Pushing, Pulling and Paradigm Shifting: Be a Champion of Change
Written by: James K. Allred

I can remember when change usually described the money you got back when you bought something. Now, it seems that every other business seminar and conference, including the most recent APICS gathering, focuses on change-how to recognize the need for it, how to deal with it, and how to live through it. Clearly, there's a revolution going on here. The trick is to be on the side of the righteous.

In the corporate world, at least, the righteous side is the one the customer is standing on. For it's customers who are driving these changes in the ways we do business. They are demanding smaller lot sizes. Shorter lead times. Higher quality. They have come to expect endless technological innovation, which has the effect of condensing new product development times and leads to much briefer product life cycles. Speed, flexibility, quality-they want it all. It can seem a bit overwhelming.

Of course, many of us have tried to cope. American industry in general, like industry everywhere, has begun putting mechanisms in place in answer to these demands. Total Quality Management, MRP II, MES, J-I-T, and a host of other acronyms are all aimed at meeting the ever-evolving requirements of this new breed of customer. But as the pace of change continues to increase, we often find ourselves running faster in place, and wondering why we can't seem to get ahead of the power curve. My contention is that in most cases, our failure can be linked to a faulty set of assumptions, an outdated paradigm, that causes us to attack the problem of satisfying customers by doing more of the same, instead of breaking out of that paradigm and looking at our processes in a new way.

For despite our attempts to speed things up, in fact we by and large have yet to change the very heart of our manufacturing process-the way material flows through it and the way material is controlled. Take manufacturing automation, for example. Although investment in automation equipment is at an all time high, the results have often been terribly disappointing. That disappointment stems largely from two factors: first of all, automation of workstations and individual production machinery without managing the workflow between those stations. We have created islands of ultra modern automation linked by horse and buggy logistics systems that are a drag on productivity. We can rivet, weld, punch, etch, and stamp faster and more accurately than ever. But we haven't optimized the way the material moves through the process, creating bottlenecks that throttle our efforts. And secondly, although we've adopted MRP II and other sophisticated planning systems, we really haven't changed the underlying material flow process. So we often end up with "scientific chaos," large inventories, and oceans of work-in-process (WIP).

The promises of planning go unfulfilled, among other reasons, because we insist on "pushing" material through the system, based on inherently flawed demand forecasts, instead of "pulling" it through based on actual customer orders. Remember those smaller lots, shorter lead times, and condensed product life cycles? No matter how sophisticated the forecasting method, it will never be as accurate as the absolute number of customer orders you receive. So, why not re-engineer your system so that the customer does your forecasting in some optimized combination of "push/pull"? Let MRP release small lots (push) and assure the right material is there. Then, let the workers call for material (pull) based on customer orders. Less work-in-process (WIP), less inventory, less expense, happier customers.

Of course this all sounds good. But to reach this higher plateau, you must first take a giant step backward and look at your material flow through new eyes. Go out on the floor and see what's going on. Talk to the production workers and get their input. Talk to a customer. Better yet, listen, listen, listen. Most of all, throw aside all your assumptions about "how things work" and start afresh. Examine your customers' needs and analyze how the material flow through your facility can be changed to meet those needs. Not tweaked. Not adjusted. Really changed. Embrace nothing less than a new paradigm for the production and logistics process.

What might that new model look like? Let's take a stroll around our re-engineered facility. Notice that small batches of material in plastic totes are moving constantly through the factory, replacing the slow-moving lift trucks and pallet loads, with minimal inventory stagnation and minimal investment in WIP. See the strategically placed dynamic buffers? They offer 100% material control accuracy and instant accessibility. And, they eliminated those gigantic stockrooms and cluttered assembly areas where it sometimes took hours to find the right materials. Now pay particular attention to the factory layout, a layout designed to dramatically reduce the distance material must travel, as well as to stage material near the point-of-use, where real value is added.

Most importantly, watch as workers use real-time information about work in the pipeline to manage material flow into and out of their workstations, pulling material only when it's needed. They're never out of work and they never have to go looking for the right material. (Did you realize that workers searching for material is the largest single cause of factory inefficiency?) Instead of the 5% value-adding activity of your old system, in your new factory material is being shaped or changed 30% to 50% of the time-and on-time customer shipments soars to 95%.

Facilities like this one are no dream. There are successful companies applying these principles right now. Names you would recognize as industry leaders and names you might not recognize yet, but you will. And in each case, large company or small, implementation of the new paradigm has been the product of visionary thinking by professionals who recognized an opportunity and seized it. People who understood the need for real change and embraced it, instead of turning away.

As an APICS member, and an important shaper of the processes within your company, you are in a unique position to act as a change agent. Because you understand better than most, maybe better than anyone, how your existing system works, you are the perfect leader for moving your company toward the new paradigm. Because you have a foot solidly in both camps-information systems and production-you are the natural coordinator of the re-engineering process. Your mission is to re-think your total logistics, re-engineer your material flow, abolish paperwork, empower the workers on the floor to make production decisions, and ultimately, perhaps, even eliminate your current job. If that sounds a little scary, think about what could happen if you don't become the agent for change.

In the next few months we will look more closely at various aspects of the new paradigm and how each one affects the goals of speed, flexibility, and quality. We'll explore workstation design and ergonomics, along with work and information flow to empowered workers. We'll examine the relationship between material movement and customer satisfaction. And, we'll look at the ways that your current information and planning systems can be integrated into the new model we are building.

The choice is yours. I encourage you to choose wisely, for your company's sake, and for your own.

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James K. Allred is President of ESKAY Corporation, Bountiful, Utah and Chairman, American Executives for Management Excellence.

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