How Manufacturers Navigate From Push to Pull Operations

[00:00:00.120] Ty Getz. Welcome. It’s the end of the week.

[00:00:03.570] Thank you.

[00:00:05.130] This is very exciting. You are our inaugural, first remote interviewee that we’ve ever had on this podcast.

[00:00:16.210] I feel very privileged, and you should.

[00:00:20.010] You know, we have an enormous audience. We have dozens of people who listen every week. Some of them aren’t even on lids payroll.

[00:00:29.270] Wow.

[00:00:32.790] So let’s get to know you first, Ty. Of course. Actually, a lot of people at lid know who you are. We’ve had the pleasure of collaborating on projects together, but for the audience, we’d love to know a little bit more about you.

[00:00:53.810] In regards to my background. Right, yeah. Okay, sure. So again, my name is Ty Getz, and I actually live in north of Chattanooga, Tennessee, in the United States. I have 30 plus years of experience. I think after 30, you have to basically say just 30, so you don’t seem too old. Right. I’ve spent my career working for either in engineering firms or consulting firms or software providers. I have experience in many diverse industries. Printing and packaging, vehicle production and assembly, steel fabrication, furniture, home accessories, pharmaceuticals, medical devices, aerospace, injection molding. Fresh out of university, I worked for a material handling consulting firm where I implemented things like ASRs, automated storage and retrieval machines, automatic vehicles, agvs, robots, conveyors and the like. I also redesigned a lot of facility layouts to handle better flow and to put some of these better material handling systems. In 1990. Go ahead.

[00:02:01.510] Oh, no, no, keep going.

[00:02:02.830] Okay. In 1993, myself and two former colleagues, we started our own business to implement shop floor control systems. Basically, it’s just being able to put sensors on machines and be able to collect the data automatically to upgrade ERP systems, legacy systems, with that kind of data, quantities, statuses, and other information like that. Did that for about three years. And then in 1996, our company was bought by a software company called Synquest. Synquest was in the supply chain planning and scheduling software optimization arena. They were kind of a small brother, little brother to itwo manujistics, who everybody knew back then. So I did that for a while. And basically one of the things I did there was I was in a director of integration services and custom coding. I also did was director of implementation services. So I was the one that was responsible for when the sales guy sold our software and said, hey, you can achieve this, or I, by putting our software in. I was the one that had to get that or. Okay.

[00:03:16.350] But they, they never exaggerated. They got it right.

[00:03:20.790] Sales guys always exaggerate a little bit. Yes, we know that.

[00:03:23.940] I’ve never heard of a salesperson exaggerating anything ever.

[00:03:27.450] Exactly, exactly. And then so did that for a while. And then in 2001, 2002, everybody remembers the technology bubble just bust. It just burst to the seams. Nobody was buying software. Everybody had software they bought on the shelves or they were buying software. That was this theory thing. It didn’t even exist yet. And so myself and three others, we started a business called supply chain process improvement. And really what we were is we were looking at saying, hey, everybody has software on the shelf, but nobody’s using it effectively, nobody’s able to, their processes aren’t very good, so we need to help them with their supply chain planning processes to make them better to go forward. So in August of 2003, me and three others started supply chain process improvement. SCPI, some people call us SCPI, you get that one every once in a while. And this is where I work 21 years later.

[00:04:25.560] That’s pretty amazing. You know, SCPI, it does quite a few things for its clients and maybe we could just do a tour of what it is that you guys tackle. The kind of problems that you guys tackle.

[00:04:42.020] Sure. So as I said, I just said earlier, CPI focused on supply chaining processes. We recognize a long time ago it’s about the process. Software is an enabler of the process, but it is not a substitute for the process. So really specifically we focus on five areas. Those areas are supply chain design, network design. Where do you put your facilities, where do you put your warehouses, where you put your distribution centers, where you put your manufacturing plants, where do you put your cross docks? How do you get your product to the customer? The cheapest. Second area we do is sales and operations planning. Snopes. And I tell people really that all that is, is balancing future demand and supply, trying to maintain your lead times. So I know a lot of people have lots of definitions for us and op, but really at the end of the day, it’s maintaining your lead times for the future against all things that are going to happen. Third thing is inventory, how to deploy and maintain target inventories to meet service goals. Okay, so where should I hold my inventory? Should be in raw material, should be in finished goods, should it be in and WiP, where at my network should I hold those that inventory to meet my customer lead time requirements?

