- How were the 3 cited questions of the Shook article implemented by Medtronic as described in the Marchwinski article?
According to Shook, Innovation is a prevalent and a significant concept. Thus, he cited three questions: What is it? What does lean thinking have to say about it? So what?”
What is it?
Shook describes an innovation as something that is new and valuable. Using the Qlik dynamic reporting software, the Phase two development team established a novel PPEP database that was capable of supporting the new pull system and at the same time being tightly integrated into the existing ERP software. Instead of being a separate database, PEEP was modified to be a front end to the EPR system for the purpose of using the system’s data to automatically carry out the updating calculations. They did not utilize the ERP as initially designed, but they did not shut it either. The main elements of the new hybrid system comprised of a build in PEEP dashboard that was connected to variables in the ERP system. That way the new systems enabled the supply chain team view and access the recommended kenban system for any segment in the ERP system, together with its expected output, enabled the users to operate the what if scenarios for the purpose of optimizing the system operation. Connecting the PEEP and the ERP also enabled the system to update kanban recommendations as variables keeping changing and to inform the supply chain team in real time about the possible problematic issues. The new PEEP system was able to identify any change, assess the capability of the initial kanban system and send a caution to the responsible client to check the inventory levels since a variable could have changed.
What does lean thinking have to say about it?
Lean thinking was an innovation, and an improvement over what initially existed, that consisted within itself the means of more innovation and enhancement.In this view, the team improved their existing system by integrating the PEEP system and the ERP system. Initially, when a container in the storeroom was used up, a supply chain subordinate would scan it into the ERP system. Immediately, the ERP system then writes a line item to a procurement order and notifies the responsible purchaser, who, as part of his or her regular standardized duty, checks it before directing it to a broker. But, if for some cause, a card is activated on the floor and not in the ERP system, a purchaser can not get a signal to purchase more, possibly causing a stock-out.
To ensure this does not occur the new in-built PEEP dashboard displays key data that shows what the ERP/kanban system considers is the storeroom. On a daily basis before a morning group scatter, a supply chain subordinate makes copies of the dashboard to be posted at the ends of corridors in a section of the storeroom. During the day, another subordinate checks to confirm what is really on the racks against the dashboard printed copies. After Every 30 days all storeroom locations are viewed. Low-risk irregularities are marked on a countermeasure sheet and revised on a weekly basis. High-risk irregularities are instantly brought to the attention of the purchaser.
So what?”
The system was found to be very effective for the warehouse, the suppliers as well as the purchasers. After an initial struggle, many more suppliers have been joining the improved pull system, however there are still a few holdouts. Some suppliers were discovered to have been extending the system to their suppliers. The buyers are very happy with the system, since they now have sufficient time to accommodate expansion and establish better relationship with their suppliers. The company has never run out of any kanban parts. Best of all, they have not seen the need for increasing the storeroom. The newly established pull system minimized inventory space by more than a half and phase two is in the process of increasing the inventory turns by more than a half.
- Drawing from the course notes and reading, what challenges were overcome by the management and the team for the observed success?
The key challenge that was overcome by the management and the team was that the company was under pressure to minimize cost and downsize the existing resources to operate with their budget. As the ongoing lean change at Phase 2 Medical Manufacturing, Inc., freed up capacity, the amount of work from client Medtronic increased with least increment in operating costs, as initially planned. But as overall deals continued to expand, the company encountered the pricey outlook of expanding the on-site storeroom. Instead, Phase 2 removed the necessity for extra storeroom space through expanding its pull system and coming up with a way of meshing two improbable pieces of technology, the plan-for-every-part (PFEP) database that reinforces all-in-one flow production, with a prevailing enterprise resource planning (ERP) system, stereotypically linked with big batch production.
Determining the balance of the two was challenging.” For instance, a key conflict was ERP’s old-style reliance on ship dates for the purpose of driving production, while lean management utilized pull systems for the production and replenishment of products in small masses based on the consumption.The man agent and the team managed to sort out the challenge by extending the initial pull system out to dealers while incorporating distinct Kanban arrangements for different inventory objects into a single pull system that is easy to sustain and monitor. To begin, Phase 2 requested suppliers for high-volume segments to join the pull system, which would utilize kanban cards to be circulated between the company and dealers to place regular orders based on leveled demand, instead of the ERP predictions.
Phase 2 approached dealers as associates, as said by Prime, they were not trying to get something for anything. They were trying to simplify the system for everyone, and they were ready to take up the responsibility for the finished goods sitting at their facility. To ensure that Kanban did not fail they ensured that all variables in the PFEP database were reviewed on a regular basis and are updated at least after every 4 months. Phase 2’s supply chain squad also ensured that they update the database when demand, lead time, storage locations, amongst other things changed. With no standard software just suited to automate the keeping up to date and other tasks, Phase 2 encountered a lot of manual work for the purpose of keeping the data fresh for numerous parts.Phase two development team established a novel PPEP database that was capable of supporting the new pull system and at the same time being tightly integrated into the existing ERP software. Instead of bei0ng a separate database, PEEP was modified to be a front end to the EPR system for the purpose of using the system’s data to automatically carry out the updating calculations.
References
Marchwinski, Chet: “Manufacturing Balancing Act: Pull Versus ERP”
Shook, John: “Innovation in the Work”