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Business901                     Podcast Transcription     Implementing Lean Marketing SystemsKanban at XeroxGuests were Mi...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsDeployment team, and also lea...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsRob: In the early 1990s, ther...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsRob: Joe, my third one was th...
Business901                     Podcast Transcription     Implementing Lean Marketing Systemsimplement Kanban, and now its...
Business901                     Podcast Transcription     Implementing Lean Marketing Systemswell to manage. And because t...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsJoe: He is actually being fur...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsWeve now established a proces...
Business901                     Podcast Transcription     Implementing Lean Marketing Systemsbuilding that day. They make ...
Business901                     Podcast Transcription     Implementing Lean Marketing Systemsmanual mechanisms in place, y...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsThey may or may not have a gr...
Business901                     Podcast Transcription     Implementing Lean Marketing Systemsconfiguration mix. Some of it...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsJoe: Do you always think that...
Business901                     Podcast Transcription     Implementing Lean Marketing Systems"Oh, I need some of those, an...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsRob: Absolutely, also you sta...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsJoe: We always talk about pul...
Business901                     Podcast Transcription     Implementing Lean Marketing Systemswhether we build it or not. T...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsIn other words, theyd like it...
Business901                     Podcast Transcription     Implementing Lean Marketing Systemsmay introduce another cart fo...
Business901                     Podcast Transcription     Implementing Lean Marketing SystemsMichael: Building on that, I ...
Business901                     Podcast Transcription     Implementing Lean Marketing Systems                             ...
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Overview of Kanban at Xerox

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I had 2 experts, Michael Curry and Rob Piersielak of the Xerox Corporation on the Business901 podcast to discuss Kanban. I felt that giving my readers and listeners a perspective on the traditional form of Kanban would be interesting. We stayed on track through the podcast but wandered off for a moment to discuss Lean and Standard Work practices at Xerox. This is a transcription of the podcast.

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Overview of Kanban at Xerox

  1. 1. Business901 Podcast Transcription Implementing Lean Marketing SystemsKanban at XeroxGuests were Michael Curry & Rob Piersielak of the Xerox Corporation Related Podcast: Kanban at Xerox Corporation Michael P. Curry is a Materials Manager for Worldwide Manufacturing Operations at Xerox Corporation. He leads an organization responsible for configuration, planning and purchasing in support of printer products built at Xerox in Webster, NY. He has 15 years of management experience with Xerox in positions such as Operations, Procurement and Materials/Logistics. Curry earned his BS fromSUNY at Fredonia, NY and his MBA in International Business fromSt. John Fisher College, in Rochester, NY. He holds a Green BeltCertification in Lean Six Sigma and is a member of the Institutefor Supply Chain Management.Rob Piersielak was born in Rochester, NY. He received his BS inIndustrial Engineering from Alfred University,and his M.S. in Engineering and GlobalOperations Management from ClarksonUniversity. He is a certified Lean Six SigmaBlack Belt, and is currently a Master Black Beltcandidate. Over his 20 year career at XeroxCorporation, Mr. Piersielak has had numerouspositions throughout the supply chain, allfocused on process improvement and design.He lead projects redesigning manufacturingplants and warehouses in seven differentcountries, was part of the Global Just In Time Manufacturing Kanban at Xerox Corporation Copyright Business901
  2. 2. Business901 Podcast Transcription Implementing Lean Marketing SystemsDeployment team, and also lead the manufacturing team in rapidTime to Market product delivery project that delivered benchmarkTTM results for Xerox. He is currently responsible for worldwideSupply / Demand and Order Fulfillment for the company’sflagship product, the iGen press, and is also responsible forWebster Manufacturing Materials Logistics Operations.Joe Dager: Thanks everyone for joining us. This is Joe Dager,the host of the Business901 Podcast. Participating in the programtoday is Michael Curry and Rob Piersielak of the XeroxCorporation. Could you both take the time and just give me abrief overview of your position at Xerox? Michael, would youstart?Michael Curry: Thanks, Joe. As a materials manager here inWebster Manufacturing Operations, Im responsible for anorganization that handles the