From the Archives of a Common Sensei Volume 18: TOTAL COST MANAGEMENT and SUPPLY CHAIN ASSESSMENT


In this volume of our blog, we are presenting a document that was pulled from our early archives that illustrates (at a high level) “Total Cost Management” and “Total Supply Chain Assessment” leading to Supply Chain Improvement.

The first graphic entitled “Total Cost Management” provides a summary of the various actions in various assessment phases. These phases include Pre-Selection Data made up of product segmentation, gap analysis inputs, cost data, and competitive product teardown/analysis. This information feeds into various phases including Total Cost Model, Continuous Improvement Process, Total Supply Chain Value Workshop (incl. Product Design Changes/Logistics/Process Improvement/Administrative Kaizen), and an Action Plan (incl. cost drivers, sources, plan schedules). The Cost Agreements coming out of the Action Plan filtering led to Management Review and Commitment, which in turn inform and are informed by Key Metrics that support quality, cost, delivery, and customer considerations.

The second graphic entitled “Pre-Selection Data” provides a little more insight into the Pre-Selection phase elements. The discussion of Competitive Product Teardown/Analysis should not be minimized! Such an approach can and will provide valuable information regarding contributors to quality, cost, supply chain enhancements. Depending on which competitors you decide to analyze, you will also gain knowledge of valuable customer satisfaction drivers! An additional consideration: when we conducted competitive teardown and analysis at our Toyota company, we included the participation of every associate who participated in making or supplying the various components as we considered re-designs or new designs. These associates were able to help our engineers understand various machining and assembly advantages from the different designs. We held workshops with combined attendance of plant and management associates, and engineers to make the most of the multitude of recommendations.

To be clear, this approach to Total Cost Management is not only appropriate for manufacturing organizations, but it can also be readily adapted for call centers, bank processes, product design across business sectors, government supply chains and processes, healthcare businesses, etc. I have personally used this approach or an adaptation in nearly every sector. Hopefully you too will gain or help others benefit from our Total Cost Management Model example!

For More Information or help with your transformation effort, contact us at http://www.per-strat.com

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From the Archives of a Common Sensei Volume 15: Nemawashi


We often hear of the term Hoshin Kanri, which strives to get every employee pulling together and in the desired direction at the same time.  In this blog of From The Archives of a Common Sensei, we are attempting to help advance your understanding of how to: (1) Align the goals of the organization (strategy), with (2) plans of middle management (tactics), and the work performed by all the Associates (operations).

Attached we are including a real-life instructional document that has been used in a Toyota organization that provides guidance for the “planning process”. 

This guidance uses many of what we now call “Lean Management” thinking and is heavily dependent on utilization of consensus building (nemawashi), which means using one-on-one discussion with each member of a decision-making groupThis consensus building of those directly or indirectly affected is usually conducted prior to a formal meeting where the indication of support is officially made. In English, the term nemawashi is most often interpreted as “the rooting process”; properly preparing the soil prior to planting so the roots will grow deep and spread.

In the attached “real life” example from my archives, you will notice that there is a heavy reliance on the previously discussed PLAN-DO-CHECK-ACT (PDCA) cycles and associated thinking.  It is expected that by cyclically performing the principles of PDCA, and the activities resulting from PDCA, continuous improvement and strengthening of the organization will occur.  These activities are expected to be carried out by ALL Associates, not only staff!

The planning takes place starting with discussions between Managers and the President of the organization to formulate ideas regarding the overall organizational plan which is then discussed with the Executive Committee.  This back-and-forth discussion is both on an individual basis (nemawashi) and collectively (consensus).  The same thinking and discussions take place in similar fashion at and between every level of the organization to formulate plans to support the plans and goals at their respective level.  YES, this takes time, but the resulting aligned plans lead to increased moral and productivity, which results in attainment of increased results concerning safety, quality, cost, and time.  While reading the attached planning approach, please note that it is BOTH top down and bottom-up planning and bottom-up reporting.  It is also important to realize that when results reporting is not as planned, the expectation is for the Manager and Director to join with the Associates to determine how to resolve any issues.

For More Information or help with your transformation effort, contact us at http://www.per-strat.com