Benefits of Quick Response Manufacturing (QRM)

Could you use help reducing lead times to bring your products to market more quickly?

Many companies have felt the spikes in demand for various products during the COVID-19 pandemic. QRM is a strategy to help your company be positioned to pivot and respond quickly.

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. Below we share more information on what QRM is and how one company was able to step up and aid in the development of a new Coronavirus test.

Per the University Wisconsin-Madison Center for Quick Response Manufacturing, QRM is a companywide strategy to reduce lead times across your enterprise. It can bring your products to market more quickly and secure your business prospects by helping you compete in a rapidly changing manufacturing arena. It will increase profitability by reducing non–value–added time, cutting inventory and increasing return on investment.

The UW-Madison Center for QRM shared a recent success story highlighted below:

QUICK RESPONSE MANUFACTURING (QRM) PRINCIPLES ENABLE PROMEGA CORPORATION TO AID IN DEVELOPMENT OF NEW CORONAVIRUS TEST

Promega Corporation of Madison, Wisconsin was recently recognized by its customer, Utah-based Co-Diagnostics, Inc. for the support Promega custom manufacturing provided in the rapid development and launch of the new Logix Smarttm COVID-19 Test. This test is now approved and available in Europe as an in vitro diagnostic and continues to advance toward emergency use clearance as an in vitro diagnostic in the US as well as India. Co-Diagnostics used the Promega PCR Optimization Kit to refine its custom master mix for coronavirus testing.

The Promega Custom Operations team then manufactured, QC tested, dispensed and packed the customized PCR assay reagents under the highest quality standards IN LESS THAN 10 BUSINESS DAYS.

Promega Corporation is a member of the Center for Quick Response Manufacturing (QRM) at the University of Wisconsin-Madison, and company leaders credit the use of QRM lead time reduction principles for dramatic improvements in their ability to respond quickly to unique customer orders and requests.

The QRM Center is a partnership between industry, faculty and students dedicated to the development and implementation of lead time reduction principles.

According to Promega Senior Manager Kristina Pearson, who oversaw implementation of QRM at the company, “As Promega’s custom manufacturing business continues to grow, we understand that lead time reduction is critical for market success.  Based on our objectives, QRM principles were a natural fit to meet our goals.”

Working directly with the QRM Center’s students and staff, Promega designed both office and product finishing cells to address the need to assess and evaluate inquiries, process orders and answer questions rapidly with a high level of customer service.

As Pearson explained, “A unique aspect of QRM is the focus not only on the manufacturing shop floor but also in the office area.  Most manufacturing principles focus solely on shop floor efficiencies.  Our initial evaluation helped us realize some key inefficiencies in our office processes.  We worked with a graduate student from the QRM Center to help us analyze our functional roles, using various modeling programs, to create a solution tailored to our business.  As a result, we moved cross-functional roles into a single co-located office space.  By co-locating staff, the team is able to quickly talk with each other in an open office area to get questions answered instantaneously instead of waiting for someone to respond to email.”

“In addition,” Pearson said, “Promega created dedicated office and lab spaces to build additional capacity for our custom business.  Our team was involved with office and lab space layouts.  We also worked with the QRM Center to help us design our new spaces in order to maximize the area for lead time reduction.”

As a result of these efforts, Dwight Egan, CEO at Co-Diagnostics said, “Promega proved to be an invaluable partner, enabling us to rapidly deliver high-quality diagnostic solutions using our CoPrimerTM technology. Our business model demands that we work with a manufacturer that can re-prioritize quickly, enabling a truly rapid response to emerging infectious diseases, and Promega provides us with that high level of service. Their dedication to customer support was instrumental in bringing a detection solution to the market.”

According to Promega’s Pearson, as a result of the projects conducted with the QRM Center, the company has been able to reduce its lead time for basic custom orders from 15 working days to 10 working days. In addition, the extra capacity built into lab and office space design with the Center’s help allows the company to meet requests in as little as five business days for emergencies like pandemic responses.

To read this success story and more, visit the UW-Madison Center for QRM website.

Looking for more information on QRM? Join us on December 10th to hear from Dr. Charlene Yauch, the Associate Director for the Center for QRM and a Professor of Practice in Industrial & Systems Engineering at UW – Madison. Register today: https://apicsmilw.org/meet-reg1.php?id=592.

Toyota President Speaks to Toyota Production System - Part 2

Photo source: Toyota

Are you familiar with the Toyota Production System (TPS) and how it was central to the success Toyota still enjoys today?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world.

