Behold The PSI: A Basic Tool for Supply Chain Planning

The PSI or Production-Sales-Inventory is a basic spreadsheet template for supply chain planners. 

It looks like this:

The PSI has three sections:  production, sales, and inventories. 

Production represents the in-flow of an item or what’s going into inventory.  A basic example is finished goods input coming from a manufacturing operation’s output.  We can also call it supply. 

Sales is the out-flow of an item or what’s going out from inventory.  An example is a shipment to a customer.  We can also call it demand. 

Inventory is the stock of an item on-hand in storage, such as how much of an item is in a warehouse. 

The PSI makes visible production, shipments, and inventories over a range of time periods or what we can call time-buckets.  It’s an outlook for planning.  It’s up to the planner if he or she wants to use weeks, months, or even days for the time buckets.  It’s also up to the planner how many time buckets to plan for.  It doesn’t have to be just three as in the figure below.  It can be any number.  Some enterprises use six (6) buckets for a 6-month outlook; others go up to 12.  It is the planner and his superiors that decide what periods to cover (e.g., weeks, months) and how many. 

The PSI’s horizontal rows list the items or products.  Each row shows the production, shipments, and inventory outlook for each item via the quantities in the respective columns or time buckets. 

An item can be a product, material, or a supply or spare part. It is recommended to select an enterprise’s most important items to the PSI.  By very important, that would mean those that executives often keep an eye on. 

Working the PSI starts with a beginning inventory at the zero (ø) column of the inventory section. 

The planner’s basic aim is to track the inventories from one time-bucket to the next.  In the figure below, the planner notes that inventories at the end of week 1 becomes fewer as a result of sales in the same week. 

When the planner, however, inputs the production and sales of week 2, the inventories end with zero (ø) on week 2. 

To put what I just said in a formula:

and to put it to represent every time bucket:

where x is the time-bucket number.

The aim of the supply chain planner is to ensure there will always be available inventory for sales.  Hence, supply chain planners typically prefer there’d be extra stock at every time bucket.  

Supply chain planners typically set inventory targets for every time-bucket in line with their superiors’ policies and strategies.  Sales for each time-bucket usually are based on forecasts and customer orders. From the inventory targets, the planner computes the production or sales needed and still have enough left to meet inventory targets.

Planners focus on either how much to sell or how much to produce to meet inventory targets. 

If it’s production, planners would adapt the ending-inventory formula and make it look like this:

For a desired ending inventory of five (5) units of items A and B, the planner would set production numbers that would match sales but leave at least five units at every ensuing time-bucket. 

When the enterprise wants to plan how much of an item to sell given inventory targets and ongoing production, the supply chain planners would adopt the following formula: 

Which in the PSI would look like this:

…which looks just like the PSI for production.  😀

The PSI in the above diagrams show the same numbers but illustrates a different approach.  The planner either figures out how much to produce or calculates how much to sell for the ultimate purpose of having enough inventories at every time-bucket. 

An enterprise can tailor a PSI for its particular business. 

For an enterprise that buys finished goods and directly sells to customers, for instance, a planner can adapt a PSI from a production-sales-inventory template to one that is purchases-deliveries-inventory:

An enterprise that imports items and converts them to finished goods, a PSI may look like the one below. 

I found this especially useful in a metals manufacturer that was importing metal coils that then were then cut up and converted into steel sheets, plates, tubes and pipes.  As steel coils were the key components of the manufacturer with its weight in metric tons as the standard of measure, the PSI enabled the manufacturer’s managers to plan the quantities and timing of importing and converting expensive metals without having too much on floor for too long. 

When enterprises use a common measure from key materials to finished product, the supply chain planner could expand the PSI to a 4-column spreadsheet consisting of purchases-production-sales-inventories:

A 4-column PSI would be particularly effective for enterprises with few but predominantly high-volume products such as those in commodities.  And it opens up participation of practically the four (4) core disciplines of the supply chain:  purchasing, production, logistics, and planning. 

The PSI doesn’t require sophisticated software or hardware.  One can use an ordinary spreadsheet program (e.g. Excel) or even do it by hand with or without a calculator (or abacus). 

The PSI gives visibility to an enterprise’s supply and demand picture from present to future for key items, whether finished goods, materials, or parts. 

The PSI’s limit is that the more items an enterprise has, the more tedious it becomes to plan and track.  ERP systems coupled with up-and-coming artificial intelligence (AI) software can make up for that.  Many enterprises, however, rely on planners to plan the items they carry.   

