Mark Morrissey MSc.

Mark Morrissey consults in procurement, global

sourcing and vendor relationship management
within multiple industry sectors.
He is a seasoned professional with over twenty
years of experience in supply chain and
sourcing roles. Within business Mark has worked
at a senior management level where he
developed vision and strategies for
organizations' supply chain and strategic
sourcing needs. His more recent work within
consulting has allowed him to focus industry
experience and apply leading practices within
multiple industries working with stakeholders.
His experience includes low cost country
sourcing, development of global supply chains
and organizational change.
Link Sage Inc. is a boutique consulting firm
specializing in:
Strategic Sourcing
Vendor Relationship Management
Sourcing for environmental sustainability
Strategic sourcing and vendor management
are critical functions for any business. From
services to manufacturing, companies are
relying more on vendors to provide non-core
products and services which creates risk to the
business through reliance on third party
organizations. This is why leading class strategic
sourcing and vendor management are critical
to the success of an organization through
ensuring the correct vendors with the required
qualifications are selected and risk mitigation is
implemented.
Principal Link Sage Inc.
Lean
HISTORY AND GROWTH OF LEAN
APPLICATIONS IN BUSINESS
Lean History
Lean was invented by Kiichiro Toyoda and Taiichi
Ohno after viewing the production system of Ford.
Adopted and engrained after World War 2 due to a
limitation of resources which became known as the
Toyota Production System or TPS
Enabled companies to ensure production output
targets by avoiding waste in operations through the
greatest utilization of resources.
North American companies in turn were mired in
waste such as inventory, obsolescence and re-work
through high volume assembly line process.
Lean History
Lean enables organizations to be more responsive to
customer needs.
Companies which use high volume low mix type of
production are less responsive to market needs and
slower to react to changes. As Henry Ford said
about the Model T Any colour you want as long as
it is black.
Companies with Lean are more responsive to what
is termed mass customization allowing them to
react to shorter product life cycles and changing
market demands.
Being responsive means building only what is
needed when it is needed. A practical application
of this is Kan-Ban or Pull System production.
Engaging only required resources when needed
supports the elimination of waste within process.
The Seven Wastes
Waste is anything that does not create value for the end
customer. The common categories of waste are:
Overproduction producing more than is necessary
Waiting- workers watching equipment or sitting idle
Unnecessary transport- movement of products or
people over distances
Overproducing or incorrect producing unnecessary
production activities associated to design or defects
Excess inventory excess products not being
consumed in continuous flow production
Unnecessary movement wasted motion through
inefficiency
Defects- repair or scrap of products
Current Application of Lean
So why are companies adopting the Lean philosophy and incorporating it
into operations?
Reduces costs through elimination of waste and continuous
improvement.
Improves asset efficiency through eliminating bottle necks.
Improves responsiveness through enabling smaller more agile
production runs.
Improves reaction time to market changes through reducing inventory
and allowing quicker change overs.
Improves customer service through bringing the customer into focus in
everything the company does.
Current Application of Lean
Lean saved Porsche.
In the early 1990s Porsche sales were sliding and high costs were hurting the bottom
line which nearly put Porsche out of business.
The reduced sales created a crisis in Porsche which was the catalyst for Porsche to
bring in Wendelin Wiedeking as a change agent. Wendelin understood the problem
at Porsche was cost resulting from inefficiencies through effort to assemble a car,
tools and space.
Wiedeking implemented a new collaborative environment between design
engineering and manufacturing which was applied to the development of a new
Porsche model The Boxster.
The Boxster was designed in record time with the lowest defects.
Porsche is now ranked second highest in customer
satisfaction between Lexus and Toyota.
Current Application of Lean
Lean is perceived to be a manufacturing
methodology. It is not!
Customer focused activities and
reducing waste are applicable to any
form of operation.
We are now seeing Lean applied in
Hospitals and Banks where they are
working to be more responsive to
customers.
Lean application in Hospitals

Improved Quality
of Care
Improved
Patient Safety
Decreased
Costs
Increased
Efficiencies
Enhanced
Patient
Experience
Increased Patient &
Provider
Satisfaction
Decreased Wait
Times
Patient
Centered
Care
Current Application of Lean
Hospitals have been able to implement very similar forms of Lean with the focus on the
patient and ensuring that each activity delivers value to the patient through the
elimination of waste.
Hospitals value mapped processes as the first step where value mapping is
establishing the value stream in the terms of work flow and material flow.
The Value Stream is used as the baseline to identify waste within the processes.
The supply of materials in hospital wards is replenished utilizing a pull system where
RF scanners are set up a key stocking locations.
Teams comprised of doctors, nurses and procurement representatives are involved
in new product trials and substitutes with the goal of standardizing the materials
used such as syringes, bandages and non-prescription medications.
Teams comprised of nurses and hospital administrative staff collaborate with one
another in continuous improvement activities aimed at improving patient care,
reducing costs and increasing the number of patients a hospital is able to care for
with fixed resources.
Current Application of Lean
So why are companies jumping on the Lean bandwagon?
Competitive edge
To reduce costs, companies outsourced manufacturing to Asia which
focused on reducing direct costs and was successful.
Manufacturing went east and the focus was on producing high volume
products which are highly standardized. Like the Model T.
Model T, any colour you want as long as it is white
Current Application of Lean
Competitive edge
The world is changing again.
Costs in Asia are rising as the high growth rate raised the standard of
living and also wages.
Long distances between manufacturing and markets means high
inventory in the pipe which is expensive. Look at BlackBerrys write
downs. ($960 million Q2 FY14)
Increased risk in extended supply chains due to
political and environmental uncertainties.
Market demands greater flexibility for different
products and product life spans are becoming shorter.
Multiple colours and variations of functionality
Current Application of Lean
Competitive edge
The change in action
Apple has committed its next Mac will
be assembled in the USA
Foxconn announced it will be building
its next manufacturing plant in the USA.
This is being driven by supply chain risks
and enabled by increased automation.
However, Lean helps the return on
investment through waste reduction.
As Gou points out, we seem to be at the
beginning of some sort of American
manufacturing renaissance. Many companies
that outsourced their manufacturing outside the
US to lower costs are now looking to bring at least
some of their operations back stateside.
(Bloomberg)
Current Application of Lean
Thinking of implementing Lean in your organization?
Good but be careful
Lean is not so much a change in process but a change in mindset.
It was very successful in Japan due to the natural structure and
discipline of Japanese culture.
North America does not share that culture so Lean is as much a cultural
shift as it is process shift.
Do no do it yourself. Ensure you have a Lean Sensei to guide and keep
focus.
Current Application of Lean
Lean implementation is not easy as it is more an organizational cultural transformation
than implementing new practices. Some causes of Lean implementations failing: (M.L.
Emiliani, D.J. Stec. November 2014)
Backsliding to the old ways of working;
Lack of implementation know-how;
Lack of a crisis to create a sense of urgency;
A traditional cost accounting system;
Shop-floor improvements;
Resistance by middle management;
Regarding Lean as the flavour-of-the-month;
Failing to remove anchor draggers who oppose change;
Resistance by hourly employees;
Resistance by supervisors; and
Failure of past Lean projects.
THANK YOU