This is the first issue in the online format. We know we can improve and will improve as we grow our knowledge of this web based system. We are not in Mircosoft world as we have been used to utilizing for previous news letters. Meantime we encourage members to "opt in" for APICS and chapter updates! APICS link
Summer is finally moving on and Fall is upon us. Days at the beach being replaced with holidays and cold weather. Life moves on...
So that means APICS moves along too. In case you have not heard, APICS introduced some changes recently.
The standard barrier for our profession, CPIM, has gone through a significant upgrade. As of August 1st, the CPIM certification is now two parts - that means two exams. The new program has received some nice enhancements integrating online technology as well as removing duplicated topics. CPIM-Part I is closely matched to the old Basics of Supply Chain Management. CPIM-Part II contains content from old modules 2, 3, 4, and 5. What does this mean for you? An opportunity! CPIM can be earned in less than 6 months. PTC is also piloting a new 100% online class for CPIM - check out website for details. Deadline is fast-approaching!
Locally, this change is allowing us to structure our classes where anyone can participate and pass exams in a relatively shorter time than the previous format. Starting January 2018, Piedmont Triad APICS will be offering both parts of the CPIM program so one can complete before the summer returns. Hmmm... And don't forget about the new Certified in Logistics, Transportation and Distribution (CLTD) program. A new certification focused 100% on logistics.
Lastly, the volunteers of Piedmont Triad APICS have been working diligently to bring you quality professional education opportunities every month. Check out our website (www.triadapics.org) to see what's on deck for November -- Leadership Night. A great opportunity to bring along a colleague or even your manager to learn more.
We look forward to seeing you at a future APICS meeting!
Board of Directors
Chapter President 2017-2018
Piedmont Triad Chapter of APICS, Inc.
APICS 2017 National Conference
The APICS National Conference took place on Oct 15th in beautiful downtown San Antonio, TX and I had a great privilege to attend, representing our PTC Chapter. This was my first time attending and I did not know what to expect. To my satisfaction, the three-day long conference was inspired by the Supply Chain Operations Reference (SCOR) model and it featured more than 65 educational sessions. During these sessions, we were exposed to world-class education and forward-thinking presenters covering all areas of the end-to-end value chain.
The opening session featured keynote speaker John Mackey, co-founder and CEO of Whole Foods Market and a co-author of the book Conscious Capitalism: Liberating the Heroic Spirit of Business. Mackey’s presentation delighted me with his ideas and theories about the free enterprise capitalism. He passionately believes that nowadays it very much matters how a business makes money. Business is not a game, not a machine, not a math equation, and definitely not a war. Business is about real life and real people. Consequently, he is encouraging us to change our limited thinking about business and embrace forward thinking concepts of conscious leadership based on solid principals of trust, accountability, caring, transparency, integrity, loyalty, and egalitarianism.
PTC gave away a copy of John Mackey’s book to one lucky winner at our Professional Development Event (PDE) on Tuesday, November 14, 2017 at Volvo.
Since logistics and transportation are my areas of expertise, my favorite educational session was Digital Logistics: The Future of Delivery, presented by Jack Allen, Senior Director, Global Logistics at Cisco. Allen’s vision for the improvements in logistics are based on Digitization. There is a difference between automation and digitization. We know that the logistics transactional infrastructure is old and we are doing a good job of automating processes but we are not yet doing a good job of digitizing. Through Automation we have taken existing processes and converted them largely to bit and bytes but we did not change the fundamental underlying processes. We eliminated the manual “bookkeeping” but humans are still the central part of the process. By introducing digitization we will take existing processes and completely convert them to bits and bytes and fundamentally change the underlying processes to take advantage of the new technology. We will take the intermediaries and “break fixes” out and instead our routine will be handled by the machine. So instead of humans downloading the data, reviewing spreadsheets, making phone calls/emails to investigate, and reacting to issues, the computers will evaluate data from multiple sources creating event management and humans will work on exception management and improving the software. I am very interested in these improvements and software like Blockchain that could help us start moving in this direction. Fun fact is that the first reported Bill of Lading was issued in 1793 in the case Snee v Prescott after which the practice of using a negotiable bill of lading has become well established and is in common use to this very day. I believe it is safe to say that the changes to this process are way overdue.