configuration, planning, andpurchasing for parts that go into the products that are builtprimarily here in Webster, but also at some of our other satellitelocations.Rob Piersielak: This is Rob Piersielak. In my role at Xerox, Iwear two different hats. Hat one is for our flagship colorproduction press called iGen. Im responsible for globalsupply/demand and order fulfillment. Im responsible for thesupply chain for that product. The other hat I have is for ourmanufacturing plant here in Webster, New York. Im responsiblefor all material logistics operations, warehouse, docks, materialmovement, truckers, etc.Joe: I was interested in having a podcast on the use of the moretraditional forms of Kanban, and I appreciate the two of youvolunteering. Rob, could you explain to me on what promptedXerox to start using Kanban? Kanban at Xerox Corporation Copyright Business901
  3. 3. Business901 Podcast Transcription Implementing Lean Marketing SystemsRob: In the early 1990s, there was an initiative called theJust-In-Time Transition Council. And that was basically a team offolks who were chartered to understand the Toyota productionsystems and deploy the philosophies contained within those intoXerox. Kanban was one of the many tools that we started to use.The initiative, as part of our overall control system, was toreduce, initially, dock to dock, cycle time, and then alternatively,cash to cash cycle time.Joe: Youve been using it for 15-18 years?Rob: Yes. Ive been with Xerox for 20 years, and its been partof my everyday life, no matter what job weve had.Joe: I know you use Kanban in the manufacturing and yoursupply chain, whats one of the better things in Kanban, overall,that you have used?Rob: Id say probably from three different flanks. One is speedand agility, and our ability to rebuild many different types ofproducts. And theyre very complex. So were able to model mixand change from one type quickly because we dont have a lot ofinventory on the floor. Id say secondly, from an overall inventorydollar perspective, every year, we bring down our totalinvestment in inventory down considerably, just by minimizingthem on the floor, establishing processes, and using tools likeKanban that allows us to do that.Michael: Rob, building on your points, it really enables theflexibility as well as the inventory dollars in any of the modelmixing that were looking for. And then obviously, just in terms ofthe pure footprint thats required on our production floor,obviously that enables some of the requirement that we needthere. Kanban at Xerox Corporation Copyright Business901
  4. 4. Business901 Podcast Transcription Implementing Lean Marketing SystemsRob: Joe, my third one was that as our manufacturingmanagement team becomes much leaner, over the years, wevereduced significant amount of layers of management. Kanbanenables us to have union members who are managing inventorylevels...That are managing production levels and they do it solelyon the Min-Max that we will establish for them. We explain tothem the process, and I never need to get involved, unless ofcourse they come to because theres a barrier or two to attainmore supply, or some other operational issue.Joe: What have you found to be the biggest shortcoming?Rob: For me, the shortcoming is you have to have anenvironment that is quick to respond to those issues that come toyou. So if you speak in the metaphor of Just-In-Time, if you lowerthe water level of inventory, youre going to find rocks. And whenyou find those rocks, you need to take immediate action. And Ifind its not always our culture, and some of our suppliers cultureto respond immediately. So if you have a pack multiple changes,a quality problem, or some other issue that changes theparameters youve set, you need to respond quickly, else you willshut your line down.Joe: Ive always seen the river rocks showing, using thatmetaphor, when you do lower your working process. You see theproblems, and you can deal with the variations easier becausetheyre more apparent. Did you find that to be true when youinstalled Kanban?Rob: Absolutely. Maybe the next level of that model is, sure,youve lowered the water, and you get rid of the rocks that youreexperiencing today. But then as you keep sailing along, a rockthat wasnt there yesterday pops up, and you need to be quick. Iknow were going to get into a couple of examples of what we do,but the message is that you cant just assume that you can Kanban at Xerox Corporation Copyright Business901