Toyota was one of the few auto makers to deliver a quarterly profit in 2020. Recently their President, Akio Toyoda, shared his view on the Toyota Production System and how that is what makes them Toyota.

In this 2-part series, we’ve summarized below Toyoda’s perspective of TPS as he kicked off a new TPS Leaders training program as shared in the Toyota Times.

Part 1 shared Akio’s thoughts on the meaning and history of TPS and the true purpose of process improvement focused on making someone’s work easier and safer. 

In part 2 below we’ll review how Akio sees concepts like Just-in-Time, achieving lead times, and Genba (place where work is done). Read more below.

4. How Akio sees Just-in-Time

During his presentation to Toyota employees, Akio shifted to explain the other pillar of TPS, Just-in-Time.

To illustrate this concept, Akio turned to Sakichi’s son, the founder of Toyota Motor Corporation, Kiichiro Toyoda, who introduced and implemented Just-In-Time. A phrase that is commonly associated with this concept is: “Provide what is needed, when needed, in the amount needed”. On this concept, Akio offered a unique explanation as demonstrated in his conversation with an employee below.

Akio: What comes to your mind when you think about Just-in-Time?

Participant C: Provide what is needed, when needed, in the amount needed.

Akio: That’s correct, but what is the practical meaning of it?

Participant C: Um…

Akio: Considering a “what is needed when needed” approach, to respond quickly to customer needs, there would need to be a lot of inventory, right?

Participant C: Normally, yes.

Akio: One finished vehicle consists of about 30,000 parts.

Participant C: Right…

Akio: So, it would follow that for a production line to flexibly produce orders quickly, a tremendous amount of inventory would need to be present, right?

Participant C: But if we know and can meet what customers want…

Akio: Who do you mean by “customers”?

Participant C: Each downstream process… or our final end users.

Akio: But we sell around 10 million new vehicles annually, and that means we have the same number of customers. How can we understand what is needed by each specific customer? It would be impossible to do. So what do we do? We have to have a lean operation in place to detect abnormalities right away and stop what is in the pipeline so that we can make improvements quickly.

And that’s why we need just in time. Granted that this is my way of understanding it, but I think the “tool” or “concept” that helps make this easier to understand is “lead time”

At Toyota, a common term for the next process, whether it be in manufacturing or in an office workflow, is “downstream process” or “Ato-Kotei” in Japanese. Those in the downstream are considered a “customer.” When thought of this way, those engaged in the work will try their best to avoid providing their downstream customers with defects. If this mindset is adopted and ensured in each process, the result is that there will be no chance that the final end users receive something defective.

In addition, the workers also start thinking about how they can contribute to making the work at the next process easier, making adjacent processes collaborate to make improvements. The result from those efforts is higher productivity, and how it should be achieved, according to TPS.

5. Achieving lead time at Sushi restaurants?

Next Akio shared an example related to Sushi restaurants, known for the freshness of their products and their ability to take orders and fulfill them quickly. At authentic Sushi restaurants the finished orders are not just waiting in front of the chef. After you place your order, the chef takes out a slice of the prepared raw fish, cuts it to size, combines with rice to make the sushi piece and delivers it to you. The point is they keep lead time as short as possible.

In Toyota world, it’s not possible to prepare every specification in advance for 10 million customers. The key then is trying to shorten lead time. Akio states, “Therefore, similar to the Sushi example, the ideal for Toyota would be to manufacture vehicles just after an order comes in from customers, by having preparing parts on hand to quickly assemble and then deliver to customers, but that is not realistically possible. That is why Toyota believes and places emphasis on continued efforts to shorten the lead time at each process.”

6. “Genba” (place where work is done) matters more than titles

After Akio completed his explanation, one participant raised his hand and shared a comment and below is Akio’s response.

Participant: Thank you very much for your time today. I’ve been at Toyota for 20 years now, and this was my first opportunity to be this close to you, so I’m pretty excited. When I had just joined the company, my general manager taught me that “work is about to making life easier for others.” Now, 20 years later, hearing your view on Jidoka, or looking to take unnecessary burdens from others around you, I feel like everything has come together in this moment.

Akio: I would often face challenges when doing kaizen activities together with dealer staff members.  Whenever there were issues, the mechanic or the sales staff at the frontline were bothered most by it. Though they would share issues with upper management through daily reports, often it was not really understood.

