15

Question 1

You can’t manage what you don’t measure.

Question 2

Metrics are only one of many factors influencing behavior

Question 3

Measurements
Attributes

Answer 3

Measurements are numbers and attributes are characteristics that are either present or absent.

Measurements, for
example, include time stamps, pressure, temperature, or energy consumption; attributes, whether or not a part is defective or a machine down.

Question 4

Performance management usually involves synthesizing the raw observations of measurements and
attributes into statistics called..

Answer 4

..metrics

Metrics are chosen to act as indicators of performance.

Question 5

KPI 1-10

Metrics and PI 100s

Measurements and Observations 1000s

Answer 5

Key perfomance indicator = KPI

Sometimes direct measurements can be KPIs

Not all metrics are “key.”

Question 6

Leading and lagging metrics

Answer 6

Leading indicators predict the future; lagging indicators report the past.

A factory needs both. Different
stakeholders want different metrics. A shareholder may be satisfied to know how well the company did
last month and use this number as a predictor of future performance. A factory manager, on the other
hand, needs to know how well the factory performs today and will in the next hours, days, weeks, and
months. The same factory manager is also interested in how the factory performed in the immediate
past, because it has career implications.

Question 7

What ultimately matters is outcomes but we cannot manage a process based only on its outcome.

Answer 7

The
best way to achieve good outcome measures is to have good leading metrics.

Generally speaking, the closer you move to measuring process inputs and activities, the closer you get to
leading indicators – of lagging performance outcomes.

If you are measuring aggregated results at an
organizational level, you are more likely using lagging indicators. The key to picking good leading mea-
sures is to understand the process that leads to the outcome.

Question 8

SMART requirements for good metrics

Answer 8

Good goals are specific, measurable, attainable, relevant, and timely

Question 9

SMART Specific

Answer 9

A good metric measures what it intends to measure and is immediately understandable.
No training or even explanation is required, and the number directly maps to reality, free of any
manipulation. One type of common manipulation is to assume that one particular ratio cannot
possibly be over 85%, and redefine 85% for this ratio as “100% performance.” While this makes
performance look better, it also makes the number misleading. Some companies calculate scores
based on points awarded or deducted for a checklist of observations. This kind of highly processed
data is not immediately understandable. Managers then often use scores to rank people, departments, or companies. A rank only measures performance relative to a peer group, not in
absolute terms. It is possible to perform poorly and yet rank #1 if all others do worse, which
breeds complacency.

Question 10

SMART Measurable

Answer 10

The input data of the metric should be easy to collect. Lead time statistics, for exam-
ple, require entry and exit timestamps by unit of production. The difference between these times
then only gives you the lead time is calendar time, not in work time. To get lead times in work
time, you then have to match the timestamps against the plant’s work calendar. Lead time infor-
mation, however, can be inferred from WIP and WIP age data, which can be collected by direct
observation of WIP on the shop floor. Metrics of WIP, therefore, contain some of the same infor-
mation but are easier to collect.

Question 11

SMART Attainable

Answer 11

People see how they can affect the outcome. With a good metric, each employee under-
stands what kind of actions can affect the value. A shop floor metric, for example, should not be a
function of the price of oil in the world market, because there is nothing operators can do to affect it.
On the other hand, they can affect the number of labor hours required per unit, or the rework rate.

Question 12

SMART Relevant

Answer 12

A better value for the metric always means better business performance for the company.
This is perhaps the most difficult characteristic to guarantee. Equipment efficiency measures are
notorious for failing at this, because maximizing them often leads to overproduction and WIP accu-
mulation. Metrics should also have the appropriate sensitivity. If daily fluctuations are not what is of
interest, then they need to be filtered out. A common method for doing this is to plot 5-day moving
averages instead of individual values – that is, the point plotted today is the average of the values
observed in the last five days. Daily fluctuations are smoothed away, but weekly trends clearly show.
There are many other methods, depending on the nature of the metric, whether its current value is
correlated with past values, and the accuracy and precision of the measurement methods.

Question 13

SMART Timely

Answer 13

Metrics should be timely. There is a limited point in knowing the percentage of faulty
units produced after they have been shipped to customers. The time dimension also emphasizes the
importance of having leading indicators supporting lagging indicators. Leading indicators help
users manage performance actively.

