On-time Delivery Starts with Trust

On a recent trip to Dallas I had the chance to reflect on two different companies facing similar issues with poor on-time deliveries. One was an aerospace company and the other a consumer electronics company. Their production processes were very different. Both are fairly early in their Lean journey but have considerable Six Sigma resources. Both suffered from poor delivery performance to customers because of a lack of trust between internal customers and suppliers.
For the electronics company it was a case of sales not trusting production. This resulted in sales making changes on the floor daily, orders being placed so that salesmen could guarantee that production was holding capacity for their customers. Unfortunately this resulted in daily schedule changes. This cracked the bull whip all the way up the supply chain, causing material shortages and lost sales opportunity. This fed the mistrust of sales for production and the cycle continued.
The same problem had been happening in the inspection process at the aerospace company. Due to a past problem the customer had mandated 100% inspection off-line for certain critical components. The batch and queue nature of production at this shop meant that parts arrived in large quantities, and usually were needed right away by the next process. Again, the managers from the downstream process would reprioritize and negotiate to make sure their parts were inspected first. This created chaos in the inspection department and delays downstream, fueling the behavior of the managers.
In the case of the electronics company, the solution to this problem is still in the works. Production capacity will have to be increased through kaizen and production lead-times shortened through one-piece flow and quick changeovers so that sales can get what they want, when they want it, within reasonable parameters. Once there is a certain level of stability, Heijunka scheduling needs to be introduced to level the mix and volume and dampen the bullwhip effect on the supply chain.
In the case of the aerospace company who is further along in Lean, a kaizen in the shipping area created FIFO (First In First Out) lanes and made the status of all parts in the area visible. Carts of parts were moved through the lanes strictly in FIFO sequence. Because inspectors were not starting and stopping in response to constant rescheduling from managers, they were able to inspect more parts. Because the managers could see when their parts would leave the FIFO lanes, they could schedule their departments and did not meddle with the sequence.
We often say that Lean transformation is more about changing behaviors than changing things. Sometimes it is necessary to change how things are done and to create the basic conditions of stability and visibility before trust between the internal customer and supplier can be rebuilt. It should be the aim of every kaizen activity to identify the root causes of non-Lean behavior, stabilize processes, set standards, and make status visible so that there can be trust between internal customers once again.

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