Board of Directors
Executive VP 2017-2018
Piedmont Triad Chapter of APICS, Inc.
CL6 Provides Three Advantages for Continuous Improvement
by John D. Hudson Jr., Principal - Sustained Systems Solutions LLC
Rather than disputing the merits of these methodologies, find synergies among Theory of Constraints, Lean, and Six Sigma
To achieve sustainable continuous improvement, leaders should address two critical strategic issues.
1. "Is the organization using the proper measurements?" This involves whether improvement efforts sometimes fall short of improving overall (global) performance. Perhaps the concentration has been on local improvements that may not help the overall system.
2. “Does the organization have excess capacity?" This involves finding out the current relationship between the organization's capacity and demand. Perhaps the company can make more than it sells or sell more than it makes.
Organizations need three key advantages to be competitive - Focus, Flow and Stability. All three can be accomplished with a vigorous application of what may be called CL6: for Constraints management, Lean and Six Sigma.
Focus is perhaps the most important key advantage. Without appropriate alignment to the organization's situation, the direction of improvement efforts may be misplaced. For example, if a manufacturing plant has excess capacity, a Lean implementation would yield even more excess capacity. A better approach is to stimulate demand via better marketing, increased sales or new product development. Lean can reduce Lead-time that may increase demand from customers and prospects that need quick responses.
Flow or velocity is the key advantage achieved by Lean and constraints management. If demand is greater than capacity, a wise Lean implementation will result in significant capacity increases. Capability to flow more product (and relevant information) also will flow more revenue through the organization. Drum-buffer-rope (DBR) is the proven pull system best practice for maximizing flow by exploiting the "drum." The drum is the capacity constraint or pacemaker for the system. DBR protects the drum from disruptions with "time buffers." It also synchronizes all other resources and decisions to drum activity via a "rope." For example, material is only released to the system at a pace that the drum can process.
Stability is the third key advantage that every system needs. Improving an unstable system is very, very difficult. Efforts to measure cycle times in this situation often will give highly variable results. So reducing variability is sometimes a necessary initial step in order to determine the true capacities of your organization's processes. Effective ways to stabilize a system include reductions of work-in-process inventory and Six Sigma tools and practices.
Constraints management (aka TOC for Theory of Constraints) provides the leverage from proper focus. Some have misconceptions about TOC. The strategic constraint to a system may not be physical (like a bottleneck), but rather a written or unwritten policy that limits the system from achieving more of its purpose. All operations are characterized by dependencies, finite resources and variability. The TOC approach avoids local optimization that can hurt overall (global) performance. Overall system performance is always worse when local measurements are combined with local optimization.
Lean principles aim to maximize flow by avoiding or minimizing impediments to smooth flow or velocity. There may be some common misunderstandings about Lean. Lean Enterprise is a term preferred to Lean Manufacturing, since Lean principles apply beyond the production environment, even into nonindustrial settings like healthcare. Lean is not focused on reducing jobs or headcount so L.E.A.N. is not an acronym for Less Employees Are Needed.
Six Sigma has tools to reduce the variability that harms organizational performance and makes improvement elusive. Some may view Six Sigma as overly technical with tedious advanced statistical approaches. In reality, 80 % of Six Sigma improvements come from the DMAIC (define, measure, analyze, improve, control) problem-solving approach, that often uses only about 20 % or less of the tools.
Another acronym for this trio is TLS for Theory of Constraints, Lean & Six Sigma. TOC and CL6 (TLS) have been implemented in thousands of organizations in both the private and public sectors around the world. Results have improved systems in many situations and resulted in billions of dollars of bottom-line benefits.
CL6 worked well in the three cases described below; one in Services, one in Healthcare and one in manufacturing.
