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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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