  5. 5. Business901 Podcast Transcription Implementing Lean Marketing Systemsimplement Kanban, and now its in autopilot, and completelyignore it, and move on to other activities in your business.Joe: A lot of people think that a manufacturer like a Xerox,probably has some clout with their vendors, they just shift thatproblem, when they use the Kanban, down to their suppliers. Dothe suppliers use Kanban too? How is that relationship viewed?Michael: I wouldnt call this shifting the problem, in the case ofour external suppliers, Joe. This was obviously a deliberate designon our part to get a signal process in place for the larger, morecomplex assemblies that are required that go into the printingand publishing devices that we manufacture here. So it reallywasnt the intent to shift the problem to a supplier as much as itwas to enable the flexibility in the floor space that we neededhere, and to get a good signal process in place with them.I think its worked. I think our suppliers would say its workedquite well with them too. If you have a moment, Ill spend a littlebit of time and give you some examples of the process, if it helpsgive a visual.Joe: I think that would be great because thats always one ofthe questions, and I have another question to follow up on that.But a couple of examples now would be excellent.Rob: Joe, before Michaels example, the one Id like to build onis its a collaborative effort. You dont just tell a supplier youredoing a Kanban. We tell our suppliers at a higher level what weretrying to accomplish, what were doing, and why. We explain tothem our pinch points, our process issues, and constraints, andwe learn theirs as well. And what weve found ...Again, Michaelwill elaborate in examples is not only does it benefit us, but alsoit benefits the supplier because they can be aware of our needs.They anticipate any issues that we may have because they havethings like shutdowns and theyre own vacation and ANL issues as Kanban at Xerox Corporation Copyright Business901
  6. 6. Business901 Podcast Transcription Implementing Lean Marketing Systemswell to manage. And because they are aware of it, and we havedone that collaborative process, they can have a much moreefficient operation as well, and not have their internal issuesimpact our production.Michael: I think they would say that its been a real benefit toboth of us on those fronts. To cite a few examples of how we dealexternally with the suppliers outside of our four walls, Im goingto give just a couple of them. Theres an assembly thats ratherlarge in size, to give you an idea lets say that its certainly biggerthan a breadbox but not bigger than the size of your desk. Butits a good size assembly thats required to go into the machinethat we produce for our customers around the globe here.Those assemblies are on carts that are staged in ourwork-in-process area on that production shop floor. We aretypically holding approximately two carts, maybe three carts, perday in that area. In that traditional Kanban process, when thosecarts become empty, they are immediately moved from theproduction floor to the shipping dock and sent to our externalsuppliers for replenishment.There are two deliveries a day typically. So theres an externaldock thats taking those empty carts to our suppliers, and onreturn, they are coming back with replenished carts with theassemblies on them that are required from us.The signal obviously is the empty cart. They also get a productionpurchase order which is at the larger scope for "Here is what wethink we will need for those assemblies" and perhaps based onthe leave time of the assembly thats going out four to eightperhaps even 12 weeks out, in terms of the overall purchaseorder. But the signal itself is a combination of the empty cart thatthe supplier receives, and in some cases, a weekly bill schedulethat the supplier receives directly from Xerox. Kanban at Xerox Corporation Copyright Business901
  7. 7. Business901 Podcast Transcription Implementing Lean Marketing SystemsJoe: He is actually being furnished with a forecast but the actualphysical movement of materials based strictly on Kanban?Michael: Right. And as you can imagine, there are multipleconfigurations of that same assembly that are required,depending on the customer and/or geographic location of theproduct that we are building too. That same assembly may haveslightly different variations, hence, why its critical to have justthe right amount of carts that are required to handle theflexibility thats required for the unique configurations inside ofthat assembly. So we have several examples like that on largerassemblies that we are dealing with our external suppliers. Wealso handle similarly packaging, the packaging that goes into andaround our finished goods, and a lot of the corrugated thatsrequired to build around those assemblies.We have a similar process with our corrugated suppliers in thearea. That triggers based on a signal of that same type ofrequirement, so that we can have that flexibility to build aproduct when we need it, and have the corrugated available topackage and ship it to our customers.Those are a couple of the Kanban processes that we have in placewith our external suppliers. Rob has offered to share with you alittle bit more about some internal processes that we have.Rob: Internal to the manufacturing plant, we also use Kanban inmany different areas. A couple of key examples would be, one, asyou may be aware, Xerox for many years has been very diligentabout asset reuse and recycling. When a printer or a copier getsremoved from a customer location, we call it affectionately"hulk". And we bring those back, and we will tear them down. Wereuse parts, or we may do a re-manufacturing of the asset. Weuse the Kanban process within Maxis. We want to make sure thatwe have exactly what we need for our manufacturing productionplant, not too much, not too little. Kanban at Xerox Corporation Copyright Business901