Even with its simplicity and features, it’s hard to find an enterprise that actually uses a PSI.  Many planners tend to devise their own templates, using spreadsheets mainly, despite the availability of integrated planning tools provided by expensive software. 

Most of the planning spreadsheets I’ve seen are hard to understand or are very specialised.  When I present the PSI template to planners, however, I’ve gotten very positive feedback with executives welcoming its application. 

A PSI is a basic manifestation of what a supply chain planner does, which is to plan production or estimate the demand needed with a minimum amount of stock at every time period.  It is a basic tool for supply chain planners.  It’s simple to set up and provides a comprehensive canvas of what an enterprise’s supply and demand would look like in the present and future.  It has its limitations in the complexity of an enterprise’s items and operations. But at the very least, it provides a foundation for planners to manage inventories and optimise supply chain productivity. 

About Overtimers Anonymous

Why Shifting from the Month-End Surge to Delivery by Demand is Common Sense

“We just have to live with it,” the General Manager replied. 

The GM was responding to my comment that month-end surges in sales orders were causing inefficiencies in the company’s logistics operations. 

I was presenting an operations assessment report to a company that distributed name-brand computer printers and accessories.  One of the key observations from my report was that the majority of sales orders (more than 50% of monthly sales) came at the end of every month.  Staff from sales, accounting, to logistics rushed deliveries to fulfil the orders and meet revenue targets.  Sales personnel counted on the deliveries to achieve if not beat their quotas and benefit from incentives. Not attaining the targets and quotas was simply not acceptable.  

The company is an exclusive distributor for a large name-brand supplier of printers.  The supplier dictated the monthly sales targets.  The supplier expected the company to meet those targets from month to month, no questions asked.  Hence, the company’s General Manager said that month-end surges were something they could do nothing about.  It was something they had to live with. 

Many executives do not want to shift from the practice of month-end selling and delivery.  “It’s not for discussion,” a consumer goods wholesale executive once told me when I said the monthly surge in deliveries was causing her firm’s transportation expenses to rise.  The executive did not want to change a practice which has become so ingrained in the company’s culture.

Executives don’t dispute that month-end surges bring about inefficiencies and high costs throughout the supply chain.  Surges cause stock run-outs as inventories deplete quicker than suppliers or manufacturing lines can replenish.  The surges also drive up inventories of customers which result in increased product returns especially for products with limited shelf lives.    

Logistics expenses increase as month-end surges strain storage and transport capacities.  Some firms rent additional storage to stockpile products in anticipation of sales surges.  Transport providers tend to sub-contract additional trucks to ensure there are enough vehicles to meet the demand.  Both the additional storage and transport capacities result in higher delivered costs for products.    

Month-end surges are sometimes coupled with periodic sales promotions and price changes which fuel more spikes in orders and delivery volumes.  Surges thus cause a “bullwhip” effect in which the up-and-down delivery volumes and resulting peaks and valleys in inventories amplify speculations throughout the supply chain. 

Executives are reluctant to move away from month-end surges because they fear lower sales will result.  They are afraid shifting from month-end sales would cause a decrease in revenue which they can ill afford in organizations that especially measure performance by monthly targets.

Moving from month-end sales to just deliveries driven by demand is common-sense logical.  It’s just not accepted given the anxiety it would cause among executives. In a demand-driven supply chain, one delivers only what and when it is needed.  The fear is the demand and the subsequent sales might not be up to par with immediate targets.

A downturn in sales would indeed be expected as customers would exhaust overstocked inventories from any previous surge.  In succeeding months, demand would pick up and sales would average closer to what would have been with month-end surges.  But executives would have to have faith that that will happen and executives don’t like to count on faith. 

Stakeholders in many companies measure executives via short-term targets.  Stakeholders want to see continuous growth in their company’s finances especially if they expect dividends and bonuses every year.  Creditors, such as banks who provide loans, also want to see continuous short-term gains to assure themselves that they will be paid the interest and principal of what they lent. 

The month-end surge is a manifestation of short-term thinking.  Shifting from the month-end surge requires changing one’s mindset from short-term to long-term management.    

When delivering only what is needed and when it is needed, all functions of the organization have to work closely together.  Sales needs to forecast future demand from the grass-roots level or from the end-user, whether that be the customer or the customer’s customers.  Marketing would support sales where it sees demand is lacking or where there is potential.  The supply chain from logistics, manufacturing, and procurement would have to build in a capable system and structure to anticipate the demand.  Sales, Marketing, and the Supply Chain, most of all, would need to communicate and come out with a consensus of action every time they review actual and forecasted demand. 