I asked them “Why didn’t you report the problem to the sales manager earlier?” To which, the sales manager replied: “You are definitely from Toyota -- that’s exactly what I said at the regularly held sales manager’s meeting!”

I replied “But the sales manager’s meeting is held once a week only, right?” Then, I met with a sales executive at the dealer, and asked the same thing – to which he replied “That’s exactly what I always request at the regular executive meeting!” But as you can imagine, that executive meeting is held only once a month.

So this is partly why I decided to abolish certain titles. When it comes to implementing just-in-time processes, the person in charge or subject matter expert is the most important. A daily report may be more beneficial than other reports or meetings. As a title gets higher, the frequent may be reduced to be weekly, monthly, and annually.

They say people with titles make decisions, but the speed of kaizen gets slowed down there…So please don’t take 20 years to figure it out (wink). Make it a daily basis. Think about how much more impact it will have.

In this way, Akio explained that abolishing certain titles in the hierarchy of Toyota, including executive vice presidents, aimed to speed up the kaizen process. Shortening lead time for customers, making existing work processes easier for colleagues, and improving the quality of the time spent for work for the sake of each member and the member’s family – that is what TPS is about.

As we saw in part 1 of this 2-part series, TPS was founded on the idea of “doing things for others”, an idea that was inherited early on in Toyota’s history and continues to be practiced today. When Akio talks about bringing back ‘what makes us Toyota’, he is really talking about this value of doing things for others, the true heart of TPS.

Looking for more information on the Toyota Production System? Join us in November to hear from Errette Dunn, Co-founder and CEO of Rever, Inc. on How Toyota really works and the secrets behind TPS based on his experience. More info below:

 

 

Toyota President Speaks to Toyota Production System (2 Part Series)

Photo source: https://www.todaysmotorvehicles.com/

Are you familiar with the Toyota Production System (TPS) and how it was central to the success Toyota still enjoys today?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. Toyota was one of the few auto makers to deliver a quarterly profit in 2020. Recently their President, Akio Toyoda, shared his view on the Toyota Production System and how that is what makes them Toyota.

In this 2-part series, we’ve summarized below Toyoda’s perspective of TPS as he kicked off a new TPS Leaders training program as shared in the Toyota Times.

Part 1 will share Akio’s thoughts on the meaning and history of TPS and the true purpose of process improvement focused on making someone’s work easier and safer. Read more below.

1. Sakichi Toyoda looked to ease his mother’s burdens.

The purpose of the training program is for Toyota’s management leaders who don’t work at manufacturing frontlines to gain a deeper understanding about TPS to help the company accelerate its efforts to bring back the essence of “what makes it Toyota” as it looks to completely redesign Toyota for the future.

Akio asked the group what were the two key concepts deeply rooted in Toyota since its foundation. The right answers were presented of “Just-in-Time” and “automation with a human touch”, or “Jidoka”. He shared a story to help the group understand Jidoka, by first showing the automatic loom invented by Sakichi Toyoda…

Sakichi was the son of a carpenter. It was said that he read various books and studied every day, thinking about ways he could make a contribution to society. Then, one thing came to mind while the young Sakichi was thinking about his mother, and how she toiled to weave fabrics every evening and late into the night. He wondered if there might be a way to ease her burden. That was the focus of young Sakichi’s attention.

It may be well known that Toyota started from the invention of a wooden hand loom, but the background of why Sakichi dared to invent such a machine may not be known as much.

Back when Sakichi developed his first automated loom, people had to use both hands to control the threads of warp and weft. His invention allowed for his mother to operate a loom using only one hand. His invention also helped improve the quality, increasing overall efficiency and dramatically improving productivity.

Often at Toyota, TPS is considered the process of making things efficient, but Akio said the purpose should be to make someone’s work easier.

2. Improving productivity was not the main purpose

Then Akio directed the participants to the next machine, called the “Type G automatic loom,” the machine that helped drive a drastic full model change of Toyota’s business. Automatic looms used back then were always monitored by one operator with a mindset of “one person, one machine”. People were the guard of each machine. This machine was able to detect such abnormalities at a time when there were no “sensors”.

With this automatic loom, Toyota was able to secure the capital required for it to shift its business model from an automatic loom manufacturer to a car manufacturer. This was enabled because a world-leading automatic loom company in the United Kingdom asked Toyota to sell this automatic loom technology to them.

An important point was that the old process created a lot of dust that often damaged workers lungs. The invention developed by Sakichi and his colleagues included a new feature that made it not only easier, but safer for the workers by automatically bringing thread end out on the pipe to where needed when the thread had been cut off.