[00:05:59.890] And then how much should I have? Everybody knows during COVID that everybody’s inventories went crazy because nobody could get anything. So everybody just got their hands on everything they could get their hands on. And now today, everybody has way too much inventory, trying to work back down what they brought in during COVID another area is transportation. So we do a lot with transportation, designs, routes, how to get product to the customer the cheapest, most effective way. We help companies with executing transportation plans and work with them on that. And the last area is really operations improvement. What we’re really here to talk about today, how to help companies better plan and schedule as well as improve their manufacturing processes. Okay, we do that a variety of ways. We also have done a lot of simulation models to either provide validity to a new process or a new plant or a new facility, a new production line, or we’ve done it to validate a change to an existing one before you want to spend the money and make the change. And then we also have lots of partners. We have lots of partners. And that helps in other supply chain disciplines.

[00:07:05.400] And of course, we use lid for warehousing, distribution projects. We use their expertise on those because we don’t have that expertise in house.

[00:07:15.200] Well, and we greatly, greatly appreciate that. And we’ve enjoyed, enjoy the opportunities to collaborate. And as we’ve gotten to know you guys better, not only of course, do you have you and your team, the whole gang there, are really experienced, but it’s the, the wisdom also that you bring to the table. And wisdom, I don’t mean the 30 plus years, I mean more this common sense, very sober, sensible, practical approach to solving problems, which I think is kind of rare, that I really appreciate when I run into colleagues in the industry who have that attitude. And I think that’s why we work well together. But as you said in your description of SCPI, what we really wanted to talk about today, because we could go on forever. I’m, of course, quite vastly younger than you, so I don’t have all the experience you do, but we could go on forever trading war stories. And normally we should have a bottle of wine when we do that. But I wanted to. I’m going to pull up, I’ve got this printed. There’s a chart I want to talk about because I find it fascinating. Utai have an enormous amount of experience helping companies solve manufacturing problems, which, of course, is an adjacent problem to the warehousing and distribution problem.

[00:08:50.040] So we have a lot of sympathy and familiarity with it, but we don’t have the depth of experience that you do. And I think a lot of people listening today would get a kick of sort of exploring that. And so I’m going to. My leading question to you, Ty, is so someone calls you in a company struggling to get production going, they know they can do better. What are the kind of things that you see that people are probably doing wrong. And before you speak, I just want to prompt you. This will get put onto the screen when Jeremy works his semi magic. But there’s a chart, a very good spi chart that sort of walks people through the journey of, let’s say, I’ll say, call it not basic manufacturing to very sophisticated, thoughtfully managed manufacturing. And I thought it would be great if you could just walk us through that journey.

[00:09:55.230] Sure. So most companies, you hear the word lean. Lean means a lot of things, a lot of different people. It could mean five s on the floor. You clean your floor up. It could mean I have a Kanban, right? A Kanban that I pull from. It could mean I actually have a level pole facility. Level pole facility, which is at the end of that rainbow. That diagram I gave you. Really, the key here is most companies are at the beginning of that journey, and there at this step is called batch and queue. All it means is they push product through their facilities. They don’t pull it. They push it. And so what happens is they push it. No matter what the other operations are doing, they push it. They try to push as much product in the system as they can. They’ll have lots of inventory sitting on the floor. They’ll have lots of inventory sitting in the warehouse. They’ll have lots of inventory sitting everywhere. Really. Where you want to get to is you want to get from where you’re going, push, batch and queue. You want to get all the way through that journey to make things continuously flow till you get to what’s called level pull at the end.