  8. 8. Business901 Podcast Transcription Implementing Lean Marketing SystemsWeve now established a process. We have a person, whomanages this, and their entire job is to make sure that for eachproduct code that we re-manufacture, we have exactly thequantity we need for the next weeks production plan.Secondly, Id say an example of where management resourcescan benefit from use of Kanban is our products, as you canimagine, they use custom pallets, due to the dimensions of ourproduct and the weight. The pallets are quite expensive. Underthe vein of recycling, we get back as many from the field that wecan get. Occasionally, we do have to purchase new.It took some time to implement, but now we have in place aprocess where a member of my union team, weve set up aKanban based on height and based on the different types of skidsthat we have, this person, when it gets to the min point, workswith the field to get pallets returned. If the fields run out of thatparticular type of pallet, they work with the buyer to get apurchase order cut.We have a very short lead time for the new pallets, and then weget those skids in. so, for all the pallets we use for our productsnow, we never have to worry about running out, never have toworry about having too much. Because of the progressive natureof scanning the field for return pallets, were spending very little.Fortunately from an environmental aspect, its great becausewere buying very few pallets.Id say a third area internally is, if you can imagine the nature ofour products, theyre quite large, and so were trying to minimizeour floor space. I have an area thats dedicated to creating kits,like one example would be panels that go around our printers.So this group...And again, complete self-directed union team,they work with manufacturing. Theyve established a Kanbanlocation. They know what product that the lines going to be Kanban at Xerox Corporation Copyright Business901
  9. 9. Business901 Podcast Transcription Implementing Lean Marketing Systemsbuilding that day. They make sure, on the location, theres a kitof the panels required to scan those products. Then theyll beworking today on the quantity required for tomorrow. Thoseinventory values that they have in the kitting area, they flow backto the buyer and to the supplier, so that we make sure that wehave what we need but not too much.Joe: When you read about it in a book it sounds perfect. Youjust get a card and it flows. We know that isnt how it happens,real world. Its got to be managed. And Murphy rules:somewhere, something will happen to upset the apple cart.Where have you found the holes in your Kanban systems? Arethere particular areas that always jump out at you, or is itdifferent to each process that you instill a Kanban in?Rob: Id say on I already mentioned is, its not cruise control;Murphy does live. So you need to be responsive. The downside ofbeing lean is, when something does happen, you dont have a lotof time to react to it. So that is definitely the negative of lowerinventory. The other areas I would say that will bite you are, one,human intervention. Sometimes people feel empowered,sometimes for the right reason, to intervene and meddle with theKanban system. It could be for things like, if theyre going onvacation and they are worried theyll run out of parts, and theyllstock up. Anytime you get the human intervention altering yourprocess; that will cause you problems.Michael: Yes, I agree, both by design, Rob. So, by intent, Idlike to put a hedge in because I think Id like to do somethingslightly different, or I dont believe, perhaps, what the supplierscapable of doing. Or even in the case of when Murphy does comeup, and that expected shipment didnt come in because there wasa problem with the trailer that was bringing it in on a Thursdayafternoon. But it does drive both us and the suppliers toaccountability. So if you continue to put those hedges or those Kanban at Xerox Corporation Copyright Business901
  10. 10. Business901 Podcast Transcription Implementing Lean Marketing Systemsmanual mechanisms in place, you can argue you never get toreally where you want to be in terms of the operational level bothupper and lower control limits. So the problems do indeed comeup but I think we are better off when we really let it run itself asopposed to putting the manual overlays in.Rob: You really need to spend time educating the processparticipants involved and how the stacking points are calculatedand replenishment signals, and why to get them on board sothat...And again, it is not...We have great people and peoplearent evil. They are not doing the things with ill intent.Sometimes they will meddle and change things because theythink they are really helping things. But they dont understandwhat they are trying to do and why. And what the good actionthat they believe they were taking could cause problems.Joe: I think that is normal, just human character to fixsomething or sometimes that; we are not aware of what we aredoing outside of our immediate area when we do that. Would youcall Xerox a lean company? Or do you follow the TPS productionsystems?Rob: Yes. We definitely found many of our aspects of materialproduction system. We have been practicing Lean since early90s. I would say two of my direct reports...I think all but one area greenbelt certified Lean Six Sigma and that person isundertaking...They are in the process getting certified. I haveseveral people in the union in my organization that is greenbeltcertified. So originally, it was from where the Malcolm BaldridgeAward and our leadership and quality that gave us the foundationto build upon. Now through Lean Six Sigma, you can...It is verycommon you will be walking into a team meeting or even animpromptu meeting on the floor. And youll listen to the dialogueand they will be discussing non-evaluative activities and ways anddefect level. Kanban at Xerox Corporation Copyright Business901