When we say “invention”, it may sound like something very advanced, but it was actually the result of Sakichi simply exploring a desire to do something for his team members at the manufacturing frontlines who were suffering damage in their lungs. He aimed to create a system that would determine what the abnormalities were caused by and then coming up with ideas to prevent or stop such abnormalities. As a result, productivity improved. It’s not the other way around. It’s not that he did all this just to improve productivity.

3. How Akio sees Jidoka (automation with a human touch)

Akio shared that he sees Jidoka as being centered on people. It’s about thinking as if you were the one working there. You can’t just make orders to improve efficiency or reduce resources while you are in a safe zone and not at the frontline.

There’s also this idea about adjusting the work to match the full output of one manpower (pursuing Ichi-nin-ku in Japanese). This concept of “Ichi-nin-ku” means the amount of work, the workload or capacity, that one worker can or should accomplish in a day. Akio continued his explanation on this with the following example:

We all only have 24 hours in a day. You don’t get more hours, like 48 hours in a day, when you are busy.

This 24 hours is a condition equally applied to all. That time includes family and a private time, but a lot of it is devoted to work for a company.

Knowing this, supervisors must make the work being done by team members as meaningful as possible. That is what Toyota’s manufacturing frontlines have been pursuing.

In other words, increasing work that truly adds value while reducing work processes that are redundant or cause team members to wait.

So my personal take on TPS is that it is “centered on people,” and this is the mindset I would like for all of you to take with you.

One of the ideas embraced within TPS is an obsession to eliminate things deemed unnecessary or that interrupt work, such as waste, overburden, and unevenness. However, that might lead people to imagine harsh working conditions where no rest is allowed. But Akio shared that knowing that TPS originates in the idea of making work for someone like your own mother easier, people might come to form a different impression of what it is really about. Similar to what Sakichi pursued, it is about creating more free time for workers by eliminating waste in work processes to reduce overtime. When the value of a worker’s time is realized, work is adjusted to maximize the output possible from manpower.

In part 2 of this series we’ll share how Akio sees concepts like Just-in-Time, achieving lead times, Genba and overall doing things for others.

Looking for more information on the Toyota Production System? Join us in November to hear from Errette Dunn, Co-founder and CEO of Rever, Inc. on How Toyota really works and the secrets behind TPS based on his experience. More info below:

Top Reasons to Choose a Supply Chain Career

Are you considering making a career move into the wonderful world of supply chain?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. We’ve highlighted below the top reasons to consider making a career move into supply chain.  

What is Supply Chain? Our partner organization, The Association for Supply Chain Management (ASCM) recently shared that supply chain is, “A connected system of organizations, activities, information and resources designed to source, produce and move goods and services from origination to end customer. Supply chain management (SCM) is the active management of supply chain activities to maximize customer value and achieve a sustainable competitive advantage.”

Top Reasons to Choose a Supply Chain Career

1. Career Openings in Supply Chain Management

Per SupplyChainGameChanger, “The talent and skills gap affects the manufacturing and supply chain industries more than almost any other occupation in the U.S. As more workers reach retirement age, the burden of the supply chain skills gap will undermine the future of supply chain management.”

Research from the Supply Chain Talent Academic Initiative found that demand for supply chain professionals exceeds supply by a 6 to 1 ratio, according to Nick Little, Assistant Director of Executive Development Programs at Michigan State University’s Eli Broad College of Business.

2. Variety of Positions within Supply Chain

Career choices within the supply chain field are spread across a large spectrum, leaving you with many different roles to choose. Places of employment may also vary. For example, you could choose to work for a big corporation, small business, local or federal government entity or a nonprofit organization. The possibilities are endless. Here’s a list of some possible career paths to choose from:

  • Supply Chain Manager

  • Strategic Sourcing Manager

  • Operations Manager

  • Buyer

  • Purchasing and Inventory Clerk

  • Procurement Manager/Specialist

  • Commodities Manager

  • Category Manager

  • Supply Chain Planner

  • Demand Planner

  • Production Planner

  • Capacity Planner

  • Logistics Manager

  • Transportation Manager

  • Reverse Logistics Manager

  • Inventory Controller

  • Warehouse Manager

3. Competitive Salaries and benefits in Supply Chain

ASCM’s 2020 Supply Chain Salary Survey Report showed:

SALARIES ARE SOLID: Supply chain professionals with a bachelor’s degree reported a median salary of $78,750, which is 24% higher than the national median salary. Those with an associate degree reported a median salary of $67,000, which is also much higher than the national median salary.

