Demand Management allows an organization to create a more efficient supply chain.  The best way to create efficiency is through transparency and simplicity. From the largest to the smallest, organizations must ensure that all suppliers and players are completely transparent. By determining what the demand might be in the future and how to manage it, the Demand Management process comes to life. The three goals of Demand Management are:

• Improving forecast accuracy
• Lessen inventory investment
• Effective balance between supply & demand

“Need is not demand. Effective economic demand requires not merely need but corresponding purchasing power.”

– Henry Hazlitt

The process becomes a unified method of controlling and tracking business unit requirements and internal purchasing operations. It focuses on the volume of products being purchased from suppliers rather than individual product pricing, which is in contrast to conventional sourcing processes. Through the Demand Management process, organizations address external spending factors, properly arrange purchase orders and eliminate waste in all aspects of the process.    

Within Demand Management, Demand Control is a crucial broad principle. It focuses on the alignment of supply and demand, especially where there is a sudden and unexpected shift in the demand plan. These shifts occur when near-term demand overtakes supply or when actual orders are less than planned. This can result in very reactive decisions, which can have a negative impact of workloads, costs, and customer satisfaction. Creating overall performance measures and essential performance indicators is vital to keeping track of demand and potential intervention. The collected performance data can result in better demand forecasts, which may be incorporated with an extensive supplier-communications program. These details help suppliers and organizations handle assets more effectively, which reduces expenditures.

Effective demand management outcomes are a reflection of policies and programs used to influence demand as well as competition. They follow the concept of a closed loop, where feedback from the results of the demand plans is fed back into the planning process to improve the predictability of outcomes. Effective and efficient organizations master the principles of Demand Management and maintain a competitive advantage through focus and disciplined process.     

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The function of recognizing all demands for goods and services to support the marketplace. It involves prioritizing demand when supply is lacking. Proper Demand Management facilitates the planning and use of resources for profitable business results.

Enjoy this educational video on Demand Management!

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Heijunka is the Japanese term for leveling. It is a technique for reducing unevenness (Mura) which in turn reduces waste (Muda). It is crucial to the development of production efficiency in Lean manufacturing. The goal is to produce goods at a constant rate so that further processing may also be carried out at a constant and predictable rate. 

Check out this informative video on Heijunka!

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After value streams have been solidified and embedded, Heijunka is a crucial process implementation in every successful lean organization. Heijunka quickly and elegantly helps organizations meet demands while reducing waste. By definition, it means leveling’ and enables production to efficiently meet customer demands while avoiding batching and results in minimum inventories, capital costs, manpower, and production lead time through the whole value stream. It truly is the key to stability.

Since the beginning of mass production, the technique of batching has been used to produce large lots of products, typically, without taking into consideration the demands of the customer. Output not purchased by the customer, is then placed into inventory for future use. This results in uneven product quality, overworked equipment and personnel, thus creating waste. Ultimately, manufacturers experience confusion and disorder because customer buying patterns are never consistent. In addition, when goods are placed into inventory, profitability is adversely impacted.

Heijunka helps organizations avoid these types of waste and inefficiencies, bringing production closer in line with customer demand. That type of flexibility in production allows organizations predictability and stability, thus experiencing better average production volume over the long term.  By adjusting production to mirror customer demand as closely as possible, waste and inefficiencies can significantly be reduced. When organizations make all product types and maintains a small inventory buffer throughout a year, there is greater flexibility to meet changing customer demand patterns. The buffer inventory will be liquidated during the year and production will be able to meet periods of peak demand and erratic customer purchasing.

It is understood that manufacturers exist to meet customer demands, with the highest possible quality product and maximizing profitability in operations. Understanding that customer buying patterns vary, Heijunka can closer mirror those needs to efficient production. This allows fulfillment of customer needs and significant reduction of waste in the manufacturing process.

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“I say an hour lost at a bottleneck is an hour out of the entire system. I say an hour saved at a non-bottleneck is worthless. Bottlenecks govern both throughput and inventory.”

Eliyahu M. Goldratt

There can be multiple causes of slowdowns and disruptions in workflow. One of the most serious causes can be bottlenecks. When efficiency is crucial to an workflow process, a bottleneck can significantly impact the bottom line and customer satisfaction of any organization. A bottleneck analysis offers an organization opportunities to improve efficiencies, customer satisfaction and ensure workflows at an even rate.

A bottleneck analysis is a detailed process where an organization gathers as much detailed information about the flow of a particular product or process. Specifically, data is gathered about the point(s) in the process where workflow is bottlenecking. This type of analysis can be done specifically to identify the cause of a bottleneck that is causing problems, or to learn about processes where a bottleneck is likely to occur in the future. The bottleneck analysis will provide important information about how things are done, and how they can be improved.

When performing the analysis, it is crucial to not only look at where the bottleneck is occurring, but the entire workflow process. This will give a better picture of what is really occurring at all stages of the process, along with what occurs just before and after the bottleneck. If a bottleneck early in the workflow process is eliminated, it may result in a new one forming further down the line. A properly performed analysis will not only help to find solutions to the existing bottleneck, but will also help to prevent new ones from forming. 

Preventing bottlenecks would be ideal to avoid having to manage and resolve them in the future. There are ways to work around them when planning the production environment. Giving employees free rein over minor decision-making will allow them to make the decision they feel is most efficient. Establishment of standardized exchanged protocols can minimize the potential for future bottlenecks to occur through minimizing downtime. 

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One of the most serious causes of workflow process breakdowns is bottlenecks. When efficiency is crucial to an workflow process, a bottleneck can significantly impact the bottom line and customer satisfaction of any organization. A bottleneck analysis offers an organization opportunities to improve efficiencies, customer satisfaction and ensure workflows at an even rate.