Services: Helping Amy at the truck stop
A large truck stop at the intersection of two interstates was losing revenue from poor customer service. Most of its revenue came from drivers of tractor-trailer trucks who stopped to refuel. They naturally wished to fill up quickly and get their big 18-wheelers back on the highway after paying. Keep in mind that this true story happened before the days of paying at the pump with a credit card. So the drivers typically stood in a line with their credit card waiting for the cashier.
Unfortunately, the lone cashier (let's call her "Amy") was overloaded with other tasks that slowed down her cashiering. Amy was answering the phone and even flipping burgers at times. Some drivers tolerated the delays, but others stopped frequenting this site or vowed to find another truck stop. Amy's multitasking hurt cashiering and sometimes resulted in quality problems with the orders she took over the phone or the burgers and other items she cooked.
The analysis of the situation did not require rocket science or advanced statistical techniques.
As Yogi Berra once said, "You can observe a lot just by watching."
It’s crucial to note that the improvement approach did not blame Amy as the bottleneck or problem. The capacity constraint was cashiering, not Amy. Replacing Amy with another person was not the direction of the solution.
Recall TOCs 5 focusing steps are: 1) Identify the system's constraint; 2) Decide how to exploit the system's constraint; 3) Subordinate all other activities to the exploitation decision; 4) Elevate the system's constraint; and 5) if the constraint moves, Go Back to step #1. Step #1 was intuitively obvious. Note that steps #2 and #3 were not skipped by going immediately to step #4. It would have been premature to add another cash register and cashier before squeezing out all the value-added cashiering from the existing cashier.
So, the decision was made to offload Amy from all the non-cashiering tasks involving the phone or cooking. Other truck stop employees were able to absorb the phone and cooking tasks without negative consequences. Hiring an additional cashier probably could have been cost justified by the increased revenue from smooth cashiering.
The positive outcomes included customers who were delighted because they were able to pay faster and get back on the road. Telephone food orders also were handled more promptly. There were even fewer quality problems in food preparation.
Beyond TOC, Lean principles were implemented at the cashiering process. Since this was the capacity constraint, workplace organization and 5S were focused there. Anything that delayed or distracted Amy from cashiering was removed or relocated. Everything she needed for smooth operation was organized and visually labeled.
Six Sigma could have been considered to answer questions about what factors most affect a truck driver's decision to use this truck stop. Problems or opportunities in which the solution is not known or obvious are good candidates for a Six Sigma project.
Healthcare: Emergency Departments need to minimize waiting and often need more capacity
The CEO of a regional medical center hired a Lean Six Sigma black belt to lead improvement projects. The young black belt had significant healthcare experience but was coached to incorporate Constraints Management (TOC) to add focus to Lean and Six Sigma.
This case study has three learning objectives: a) Recognize the critical roles of both leadership support and robust guiding principles in the implementation of change; b) appreciate the role of data in ensuring that a change is impactful; and c) understand the importance of employee ownership for achieving sustainability of improvements. International consultant Eli Schragenheim, who collaborated with TOC father Eliyahu M. Goldratt, says: "What to focus on? This is the question."
The black belt and coach chose the hospital's emergency department for an initial project. Patients have choices, and recent experiences in this department have a primary effect on patient satisfaction. Another rationale for picking this unit was the worldwide crisis of overcrowded emergency departments, which often serve as the front door of most hospitals.
Before describing some challenges for this department, some Six Sigma operational definitions for this situation should be understood.
- Length of stay (LOS): Elapsed time from arrival until departure
- Provider: Physician or midlevel provider, e.g., a physician's assistant
- Medical screening exam (MSE): Initial provider interview and assessment
- Door-to-doc (D2D): Elapsed time from arrival until provider greeting
- Left without treatment (LWOT): Patients who leave before the medical screening exam.
The "patients first" concept noted that there is a direct correlation between length of stay and mortality, and wait times are a huge dissatisfier. Several metrics needed attention.
