P&IM?
ゝ ｔ Ｓコ０
G-l0
ls Common Sense Nonsense in
Michel Gavaud, CFPIM
+aitu
lntroduction
Where is common sense to be lound? Where is nonsense hiding?
These questions don't have obvious answers. This is even lruer, ,or over lime and
with a more profound understanding of difficult siluations, we perceive that what
has been conceived of as common sense may become nonsense. Conversely'
what had always assumed the guise ol nonsense sometimes ernerges victorious'
ln my paper, I propose to investigate some areas ln which-these 2 notions. common'sense and nonsense, have not been lhat easily disiinguishable' This is
shown up during our CPIM work sessions in France. And since lhe CPIM certification is "a journey and not a destination"' I hope my paper will highlight some paths
which should serve to keep us in the right direction
1
. ls it more worthwhile to be the second to enter the market?
Common sense?
For years I have heard lhis apparently unbeatable argument. "Let the others go
aheid and lry, and trip ff they have lo"- Even though this argument bothered me
and even rholgh I did nol agree with il, I tnd to acknowledge lhat the company I
worked for was the leader in Europe without always being firsr in B&D lwas also
told of US companies, not necessarily losers' which adhered to this patlern'
Justification was easy: Olher (usually srnall) companies should be the ones to tesl
technological innovations or otfer new specilications lo customers- It these wor'
ked, it would not be ditficult lor us to impose ourselves on the market with our
marketing power and the cosl advantage we could get from the large volume of
products we could sell through our exlended sales organisatiorl
ln a stable market where littte competition existed, this approach could be iustified. And it slill is in vogue in valious comPaniesNonsense?
One can have a quite dif{erent viewpoint when considering the needs and wants
of customers for. consciously or not, they expect new specifications (fig l)'
Let's recall the case of SONY'S walkman, the lirst porlable cassene player' Sold at
with lhe
$250 as long as SONY was alone, it saw its price dropping significantly
arrival of th; firsl competitor and plummetting to $10 when its specilications lagged behind customers' needs and wants.
What would be INTEL's fate if it waited lor the arrival o{ MOTOBOLA'S new products to develop its own chips? We could ask the same queslion ol MOTOROLA'
lf there once was a time where one could hope to be the winner by being second
and thereby taking less risks, this lime is definitely over. ln spile of lhe risks' com'
mon sense demaMs that we be the lirsl, even if this is sometimes al a cosi
2 - Development costs are too high or too low?
lf, for ihe development ol a given product. we examine the curue where cost is a
function of the time needed to complele development, we would find a curue quile
similar lo that ol lhe EOO. There would be a small difference, however: lhe development time would not be zero but a number o{ monlhs. or even years in the
case of a new car or a new plane. The more we try lo accelerate development
time, the more we will have to spend, by duplicating leams, equipment and so on
Clearly, there are timits lo what can be spent. When we look once again al lhe
example ol INTEL, we realize that they will nol do bener with lhe 586 than they
were able to do 10 years earlier with the 286.
On the other hand, one can't expect cost reduction when delaying development'
We enter a vicious cost-time spiral. Since ihe product is not yet lully developed.
marketing will ask for new specifications. This will lead lo new studies. requirements for additional resources aM an increase in the development time. As existing products become less and less competitive. marketing will urge lhem lo be
improved, interrupting the development team's preoccupations and increasing
once again the time to market. Costs are thereby naturally increased.
ln my former company, such was our experience when we introduced a completely new technology. Due to the excessive tardiness of the proiect' we had literally
to lace-litt our existing range. An intermediate range was conslructed Why we
ln my (ormer company, such was our experience when we introduced a comdetely new technology. Due to the excessive lardiness of the proieci, we Md literally
to lace{itt our existing range. An intermediale range was constructed. why we
called it "Family line" will remain a mystery. Maybe because it became all too ramiliar in our company. ln any case, we may say lhat instead of the usual 3 years. we
needed 7 years to get the producl onto the market. But at what cost? The good
news was that our customers were not expecting this breaklhrough and our best
(or worst) competitors had decided, in this case, to be secoM best by being the
best second.
事
PP.Ortf
The period of time between the expression of these needs or wants and their,ulfil-
ment by the supply of corresponding products will be lhe arena of competition
(fis. 2)
-- - Z.'ur c.
i
C
ir"l,
ppc re,, I
br.r7
Bearing in mind this cost-lime curve and lhe profit resulting lrom lhe speeding up
of a new product introduclion, we clearly see that we have to plan overcosts lor
our H&D proiects as long as they permit a lead time reduction. This is the basis of
Time-Based Competition.
+tima
The firsl compelitor to €.nter the market wilh this new specitication will have a
great Iatitude when lixing his price. He will obtain higher margins lor higher quanlities (lig. 3).
