Synchronous Management® Theory for Supply Chain Consulting
Our approach to supply chain consulting with Synchronous Management® starts with one simple premise: that a firm is in business to “make money”. The firm’s goal is not simply to satisfy customers, improve quality, and deliver goods in a timelier manner or to achieve technological improvements faster than the competition. While the latter objectives may certainly contribute to improving a firm’s profitability, they must be coordinated with the realities of a firm’s business in order to reach their objective. In fact, any improvement or any other action is considered waste unless it “makes money” for the firm.
Today’s firm faces several problems:
- Inaccurate forecasts
- Unstable raw material suppliers
- Work in process inventories that seem to increase with a mind of their own
- Quality that can be unpredictable
- Broken delivery promises
- Paperwork cycle times that dwarf the time required for production
- Performance measurements that show profitability continuously improving as the firm loses more and more money!
Add to all of this the increasingly competitive world environment for manufactured goods, where many competitors have honed their skills to the point that attempting to compete may seem impossible. In such an environment success demands both a strategic and tactical view of the business.
Our supply chain consulting solutions solve the competitive dilemma and incorporate both of these views of the business. At the strategic level, Synchronous Management® is a methodology that examines the symptomatic role of inventory upon quality, production cost per unit, the ability to implement engineering changes quickly, the amount of plant and equipment investment required, production cycle times, and the ability to meet promised delivery dates as well as production schedules. In short, our view is that inventory is neither good nor bad, but rather it is a symptom that can be used to identify and prioritize opportunities for improvement. At the tactical level the output of our supply chain consulting analysis work is used to address the causes of disruption in the workplace.
The strategic objective of Synchronous Management® is to simultaneously:
- Increase throughput –“T Δ ”– (with throughput defined as total PAID sales)
- Reduce inventory (note that inventory is valued at purchased material costs only, and reducing inventory is stated as “I ∇ ”) and
- Reduce operating expenses (defined as the total cost of converting raw material into throughput, with reducing operating expenses stated as “OE ∇ “).
The successes of the Lean Enterprise actions are well documented, but the failures and especially the sub optimization of Lean Enterprise potential is much less documented and certainly less publicized. We feel the prerequisite for maximizing success is that the Lean Enterprise actions be linked to the firm’s strategic T Δ I ∇ OE ∇ objectives. The firm must be able to identify and prioritize its improvement opportunities and to use a series of synchronously executed actions to address those opportunities. This solution might seem straightforward, but it certainly isn’t easy to implement. That is where we can bring value to your organization with almost 30 years of implementing successful supply chain consulting solutions.