  11. 11. Business901 Podcast Transcription Implementing Lean Marketing SystemsThey may or may not have a graphic data to show up but youlisten to the conversation. And as demonstrated by the daily workactivities, I think that is the proof that it is a lean company.Michael: It is not only on the existing work that we do. But aswe continue to take on new work, new programs, new productsthat is always embedded into those assumptions as we launch anew program and it has become a new product. It is absolutelyingrained in the work processes and the peoples work itself.Joe: So for Kanban to work you basically follow standard work? Imean is there a standard work practice in the areas when you aretalking about people making decisions that allow them tounderstand the Kanban system?Rob: There are standard processes that people are notempowered to change the standard work process unless they usethe appropriate change, process to change it. We want people tobe enthusiastic and creative and as they discover areas forimprovement, they are encouraged to so, but they cant do it just100-percent on their own. We are also ISO certified; ourprocesses are documented and audited, so they are not free tochange things on their own without following the appropriatechange process.Joe: I got a little side-tracked there but I was just kind ofinterested in that. But, back to the Kanban side. Do you find aneed to install buffer stock? I mean, how lean can you really get?Rob: Well, I think it really depends on your sourcing model. So,of course we are globally sourced and Ill let Mike talk about thatin a little bit. But for our local suppliers its not uncommon thatwe will have maybe two days of supply in the building.Mike Curry: Yes. I would agree with you Rob. Thanks. Andsome of it is to enable the flexibility that we want within Kanban at Xerox Corporation Copyright Business901
  12. 12. Business901 Podcast Transcription Implementing Lean Marketing Systemsconfiguration mix. Some of it is, frankly knowing that merchantvery well. I would say for the most part, its about a day andhalf-two days depending on the assembly that we are talkingabout. The supply and demand case and the customer we aretrying to support. But there is definitely some variability in whatwe carry. But for the most part we try to keep it extremely lean.Joe: When you talk "Globally", it is interesting using Kanbanbecause everybody thinks of something being shipped veryquickly to them. Thats tough to imagine in a global matrix,especially when pricing and so many other things are beingdictated by things coming over in a container. How does Kanbanwork globally? Is it just a longer span? A little bit more work inprocess? Do you just kind of take it just up a notch? How do youdo that?Michael: I can cite two different examples, Joe. One, Rob wastalking earlier about we do some re-manufacturing recycle andwe do have some assemblies for example, that are builtoverseas. Theres a business model that suggests that thoseparticular assemblies be re-manufactured based on an expiredalternate date. So the signal; the Kanban process for those is OK,as those spent hulks come back that Rob referred to earlier, weyield that assembly. When we get a cart and/or a container loadfull, that is indeed sent back to the OEM supplier tore-manufacture. That is indeed a signal thats in place with them,with us here.Another example is an assembly house, an external supplierlocally here but all of the components are indeed sourced fromoverseas. So that assembly house that is local to us here has gottheir own signals with the external supplier but the actual Kanbanis in place between us and them. Kanban at Xerox Corporation Copyright Business901
  13. 13. Business901 Podcast Transcription Implementing Lean Marketing SystemsJoe: Do you always think that Kanban a visual signal like a cardor a container or is it done electronically? Do you just send thema picture of a container?Michael: Its primarily a cart on the larger assemblies. And Iwas referring earlier to the packaging. Obviously, the packagingis coming in...This corrugated packaging that I was referring to iscoming in on skids. Thats probably more of an electronic signalthat said, "Look, weve consumed the following configurations forthe week and heres what we need next."Rob: Yes. I agree. Id say most of our Kanban is either a spot onthe floor or a height, a tape, a stack, or a cart. The only one, as Iwas preparing for this session, I was remembering years ago wehad an operation in Mitcheldean, England where they made wireharnessing and other components. That was one of the onlyfacilities I saw globally in