Attaining higher sales is not a product of individual sales persons or a result of incentives for just one group.  It is the product of teamwork.  Any challenge in fulfilling demand and achieving targets can be met if the organization works as a team. 

And isn’t that what organizations are supposed to be doing in the first place?

About Overtimers Anonymous

Originally published in LinkedIn May 06, 2019

A Letter to the IE: More than Ever, We Need to Lead the World to Productivity

:

Dear Industrial Engineer*          

The year 2020 ended without a happy ending.  The SARS-CoV-2 virus had not gone away.  It continues to be a global threat going into 2021. 

Political and enterprise leaders have done all they can to defeat the virus. 

There was hope. 

Thanks to record-breaking world-class collaboration efforts, vaccines have become realities and are on their way to inoculate millions.  We are grateful to the scientists, engineers, health-care professionals, executives, and numerous support personnel who have done so much and continue to do so.

But there was frustration. 

The pandemic, however, had spread to every continent, including remote Antarctica.  It continues to infect and force governments to restrict movement and distance.

We have become more lonesome and insecure.  Some of us had pushed back but to no avail.  The virus retaliates without discrimination.  More had gone sick.  More tragically had passed away. 

Throughout the war against CoVID-19, we industrial engineers have been conspicuously left out.  We don’t really know if it’s because leaders are ignorant of what we can offer or if it’s because many executives think they have enough expertise.   Whatever the reason, we could have done more. 

Most of us industrial engineers are hard at work in different careers and jobs around the world.  Many of us have made big differences to the enterprises and organisations where we are employed or engaged. 

But for whatever we have done, whatever we continue to do, it hasn’t been enough. 

Long before the pandemic, productivity growth has been on a decline.  The gap in productivity year-to-year between advanced economies and developing nations has widened.  Disruptions ranging from natural disasters to socio-political upheavals had taken a toll on enterprises.  Growth has been curtailed.  Many enterprises, notably small businesses, have lost ground in competitiveness. 

The 2020 pandemic hit global productivity when it was already down.  It’s the culmination of its decline.  And we have felt the impact like a hammer driving down on the nail. 

We need to do better.  We need to make our world more productive.

Productivity is a misunderstood measure.  Unlike financials like profit, sales, costs, and cash-flow, it is not easy to describe productivity in one metric.  Economists try to do that by defining productivity as the output of a person; but doing so makes it incomplete and inaccurate. 

Productivity is delivery versus consumption; how much one delivers correctly to customers against how much resources and time are consumed in doing so.  Productivity requires direction.  What are we delivering, how many or how much, how close to what customers want, and when?  What are we going to use to make and deliver, how long it should take, how it will be conveyed, and with how much support?   It’s not efficiency which measures how fast we’re going; it’s more like velocity which measures how much nearer we are to our objectives given the resources we spent.

Productivity drives value.  It connects to the priorities of the enterprise.  It’s what gives us industrial engineers purpose because we’re in the best position to understand it and improve on it.  Productivity is our watchword. 

In an age where supply chains and operations are in the midst of crisis,

we find ourselves in an unprecedented position to make a significant difference. 

I don’t suggest a political campaign or a public relations drive.  We just need to demonstrate.  We don’t need to debate our proficiencies; we have the skills.  We know what we have and what we can contribute

How we can show what we got can be summarised in four approaches:

First, Point Out Problems and Volunteer to Fix Them

We shouldn’t wait to be assigned.  We should point about problems, make visible opportunities, and offer ideas and solutions.  In short, we should be proactive, i.e., act on our own without waiting for someone to tell us about problems.  We know more than a lot of people when there’s a problem. 

Second, Drive the PDCA Cycle

We should drive the Plan-Do-Check-Act (PDCA) cycle, the basic process of carrying out solutions.  What many people don’t realise is that it’s a cycle, not a model for a one-time project.  We don’t stop after implementing a solution; we seek opportunity for something even better.  It’s why we also call it continuous improvement.  PDCA is a wheel that we keep spinning to keep productivity moving and growing. 

Third, Stand Up and Be Heard on Strategy

Keeping the PDCA cycle spinning requires leadership.  We are those leaders.  Our superiors are our audience.  Feedback, justification, and assertion are therefore essential.  We should have a say on strategy because productivity depends on direction.  It doesn’t just ensure the PDCA cycle keeps spinning but  that we spin the right cycles; we address the problems that are most important. 