1992 Conlerence Proceedings
3 - One
can't measure prorit gained by additional flexibility
Common sense?
This is perfectly right. We know of a case where a company had a range ol producls based on non-leading lechnology. A lull form of automation was studied but
the decision was not obvious: wirh sales remaining the same it appeared that cost
price would not change. but in the case of a 1006 sales decrease, automalion
would not be profitable. Nevertheless the decision was taken to automatize. Being
badly conceived, the project got into lrouble and the excess cosls led to its being
stopped. ll no longer was prolitable according to common sense!
355
鸞鸞朧蘊 融褥 鮮
輛聰 淵1盤:難憾辮I驀憚
4‐
When our!oad decreases,we rnust decreaSe our Capacity
Ю
S me
W譜 躙綿S:部 篇
Ⅷ需
鼎∬魔躙 」
irnrnediately
I:誦
:電
:詰
'Your sel up cost makes no sense eilher! I can make as many s€t-ups as I want il I
producl, if the
have excess capacity in men and rnachines. However, lor lhe same
same machine is a boltleneck resource, each unit unproduced means a loss ol
the margin that I would have had in selling if. My set up costs which were practically ineiistent some time ago now become prohibitive"'
What do we make of our common sense formula when contronted with such reasoning?
Common sense?
The Just in Time aPproach has linally gtuen us the right answer:-there should [g
no more stock. Zero slock and zero lead lime now point to the EOO = I lormula.
So the EOO is definitelY dead!
lhe APICS cata"So there it is, linally the answef'. But one day, having looked up
togue and having lound what I thought to be the ultimate book on the subiecl, t
ihe d"lirery process was the same costly one used when we oroierd a
"opy.
oi zOo-goo books. Naturally, I was expected to pay customs cleader balches
rance and delivery charges amounting to loOO francs tor a book which cost no
more than 150 francs! liound myself back at square one: lhe irjeal series is not
necessarily one. Mere nonsense, scotfed my accountant!
So where is common sense to be lound?
a truck is hall or
ls the answer that difricull lo find? ls it reasonable to deliver when
rhree quarters empty? The Japanese, who thoughl so, retracted hurriedly as soon
as lhey were invoiced for these split deliveries.
the lemperature
Examples are frequent in industrial units where in order lo control
it
in a turnace or to iake the characleristics of a particular equipment inlo account'
necessary lo produce in series greater than one- Whether or not we have
is
often
acrually calculated rhe EOO in accordance to the tormula, we may reasonably
conclude "Long live the EOO".
鰈
蒻鶉 棚 鸞
vice level
6-
.
lt is easier to eliminate than to reduce set up time
Undoubtedly,theiniiia|reduciionswillprodUceimpressiveresults:thelransferof
possi'
internal to e>lernal set up activities will bring about immediate gains' Olher
ble improvements may be conslJered without necessarily involving heavy
etc'
charges: .die positioning, toot maintenance, haMling improvement
But this might not always be the best solution. ln an excellent article in
the P&lM
Joumat, CJne Woolsey describes a situation where it may be more economical
equipmeni but to lel the machine run a second ptoduct until the first
noi ro
"r""n cleaned out.
is completely
Common sense?
But how?
Still, the simplesl ot all might be to eliminate the need lor set ups'
By avoirling the need for a new parl. The engineering-deparlment seldom
aon""rn, itielf with the consequences of lhe conception of a new pan Yet' the
piice ot a new part is often higher than we imagine We are loo often satis'Iied
ter"L
5‐
The E00 iS dead,long‖ vethe EOO:
蹴淵 讐i::長 mtti3『 躍器製需翼∬:留 鰯:1:1器 躍
洋
:
i「
憾蝙鶯 爾聰 牌im
stt lot S12eS
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tatestO me
;鮮1]罵 ]構 爺
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::はTtttp鮒 l崎
縄鷺
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‖糖電製L『 8器 :iri:酬;Y:]u肝 配獣
standard lme)to CalCulate the E00
器 滞
SaullS
::mmon sense dcdabn once“ 訓Z“ 酬 be ma byぉ
every CO「 ner
356
i-nen *e aaa some engineering costs to certain administrative costs' all of which
produamount to some thouinds of dollars. Bul if we added to this the cosl o,
cint specitic tools or dies, that of set ups during the lile cycle of the parl and
to be
ttroie retated to its engineerlng changes, the total cosl would easily have
multiplied by 1O il not by 50. ll the Engineering Oeparlm€nt office had been aware
orlr,lse i.iicarions. it could have resoned to more efficient melhods like Group
Techndogy.
lnstead of aiming at reducing set up times, the effort would be directed towards
eliminaling them.
7 - Being
"Just ln Time"
Common sense or nonsense?