Xerox that where the card methodologyto signal to produce and replenish worked well. There were smallparts, small bins, and a small rack. And it worked very well inthat instance. However in the larger parts and the larger lines thecards, when we tried to implement them, I found it really addedto an administrative burden that I think was really kind ofneedless.Whats interesting is you cite electronic. What were in theprocess of doing right now is...Id say by the end of this quarter100 percent of our plant will be on what were calling"consumption pull". Thats really an electronic Kanban whereweve already completed this on a couple of lines and were doingour biggest line right now.Defining the stock points and what is that? No padding, no fluff.What do we really need on a part by part basis? Then setting thereplenishment signal in our internal shop for our control systemand the human element is completely out of it. Where historicallyit would be a material dispatcher or an operator who would say: Kanban at Xerox Corporation Copyright Business901
  14. 14. Business901 Podcast Transcription Implementing Lean Marketing Systems"Oh, I need some of those, and those." Theyd go shopping andtheyd scan for the parts they need.We are truly limiting 100-percent of the human interaction. Thehuman part will only be dated of course if something changes orif theres a defect found. We are going with that electronicKanban to all of our lines.Joe: What benefit do you think youll receive out of that?Rob: Well, first and foremost its floor space. At the Webstercampus, as we brought more work in and more groups of peoplein where our manufacturing footprint has been condensedsignificantly, and so in lines that used to have the benefit ofabundance of space that worlds changed significantly. So first is,we are shrinking our lines down, delivering the same output but asignificantly reduced footprint. Second, we were pushing theinventory back to the warehouse then ultimately back to thesupplier. We create fewer inventories inside of the building.Third, the less you have to touch a part, the less people you needto touch it. So were getting efficiencies from the fact, we needless people to do the work.Michael: Rob, I also think its a more accurate position of whatyou truly had in inventory and that signal is representative on thebuyers planning page and all the way back to the supplier. Itenables a more accurate snap shot of truly where you are in theon hand inventory balances and what you really need.Joe: I think so because work-in process is always the mysteryfor everyone. Its the hardest part to manage, its the hardestpart to account for, it is the hardest part...I mean we could go onand on in the manufacturing part of it and always work-in processis a tough part. As you shrink that I would think it would be youwould have to be more efficient and your quality would rise. Kanban at Xerox Corporation Copyright Business901
  15. 15. Business901 Podcast Transcription Implementing Lean Marketing SystemsRob: Absolutely, also you start to see elements of waste. Wehave great employees. So its not always intuitively obvious thatyour lines are imbalanced. So, youll have an operator who isbuilding up sub-assemblies ahead of time. They are working andworking and they are building up. That is because they have thematerials and the space to do so.So, when you do install with caps, when you truly in effect look atyour system and try to implement a work control system, whichKanban is only one tool to accomplish that via. But when youreally put in a whip cap, it starts to become apparent where theareas of waste and opportunity are in your operation.Joe: Im going to ask kind of a silly question, I think. But ifyouve been doing Kanban for 20 years, whats left to get out ofit? I mean, havent you gotten it right yet?Rob: Its quality, it’s a continuous journey. Yeah, weve gotten itright. Then weve gotten it better. Then weve gotten it better,again. Then products change, and we add new products. Then itgives us a whole new way to do it. And then we, for the time tomarket process, we engage early in the design of the product.So lets face it. You cant get rid of all waste in a process. Itseither cost prohibitive or its designed in and you have to dealwith it. But the next products that come down, you change theirsourcing. You change the ways that we test them and build them.That brings about new opportunities.Michael: Yes, I would agree. We still have a ways to go on theexisting product thats in house already Rob is referring to. Asyou continue to key up the next band of products that aredestined for our organization, our factory, you look at those againand think, "Can I do it with the existing model?" Or if thesourcing is slightly different then you have to, perhaps, adjustsome of the Kanban assumptions. Kanban at Xerox Corporation Copyright Business901