The emergency department had a LWOT rate of 8.1 %, compared to the national average of 2 %. A reasonable target was 1.5 %. Door-to-doc was 88 minutes compared to 75 minutes statewide & 55 minutes nationwide. Length of stay has a significant effect, since lowering that metric from 6 hours to 2 hours triples the capacity of patients per day for each room or bed. The return on investment (ROI) for this type of improvement is much better than for capital expenditures.
Process flow was: Arrival; RN-triage; bed; medical screening exam; tests; disposition-decision (admit, depart, refer or other).
A regression analysis of LWOT revealed that the most important factor was not door-to-triage or door-to-bed but door-to-doc.
After the analysis, the question for the team was how to cause the change? The leaders selected a team for an employee-owned Kaizen event (aka RIE or Rapid Improvement Event) with facilitated coaching of an eye-opening "current state" analysis.
The team focused on reducing any wait time that adds to length of stay & door-to-doc, time that doesn't add any value to the patient. Efforts concentrated on beginning the medical screening exam as soon as possible. The team sought to eliminate or postpone anything that delays MSE. The employee team developed training material, led the training and managed a pilot.
The team members designed a new process that reduced 84 steps to just 12. They piloted their changes, as it's always best to test drive a new process and adjust as needed. They then chose to go live.
Positive effects were dramatic, including a dramatic 78 % reduction in wait times to see a provider and a 90 % reduction in the rate of patients who left without treatment.
Based on revenue from emergency department visits and admissions, this reduced rate of LWOT translated into more than $2 million in potentially recaptured revenue charges.
Since metrics drive behavior, a multilayered approach was used to create a process of ongoing improvement ("POOGI"). It included daily emails with hourly results, a biweekly metric review and daily metrics for both providers and the nursing staff.
The improvement team front-line staff always immediately investigated problems with quality or delays using visual analysis and dialogue. The acronym WWW/TALA (What Went Wrong/Take A Look Around) described this approach.
Significant improvement and sustainability for a Manufacturing firm
For most organizations, including manufacturing firms, sustaining improvements can be an ongoing challenge. Examining your own experiences with improvements likely will likely confirm this statement. This case study company is a progressive & successful manufacturing organization that has its niche at the intersection of high-definition color envelopes, direct marketing materials, digital printing technologies and related expertise. This enterprise has been successfully managed by TOC principles for many years. The company's CEO realized that its operations would benefit from developing into CL6. Adding Lean and Six Sigma knowledge and skills for key leaders of the management team would provide new opportunities. Both Lean and Six Sigma have proven ways for sustaining improvements.
How does TOC promote sustainability? Consider the 5th step of the 5-step improvement process:
1-Identify the system's constraint
2-Decide how to exploit the system's constraint
3-Subordinate all other activities to the exploitation decision
4-Elevate the system's constraint
5-If the constraint moves, go back to step No. 1 (avoid inertia).
If the constraint moves, priorities change significantly. Strategic actions to stabilize the constraint avoid these challenges. The CEO recently contracted for an initiative to integrate Lean and Six Sigma understanding and application. It was understood and agreed that TOC metrics would continue, so Throughput would remain the No. 1 priority.
Throughput dollars = Sales $’s minus totally variable cost $’s (TVC). TVC costs include raw material costs, sales commissions & any freight not paid by customers. This means that the result, Throughput $’s, are the "stick-to-the-ribs" $’s that contribute to profits.
Lean and Six Sigma could offer opportunities without compromising either TOC principles or measurements.
The project began with a full day, hands-on workshop that combined the principles of TOC and lean for 20 key managers. While some had experienced TOC and lean education, this event provided a common platform to synchronize their understandings. This workshop was designed with the goals of helping participants gain a better understanding of how to manage their own systems (including production systems and quality systems) to learn what changes help and why they help and to understand what changes to make to their existing systems.
The event allowed participants to experience challenges in a simulated factory to understand both TOC and Lean principles. The workshop shows the "How to" version of The Goal video and applies its concepts, including: The 5 focusing steps, synchronous flow, DBR (drum-buffer-rope) & buffer management.