Numerous people have said to me: "Our company is totally "iusl in time"' I then
the proanswer, "OK, ln that case, you should be able to delivet within seconds
duct whose characteristics I am about to describe".
"Oh no, stop kidding!"
"Lel's admit that zero lead times don't apdy where you work' But I suppose you
follow the principle ol zero slock, or that you have only a lew days' stock on
hand?"
'vvell. zero stock isn't quite how it works. tt's more in terms of weeks that you
should counl our stocld.
"Ah. rhen maybe you have zero defecls?"
"Here. I can assure you that we've improved considerably. We're beginning to
"six sigmeasure in terms ol ppm, but, of course. we're nowhere near Molorola's
mas"-
IOm
'Well, since we can't evoke zero defects, perhaps ... zero paper'?"
He cuts in abruplly:
'This conversation's getting on my nerves. And why on earlh are you taking notes
on paper anyway?"
'Touch6! Al leasl you'Ie not guilty of zero humoul! But I heard that in France
you've added a sixih zero to lhe 5 zeros that are supposed to represent the Olympic rings. What exactly does zero disdain mean?"
'well you really musl be thick if you don't understand Ihat".
"Perhaps, but in that case you now undersland why I reacled so vigolously when I
heard you say "My company is totally iust in lime".
@ American Produclion & lnventory Control Society
^^-'_h
.4^<e w6'i.t lell
c
lhat w6 shouu be heading torads lNs goal (a IouF
h rin'd (a desriurbn) A'd headins.rc
;;i"urili; ;;;";quire b€ t6luda p'oce's
d cod'ruo* Lnp.o/er*d .n
*ll,lii." n*i **,. hamouds
lmol'/e<l'
^
which lhe whole company
$/tldt demorEirale our krapacliy lo
8ut we have countless couder e)'amdes
embrace thls 'lGlzen' approach.
|trde'rErred a kartan qslem h th€
ori, *r,"oo,* *O
'nalo'l
and
only ol slock
rh6 ",.""esrdty
hiti,l r.sdrs til€re or€.n h ieflrE
ga:*ll
[:s.dri" x,* g*si:r*'#mffi TsY
'rol
tlad
had been removed. One slat'c system
smgy been red3ced
bY
an exisrinq
sydenr ralher ftan lhe adoptlon
oa
a lotally new
sldem whlch
hevtra_
uy wll fina lsefl ostdated 6 lotv yea.s hler'
Con3€rvation ol cu3tomerslt b much easler lo consewo o'r€'s custo'ners lhan
lo tak€ on lhoso of one's competilors. This ls the basls d relatlonal matfietlng.
whlch cenalnly wll b€ lhe way ol lhe ftnu.eConseMatlon wlll sooo be one's b€sl w€apon ll one wlshes to be a step ahead'
anofier slalic
ln lllass p'oduclloo uras a sl'iklng
i'^"i*, ..-"-. French g/oup invon/ecl
lo deliver iusl ln
lll--i. i"'rno"n-, .r .r,,.r i lime. hs $pd€rs were $pposed
howeler' lh6 group u'
h{
'"""n
Sorn€lirE
a
day
Year'
,i.es
,p,o
riil.
Jr" in tirne. became ls coi'r e' eEnse rn exactv h'ee
;;;:i;; ;;;;" ""r",ut
", -t'ich fis emrlot€es eere on {nl<e! The company had
i..i^). ,*,;-1 .r,,i"n
personner ro b€
:::':,::"";;-";;;i"
.i*'" it'" co,nrio* .*"..*ry ror hsHaving
krag'neo
p(os-amme
T'lr'e
h
hs
Just
ln
invorved
to:r
ard
il;ir-#;
ro head rc
rpu'
urdenaken
o'lv
has
companv
rhis
i;
t'.e".
iili'it", *i'-,, i*,
wa,ds lhis goal
I
Cons€rvation ol methods: wtlen a company reorganlzes hsell. *ten i undoF
takes conslde.ade changes h ns produclion there Ls an aNerwh€lmlng iempla'
ilon lo ftror'/ eveMhlnq up snd stad on a new syslem. Here agalr\ the k€yvro.ds
rtnid b€ care- on dence. h wodd l.ide€d bo wiser lo conslder ihe rsalignrn€rt ol
Concluslon
seose o( nonsense? li hasn l always been lhat easy lo decUe whlch ls
which Io thls shod loumev lhat we have laken logethe' Once again. lhe mosl im_
ponanr rhing is to rnaintaln a clhical spld while s€archlng lor lhe dght answers.
whiie loohing lor posslbllhles ot hprovemed
This lmplies an openness which will keep all lorms ol exdusion and Bind con_
lormlly at arm's len!(h.
"Nonsense o. common sense' we can only cooclude wtlen laced wilh the ditficti'
ls lo look lor and to say :
ry or chooslng. what .eally rnakes sense
Cofimon
'vlve
la difl6rence'.
