The Factory Physics Blog
Welcome to another round of the wild west. The advent of blockchain technology is ushering in a new era of innovation and change. Managers are facing unknown terrain but it is terrain that contains a wealth of value for manufacturing, services, supply chain and project management. This month we... Read more
In our last blog we stated that there is no simple formula for calculating the safety stock required for a given fill rate if the reorder quantity is greater than one. In this blog, I’ll provide detail on correct safety stock calculation and some considerations when trying to optimize safety stock... Read more
Inventory is a great fascination for managers. Primarily because it is a fairly flexible asset that companies can use to manage their financial performance. This also makes inventory a source of poor control because short term financial reporting considerations often overrule good operations... Read more
Ever get the feeling that you as a manager or your company’s managers are driving variability and chaos in your company through uncertain decisions and conflicting goals? You’re not alone. The Vice President of Manufacturing of a multi-billion company once reported that Production had done a... Read more
“‘Eliminate Waste’ is a nonsensical slogan. 1 ” – Shigeo Shingo Performance improvement strategies that revolve around the notion of reducing non-value-added activities continue to be popular. Unfortunately for the multitudes of companies relying on them, these strategies are seriously flawed and... Read more
At Factory Physics Inc., I have railed against buzzword initiatives for years. Buzzword initiatives are akin to death and taxes—not anything people like but they seem to be unavoidable. Companies continually launch buzzword initiatives like rock concerts, e.g. Agile, Lean, SixSigma, Lean SixSigma,... Read more
Forecasting is often greatly misunderstood and also obfuscated by the allure of the latest technology. In Lord of the Rings, Saruman had the best technology available with the palantir (the “seeing stone”). However, his technology didn’t save him from making serious mistakes or from a bad end... Read more
At a recent SAP user’s conference, a speaker discussed how his company (a Fortune 50 company) had challenges managing inventory and production scheduling. They heeded management’s and SAP’s exhortation to respond to all MRP exception messages. The company hired Accenture as a third-party resource... Read more
Variability is abundantly prevalent in our world. For example, we very rarely leave the house at the exact same time every day. Why is that? Variability in timing includes what we had for breakfast, whether or not we set the alarm clock or how late we stayed up the night before. For this blog post... Read more
Successful managers apply practical science to quickly achieve predictable improvements. Imitating other competitors or “best practices” of companies in different industries is an uncertain path at best. Executives and managers are most successful by understanding and applying practical operations... Read more
A Wall Street Journal article, For a More Productive Workforce, Scientific Know-How Helps , Lauren Weber, June 28, 2017, describes a new study from the National Bureau of Economic Research. "Companies with a higher proportion of scientists and engineers are more productive than their peers, even... Read more
A major aerospace company trains over 300 line and management employees to advance existing programs The case study is of a major aerospace company whose repair and overhaul (R&O) business generates over a hundred million dollars in revenue each year. Executives in the R&O business have... Read more
An article recently recirculated on Linkedin described the secret to forecasting as: " the best way to improve your forecasting is to reduce your forecasting. " The article also provided a picture of some sort of martial arts contest and stated " it’s perhaps the humility of Japanese culture that... Read more
Companies pursue supply chain speed as a competitive advantage but often wreak havoc. Instant communication and voracious data transfer can easily overwhelm today’s managers. Trying to manage with speed is like texting while driving—you know it’s dangerous but there’s a strong urge to respond while... Read more
We first met Norbert Majerus at one of our Factory Physics seminars in Tampa in 2005. He was just beginning his Lean journey at Goodyear. As Norbert relates it, "When I was asked to take a shot at developing a lean product development process at Goodyear, I started going to conferences, read books... Read more
Industry surveys are everywhere. The term "alternative facts" has recently come under scrutiny and provides good insight into much of the value of industry surveys. To quote Mary Norris' recent article in The New Yorker , "They do not have actual existence. Alternative facts are delusions." The... Read more
There is a crisis in the management of mega projects. Companies spend billions of dollars on energy and civil construction projects which are chronically late and over budget . Fortunately, the visionary leaders of the Project Production Institute are applying the principles of operations science... Read more
How often do your meetings end in applause? Ever been in a bad meeting? Far too many people have. There are innumerable articles about time wasted in meetings. So why do people continue to have meetings? There must be something of value that occurs in meetings. Turns out that meetings are a service... Read more
Employee capacity planning directly affects employee morale and performance. Many companies do capacity planning and staffing using a "seat of the pants" approach and their productivity suffers. Unfortunately, the relationship between employee utilization and work variability is not well understood... Read more
“The value of experience is not in seeing much, but in seeing wisely.” – William Osler Performance improvement strategies that focus on value-added activities have been popular for at least a couple of decades. Executives, managers and workers alike appreciate the simple idea of eliminating waste... Read more
“Cost Accounting is enemy number one of productivity.” – Eliyahu Goldratt "First I kept the cost accountants out of my plants, but I found this was not the solution…It wasn’t the cost accountants that were the problem, but all these ideas about the efficiency of an operation.” –Taiichi Ono The... Read more
The answer from Jean-Pierre Goulet, “It’s easy, we used Factory Physics science to achieve the goal!” This case study is about a manufacturer of kitchen cabinets (we'll call them "Cabinets Inc."). Their annual sales average US $3M. Their earnings before taxes for their last 3 years were, 1.2% to 1... Read more
A March 10, 2016 article in the Wall Street Journal was headlined, Americans Rank Last in Problem-Solving With Technology . The problem is not a lack of technology. The problem is that Americans don’t consider basic skills such as math and science as necessary to their success. This problem is... Read more
The astronaut in the picture is where he or she is (and successfully back from there) because of thorough application of many branches of science. Science is the process of making an observation or a hypothesis about the behavior of nature and then relentlessly testing that observation to see if it... Read more
Vince Lombardi once said, "Perfection is not attainable. But if we chase perfection, we can catch excellence.” Managers often forget the first sentence of that quote and, with guns and slogans blazing, attack the second sentence's objective with gusto. This is usually very hard on an organization... Read more
There are many ways to fail at inventory optimization but I list three primary causes and welcome your ideas and comments. 1) People don't understand basic inventory concepts. This problem is rampant in industry. Even many of the purported "expert" organizations offer advice that is wrong or... Read more
We see a tremendous amount of wasted effort on inventory optimization at companies. It's not unusual to see efforts repeatedly diverted from one inventory effort ("Improve forecast accuracy!") to another ("Implement ABC analysis!") and on and on. Unfortunately, many managers do not have a... Read more
Welcome to the Factory Physics blog. We are providing this blog as a forum for questions, comments and discussion. To start with, we provide a link to our most recent white paper on practical inventory optimization considerations for executives. Our latest white paper addresses two very common... Read more