[00:11:04.810] And level pole means I pull it. And when I pull, the process in front of me pulls. And it’s just a chain reaction that happens. If I pull more, they have to pull faster. If I pull less, they pull less. Okay. That’s how we don’t get out of bounds. Okay. Then one of the things that happens, a lot of places I’ll go in and I’ll say, are you a pole or push? A lot of people say, we’re poll. And there’s one telltale sign that can tell you if you’re a push or a poll. How many places do you schedule in your process? If you answer more than one, you are a push because these things aren’t in sync. So you have multiple scheduling points. You’re pushing product at some point. Okay. So that’s an easy way to tell. And that’s one thing that I look for when I, when I start working with a company, just so we all.

[00:11:52.030] Understand what you mean. Yes, I’ve got a manufacturing process. Let’s pretend with four steps. You know, maybe there’s whatever those four steps are. And you walk in and if I say, oh, no, no, we’re a level pool. We’re very sophisticated. That’s wonderful. And then I, and then you say, show me a production schedule. And if I’m scheduling each of those four steps, you know that I’m really kind of a pusher, not a puller. Yes. And if I’m actually, just let me. Is it as dumb as this? If I’m only scheduling the last step, then I’m a puller.

[00:12:35.500] It can be, it can be any step. You could schedule just the first step and then fifo everything after that. Okay. But it’s one step. You’re scheduling. If you’re scheduling four, what it means is you’re pushing and you’re trying, you’re trying to coordinate all four steps.

[00:12:49.990] Yeah.

[00:12:50.510] Okay. Which is hard to do. I mean, you know, most companies that we do, you know, that have scheduling systems and stuff, you could say, hey, we’re going to be on this product a from twelve to two today. Well, guess what? You either get out early or you get out late. Usually you’re not right at 02:00. So what happens when you get out 02:00 well, were you supposed to change over? Okay, if I change over is the stuff that I’m supposed to work on next. Is it ready? Maybe not. This is where you get, this is where you can get in trouble.

[00:13:18.680] Yep. So maybe if we can. Do you have a case study or something that we could wear? We could wrap our heads around?

[00:13:28.520] I can. Is that where we want to go next? Case study?

[00:13:32.800] Yeah. Or just a real life example that you want to walk us through?

[00:13:40.370] Sure. Sure. So the case study I was going to talk about today was basically we did a project over several years, worked with this company to try to help them plan better. They’re a print packaging company. They did six really different types of packaging products that they produced. They had 18, after acquisition, had 18 plants in the US that they were producing. A lot of the plants had the same capabilities. They were known for poor service, long lead times to their customers. So management really wanted to say, hey, is there a way that we can improve service? We want to grow. Obviously, we’ve grown through acquisition. We want to keep growing. So how do we grow through service? How do we get better service, get more customers who want to come to us? The second one is how do we increase our profits through lead time reductions and capital investment, how do we make great use of that so that we’re not having pieces of equipment stand around underutilized, idle. So kind of the problems that this company had is all these 18 plants, they were treated pretty much a standalone, make to order shit job shops.

[00:14:54.100] So what happened is if I was the manager of that one plant, my incentives were my plan. So I wanted to bring in as much business as I could and I didn’t want to share. Second thing is, I didn’t want to, I didn’t care if I could get it out or not, okay. Because I didn’t want to give up any business. So I just kept that all myself. The second thing is, there is no booking control. What I mean by booking is there is no way to properly book the equipment to make sure you had enough capacity and you get jobs out on time. So you’re either under booked at your plant or you’re overbooked at your plan. The guy who’s overbooked, like I said before, didn’t want to share with the guy who was underbooked because that would hurt his bonus and incentives. The second or third thing would be the imbalance between print. This is a printing packaging. So there’s a printing operation and then there’s finishing operations to what you just printed. Okay. A lot of times printing companies just care about printing. Printing presses are the thing. They want to keep their printing presses running, but the finishing operations actually can become a bottleneck very quickly.

