An interview earlier today caught my eye, then churned my stomach. Steven Brostek, director of production operations for Chrysler’s Belvidere facility, discussed their materials initiatives with Bob Treblicock of Modern Materials Handling magazine. Here’s the exchange that roiled my burrito:
Modern: Since you’re now using an integrated
logistics center away from the plant to organize and deliver parts, did
you significantly reduce storage at the plant?
Brostek: Yes, we did. We used to keep two days
worth of parts at the plant. That meant maybe 500,000 square feet of
storage space. In addition, we had a bullpen of 85 to 140 trailers full
of parts waiting to be unloaded in the yard. Now, we keep about 2 hours
worth of parts at the line. All of that storage space is devoted to
So let me get this straight… storage at the plant was reduced by about 500,000 square feet and a "bullpen" by moving all that stuff to an "integrated storage center" away from the plant. Now only two hours of parts are kept on the line. Woo hoo! Really?
Minimizing inventory is obviously a core attribute of lean manufacturing. As is point-of-use inventory. Presumably not all of that monstrous amount of inventory was on the line, and was probably in an attached warehouse. Now the warehouse (ok, ok… "integrated logistics center") is somewhere "away from the plant." Has system inventory really been reduced by even a penny? Or did they just add one more transportation leg to the supply chain equation?
Many of us have witnessed this at the Detroit Three auto factories, but primarily driven by suppliers who were being driven hard by the auto companies to "do kanban." Did they reduce inventory? Did they implement kanban signals back to the first, second and third tier supplier factories? Nope. In most cases they just pushed guesstimated production into semi after semi. When the "kanban signal" came in they just drove one over to the auto factory.
A buddy of mine had a term for this nonsense: "ghost kanban." You may think it’s kanban, but it’s really just an apparition.