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CONVENTIONAL APPROACH PROBLEMS

Variability and Volatility CANNOT be managed at the individual event, resource or part level. The key to managing
variability and volatility is at the systemic level.

Below are short, to the point answers for the tough questions faced by Materials and Production Control personnel today.

MRP & CRP

Why do MRP and CRP fail in the face of VARIABILITY?

 The PUSH based and non-dynamic tactics of MRP and CRP, while designed to take away volatility experienced within the factory, are incapable of handling the inevitable deviations to forecast (VARIABILITY) that happen. The result is material shortages, high inventories, the need for massive course corrections and poor VELOCITY performance.
Smoothing

Why are Demand Planning and Smoothing (Advanced Forecasting Algorithms) Tools an ineffective answer to forecasting problems?

 The solution is not to be more precise about something that is inherently imprecise. Improving forecast accuracy by 30-40% still leaves a huge amount of error and unpredictability. Additionally, ALL forecasting tactics, no matter how advanced, still represent a basic attempt to PUSH through the system creating an inherent conflict for companies that want to introduce or utilize PULL based tactics.
APS

Why does APS fail in the face of VARIABILITY?

 Concurrent scheduling creates a discrete time-based schedule for every resource center and work order. These schedules are short lived and often impossible to execute as it only takes a few random disruptions (VARIABILITY) to cascade throughout the schedule and make it completely unrealistic.
Six-Sigma

Why is Six-Sigma ineffective at making a real difference in the face of system level disruptions?

 Variation in single resource centers is NOT the problem. THE problem is the accumulation of variation across dependent systems. Six-Sigma does not have a reliable focusing method to know where to apply its tactics to make the biggest impact to the ENTIRE system. Thus, total system VARIABILITY often remains the same.
LEAN

Why does Lean have difficulty in the face of VARIBILITY and VOLATILITY?

 The PULL based tactics of LEAN can increase velocity but are highly susceptible to environments with VARIABILITY and VOLATILITY. Some LEAN tactics can even exacerbate the effects of VARIABILITY. (e.g. striving for balanced capacity, eliminating all inventory, and flattening the BoM).
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