Edward S. Pound Jeffrey H. Bell - Factory Physics for Managers: How Leaders Improve Performance in a PostLean Six Sigma World

Copyright 2014 by Edward S. Pound, Jeffrey H. Bell, and Mark L. Spearman. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

ISBN: 978-0-07-182261-9

MHID: 0-07-182261-5

The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-182250-3, MHID: 0-07-182250-X.

eBook conversion by codeMantra
Version 2.0

All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps.

McGraw-Hill Education eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs. To contact a representative please visit the Contact Us page at www.mhprofessional.com.

Factory Physics and LeanPhysics are registered trademarks of Factory Physics Inc.

TERMS OF USE

This is a copyrighted work and McGraw-Hill Education and its licensors reserve all rights in and to the work. Use of this work is subject to these terms. Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or sublicense the work or any part of it without McGraw-Hill Educations prior consent. You may use the work for your own noncommercial and personal use; any other use of the work is strictly prohibited. Your right to use the work may be terminated if you fail to comply with these terms.

THE WORK IS PROVIDED AS IS. McGRAW-HILL EDUCATION AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. McGraw-Hill Education and its licensors do not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Neither McGraw-Hill Education nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting there from. McGraw-Hill Education has no responsibility for the content of any information accessed through the work. Under no circumstances shall McGraw-Hill Education and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages. This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise.

To Meg, my one and only, Zachary, Madeline, and Audreyepiphanies to me. Every breath is a blessing. May the Peace of Christ that passes all understanding keep your hearts and minds in the knowledge and love of God.
Edward S. Pound

To my wife, Julia; my parents; and the team at Arc Precision.
Jeffrey H. Bell

To my wife, Blair, who for thirty years now has picked me up when I was low, has kept me humble when I was haughty, and has loved me always. And to my children, who have blessed me and taught me more than I have taught them: Jacob, William, and Rebekah; and to my grandchildren, a wonderful blessing, Alana, and Jake. And to the only wise God be glory forevermore through Jesus Christ! Amen.
Mark L. Spearman

THE BOOK IN BRIEF

How can executives and managers of manufacturing and supply-chain companies predictably achieve high cash flow, low cost, and excellent customer service? This book describes how forward-thinking managers use Factory Physics science to cut through the clutter and confusion of competing options. Typical management efforts currently lack any comprehensive, practical science and are almost always hit or miss. Managers commonly move from one initiative one year, such as Reduce inventory! to another the next year, such as Improve customer service! because they dont have a practical understanding of the underlying natural behavior of the operations they are trying to manage. Meanwhile, software companies are ever touting the next big initiative in software, such as materials requirements planning (MRP), enterprise resources planning (ERP), advanced planning and optimization (APO), cloud computing, and big data, to chronologically name a few, as if more advanced technology is the solution to whatever ails a company. Using Factory Physics for Managers, leaders will advance management practice and performance because Factory Physics science objectively describes what will work for them and what will not. The practical Factory Physics approach helps managers decide whether and when to use the excellent Lean, Six Sigma, and Theory of Constraints operations tools to drive company business strategy implementation while predictably and repeatedly achieving their business goals. Managers innovatively use Factory Physics science to drive higher performance using existing ERP or legacy information technology (IT)no major IT investments required.

With Factory Physics for Managers, Ed Pound and Jeff Bell, executives each with over 20 years of experience in operations, and Dr. Mark Spearman, with over 30 years of experience in research and consulting and coauthor with Wallace Hopp of the world-renowned, award-winning textbook Factory Physics (Long Grove, IL: Waveland Press, 2008), describe the manufacturing and supply-chain management summit: a comprehensive, practical, and scientific approach to managing manufacturing and supply-chain operations. This approach directly addresses the inherent variability and risk in business. Typically, executives apply some bundle of popular initiatives, mathematics, and softwarethe results are unpredictable and often disappointing. This book provides a fundamental science in a very practical framework that will immediately improve executives and managers intuition, change how they view their world, and enable them to lead their organizations much more effectively.

WHY IS THIS BOOK NEEDED?

There is widespread confusion about what works and what doesnt work in manufacturing and supply-chain operations. As a result, operations strategies and plans often do not achieve what they promise. Software companies sell applications that just perpetuate what clients already doregardless of whether or not the software does what the client needs. Lean proponents promote the Toyota Production System and its tenets in the vein of an operations theology. Six Sigma proponents insist on the rigorous statistical analysis required to identify and root out variability. Theory-of-Constraint adherents continue to focus exclusively on bottlenecks. In response to the uneven success of these efforts, Lean and Six Sigma proponents simply concatenate those two initiatives (Lean Six Sigma) in a continuing search for a comprehensive solution to achieve business results. Meanwhile, the academic community, and industrial engineering in particular, has lost its way. Many curricula teach the Lean and Six Sigma approaches but are following industry rather than leading. All this creates enormous confusion. What are executives or managers of manufacturing, service, or supply-chain companies to do in determining how to best lead their companies to achieve marketing and financial goals?