Watch this educational video on Bottleneck Analysis!

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A best practice in the manufacturing sector and considered the gold standard for measuring productivity, Overall Equipment Effectiveness (OEE) provides crucial insights in manufacturing. It was a term coined by Seiichi Nakajima in the 1960s to evaluate how effectively a manufacturing operation is utilized. It is based on the Harrington Emerson way of thinking regarding labor efficiency. The results are stated in a generic form, which allows comparison between manufacturing units in differing industries. It is not, however an absolute measure and is best used to identify scope for process performance improvement, and how to get the improvement.

It is understood that manufacturing is a complex and costly process. Absolute efficiency is crucial to success — using metrics and guidelines, manufacturers remain in control over process and production. OEE is the tool which combines manufacturing issues and data points to provide information about the process. Every member of a manufacturing team can use the data to better understand the current state of a process. It provides a strong framework to accurately track underlying issues and root causes, along with a framework for improvement. OEE metrics can accurately and quickly reflect the current state of any manufacturing process. Conversely, it can also be a very complex tool, allowing an understanding of the true effects of various issues. 

The four components of the OEE framework are: OEE, Availability, Performance and Quality (OEE = Availability x Performance x Quality). The Availability key refers to the machine being available. The Performance key refers to how much waste is created through running at less than best speed. The Quality key focuses on the time wasted by producing a product that doesn’t meet standards. It then allows manufacturing companies to pull together separate business functions into simple, but powerfully useful metrics. Finally, by using OEE concepts, waste can be exposed and understood, and efficiencies maximized.

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Overall Equipment Effectiveness (OEE) is a KPI which has become the gold standard in manufacturing to measure and monitor the effectiveness of operating production and packaging machines and lines. Because manufacturing is a complex and costly process, absolute efficiency is crucial to success. Using metrics and guidelines, manufacturers remain in control over process and production. OEE is the tool which combines manufacturing issues and data points to provide information about the process.

Take some time and learn more about OEE here:

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The popularity of TPS and Lean manufacturing is fully entrenched in manufacturing on a global scale. The success of these concepts are indisputable. Like any other process, elements can be left out or overlooked. Jidoka is a crucial concept in both TPS and Lean, but is also a lost pillar within these practices. The importance of it cannot be understated.

Check out this educational video on Jidoka.

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Patient safety practices have been defined as those that reduce the risk of adverse events related to exposure to medical care across a range of diagnoses or conditions. This definition is solid, but quite incomplete, because so many practices have not been well studied with respect to their effectiveness in preventing harm. However, the one fact we understand is the direct relationship between quality improvement practices and patient safety.

This week, our healthcare professionals are celebrating Patient Safety Awareness week. This is an annual opportunity to bring together healthcare professionals and patients in an effort to provide the highest quality and safest delivery of healthcare possible. Healthcare professionals are very familiar with the alarming and frequently cited statistics from the Institute of Medicine. Medical errors result in the death of between 44,000 and 98,000 patients every year. These numbers remind us that quality improvement and patient safety efforts must continue to be foremost in their daily practices.

Healthcare institutions and professionals are exploring innovative approaches and methods that reduce preventable medical errors, improve patient care and safety and decrease healthcare costs. Increasingly, healthcare institutions are implementing lean operational principles and practices pioneered at Toyota and other industrial companies. Lean is a cultural transformation that changes how an organization works. No one stays on the sidelines in the quest to discover how to improve the daily work. It requires new habits, new skills, and often a new attitude throughout the organization from senior management to frontline service providers.

Lean is a journey, not a destination. Clinical and nonclinical staff members who are given the encouragement, training, and time to make meaningful improvements in how the work is done are unlikely to want to retreat to an earlier period when formalized efforts to improve existing processes were outside their control. When staff members gain confidence in their problem solving skills and they see positive changes, momentum for even more improvement will build.

By applying lean methodologies to existing systems and procedures, major healthcare institutions are achieving significant improvements in patient safety while also reducing costs.

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Most definitions of lean manufacturing refer to the reduction of the Muda (7 wastes) as the main focus. Few definitions of lean differentiate between the different types of waste and seem to purely focus on Muda. The Toyota Production System (TPS) sees waste as being three — Muda, Mura and Muri — something that many lean practitioners seem to have forgotten. The best way to tackle a problem is to remove the root cause, therefore the focus of any waste reduction program should be on removing both Mura and Muri, as this will automatically remove much of the Muda (7 wastes) in the workplace.

The overall aim of any quality improvement technique is to improve the profitability of the business. To do this you have to be able to recognize these three wastes for what they are and be able to tackle the root causes.

Muda – Commonly referred to as the 7 Wastes and are non-value adding processes or actions.

Mura – Seen as unevenness or a lack of stability and flow. This drives the creation of Muda.

Muri – This is simply defined as overburden. Expecting too much, with defining process or not having the correct skills or tools.

The three Japanese Mu words are part of the Toyota Production System (TPS). Each of these is a type of waste and are recognized by the Japanese as part of a business improvement initiative. The elimination of waste has come to dominate the thinking of many when they look at the effects of the TPS because it is the most familiar of the three to implement. In the TPS, many initiatives are triggered by inconsistency or over-run reduction, which drives out waste without specific focus on its reduction.

In today’s competitive environment, a focus on reduction of waste is crucial to the success and profitability of any organization. Eliminating waste makes it easier to see and find problems, which is the first step to solving them. It removes frustrations, which improves worker and customer satisfaction.

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