Participants experienced how TOC provides focus for leverage and that with Lean, "there's no business like flow business."
In reality, continuous improvement involves recognizing and solving problems. As the French surrealist Andre Breton said, "To see, to hear, means nothing. To recognize (or not to recognize) means everything."
Next was a daylong problem-solving session including Six Sigma's DMAIC approach & an introduction to the A3 problem-solving tool. Participants were then facilitated in discussing practical applications of these methodologies to real-life challenges.
Some problems are complex, broad in scope and may require months to gain and sustain improvement. A Lean Six Sigma project with the five DMAIC phases is appropriate in such circumstances. Other challenges are moderate in scope & improvement may be achieved via a kaizen event (rapid improvement event), essentially a time-compressed DMAIC. Finally, some specific problems can be analyzed and solved by teams of employees who are familiar with the process. These may be called quick wins. A3 provides a standard approach for quick wins & can be used in many ways. Progressive organizations need to use all three approaches.
This manufacturer had 2 negative effects or challenges:
1. Frequent last-minute schedule changes
2. Throughput $ losses because of insufficent preventive maintenance
Often, the brutal truth is that well-intended sales people may trigger last-minute changes or expedite orders for the sake of "better customer service." Uncontrolled, such changes can chew up manufacturing capacity, yielding less total customer service capacity to sell.
For this organization, the sales team participated in the workshop and grasped that stable schedules result in better manufacturing performance. Sales professionals were persuaded that this enhanced production capacity would improve overall customer satisfaction. They, along with production and management personnel, understood that better performance would come by moving toward more stable schedules and away from frequent last-minute schedule changes.
In maintenance, one way to gauge the effectiveness of maintenance is to determine the % of maintenance activities that are planned (i.e., preventive) and the % that is unplanned ("emergency"). Unplanned maintenance is usually much more problematic and expensive.
The"House of Lean" analogy below shows that lower-level Lean tools are necessary for successful TPM.
This figure above shows Six Sigma’s five stages. Note that the Control stage specifies activities that matter most in sustaining improvements.
A triple combination for improvement
These three case studies illustrate a range of appropriate application areas for CL6. It blends the three proven improvement methodologies of constraints management (TOC), Lean and Six Sigma to create maximum synergy for accelerated results.
Perhaps it would be advisable to replace disputes about which methodology is best with an objective search for their synergies. Integrating strategic constraints management principles with Lean and Six Sigma tactical tools provides a powerful combination.
John D. Hudson Jr. is principal of Sustained Systems Solutions LLC.
He previously was a senior project manager with GENEDGE Alliance, Executive Director of the A.L. Philpott Manufacturing Center, Director of Technology Assistance for Virginia's Center for Innovative Technology (CIT), president of Advanced Data Technology Inc., research statistician, business systems analyst & manufacturing systems manager for Dan River Inc., & a statistician for Tennessee Eastman Co. John earned his M.S. in Statistics and B.S. in Mathematics from Virginia Tech.
He is a certified Lean Six Sigma Black Belt and certified academic Jonah from the Avraham Y. Goldratt Institute.
"Robotic Automation and how it relates to the APICS Body of Knowledge"
Presented by Chris Urbane
Tuesday, Dec. 12th, 2017
5:15pm - 7:30pm
The Volvo Communications Center
7900 National Service Road
Greensboro, NC 27409
Christopher Urbane, Industrial Engineer, will present Robotic Automation and how it relates to the APICS Body of Knowledge. He will discuss how automation affects capacity, process, flow, LEAN, and adds value to an organization’s complex manufacturing processes. Christopher will use a recent robotic installation at Volvo Trucks North America Body in White as the launching point for this discussion. Talking points will tie directly into the APICS Body of Knowledge as it pertains to an industrial manufacturing setting. Learn how APICS principles apply directly across organizations in different industries, no matter what your role, function, or business you are in.
Things you will learn:
How Industrial Automation improved material flow, eliminated parts handling, and reduced WIP.