[00:15:59.520] Okay. Depending on the type of products you’re running back to back, set up changeovers, different types of processes. So they had no way of booking that capacity or scheduling that capacity across both printing and finishing. So that was a big issue for them. Another one was they had a, like a lot of companies, they have customer service, customer calls in, hey, I need this job, when can I get it? They were promising dates, but they really had no tool for promising the dates somebody gave them. I’ll just make it four weeks or make it six weeks, but then he would make it four weeks, six weeks or whatever to the customer. Customer say, great. And then they were late on delivery, so poor service. Okay, so no way of doing that. Another one was a, they had no process for even planning for capital equipment expansion, so they wanted to grow. Okay, printing presses just aren’t out there. You can’t pick them up at Walmart, right? You gotta actually go buy them from somebody. And they take 1218 months to build, to install, to test, to get up and running. So you have to have a good process that understands where your business is going and how many presses do I need?

[00:17:05.550] How many people do I need? How many resources do I need to make that all come together? So they had no job on that one. The last one was because they were a job shop and they had long lead times. A lot of their customers would say, hey, I want you to keep stock for me of so much because your lead times are too long and I want to come in. I’m a key customer. I’m going to pull that stock when I need it and I can get a shorter lead time. Okay. So they said, yes, great, let’s do that. But what happened was because they were overbooking the equipment, they weren’t keeping up with replenishing their inventory. So the customer would come in and say, I want that inventory. And they’re like, oh, shoot, we don’t have it. All right, let’s break into a job and let’s go just produce there so we don’t get in trouble. And that just creates, we like to call it a lot of time playing schedule. We call it this death spiral, right? You get out of whack and when you do crazy things to your customers, they will act crazy back.

[00:17:59.720] They’ll panic, they’ll over order. We saw it during COVID Everybody over ordered. And you don’t know what true demand is. So what happens is you’re just like, okay, backlog is growing, is growing. It’s just spinning, spiraling, spiraling. And then you’re in trouble, somebody quits.

[00:18:14.400] Can I just interrupt for 1 second?

[00:18:15.810] Sure, sure.

[00:18:17.550] And then we’ll get back on the story. But what you just said there, it just really strikes me because it is one of those things, and I’ve seen this in my career over and over again as well, that when you’re in an environment where you provide poor service, unpredictable service, or just actually predictably poor service, your customers who are, because of lack of choice or whatever, who are dependent on you, do develop habits that magnify the problems, that poor service that caused the poor service in the first place. And I just thought it was so interesting the way you said that because I found that to be a ubiquitous problem in the supply chain.

[00:19:11.180] Yes, definitely. It really reared its ugly head during COVID because a lot of planning groups could always, they could always, I guess, expedite expedite products, expedite this, expedite that. During COVID there was nothing to expedite. You couldn’t even get your hands on stuff, right? So now these little cracks in your planning processes now are getting bigger and bigger. And we had another customer, different industry that they just, their backlog just exploded. They had three key customers that were ready to leave them and they had no way to get out of it. They didn’t understand how to get out of it. So we were able to help them go in and understand their systems, create a run strategy for them to catch up, allocate products to their key customers to get them out of trouble right now.

[00:20:07.620] I didn’t mean to go on a total tangent. It was just a really interesting point. So we were back to interrupting the normal course or the normal schedule for these rush jobs. That just exacerbates the whole scheduling problem. And then with the packaging company.

[00:20:26.250] Okay, well, so those are really the key areas of the problems they had, right. The standalone plants incentives were not correct. They didn’t want to share work. They didn’t share capacity. They had no way of booking work. Okay. How much each job took. They had no way of doing that. And their key customers, they couldn’t reserve stock form. So that’s really the issues that these guys had. Right. And then what we did for them. So we came in and we set up a simple enterprise, enterprise planning system across all their plants to be able to start turning bookings into hours against available capacity and to share that amongst the group so that we could spread out the work and give everybody work. Okay, which made them change their incentives. Right. Because they no longer wanted to have that incentives. Give me, I’ll just take everything. Again. It was more important to hit service goals, hit productivity goals. So we also had a system to prioritize key customers to be able to start when they called in and said, I want this job, or they’ve accident job, I want this job. We could give them an accurate order to promise date because now we know capacity and could book the next one in there, layer it in there.

