Lean

Consumption Rate, Replenishment Time, SWIP and Why Glaciers Need Love

Avatar photo By Jon Miller Updated on June 20th, 2023

Over the past week, the greater Seattle area was met with the largest snowfall in a decade or two. Recently I was in New York City, where the season’s supply of snow had dropped last October, with barely a blizzard since. Back in November during a train ride through the Alps courtesy of an unexplained Swiss Air cancellation, I saw unseasonably snow-free peaks. Even if you question the science behind climate change and the link between higher atmospheric carbon and increased temperatures, anyone with a basic understanding of lean thinking should be alarmed by the evidence of melting glaciers. This concept aligns with the principle of maintaining logically sized levels of stock or standard work in process.

Understanding Demand and Supply: Parallels from the Water Cycle and Financial Crises

First, a review of the basics of consumption rate, replenishment time, standard work in process (SWIP), and what this means for delivery to the customer. Simply put, if our replenishment time is longer than and asynchronous with the consumption rate of our customers, we need a SWIP reservoir that allows us to build up and draw down stock. This requires that we have the throughput capacity to get ahead of demand in the first place, i.e. by producing while customers sleep. For a detailed explanation of what this means for a complex manufacturing process, please read the following article: How To Calculate Standard Work in Process (SWIP) Quantity.

The water cycle and a supply chain, balanced with customer consumption through standard work in process, are similar concepts. Indeed, the recent crash of the global financial system, particularly the US housing market, can be likened to overproduction (of houses) and shortage of raw materials (cash), fueled by false demand (housing bubble). Nature maintains balance without greed or unnecessary complexity. We should adopt the same principles in systems we build or influence.

Unmasking the Water Shortage Threat: Glacier SWIPs in Focus

Wondering about the water cycle, melting glaciers, and unusual precipitation, I looked into what some are calling “peak water“. Although we won’t run out of water in the same way that we can burn up all of the petroleum that we extract from the earth, we may run out of water we can use faster than we think. Research by Russian hydrologist Igor Alexander Shiklomanov provides insight into the distribution of the 1.34 billion cubic kilometers of water on Earth:

  • 96.5% of water is salty ocean
  • >1% of water as soil moisture or inaccessible groundwater
  • 1.75% as glacial ice
  • <1% of water is accessible for human use

While one might think “<1% of 1.34 billion cubic kilometers is more water than we’ll ever need in our lifetime!” the truth is more sobering. Less than 0.008% of the freshwater is readily accessible in the form of our lakes, rivers, dams, and rain. And not even all of that is fit for human consumption without treatment.

What about the nearly 2% of water in glaciers? Why not tap that source? 

This is in fact what the water cycle does. During cold, wet winters water is stored as ice in glaciers. During warmer weather, the ice is released as water into streams. The world’s glaciers are free reservoirs of freshwater, like tens of thousands of man-made dams. The trouble seems to be some of these glaciers are melting into the salty ocean, increasing the unusable portion of the earth’s water supply, even while reducing the SWIP buffer that we rely on for melt-off flow in the spring and summer.

When a supply chain runs itself dry of SWIP, bad things happen. The downstream process must wait for replenishment at the full lead-time of the upstream process, or find a quick alternate source of supply. In the raw materials-to-retail supply chain this at most causes a lack of product on the shelf, lost customers, and fired supply chain managers. If we are heading towards a drastic depletion in the glacial SWIP from our water cycle, we will face the challenges of finding another source, speeding up the replenishment of our SWIP through some mega-freezing technology, or waiting out the literal glacial lead time to replenish.

Expanding Value Stream Maps: Consider Long-term Resource Replenishment

The value stream map is a popular tool but few take it far enough. The typical loops are:

  • customer-producer
  • producer-supplier
  • intra-producer

The vast majority of value stream maps look only at the:

  • production
  • distribution
  • and consumption loops

not at the wider and longer-cycle loops such as the replenishment of water, air, raw materials, skilled labor, or goodwill. The reward systems of our current business world motivate this. The reality of very long lead-time replenishment is buried in the triangles labeled with the letter “I” for inventory. There seems to be an inexhaustible inventory of minerals, water, topsoil, clean air, and free-flowing fuel. The most precious materials require glacial or even geologic time to replenish. The Earth doesn’t have a graveyard shift it can run to catch up. We ignore the depletion of SWIP at our peril.

*For more resources please visit www.gembaacademy.com


  1. chris

    January 23, 2012 - 5:40 am
    Reply

    I appreciate your attempt to tie this all together but it is hyper hubris if you think you have. This is a complex system that no lean practioner worth his salt would treat with such off the cuff remarks.

  2. John Santomer

    January 23, 2012 - 7:52 am
    Reply

    Dear Jon,
    I am amazed how people can believe in blind faith without question and yet can not accept the cycle of fresh water and its supplies around the world. My mentor would always say, “It does not need rocket science” to understand all these nor a complex comparative analysis to SWIP, supply chain, demand and supply etc. But two words come to mind, “accepting responsibility”.It does not even need to be grand and certainly nothing is too miniscule.

  3. David

    January 23, 2012 - 12:41 pm
    Reply

    Good article. I suppose there were times when there was too much SWIP (ice age). I hope we do not get to point where our SWIP is depleted. Your analogy highlights the importance of understanding factors which we typically think are out of our control. As far as global warming, it may be out of our control. But maybe not. The beauty of visual management is that it alerts us to problems immediately so we can take corrective action before we shut down our customer. Hopefully we are only in a cycle of natural variation that doesn’t end life as we know it.

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