  16. 16. Business901 Podcast Transcription Implementing Lean Marketing SystemsJoe: We always talk about pull in lean manufacturing, but is itreally being triggered by the customer?Rob: Not directly, no. I dont remember if it was UPS or FedEx,but if you remember the commercial a few years ago where theydo this pan shot some morning and the factory workers arentthere yet and the lines bins are empty. The premise was, "Theyllhave it stocked in the morning for the parts they need for thatday." Its a great vision but I think global sourcing, particularlyfor large complex electronic devices, its really not realistic intodays world. You have to do a hybrid push-pull.So in a purest sense just in time would be, I get an order. Thatsmy signal to start one and complete one. No orders; everybodysits down. Particularly if you have seasonality for your product orservice, its not possible because you cant afford the staff foryour peak demand periods. You have no choice but to staff anddesign your operation at a lower than your peak and you have tobuild ahead. So you still have to use your forecasting.Now it doesnt mean you dont turn a blind eye. For example welook at things like the cue in the prospect list where were veryintegrated in the orders cycles globally. We pay attention towhere deals are in the sales management process. We tailor theconfiguration that we have in stock to those processes.Now clearly we cant do that for all products. The smaller ones,you just need to go on a more historical forecasting andsupply-demand rules. But for the very expensive, very largeboxes with a longer sales cycle, we absolutely take advantage ofthat.In fact, one of the areas, an example of where were trying tochange and grow, we have a product thats not launched yet. Ourgoal is absolutely to have some sales skin in the game as to Kanban at Xerox Corporation Copyright Business901
  17. 17. Business901 Podcast Transcription Implementing Lean Marketing Systemswhether we build it or not. The sales cycles are such that we canbuild the system inside of it.Were going to expect our operating companies globally to havecommitment that if they want us to build the system, they areselling it. The customer may not have actually fully signed on theline, so well need to commit to it. Its going to bring about awhole new level of conversation.Joe: Is there some other topics that maybe Ive left out thatmaybe we should talk about a little bit? One of them is, I guess,mixed model that I think of right off that I didnt really talk abouttoo much. Can you explain mixed model and what that is?Michael: Yes. Rob, if you want Ill take a shot at it then you canchime in. Depending on the type of product that were buildingfor a customer, you can imagine where were shipping it to mayvery well have an impact on what goes into the product, right?We know what goes into a product thats for perhaps a productthats going to be installed in Europe is different than for NorthAmerica. Theres a lot of electronics that are slightly different,different requirements for Rohas versus non-Rohas. Right downto the labeling that the customer may indeed want.So that precludes that you tend to get into a lot of differentconfigurations for the different customers in geographic locations.So with that, those larger assemblies I was citing earlier that areindeed part of the Kanban process may very well have four, six,eight different configurations. If its a larger assembly thats got150 part numbers in it, perhaps 135 of them are all common.But those other 35 that make it unique require that you indeedmay have to have another cart or two in the process. All of ourproducts do indeed carry multiple configurations. And some ofthose customer requirements are indeed in and around flexibility. Kanban at Xerox Corporation Copyright Business901
  18. 18. Business901 Podcast Transcription Implementing Lean Marketing SystemsIn other words, theyd like it sooner so we tend to either carryunique assemblies on a cart waiting or perhaps carry it at thelower piece part level. Rob, Ill let you build on that if youd like interms of configuration mix.Rob: Id say the only ability...I think youve painted an adequatepicture of the complexity we have to build and deal with andbringing it back to the topic at hand. I think Kanban is an enablerfor that. Because lets say you need to build five vanilla and fivechocolate. Theres a very expensive board thats differentbetween those two. We will set the Kanban and make sure weveonly got five of the boards you need out there, not excess.Because, lets face it. As much we wish designs were perfect andfail safe there are some scenarios where when you plug thechocolate board into a vanilla itll work for a while. Then it willprematurely fail or cause other defects that we might not catch.We dont have a lot of those situations but clearly the more youcontrol your configuration and the build quality, with the parts onthe operators station and take decision making out of theoperators hands, it just positively influences on quality.Joe: In any manufacturing system there is still a time thatcomes by that you ignore some of these things and you ramsomething through that you have to deliver; emergencieshappens and stuff. Do you ignore Kanban at that time or doesKanban hurt or help you? Or is there a FIFO lane there? How doyou handle that; those emergencies?Mike: Its Mike, Ill take a stab at it. So the Kanban still resideswhether its an emergency order or not. If its a very uniquerequest we certainly have the ability to work around or perhapsintroduce an additional cart, for example. But the Kanban isindeed the core part of the work process and whats on the shopfloor. So we do not deviate from the Kanban process itself. We Kanban at Xerox Corporation Copyright Business901