[00:21:44.560] Okay. You can get it two weeks from now. You get three weeks to now. And then just making sure that we kept their, make the stocks up to snuff. Right. We have enough capacity to get those replenished on time and keep them up to snuff. So when those key customers came and said, hey, I want the inventory now you have and you’re not turning your whole facility upside down to do it. So that’s really the things.

[00:22:08.870] That’s very cool. So. All right, so Ty, explain to me. I mean, you know, if I’m a manufacturer, if I’m one of lids clients and I’m super happy with what lid is doing, as you know. But I have a problem manufacturing. I know they’re not the right. The right guys. How do I get started working with SCPI? What is it like to live through a project with you?

[00:22:42.160] Well, so usually I always say, like a lot of times with these projects, I call them no brainers, right. Because a customer will come to us with a problem that’s basically affecting their customers. Right. They’ve got poor service. They’ve got complex processes. They can’t get product out. They’ve got increasing lead times. Right. They keep going longer and longer. We have a client right now, prospective client, we’re looking at. They went from four week lead time. They’re at 40 weeks right now. That’s a big problem. Poor equipment utilization, poor facility layouts, poor excess slow moving inventory. They need to expand. They need to put a new process in. So there is a definite problem that they have that can be tied to a certain definite payback. Right. And so what we do is once they engage us, you know, first we like to come in and we like to do an assessment. Assessments are our way of really understanding what the symptoms are telling us because you can give us a symptom. Okay. And for instance, I had one customer one time came to me and said, we have a transportation problem. Come in and look at our transportation.

[00:23:48.960] Our transportation costs are going up all over the place. So when looked at it, it wasn’t a transportation problem. They had an inventory planning problem. Transportation costs were going up because they couldn’t plan inventory effectively. And they kept moving inventory around between all their distribution centers to try to hit their service goals. So we’d like to do those assessments first. They’re quick, they’re not very expensive. We learn your business, and we learn what really the key. The key.

[00:24:13.690] Two questions about that, ty. When you say they’re quick, let’s, you know, just say for a medium sized manufacturer, one plant, but doing good volumes, you know, like, is it a, what does quick mean to you?

[00:24:29.000] Two to four weeks.

[00:24:30.440] Yeah. Okay. And is there a. Is there a large data request or data pool that comes with that? That assessment?

[00:24:37.830] Yeah. So we’re different than a lot of the big consulting firms. And the big consulting firms will go in and they’ll do. They talk to people and they try to get information from people, and they try to put that back to tell you what your problems are. We do both. We do interviews with people, key people, and we also collect a lot of data. That way we learn your business. And the second thing is we can tie out the data to the, to what we heard in the interview. If one’s wrong, if the data is different than interview, interviewees answer, we go back and say, hey, these don’t match. Is this still true? Is the data wrong? Do we not pull the right data? Whatever. So make those sure they match. Then once we have that, we usually have a picture of what the true issue is and where the opportunity is.

[00:25:20.490] Yep. Well, music to my ears, ty. I like that. All right, so now let’s say you’ve done the initial assessment, and let’s pretend for argument’s sake, because we’re living in a fantasy land of my own making, let’s pretend that the problem I thought it was is pretty close to right. And you’ve come back with an assessment that’s going to say, I think this. I do, you’re right. And here are the kind of things we need to address in order to fix that problem. What happens when the assessment is completed?

[00:25:56.080] Well, part of the assessment too, is to, you know, is to understand what the opportunity is. Right. Is payback. Right. Why would anybody wanna do anything else with a payback, right?

[00:26:06.140] Right.