Fourth, Promote Productivity

As industrial engineers, we promote productivity.  No one else will.  Not the economists, not the post-graduate business administration executive, not other engineers.   It’s us because our education and experience have us focused on productivity more than anyone else. 

Productivity has become a forgotten term in the decade of 2010 to 2020.  Its growth has fallen by the wayside.  It is on us to remind everyone about it, show how important it is to the viabilities of enterprises and competitiveness of organisations, and reveal its potential in the fight against disruptions, especially versus seemingly insurmountable ones like the pandemic. 

The anchor of our IE vocation is productivity.  It’s our unwavering principle we base our accomplishments on.  It is the flag we wave amid disruptions and difficulties. 

Let’s get going. 

About Overtimers Anonymous

*I had suggested we change our titles to supply chain engineers.  😊

Acknowledgment:

Alistair Dieppe. 2020. Global Productivity: Trends, Drivers,
and Policies. Advance Edition. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO.

How Important Productivity is to the Value Chain

The fast-food restaurant drive-thru I go to every Sunday morning hasn’t been serving the liquid creamers that accompany the coffee I order with my meals.     

At first, they said the creamers were out of stock.  A week later, they said they can only serve one (1) creamer instead of the two (2) that should come with every coffee order.  Finally, they substituted the coffee creamer with a non-dairy powder cream in a sachet. 

The fast-food company saved money in all three (3) instances.  They saved when they served coffee without any creamer or with just one instead of the usual two.   They also saved when they started serving the powdered creamer in sachets as the liquid creamer is more expensive.   

The fast-food company can claim savings but did it deliver value? 

In his seminal book, Competitive Advantage,[1] Michael Porter introduced the value chain, a representation of a firm’s “collection of activities that are performed to design, produce, market, deliver, and support [the firm’s] product.”

Value is the “amount buyers are willing to pay for what a firm provides them.”  The typical strategy of the firm is to create value that “exceeds the cost of doing so.”  According to Porter, value is the key to competitive positioning.

The fast-food company normally served two (2) 10-ml cups of imported liquid creamer with every coffee order.  It was something I look forwarded to and expected whenever I went to the fast-food company’s drive-thru.  When the fast-food drive-thru stopped serving the creamer, I was not happy.  I felt I was no longer getting my money’s worth from my coffee order.

Bundling two (2) 10-ml creamers and two (2) packets of sugar was standard for every coffee order, according to the drive-thru attendant.  Unfortunately, the fast-food drive-thru no longer had the stock and substituted the creamer with a cheaper sachet of locally produced non-dairy powder. 

The fast-food company apparently thought substituting the imported creamer with a cheaper local product would be no big deal.  The management of the fast-food company probably didn’t believe its customers would buy less of its coffee, even with the downgrade. 

The cost of all the activities in the value chain must be less than the price of the product.  The difference between the price and the cost is the margin.    Enterprise executives tend to cut costs or differentiate their products to maximise margins. 

The problem arises when customers like me perceive a lower worth of the product as a result of the enterprise’s cost-cutting.  Perceived lower worth leads customers turning away from the enterprise and opting for alternatives from the competition, resulting in lower demand for the enterprise’s product.    

Many enterprises see-saw between cutting costs and differentiating their products as they struggle to maintain their products’ profit margins.  When they see costs going up, some enterprises buy cheaper materials and services.    When they see demand slowing, they spend more for product development and advertisement of their product’s features.  In either case, the enterprise ends up losing customers or spending more than it should.    

All functions in an enterprise make up its value chain.  Whether it be purchasing, marketing, logistics, sales, manufacturing, finance, accounting, human resources, information technology (IT) services, legal, public relations, research & development, etcetera–every department and individual play a part in delivering value for the enterprise.  Every one in an enterprise contributes.  There is no exemption.  If the value chain is to be competitive, everyone has to work and to work together toward the common cause of maximising the margins of the enterprise’s products. 

Every part of the value chain must be productive.  Productivity drives value. 

Productivity is output over input.  In the value chain, productivity is the output as delivered and accepted by customers versus how much was inputted in doing so. 

That means whatever function we work in, we must deliver output that would benefit the enterprise’s product margins.  Our performance, no matter how seemingly small or irrelevant, contributes to the value chain. 

