Superior Supply Chain Through Operational Excellence: An Interview with Steve Cimorelli

This post has already been read 478 times!
0 Flares Twitter 0 Facebook 0 0 Flares ×

Ron Crabtree

Steve Cimorelli is one of the authors in the new book Driving Operational Excellence on the keys to success in Operational Excellence and Lean Six Sigma. You’ll find his thoughts very insightful and helpful in many different ways. Even if you’re in a service providing industry you have supply chain issues. Moving information through a series of processes to convert them into a result, like a check, a mortgage application or answering a technical problem, all experience the same kinds of problems found when converting raw materials and parts into a finished product.

Steve Cimorelli

I began my career as an engineer with NASA back in the days before the first shuttle launch. I started there as an Engineering Intern while I was working on my degree in Industrial Engineering at the University of Central Florida. I stayed there about five years, through maybe the first nine or 10 shuttle missions and then went on to join McDonnell Douglas on the Tomahawk cruise missile program making a variety of other weapons systems and a bunch of different airplane parts. I did that for about 10 years then moved to Learjet, the maker of the muscle car of private jets if you will.

And then things got really interesting. I made a move out of the aerospace and defense industry into more commercial manufacturing, and in 1995 I joined the SquareD company, a part of Schneider Electric that made a variety of different electrical control products, and it was there, as a Manufacturing Manager, that I really became steeped in Lean Operational Excellence concepts. Then I had the privilege, during my final four years with them, to consult internally on putting those practices to work in manufacturing and distribution locations all around the world.

Then, in 2005, I joined Cummins Filtration as their Director of Global Inventory Planning, and it was there that I became certified in Six Sigma. In January of last year, I left Cummins and founded my own consulting business, SCC Inventory Consulting, where I am today. So, I’ve been very fortunate to work in a broad range of industries, a variety of different disciplines. Not just in the US, but all around the world, including places like Mexico, Canada, France, England, Belgium, even China and Japan.

Ron

Before we continue on, I’ve got to ask you a question. You think back to all the years you’ve worked in the supply chain in all these different countries, and you’ve certainly seen a lot of things in different places. When you think about our ability to respond to changes in the marketplace, what’s the biggest limiting factor? Is it the physical movement of the goods and materials, or is it the movement of information to support that?

Steve

Oh, it’s really both. If you take a look at one of the primary Lean tools, value stream mapping, there are really two key elements there. One is the flow of information, and the other is the flow of material through a process, and I would have to say they are equally important. They each have their own challenges. I’m not sure one is any easier than the other. But they certainly have to play together.

Ron

Let’s take a look at some of those important aspects of Lean Six Sigma. I think it’s helpful to break it down. Some of the listeners that have been with me for a long period of time have heard me talk a little bit about Lean Six Sigma in the past, but I think there’s some value in revisiting that subject  for a moment. So, let’s just break that apart. Let’s just start with the Lean component. What’s this whole Lean component in the Lean Six Sigma formula?

Steve

That’s an interesting question. I’ve asked myself that many times along the way. What it really comes down to is Lean is all about eliminating waste. So, getting rid of anything that doesn’t add value to the product or the process that you’re involved in. Some examples in a manufacturing setting would be things like unnecessary inventory, unnecessary motion, defects, waiting for something to happen or a part to come your way, transportation. All of those things are essentially wasted in the process. And Lean has a variety of tools and techniques that can help us to identify and help to minimize, or even sometimes eliminate, those non-value-added things that we call waste.

And again, one of the most fundamental of those tools is process mapping, or what’s known as value stream mapping.

Ron

All right, great. Well, you touched on that a little bit earlier. Let’s tackle the other half of the Lean Six Sigma equation. The Six Sigma part. Tell me a little bit more about that.

Steve

Ok. Six Sigma is really all about a structure of analysis. If you think about problem-solving as occurring over a continuum, sort of, on the left-hand side are the simple, gut-feel, I think, types of approaches to problem-solving. Then, as you move across that continuum and the product –the problems become more complex; the tools that we have to apply to solving those problems become more complex as well. So, when you’re talking about Lean Six Sigma, it’s more the structured, statistical kinds of problem-solving techniques that lend themselves to solving complex problems.

I would say it’s a structured approach to eliminating waste. So, put the two things together, it’s a structured Six Sigma analytical approach to identifying waste in a product or process and applying the tools to eliminate them.

Ron

I think that’s a pretty good analogy and everyone’s got a different spin to it but hearing it put a different way can perhaps turn on the light and make it easy for folks to grasp the concept. So, that’s very helpful.

Can you share some practical examples and stories about how we actually leverage aspects of Operational Excellence, like Lean Six Sigma, in the context of supply chain and inventory management and moving information, if you will, across a series of processes? And, could you share with us some of that story about how that actually works as you’re going to in detail in your chapter?

