Reduce Fulfillment Time
Lean companies
- Can fill a customer order very quickly
- Understand the value and the value-stream of each product
- Make value flow without interruptions
- Let the customer pull - this triggers production
- Make products one at a time - the customer sets the pace
- Strive for zero inventories
- Replace physical inventory with fast communication
- Eliminate all delays and inefficiencies (waste)
- Eliminate equipment breakdowns, interruptions, and other production losses
- Reduce setup times to minutes or seconds
- Build-to-order using mass customization
- Pursue perfection - continuous improvement
Traditional companies
- Have long lead times
- Fail to see how customers value their products
- Make products to forecast (push system)
- Schedule production in batches to avoid long setup times
- See inventory is a necessary evil, a buffer between the stream of products and uncertain customer demand
- Fix problems as they appear
Benefits of Lean
- Avoids committing inventory and resources until the product is sold
- Gives customers what they want, on-time, all the time
- Avoids inventory of obsolete product
- Keeps minimal inventories - only what is needed to maintain the flow
| "Dell is continuously refining its direct approach to manufacturing, selling
and servicing personal-computing systems. Current Dell initiatives include
moving even greater volumes of product sales, service and support to the Internet,
and further expanding an already broad range of value-added services. The Internet,
the purest and most efficient form of the direct model, provides greater
convenience and efficiency to customers and, in turn, to Dell. Dell services are
focused on enhancing computing solutions for, and simplifying the system buying
decisions of, current and potential customers."
- Development of the Direct Model, Dell Computer, dell.com |
| "It would behoove any company that intends to be a vigorous competitor over the
next few years to think long and hard about things such as fulfillment. As Randy
Mott (Wal-Mart senior VP & CIO) put it, 'It's not sexy - but without that
capability, you've got nothing.'"
- Fulfillment: The First Challenge by Bob Evans, Editor-in-Chief, Industry Week, September 20, 1999 |