Some of us equate value chains with supply chains.  This is wrong thinking and it is detrimental to an enterprise’s productivity.  Whereas the supply chain’s basic functions like purchasing, manufacturing, and logistics directly add value to a product, roles such as legal, human resources, marketing, sales, engineering, information technology, and research & development (R&D) are just as equally important. 

Human resources professionals hire talented people to staff the enterprise’s organisation.  In-house legal counsels ensure products are compliant to local laws and regulations and defend the enterprise’s products’ intellectual properties.  Finance executives ensure the capital needs for products.  Marketing cultivates ideas for R&D to develop into reality.   

A condiment such as a coffee creamer may seem trivial.  For value chains, nothing is trivial.  Every detail and process have a bearing on how a product’s value chain will bring worth to customers. 

The fast-food company may dismiss my disappointment if it turns out I’m alone in complaining about a downgraded coffee creamer.  If a vast majority of its customers continue to consume the fast-food company’s coffee, then well and good, the enterprise would have saved money without any dent to its coffee’s perceived value. 

But if my sentiments are shared with many coffee drinkers who decide to turn away and find alternatives, then the enterprise would no doubt be strongly encouraged to improve the productivity of its value chain.  Perhaps it will study how better to source its imported creamer to ensure it will always be bundled with the coffee it sells. 

In the meantime, I decided to get my Sunday morning coffee from the fast-food company’s competitor. 

About Overtimers Anonymous


[1] Michael E. Porter, Competitive Advantage,  (New York, N.Y. : The Free Press, 1985), pp. 36-38

Logistics Solutions Can Be Simple

A medium sized retailer of health food items imports products from abroad.  The retailer prides itself with a very well organised warehouse and a crew of workers that swiftly repack the imported products and send them to the retailer’s stores all over the country. 

The retailer’s sales department, however, has constantly complained about lack of enough fast-moving products to stock store shelves.  They frequently request for more items which the retailer’s purchasing department promptly orders.  Yet, the sales people still complain.  Why are store shelves empty despite the inbound volume of imports?

A consulting team the retailer engaged found that the retailer’s warehouse was indeed quickly repacking and delivering needed fast-moving imported items to stores.  Once they arrive at the stores, the fast-moving products were sold within days. 

But the warehouse inventories showed almost no stock available of the fast-moving items at the beginning of every work week.  How can this be since imports via container vans were arriving every week?  The stocks have been arriving but the warehouse says they are not on inventory.  Where were the items? 

It turned out that when container vans of imports arrived, it would take as long as ten (10) days to completely unload, put away, and enter items into the warehouse inventory records.  Every container van would have a mix of as many as a hundred products totalling to as much as a thousand cases or packages.  Some items like paper products were bulky, some like food supplements were tiny.  The warehouse’s personnel would unload products from the container van into pallets, but it would take several days to sort the items, inspect them, and scan them into inventory.

Hence, even as the imported items had arrived, they were still “in-transit” on the retailer’s inventory system.  The warehouse didn’t repack and deliver products until they were entered into the system. 

To complicate things further, sales people would ask the warehouse to put priority in receiving items that were running low on stock at stores.  That resulted in warehouse staff in receiving some items from inbound container vans and putting others in a holding area, in which these latter items would sometimes sit there for as long as one (1) month before anyone sorts and scans them.  This resulted in a vicious cycle where products were alternating in out-of-stock as warehouse staff switched priorities in receiving one item to another. 

The solution to the problem was simple.  Management just had to re-enforce the retailer’s policy of unloading every container van completely before receiving another one.  Management also had to shorten the time to receive inbound imports.  More than a week was too long.  It turned out that the employees assigned to receive inbound container vans sometimes were pulled to do other jobs in the warehouse.  Management only had to put a stop to that and have the assigned employees work full-time in receiving the vans. 

The consulting team also suggested the management review the retailer’s purchasing and inventory policies.  It wasn’t that the purchasing department was buying enough; it was that they weren’t buying frequently enough. 

The purchasing management preferred to buy items in bulk to take advantage of pricing discounts.  They would order only once a month or even less so.  As inventories ran down, the next scheduled arrival of vans would sometimes be weeks away.  Planners and purchasers ended up rushing the dispatch of container vans which sometimes delayed the delivery of other items and again brought on a vicious merry-go-round of items running out of stock. 

Purchasing just needed to balance buying in bulk and scheduling shipments to arrive more frequently, such as weekly versus monthly.  Purchasers could negotiate contracts with vendors to commit to buy in bulk at competitive prices but ask that deliveries arrive in smaller quantities more frequently. 