How automation was leveraged in designing the Element of Human Error out of the process or Poka-yoke.
How robots deliver sustainable and reproducible results consistent with LEAN and Six Sigma Thinking.
The point of automation is not to take away jobs although that may seem like the immediate result.
How to run and implement a successful program by discussing best practices as experienced along with what not to do.
The long-term effects of automation on the manufacturing industry in general
Who should attend?
Professionals, students, stake-holders, and others that may be directly influenced by automation in the workplace.
Those who would like to learn more about what it is like working as an Industrial Engineer in the automotive industry.
Process owners that are considering or struggling to implement automation in their business unit.
Menu: Christmas Dinner: Farmer’s Harvest Salad: Roasted butternut squash, ancient grains, diced apple, fennel, toasted pumpkin seeds, kale, ginger-turmeric vinaigrette, Prime Rib with Au Jus and Horseradish, Cheddar Scalloped Potatoes, Grilled Asparagus with Grape Tomatoes and Mushrooms, Yeast Rolls, served with butter, Cinnamon Apple Pear Crisp, Sweet Tea and Un Sweet Tea, Bottled Soda and Water, Starbucks Coffee service.
Visit www.triadapics.org to register!
“Blockchain’s Roles in Meeting Key Supply Chain Management Objectives”
Presented by Nir Kshetri
Professor of Management at The University of North Carolina at Greensboro
Tuesday, Jan. 9th, 2018
5:15pm - 7:30pm
The Volvo Communications Center
7900 National Service Road
Greensboro, NC 27409
Nir Kshetri, Professor at UNCG - University of North Carolina-Greensboro, will explain Blockchain’s roles in meeting key supply chain management Objectives. By discussing case studies of blockchain projects at various phases of development for diverse purposes, Nir will demonstrate how blockchain is likely to affect key supply chain management objectives such as cost, quality, speed, dependability, risk reduction, sustainability and flexibility.
Arrival of blockchain is set to transform supply chain activities. This presentation examines how blockchain is likely to affect key supply chain management objectives such as cost, quality, speed, dependability, risk reduction, sustainability and flexibility. Early evidence linking the use of blockchain in supply chain activities to increase transparency and accountability is presented. Case studies of blockchain projects at various phases of development for diverse purposes are discussed. It illustrates the various mechanisms by which blockchain help achieve the above supply chain objectives. Special emphasis will be placed on the roles of the incorporation of the IoT in blockchain-based solutions and the degree of deployment of blockchain to validate individuals’ and assets’ identities.
Keywords: auditability, blockchain; Internet of Things; network effects; supply chain; sustainability
Nir Kshetri is Professor at University of North Carolina-Greensboro and a research fellow at Kobe University. Nir has authored seven books, one of which is selected as an Outstanding Academic Title by Choice Magazine. Nir has published over 110 articles in various journals. Nir participated as lead discussant at the Peer Review meeting of the UNs Information Economy Report 2013 and 2015. Nir is the winner of 2016 Bryan School Senior Research Excellence Award. He is also a two time winner of the Pacific Telecommunication Council’s Meheroo Jussawalla Research Paper Prize (2010 and 2008). Nir has been interviewed and/or quoted in over 200 TV channels, magazines and newspapers. He has been quoted/interviewed and/or his work has been featured by hund reds of media outlets worldwide such as Foreign Policy, Bloomberg TV, CBS News, Christian Science Monitor, U.S. News & World Report, New Boston Post, Observer and Salon.
Chapter management excellence is an integral component to enhancing the member experience. Successful APICS chapters provide their members with opportunities for stellar education, career development, and networking. The APICS Chapter Benchmarking and Reporting (CBAR) program recognizes chapters that have exceeded minimum standards and exemplify excellence in overall chapter management. We are proud to announce the APICS Piedmont Triad Chapter received the 2017 CBAR Platinum Award designation, an admirable accomplishment for an APICS chapter. As a member of an APICS Platinum Award Winning Chapter, the CBAR designation signifies commitment to providing an exceptional membership experience.