No, this isn’t advice to the
lovelorn. It’s the question we think you need to ask about
your processes. Based on our experience, you may be surprised
at the answer.
Coupled processes are analogous to a
train with each of the cars coupled together and being pulled
by a single source, the engine. Each car depends on the one in
front to pull it along. Decoupling is a disconnection that, if
intended, stops the train. If unintended, causes a train
wreck. In either case, a decoupling costs the railroad, and
the railroad’s customers, money.
To extend the train
analogy to your operation, the cars represent your processes.
If, as many of you profess, you’re lean and customer centric,
then the customer is the engine, “pulling” product and/or
service through your company on demand. Intentional decoupling
shows up as long lead times, buffer inventory, and/or end of
line inspection for quality. Unintentional decoupling causes
missed delivery dates, short shipments, expediting, late
penalties, and low productivity.
Decoupling can be
devious. Let’s look at some examples. Let’s say you’re a
supplier to an automotive OEM and they provide you orders with
a sequence of priority in which they want to receive them. You
ship your product, sometimes as much as 20-24 times a day, in
the same sequence they’ve requested. Sounds like your
processes are coupled with those of your customer, right.
Well, maybe and maybe not. If you load trucks bound for the
customer in the sequence they gave you with product you pulled
from finished goods inventory you’re decoupled.
Why?
Because you’ve built a buffer, finished goods inventory,
between your customer and your processes that costs you money.
Another example is when production schedules are determined by
30, 60, or 90 day projections but a weekly release for actual
production causes a mad scramble for parts, production time,
or manpower. It’s the same if a sub-assembly operation
produces at one rate and builds up product in batch while the
main assembly operation draws down on the build up. It might
look like line balancing but it is really decoupling. Again,
it costs you money.
The reasons we hear for decoupling
are varied: 1) unpredictable customer demands, 2) unreliable
suppliers, 3) unreliable equipment, 4) unreliable operators,
and 5) unreliable quality. As a result, just-in-case surfaces,
in the form of excessive inventory. The financial
justification often used is that the cost of missing a
shipment (shutdown penalties) exceeds the cost of the
just-in-case inventory. What some don’t realize is the cost of
just-in-case is higher than just the inventory. Additional
costs that come from just-in-case include lower productivity,
excessive floor space, higher scrap/rework, and higher
turnover.
Synchronicity is a word we use to stress the
importance of linked (a.k.a. coupled) processes throughout the
supply chain. Linkage is achieved when the work flowing
through all processes is sequenced exactly to customer
requirements in a synchronized flow. Inventory costs are
lower, obsolescence is virtually obsolete, scrap and rework
costs are diminished, space requirements are substantially
less, and productivity is often 15-20% higher. Importantly,
synchronized processes and sequenced production provide
maximum flexibility to successfully deal with the myriad of
issues that arise in daily operations. If your processes
aren’t synchronized and sequenced, the decoupling will cost
you money. If your suppliers’ processes aren’t synchronized
and sequenced with yours, it will cost you money. If your
processes aren’t synchronized and sequenced with your
customer’s, it will cost you money.
Don’t let your
justification for just-in-case become a rationalization that
costs you money or threatens your survival. You have two
choices to meet customer demand quickly: building inventory or
building flexibility. Remember, inventory costs you money.
Flexibility makes you money. The choice is
yours.
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