Logistics is about ensuring a smooth supply of materials and products from one point of the supply chain to the next.  It’s about planning, buying, and transporting enough.  Not too much to cause pile-ups of stock that tie up space and cash.  And not too few that risk run-outs that interrupt production and compromise services.

Logistics is broad.  It covers what comes in, what comes out, where it goes, and where it leads to.  One may say it covers all the things that sales, marketing, and manufacturing do not. 

Logistics is not the supply chain.  It’s a big part of it but not the whole of it.  Logistics is the life-blood that courses through the supply chain but it isn’t the supply chain.  It works with counterparts such as planning, procurement, and production to make sure merchandise moves through suppliers and manufacturers to meet the demands of customers. 

Improving logistics is about improving the flow between points in the supply chain.  That means minimising bottlenecks and focusing resources to move things where they are slowest.  It means making sure stuff are put away and at least cost and risk of damage, at the same time making sure they don’t over-stay in one place.  Scrap and out-of-stock are what logistics practitioners avoid as much as they could.  For when there is scrap or out-of-stock, it’s a failing mark for logistics. 

As the case of the health food retailer illustrated, logistics solutions usually come back to basics.   Inbound receipts were moving too slow and caused stocks to run out at stores.  What was needed was re-enforcing policy and focusing on finishing every job of unloading the container van and putting away the items.  With items flowing with fewer delays, the warehouse would be able to repack and deliver to stores the items they sorely needed week to week. 

Logistics can look complicated but the solutions can often be simple. 

About Overtimers Anonymous

How to Deal with Insults

I was insulted the other day.  A senior director on the board of trustees of a high-rise building said I lacked technical education and experience.  For a person who is an engineering graduate and has been in business for almost 40 years, that sounded very much at least like an insult. 

It’s not the first time.  The same senior director accused me of being out of touch and living in an “ivory tower.”   A priest once called me a liar.  Others have called me “stupid” and an “idiot.” 

As we get older in our jobs, conflicts are inevitable.  We will have disagreements with people we work with.  There will be debates that lead to heated arguments.  Almost always, the parties involved will be professional and will focus on the issues.  Once in a while, however, the conflicts would escalate into quarrels that would result in name-calling and insults, and sometimes fist-fights.

People have gotten angry at me and have scolded me.  Some of them I deserve for errors I made; some because I took a stand on an issue. 

We as professionals know better not to insult others.  Yet, it happens, sometimes unintentionally due to emotional outbursts, and sometimes unfortunately because the person doing the insulting is just plain bad.     

We were taught that insults are wrong.  Most religions tell us to respect our neighbours.  Social and legal norms urge restraint and resolution with the help of third parties. 

The latest trend is to exercise empathy, that is, to foster understanding of the points of view of others.  Understanding others would cool any conflict down. 

Exercising empathy is a skill.  It requires practice and it takes time to master.  There’s also no clear standard to know if one has even mastered empathy.  We’d have to rely on the results. 

In this cut-throat world we live in, we play to win.  We therefore become defensive or frustrated when someone else disagrees with us and seems to be putting up barriers to where we want to go.  When that happens, we sometimes lose our cool and we end up insulting others. 

There are also people who just have that personality to insult others.  It’s like they adapted a policy to insult others so as to overcome and step over them.  Whatever we do or say, as much as we try to empathise, they just go on to insult us.  We respond by either avoiding them or insulting them back.  The first is an escape; the other leads to war. 

There are people who don’t let insults affect them and are very good in cultivating relationships with difficult people.  We call these people charismatic and gifted.  We try to emulate them.  But they seem to be in a class by themselves. 

Insults, left by themselves, escalate conflicts and cause wars.  We can avoid those who insult us or become like them and insult them back.  Or we can somehow patiently learn and practice the skills of empathy and become impervious to insults.

It’s our call. 

About Overtimers Anonymous

Six (6) Principles to Successful Flexibility

Flexible manufacturing was popular in the 1990’s.  Twenty years into the 21st century, we don’t hear much about it anymore.  Instead, we hear a lot more about digital and connectivity.  Amid a raging pandemic, people also talk about resilience.

Whatever the buzzword, what matters in the end is how well enterprises deliver versus customer demand.  It’s nice to have a robot that does twice the job of an ordinary person, but it’s another thing when an enterprise didn’t make available items when the customer needed them, which happens more often than not. 