[00:26:07.100] Second piece of that is then we take what’s there and we say, okay, there’s we like to do next is we like to do some smaller projects that have a defined scope because then we can price it out. Well, we can be successful with you and you get some results along the way. So we’re not gonna come in and say, hey, this is a two year project and we need to do all this stuff, and here’s everything you need to do. No, we’re going to say, okay, starting here. We would start here first, prioritize it, start here. Let’s get there. Then we’ll go to the next thing. If there is a next thing, maybe there’s not. Maybe that’s it. And or grow the next thing. Right. So continue to help them. What we usually tell people is that, you know, we’re not trying to stand in the forefront of your company. We’re trying to stand kind of behind the curtain. Right. We want to be part of your team. We want to help you. We want to be a resource to help you get what you need to get.

[00:26:57.940] Excellent. And then let’s say, so now.

[00:27:04.580] I’m.

[00:27:04.990] Running through a series of small projects with big win impact or visible, obvious wins. And that helps me as the client, develop a trust not only in you, because you’re a likable and trustworthy guy, but also in the process, trust in the cause. Sometimes the things that you’re going to recommend are fairly, I mean, for lack of a better word, they’re abstract. They’re not that always obvious to grasp. It’s like, wow, you move the machine 3ft over and everything’s solved. Sometimes it’s a lot more complicated because you are very process oriented and some clients can have a hard time, especially around a table with a bunch of different stakeholders, immediately seeing what the process change you’re recommending will lead them to. Fair or not fair.

[00:27:57.560] Yes and no. You know, a lot of the processes that we’re implementing, there’s best practices that we can show over and over again. You need to have those to be successful. Right. And we can show, you know, one of the things that a lot of these lean teams have, like when you have like a lean six sigma team or a lean team in your business that does all these lean projects that take out waste and take out steps, right. They do all that. One of the things we find a lot of times in those Kaizen events that they’re doing and stuff like that is, yes, they take out waste, they take out non value at a time, but they’re missing the key steps to a process. They never had them, so they can’t, so they won’t even study them. They don’t come back and say, oh, we’re taking out these five, but we’re going to put these three, they don’t even know about the three. And so we’re able to demonstrate that these three steps are crucial to make that process work.

[00:28:46.810] Yeah.

[00:28:47.250] And we can prove it over and we can prove it over and over again. Other examples, other companies that we’ve done it with, you can prove that these people can be there.

[00:28:55.010] Yeah, that makes sense. And then I know, you know, Ty, you are and your company has worked a lot in the world of simulations, and simulations can be intimidating for folks in industry because they’re, they’re expensive and they’re complicated. What would you say to people? When should they turn to using a tool like simulations to solve problems? What are the kind of thresholds you need to cross when you say this is really the only or not the only, but the best way to solve this problem?

[00:29:31.500] It needs to be a complex system. So I tell people that all the time. I mean, if you solve a spreadsheet, why would you ever want to create a model for it? Right? It’s got to be a complex system that’s expensive. That’s an expensive capital investment that you have. Either it’s a new investment that you have. You want to make sure you get it right. You may get fired, right? Or it’s one that you, maybe you want to make a change. I had a customer one time come to us and said, hey, I want to make a change to our process. It’s going to cost me $5 million. Should I do it? We did a quick model on it and said, no, you shouldn’t do it. Don’t waste the money. You’re not getting what you think you’re getting. So for, I know that may, you know, these models may sound expensive, but when you’re talking tens of thousands of dollars against millions of dollars, it’s what I call a no brainer. It’s a no brainer, right. You should try. The second thing is we learn the simulation models. I do. I learn so much about their data, their process, where they can improve, what they can change, just besides what we’re looking at.

[00:30:30.300] You learn a lot and you almost become the expert, and these customers end up relying on you to ask questions. What about this? What about this? That will go on for some time after a model is done.

[00:30:44.020] Well, Ty, I know you’re a busy man, and it’s been extremely generous of you to share this time with lid and with the podcast. I could, I would love a follow up podcast in the future to dive into some of these things, like the simulations and some of the experiences you’ve had there. I think a lot of people would find it really interesting and enlightening. But for now, it is the end of the week. I wish you a wonderful end to your day. Hope Chattanooga weather is good and hope to see you in person soon.

[00:31:23.550] Thank you. I really appreciate it. Great talking with you.

[00:31:26.250] Likewise. Have a great day, Ty.