OPPORTUNITY FOR ADDITIONAL EARNINGS AND SIGNIFICANT RAISES: 91% of respondents received some form of additional cash compensation (bonus, profit sharing) to their salary. The average raise increase received in 2019 was 4.7%, which is higher than the national average of 3.5%.

GENDER GAP CONTINUES TO NARROW: For the 2nd year in a row, respondents under 30 reported the same median salary regardless of gender. Women 30-39 reported a median salary that is 93% of what men earn. Although still not acceptable, it’s higher than what women on average nationally earn which is 82% of what men earn.

BENEFITS ARE GOOD: Almost three quarters of supply chain professionals are offered paid family/medical leave and more than 80% receive three weeks or more of vacation time. The majority (79%) of respondents are satisfied with the quality of their benefits.

Overall supply chain professionals tend to be happy with their careers with nearly all (88%) reporting they have a positive outlook.

Looking for more information on supply chain careers and tools? Join us in October for expert led instructor Certified Production, Inventory and Management (CPIM) Part II classes for globally recognized certifications in in-person and virtual for CPIM Part II (Starts 10/19), Demand Driven Planner Certification Workshop (10/22 & 10/23), and a FREE webinar to learn more about the Port of Milwaukee on 10/22!

Foreign Trade Zones

Are you an importer or exporter looking for opportunities to better manage duty fees?

APICS Milwaukee Chapter serves the supply chain community with education and information needed to compete in today’s world. Foreign Trade Zones (FTZ) can provide benefits to help manage duty fees.

What is an FTZ?

FTZ’s are designated sites considered outside of U.S. Customs territory for specific purposes. Typically FTZ's are located within the warehousing or manufacturing facilities of organizations seeking FTZ advantages. Merchandise may be brought into an FTZ and stored or processed there without being subject to the customs laws of the United States and oversight of the zone operations is the responsibility of U.S. Customs & Border Protection (CBP).

FTZ’s are secure areas under CBP supervision that are generally considered outside CBP territory upon activation. Located in or near CBP ports of entry, they are the United States' version of what are known internationally as free-trade zones. It is the intent of the U.S. foreign-trade zone program to stimulate economic growth and development in the United States. In an expanding global marketplace there is increased competition among nations for jobs, industry and capital. The FTZ program was designed to promote American competitiveness by encouraging companies to maintain and expand their operations in the United States.

Port Milwaukee outlines the following savings and benefits available through Port Milwaukee's FTZ program:

  • Overview & Benefits: Fundamentally, the FTZ designation provides the ability to defer, reduce, or eliminate Customs duties on imported goods admitted to a zone. Among a variety of other benefits, the highlights are:

  • Deferral of Duties: As a rule, Customs duties are paid when the merchandise enters into U.S. Customs territory. Since the FTZ is considered outside of Customs territory, the duties are delayed until the products exit the zone. This provides cash flow savings and allows companies to keep funds accessible for operational necessities while the merchandise remains in the zone. Unlike bonded warehouses, there is no time limit on the length of time that merchandise can remain.

  • Reduction of Duties: Operators of Foreign Trade Zones are allowed to elect the zone status of the merchandise upon admittance to the zone. This status determines the duty that will be applied to the foreign merchandise when it exits the zone. Operators may elect the duty rates that apply to either the foreign inputs or the finished product produced in the FTZ, whichever is lower.

  • Elimination of Duties - Exports & Scrap: For merchandise that is produced and re-exported or scrapped material that is wasted in production within the zone, the products never technically enter the U.S. market. Therefore, Customs duties are completely eliminated.

  • Weekly Entry: For companies that file a significant volume of Customs entries, a substantial way to save is through filing only one entry per week - rather than filing one entry for each shipment as is normally required by federal law. This results in a reduction in the overall amount due for Merchandise Processing Fees (MPF) owed for each entry.

To learn more about the FTZ program and possible benefits for your organization, please contact FTZ 41 Administrator Jazmine Jurkiewicz at 414-286-8133 or via email at [email protected].

APICS Milwaukee will also be hosting a FREE webinar to learn more about the Port Milwaukee on October 22nd from Noon-1:00 PM CST. Register today!

While the world around us is always changing, it’s imperative that supply chain managers keep learning and adapting to be successful. At APICS Milwaukee, we are here to help you with the education and information needed to remain competitive.