Flexibility is the capability to change quickly and adapt to fickle demand.  It is the ability to switch from one product to another or the means to swiftly tweak a service to meet a customer’s unique needs.    

Flexibility does not happen by itself.  It’s the result of a strategy or a policy.  An enterprise becomes flexible because it decides to do so.

Flexibility is not agility and it isn’t responsiveness, although all three work well together.   Versatility is the combination of flexibility, agility, and responsiveness and is an ideal an enterprise wouldn’t mind having.  But we’re getting ahead of ourselves. 

Flexible systems are applied popularly in manufacturing.  They come in different forms.  The following are some examples:

  • Cells.  Groups of machines run by one to three operators.  For instance, a machine shop that has several groups in which each consists of a lathe, drill, and milling machine run by a single operator.  Each group does its own product from start to finish. 
  • Parallel Lines. Several identical production lines in which each makes a variant of an item.  For instance, three to four soap lines in which each produces a different colour of soap. 
  • Fast Change-Overs.  A production line in which operators can quickly change from one item to another.  For instance, a steel pipe manufacturer which is equipped with jigs and fixtures that are easily adjustable that allows operators to change from one diameter of pipe to another within minutes;
  • Common Core. A product line that has a common base or module to build varieties of items on to.  For instance, an auto assembly line that uses the same chassis for different models of cars and vans;
  • Modular Manufacturing. Using pre-assembled or pre-fabricated modules and assembling them into varieties of products.  For instance, suppliers to an aircraft manufacturer deliver pre-assembled portions such as the fuselage and wing such that the aircraft manufacturer can not only quickly put together an airplane but also mingle the parts differently to produce a different variant (such as a longer fuselage for one aircraft and a shorter one for another). 

Successfully implementing flexibility relies on a few principles:

Think Small

The larger the manufacturing group, the more complicated and rigid the operation.  The smaller the group, the more flexible it becomes.  Having multiple small groups such as cells allows more leeway to customise items of different specifications, at smaller lot quantities, and in shorter time.    

Balance Integration with Autonomy

Integration means connection toward a common goal of delivering value for the finished product or service. It is not centralisation. An enterprise would do well to give individual managers some freedom and authority to design their operations without sacrificing coordination with others. 

Innovate to Invest

Enterprises sometimes have it the other way around.  They invest to innovate.  They pour resources to consultants and outsiders to design the flexibilities.  The enterprise’s stakeholders are supposed to be the experts, so shouldn’t the innovation come from within and not without?  Wouldn’t it better to first tap home-grown expertise and then invest in the innovations that are brought forth?

Cultivate Talent, Not Acquire It

Likewise, with talent.  Enterprises sometimes try to hire the best talent outright.  But those in the organisation know its workings better than anyone else.  We don’t have to limit an operator to one machine; we can train her with another and reward her for the skills she gained on top of the performance she will contribute.  The enterprise reaps productivity as a result.    

Use Multiple Measures

Flexibility has that quirk that it’s not measurable by one metric.  We can measure capacity and service because they are singular.  Flexibility is multi-dimensional.  It requires several metrics and analytics to see. 

Everyone is a Member of the Team

We hear it again and again.  Top management support.  Commitment by everyone.  At the same time, we form task forces that include only a few and leave out the others.  When it comes to flexibility, that one cell, production line, or module does not perform alone.  It needs coordination and synchronisation as much as it needs the space and design to work freely within itself.  The operators in a group are a team, yes, but the group is part of a larger team that puts the groups together toward one goal.  It may have been difficult then, but modern day technology has allowed everyone to stay in touch and be a member of the overall enterprise team. 

Flexibility may be a bygone buzzword.  But it still is very much applicable for enterprises seeking to stay in business amid the challenges and disruptions of the present-day.  They are ways to be flexible, such as via cells, parallel lines, fast change-overs, common cores, and modular manufacturing.   Following some principles, enterprises can progress in productivity and remain on top of the heap.

About Overtimers Anonymous

The Terror Boss

Most of us will eventually encounter the Terror Boss.