- False ProPhets
p'odocllon" Jusl
Some monlhs aqo. France was In\raded by a ne1{ mode:'Lean
j't
a r"goe. ils place taken by lhls n€lr lrcid' Tease(s renamed
i"-rr." *""
o-Ouaio." ot riqhr producto.! s hodtag€ to lhe vanous diels ttal are
our weight Unhappy that I was nol the lounder ol lhls
f,a,
t. ort"*er whain was 5l about I noriced, lirsr ol a[ lhal lhe
."nr.inino its odncioles was erniled h Enollstl The Ma'hlne lh'l Chtmed
va cMnoer re
ir," wo.to t,rr ir,", iit u"nslalion h Frcnch was Le SvstAm Oui
Monde rlhe Ma.hin.lhal will CMnge lt1. wdld)'
i iti.
".*i
"r"-"!Jto,r"r"i
"iiiJl
r,-*
* ."it
lhe
wantino lo lnoY/ rno(e, I chanced on a le, wnnen by one ol lhe w'ile6 d
50
bool. A:nd wtar d'd I reid? "A deca're ago. we dsn€d J'parf b€gan lh€ an'de
i *as arr aOour an erpe,lence daling l! yea6 ago that was b€ing preseded as
ol
someihino revddio.Ery: Looking more dosdy, I noliced thal all lhe e)€mces
i,enctr co'moanies cneo were no.€ oth€r lhan oGmdes ol on€ong lmp(ovemmt
r"r"t", .rock, reliabny ol ddivery etc Noting \N-as r|€{ h lhls'
in qrulitv,
"".ri""
t had ihe lean salislaction. however' d erQlahlng to o'!e Irry perticipants that
bd not over_
"
his company was engaged ln lean p.oducto'f. lle eas $rpris€d
Biography:
joyed al learning lhis.
Michd CAVAUO CFPIM ls Okector Or MccM a cOnsuJng and education irm
This sas holv I launched my exdamllon of t& n€w lads hlroducto'l :
'Al the origin o{ this lad. thete were corEdtarls wtrc' h tt|e 50s" didn l kno'/ how
lo implement a reorder poinl syslem'.
1??'
on toratds MRP- And when lhey
dirn r oblain resutis wilh MRP. thev sdopled '-[T. $le mod sophislrcated. havlog
pro_
ak€rc,y had a ning wnh OPT- The mosl hgir step nolv b to embtace lean
rol course. ttaving ta ed whh BOP' ltley $/etl
wonder. bd lefs iust hope lhay're abollt lo retite'.
9
- Conservatlon
■鞣∬驚
職犠
職鰤鮒総 議畔:11を‖
AP10S Dictionary
M chd ls cofounder olthe CPIM de Franco Soc ety and Presdent of:he Com
よ
」
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l諦 紺 』
謡:1:lil憾 常
馬
騰竃
斜雷
認 注1:青諄
認棚す
』
AuomatOn Systems)
11:『
My participanl linarly underslood:
''So whal witl happen when lhey lalt?
"l
r逸
i‰
認
T帖 躙鶴
露冊黒 品常 留品:脳 電胤瑞鑑 l‖
i‖
Nonsense or cotunon sense?
I am intimalely convinced lhal lhere b ooe area $'here
cffiflrcn
sense should pre'
as tegads conseNatio.L Fa, ntore lhan consideGlions abou ue
envi.onment or ecology are being irndied itere ls vre shodd pracllse conserya'
vail and this
li
Machines: lhe time is Easl Eten we shojd g€l *J d an dd nuchine lmmed'Elely
ater n has been replaced. Today, w€ krto{ ihat yl€ slrodd keep $e o{d one, thai
il should be used lo produce iust o.le tlnd ol pai. wnh no sel ups .equi.ed ard
iusl in rime. lhis rnachine wall be able lo produce each ard every day lhe parts ne'
Material consedalion: the life ol a p.odud does nol slop al ns dealh. We should
now sp€ak ol a rebirlh. Since we can recyd€ co.npoients. producrs should now
t'€ c,esigned wnh lhis second lile in mind. DFA (Oesign lot assemuy) shodd now
gve in ro DFD "Oeslgn for disassemuf.
Human conservaiion: This lerm n*Jtt $rpdse hn we shodd mo.e ard more
I.equenity. com€ lo le,ms w h n. EverY companY shoJd prcviie opponunnbs lor
ils personnel lo be "recycled : by gililg lhem lhe arEnce to acquke ned qualilica
iioos and c,o diflerent iobs. Fo. inslance, h Francq lhe CPIM didoma is ,ecogni2d as a greal means 1o oblaln new career po6sibliti€a
1992 Conf erence Proceedings
357