Forecast Errors
Volume 2, Issue 22, June 8, 2015
A forecast error is the difference between the actual and predicted value. The consequences are expensive inefficiencies that can be resolved with lean manufacturing technology.
Kanban Better Choice for Projects than Scrum
Neil A. Chaudhuri recently suggested why Kanban may be a better choice for projects than Scrum. Scrum is a process. Kanban is more of a metaprocess, asserting key principle without prescribing how to accomplish them. There is nothing about sprints, Product Owners, formal planning meetings or any of the ceremony associated with Scrum. Based on the lean manufacturing model espoused by the “Toyota Way,” Kanban is in a way a superset of Scrum. The ability to visualize work in an explicit way is vital. Kanban demonstrates unequivocally where everything is in workflow. It also reveals potential bottlenecks where manufacturers may apply the Theory of Constraints. Establishing pull systems using Kanban as the core underlying methodology, has been critical to the movement toward lean manufacturing processes during the past few decades. Read more.
Global RFID Kanban Systems to Reach $1.1B by 2020
Global RFID Kanban systems market is expected to reach USD 1.1 Billion by 2020, according to a new study by Grand View Research, Inc. Increasing cases of stock outs, over inventory, clerical errors and growing demand for real time asset and inventory tracking are some factors expected to drive market growth over the next six years. Furthermore, high cost incurred due to medication expiration, increasing demand for FIFO system and the implementation of lean inventory management is expected to boost market growth over the forecast period. North America held majority of the market in 2013, with revenue estimated at USD 97.5 million. Economic development, increasing demand for process optimization, rising awareness level amongst healthcare organizations pertaining to the benefits associated with RFID kanban systems are some major drivers of this market. Read more.
High Margin Products the Place to Start Demand Driven Supply Chain
One inventory forecast management approach suggests immediately limiting production and ensures unwanted items are not produced. If the estimate of 50-100 units created weekly to meet demand, then most manufacturers would choose 50-75 as a forecast starting point, and produce more if the actual demand turns out to be higher. Conversely, some manufacturers start out picking a number in the upper register, between 75 and 100 based upon the same calculations. If overproduced, production for the following week will occur until parity is reached. Either strategy is ineffective according to Antonio Ferraro in his Kanban Process – Understanding the Steps for Better Efficiency. Setting a low work in progress limit right off the bat is generally a quicker way to get to you precise number because workers are focusing on a smaller number of tasks. This translates to fewer defects, less administrative woes, and a clearer picture. The downside to starting low is that is can end up painful if you have an unexpected influx that you aren’t ready to handle – clients may have to wait slightly longer than usual. Find out more about the Demand-Drive Supply Chain. Read more.
Move from forecast errors to demand driven accuracy:
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