The Terror boss is that direct superior who shreds a subordinate’s self-esteem.  He or she:

  • Yells at you, with expletives and words not acceptable for children below 18 years old;
  • Finds faults, never praises, never has anything good to say about you;
  • Assigns lots of work that require overtime beyond the laws of physics;
  • Criticizes you and your work in front of the whole office;
  • Takes credit for any good results arising from your work;
  • Tells you that you don’t deserve a promotion or raise but should be thankful you still have a job;
  • Disapproves requests for off-site training;
  • Doesn’t allow you to reimburse your expenses for official business meetings;
  • Calls you about work when you’re at home or on vacation;
  • Accuses you of stealing when something goes missing;
  • Says you’re lazy;
  • Orders you to do personal errands such as shopping at the drug store and delivering the stuff to his or her residence;
  • Blames you for his or her wrong decisions;
  • Does everything possible to make you feel worthless.

One would eventually have a Terror Boss.  How we respond will determine what we become. 

Managing Multiple Risks

Threats of fire, natural disasters, and supply chain disruptions don’t take breaks.  They don’t necessarily come one at a time.  Risks are mutually exclusive.  They can occur simultaneously. 

Ongoing threats make our lives complicated. We are constantly stretching resources to keep workplaces and homes safe and secure from risks.  We need to always consider that bad things may happen never mind if we have fewer people to count on and less time to allocate. 

Individuals make up organizations and each individual has his or her special role that contributes to the collective success of the organization.  It is in our individual role that we also anticipate, mitigate, and manage the particular risk that each of us would first encounter. 

  • It is the information technology expert who updates software security to protect against cyber threats;
  • It is the engineer who designs facilities for adequate protection against fire and earthquakes;
  • It is the technician who conducts preventive maintenance to minimize unscheduled equipment shutdowns;
  • It is the security officer who sees to it that offices and personnel are protected;
  • It is the human resource professional who checks on the morale and health of employees.

If all of us do our part, we keep risks at bay.  Not just one risk.  But all risks.  Even if they come all at once. 

About Overtimers Anonymous

It’s Time to Start Listening

Joseph Biden wins the American presidency.  Donald Trump has lost.  Many people are rejoicing. 

But the election results were close.  Very close.  So close that one cannot discount that nearly half of the American electorate voted for either candidate.  While President-elect Biden garnered more votes overall, soon-to-be former President Trump won as many as 2,500 out of 3,143 counties in the United States favoured Trump. 

President-elect Biden has called for unity and healing.  I wish him the best.  I’m not optimistic but neither I am pessimistic.  As much as there is hope, it’s going to be really hard for his new administration to do what he said. 

I worked in a factory at West Virginia for a brief year in 1984.  Before that, I studied at the University of Wisonsin-Milwaukee.  Bridgeport was and is the American epitome of small-town America, an apt model for the American folk artist, Grandma Moses

I worked well with the people at the factory and they became good friends.  Managers, foremen, and workers on the floor were a mix of young and old, and predominantly white.

None looked at me as different or inferior.  I was treated the same as everyone else. 

American media got it right when they said that the country needed soul-searching after Trump shockingly won the 2016 elections.  America voted for Trump and many who voted for his opponent, Hillary Clinton, wondered why people would vote for a man who was belligerent and crass in his speeches and social media posts. 

Four (4) years later, Trump again almost won.  The majority of rural America, making up most of the geography of the country, favoured Trump.  Some are asking why, but many just shrug their shoulders. 

I agree with President-elect Biden that America needs to unite and heal.  And it should start with finding out why rural America still liked an incumbent president who seemed to fan flames of racism and conflict.  It starts with listening. 

Listening is not easy.  It requires time and empathy.  It is a skill that is honed.  One has to be patient and be willing to take in the information and views of the other, and painstakingly digest the details. 

Listening’s result is understanding.  We see what the other is saying, thinking, and feeling.  We don’t filter; we mirror; we absorb; we identify. 

Listening requires the setting aside of mindsets and first impressions.  That makes it hard.  But if we reproach people before we even know what they’re thinking and feeling, we’d have an impossible mission to influence them, at least heal any wounds we might have with them. 

The American election experience exposed wide rifts within its society.  It’s a lesson for not only Americans but also for everyone to embrace listening as a first step to healing and unity. 

I learned to listen at that factory in Bridgeport, West Virginia.  I had to.  The projects I undertook as a new engineer required the enrolment of employees to my ideas.  But as I got to know them, saw their situation, and understood their jobs a little, their views instead shaped my ideas.  My project solutions became more of theirs.  Many turned out simple and successful.

America is divided.  A newly elected president calls for healing.  Realistically, it will be a challenge.  It starts with listening.  Listening won’t be easy.  But when one invests in it, even a little, it will be well worth it. 

About Overtimers Anonymous