Tuesday, November 19, 2002

Couch Potatoes Go Lean

George Koenigsaecker of Simpler Consulting proposes 9 ways Lean is different from our "natural" way to think. His point 4, in the form of "natural vs Lean."

Economic Order Quantity vs. All set ups can be reduced by 97%

In today's Wall Street Journal, there is a fabulous example of this. If you subscribe to the on-line version you can go tothis link (it is a subscription site) and read it. Or you can find a hard copy...it was on the front page.

In short, the article describes how a furniture manufacturer in the hills of eastern Tennessee competes favorably with cheap imported furniture by leaning out their systems to provide custom couches in three weeks or less. The author did a good job of "stapling himself to an order" to describe how one couch flowed from the buyer in Wisconsin to the furniture store to the factory to assembly to the truck back to the buyer in 12 calendar days.

What was interesting was that the factory employed some clearly lean principles (e.g. driving strong relationships with fabric suppliers to get multiple small deliveries) yet still utilized a fair amount of batching. Nevertheless, they were winning customers and gaining market share, simply by delivering promptly. It is a tremendous value proposition.

What did they do? They challenged the assumption that it takes 12 weeks to deliver a custom-built couch. They deliver in one-fourth the time.

I hope this is helpful

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