How Much Inventory Do You Really Need? A few years ago, I implemented an SAP? ERP system for a subsidiary of an Australian arms manufacturer. The company was setting up a manufacturing plant in Tucson, AZ. The Iraq war was at its peak. It was mandatory that the company manufacture their product in America, and they needed to ramp up production fast to produce enough to support our forces in Iraq. During a requirements-gathering workshop, the plant manager told me that companies producing similar products turn their inventories at three. He wanted to turn his at six. What processes did he need to make that a reality? (As you probably know, a ?turn? is a technical term in inventory management that measures how fast you convert raw materials into finished products. The larger this number, the lower the inventory; e.g., a turn of four means that the raw materials procured today will get converted into a finished product in three months because the inventory turns four times a year). I had spent over a decade consulting on various ERP solutions for manufacturing enterprises, and I had hands-on experience implementing supply chain solutions for enterprises large and small that employed a

Single Use Replenishment (SUR?): A comprehensive planning solution for recognizing and servicing demand spikes in your supply chain? today! In my earlier blog post, Why are we busy pushing? Pull your plants for a LEANER Supply Chain…Today , I concluded that no one wants to build to forecast, but most of us do exactly that. I also argued that you don?t have to be in a perfect LEAN state to build to customer demand. You can do this in your own environment, starting today. You don?t have to accept the inefficiencies of building to forecast?there really is a better way. In another blog post, Can You Plan Using Push and Execute Using Pull?, I explained why it is necessary for us to employ a different planning method in a demand-driven, pull or LEAN environment. Solutions like LEAN PLANNER? scan the planning horizon and calculate the buffer size (KANBAN/ROP) for the entire time horizon. You now have a dynamic LEAN plan that adjusts itself to the changing demand profile. You can see dependent demand across all the levels of product structure on supply chain nodes that are managed entirely by pull. Variability is the biggest enemy of a LEAN supply chain.

Can You Plan Using ?Push? and Execute Using ?Pull?? LEAN PLANNER? ? A LEAN planning solution to pull any product on any node of your supply chain? today! In an earlier blog post, Why are we busy pushing – Pull your plants for a LEANER supply chain, I concluded that no one wants to build to forecast, but most of us are doing exactly that. I also argued that you don?t have to be in a perfect LEAN state to build to customer demand. You can indeed do this in your present environment starting today. Forget about the inefficiencies of building to forecast?there really is a better way. We all know what it is like to plan in a push environment. A finished product forecast is fed to the MRP (Material Requirements Planning)/APS (Advanced Planning System) system. Based on product structure, lead times, lot sizes and other planning parameters, it spits out a supply plan for all the materials that make up the product. This plan is then used to do capacity planning for in-house produced assemblies. We send it to our vendors for them to plan their supply. A similar plan is put to work managing our warehouses, distributors

Seven things you must know before ??implementing an on-demand enterprise solution. After spending over twenty years implementing large scale on-premise ERP systems such as SAP?, I was very excited when the opportunity to implement ARIBA, an on-demand, in-cloud enterprise solution, came my way. Our? customer, a US-based multi-billion dollar consumer goods company specializing in a variety of chicken and turkey products, had engaged us (www.LeanAxis.com) to implement ARIBA for their spend management. I remember ARIBA from my Y2K days. The B2B space was hot. Companies like ARIBA and Commerce One were redefining the way enterprises did business. They were a challenge to the archaic functionality and outdated implementation methodology of traditional ERP solutions. Leading solutions, such as SAP?, were too complex. Customers spent way too much money on implementations, most of which ran over budget, while realizing little ROI. It was inevitable that some innovative upstart companies would come up with better ways of doing things and transform the business of transformation. One innovation was software delivered as a utility. You paid to activate it, then you paid as you used it, much the way you paid for home cable service. As with cable service, you could cancel at any

Why are we busy pushing?

Pull your plants for a LEANER Supply Chain?Today!

At one of my supply chain conference meetings I asked the audience if they would prefer to build to forecast and ?push? the product to their customers or wait for customers to ?pull? and then build. To my surprise, not a single person chose the former. Everyone was in favor of building to customer demand.

?So how many of you in fact build to customer demand?? I asked.