  19. 19. Business901 Podcast Transcription Implementing Lean Marketing Systemsmay introduce another cart for example, into the system or takeone out depending on the case. But we do not let the Kanbanprocess go by the way side in cases that are even extreme.Joe: I think thats a good point. You still follow standard work tobe able to produce it.Michael: Right. Its the way we get work done. Its the way thematerial gets from the dock to the line. Now of course, if theresone particular part that we are out of and the lines down ...Whenthe Fed Ex truck backs up, we may have that one particular part.We would expedite the line to get the line the pieces they need.But then, that shift will be back to business as usual. If its aKessler building or a Kanban-Card or what have you.Joe: Is there anything you would like to add to thisconversation?Rob: Ive said a couple of times, Kanban is a tool in the part ofan overall work control system. But you cant start with throwinga Kanban in. You need to stabilize your production. So if you havea very sporadic and non-standardize build of high rotationworkers and maybe youll build in this quarter and youre notgoing to build again for a couple of quarters. Kanban, it may bevery challenging to implement a Kanban. You have to first look atyour process, you have to stabilize it.You have to reduce your variation in the process cycle time. Andof course, you want to pull as much waste as you can out of yourprocess cycle time. Once youve achieved standardization, thenKanban can help bring you to the next level.Thats why this podcast we focus on this one tool which isextremely valuable. But used in the wrong sequence of processimprovement, I think you could have some pretty frustratingresults and experience a lot of down time. Kanban at Xerox Corporation Copyright Business901
  20. 20. Business901 Podcast Transcription Implementing Lean Marketing SystemsMichael: Building on that, I think it is perhaps a traditional lookat Kanban would suggest "Well OK. Its this little list. Im going todeal with between me and supplier A B or C." But as thesourcing models do indeed change and become more complex, itmight look like you cannot use Kanban. But I think you canindeed continue to use Kanban whether youre supplier is in yourback yard or perhaps even hundreds, thousands of miles away.There are Kanban type processes that you can put in place andthat can be productive in a win-win for both your business andyour supplier.Rob: So my advice to someone that really wants to play withthis powerful tool is to understand your process. Make sure itsstandardized and youve minimized variation. Then set your rulesfor what your stocking points are how much you can afford tohave on your line. What your replenishment signals going to be.Is it going to be electronic-card? Who is going to manage it? Whoowns it? Put their name right on it so that its visible for thepublic to see.If it is external where youre dealing with a supplier, engage thatsupplier. Bring him into your plant, go to their plant. Understandeach other’s processes and their constraints and weaknesses.Then the last part is in your culture make sure that you have avelocity for dealing with issues when they come up. Make surethings dont get swept under the carpet. Otherwise, youll bedealing with issues on every single replenishment, which gets oldreally quick. Kanban at Xerox Corporation Copyright Business901
  21. 21. Business901 Podcast Transcription Implementing Lean Marketing Systems Joseph T. Dager Lean Six Sigma Black Belt Ph: 260-438-0411 Fax: 260-818-2022 Email: jtdager@business901.com Web/Blog: http://www.business901.com Twitter: @business901 What others say: In the past 20 years, Joe and I have collaborated on many difficult issues. Joes ability to combine his expertise with "out of the box" thinking is unsurpassed. He has always delivered quickly, cost effectively and withingenuity. A brilliant mind that is always a pleasure to work with." James R.Joe Dager is President of Business901, a progressive company providingdirection in areas such as Lean Marketing, Product Marketing, ProductLaunches and Re-Launches. As a Lean Six Sigma Black Belt,Business901 provides and implements marketing, project and performanceplanning methodologies in small businesses. The simplicity of a singleflexible model will create clarity for your staff and as a result betterexecution. My goal is to allow you spend your time on the need versus theplan.An example of how we may work: Business901 could start with aconsulting style utilizing an individual from your organization or a virtualassistance that is well versed in our principles. We have capabilities toplug virtually any marketing function into your process immediately. Asproficiencies develop, Business901 moves into a coach’s role supporting theprocess as needed. The goal of implementing a system is that the processeswill become a habit and not an event. Business901 Podcast Opportunity Expert Status Kanban at Xerox Corporation Copyright Business901

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