transaction histories on manufacturing steps, for analysis through process mining. You will then visit the workshop with flow diagrams and queuing reports in front of you, enabling you to immediately engage in a well-founded discussion with your contacts.
In any case, at the end of the visit, and while it’s still fresh in your mind, draw a macro diagram of the flows you’ve just been through, identifying the key points: constraints, stacks, and queues.
These few principles also apply beyond the factory floor. If you’re looking at an end-to-end supply chain assessment, however complex, start at the end – with demand – major constraints identification, and draw up the macro flows. This support will then enable you to federate the players involved to identify the target model definition.