Steve

Sure, I’d be happy to. I guess the headline here would be to act on fact. Let me set up the problem a little bit. The issue was, this is a company that both manufactures their own products for sale through their distribution network and purchases finished products that are made to their specifications. But, made by someone else. They bring those products in. So, it’s called branding. They’re selling branded products as their own through their own internal distribution networks.

The particular problem, in this case, was that those purchased, branded products were experiencing significantly lower service levels to the customers. What I mean by service level is essentially on-time delivery. These are stocked products that when a customer calls, we expect them to be in stock, and we should be able to ship them out same day or no later than 24 hours later. Well, these branded products were having significantly – double-digit – levels of service.

Ron

Double-digit, you mean minutes, hours or days?

Steve

Percentages. Double-digit percentages. So instead of, for example, 98% on-time delivery, we were looking at something less than 90% of on-time delivery.

So a significantly different level of service on these branded products than on the in-house manufactured products. So, this particular customer went about a formal, rigorous, Six Sigma analysis to try to understand why; what were the root causes?

So, let me walk you through a little bit of what we’ve already talked about. Beginning with waste. If you think about everything that is associated with not having the product in stock when the customer orders it, that’s waste. So, things like having to follow-up with the customer, apologizing for not having it, trying to understand – do we need to break their order into pieces, maybe do a partial delivery of the things that we do have and a later delivery of the things that come in a number of days or weeks later, following up with the supplier, cross-docking when the product finally does arrive in stock, etc. Everything associated with not having that product when the customer wanted it is waste.

So, in the book, we talk about doing this structured Lean Six Sigma analysis process to try to identify what those underlying root causes were. Now, let me go back to the problem statement for just a minute. The company firmly believed that there were two primary underlying problems. One was what was called the MOQ, the minimum order quantity, from the supplier. The other one was long lead times on some of these products from the suppliers. And there was a firm belief that those two things were the key underlying culprits.

Ron

So they had a preconceived idea of what the problem was?

Steve

They had a preconceived idea. Now, long story short, taking those two problems and a number of other things that came up through the process of working through the project, the company identified that the MOQ, the supplier’s minimum order quantity, was, in fact, a key underlying culprit. But, the process exonerated long lead times as contributing to the problem. That was a significant “Aha!” moment for the team, and that’s something that’s very likely to happen when you apply these kinds of rigorous, analytical techniques. You’ll be surprised at the findings that you come up with. And what that allows you then to do, is acting on fact. You’re no longer acting on those preconceived ideas or those biases that you bring to the process, and you’re in fact, acting on facts and putting the correct solutions in place.

So, what’s really good about this book though is it’s written for everyone. My chapter is a manufacturing, distribution, supply chain kind of problem. But the focus even in that chapter is not on supply chain per se or manufacturing per se. It’s on the Six Sigma methodology. How did we apply the methodology to that particular problem? And we do that in a way where everyone, no matter what discipline they’re in, can take away some lessons from that process that apply to them.

Other authors in the book discuss problems in other fields, like education, like healthcare and a variety of different industries. And we also talk about how to manage the changes that are brought about when people apply these methods in whatever industry or whatever discipline they work in. And, as you know, effectively managing change, especially of this magnitude, is always an important element.

Ron

That was a lot of great information in a hurry. Could you sum all of that up for us and maybe what you think the biggest takeaway is, that you’d like folks to get from this particular discussion?

Steve

That’s a great question, Ron. For me, the biggest takeaway is to always act on fact. That’s really the heart and soul of Lean Six Sigma. Now, what’s important to recognize though is sometimes the facts come from data. And there’s a whole slew of quantitative methods that we can use to apply when we have good data. Other times, there’s no data. There’s knowledge; there’s information locked up in people’s heads. So, there are a variety of good qualitative models that can help us with problems like that and gather that information and structure it in a way that still allows us to act on fact even though we don’t have hard data.

I would add one other thing – this is based on my experience – that the solutions we come up with when we act on facts tend to be better. They get better results, they get better buy-in from the people that have to go and implement those changes and, quite often, they can help us to avoid unintended consequences.

 

Bio for Steve Cimorelli:

Steve CimorelliSteve has more than 20 years’ experience providing front-line and executive-level leadership with 10 years delivering consulting services to manufacturing and distribution companies. His strengths are in the areas of Six Sigma problem solving, Lean manufacturing, pull systems, assessing opportunities for improvement and implementing sustainable solutions to clients’ problems. Steve is equally effective working with senior management on operations strategy matters as he is at helping front-line employees learn and utilize new Lean skills.

If you liked this article, we'll be happy to send you one email a month to let you know the newest edition of the MetaOps/MetaExperts MegEzine has been published. Just fill the form below.

Related Post