Question 14

The language of things or the language of money?

Answer 14

Shop floor metrics should be in the language of things rather than the language of money.
Metrics posted on the shop floor must therefore be nonfinancial. This does not mean that financials
should be hidden from shop floor personnel, just that they should not be the basis for metrics these peo-
ple review everyday.

Accountants translate the shop floor metrics in the language of things into the language of money for
communication up the management chain.

Question 15

The Balanced Scorecard

Answer 15

The Balanced Scorecard uses four
perspectives to encourage a more balanced performance management:
1 The finance perspective. Typical measures here are earnings, revenue, return on
investment, manufacturing cost, cost of poor quality.
2 The customer perspective. Typical measures are customer satisfaction, complaint
rates, and market share.
3 The internal business perspective. This is where we measure the direct performance of
our operations. We can track process quality, product quality, scrap rates, speed and
efficiency, and a range of other metrics.
4 The innovation and learning perspective. These measures relate indirectly to today’s
operations but will impact how well we do it in the future. Examples include metrics
for continuous improvement and skill development.

Question 16

The DuPont model

Answer 16

The DuPont model is a schematic way to break down a company’s profitability into its components.

The point here is not to use the DuPont model to calculate ROI (ganz rechts), but to understand the fac-
tors that ultimately drive financial results.

Question 17

Management by Objectives = MBO

There are plenty of traps in measurement: (list 7)

More recently, it has been rephrased to Objectives and Key Results (OKR)

Answer 17

• The MBO aphorism “what gets measured, gets done” has some truth to it and managers risk get-
  ting exactly what they measure, not what they want. MBO also ignores the fact that many things
  that are not measured also get done.
• The use of performance measurement creates a measurement-driven organizational culture, not
  necessarily focused on customer needs.
• What is easy to measure is usually not what is right to measure.
• While measurement may create extrinsic motivation, it can hurt the more effective intrinsic
  motivation.
• A performance focus creates internal competition, which almost always will be gamed, and creates
  less cooperation and sharing between teams and departments. This is particularly a problem when
  performance metrics are used for compensation and rewards.
• When measures are not met, people can get low self-esteem, burnout, and low job dissatisfaction.
  When measures are always met, people can get complacent.
• Performance measurement systems can be costly bureaucracies that drain resources away from
  delivering performance.

Question 18

Objectives and Key Results (OKR)

Answer 18

While OKR is not a rigid method, it has a few important principles. One is that every objective (O) should be significant, concrete, clearly defined, and inspirational(!). Each objective
should have 3–5 key results (KR) tied to it. KRs should be unambiguously measurable, in
such a way that one can answer the question “Did we achieve that result? Yes or no.” The
target success rate for KRs should be 70% according to Doerr. OKR prefers leading indicators to lagging indicators. Tasks are planned to achieve the key results.

Question 19

Hoshin kanri
- What is it?
- Name key features

Answer 19

Hoshin Kanri (also known as Policy Deployment) is a strategic planning and execution system used to align an organization’s goals with its daily operations, while engaging all levels of the organization in the process.

Key Features:
* Strategic Focus: Defines 5–6 key strategic priorities for the next 1–3 years.
* Cascading Goals: These priorities are translated into actionable goals at every level of the organization.
* Interactive Planning (“Catchball”):
* Senior leadership proposes goals.
* Middle management refines and responds.
* This back-and-forth (like tossing a ball) continues down to frontline managers.
* All levels align their action plans with overarching strategic goals.
* Communication via A3 Reports: Each goal is typically summarized on an A3-sized sheet, promoting clarity and focus.

Question 20

Metrics in manufacturing: SQDCEP

Answer 20

Metrics in factories are often organized by dimensions of performance, like “safety,” “quality,” “deliv-
ery,” “cost,” “environment,” and “people” but many variants exist. Very common is also
“productivity.” Others replace “people” with “morale,” and others again use “time” instead of “delivery.” The dimensions under which one sorts the metrics is less important than choice of metrics themselves.

Question 21

Metrics of productivity

Answer 21

Value-added per Employee = Sales – (Material costs + Energy costs + Outsourced Services costs)

e.g. employee per car
If a company employs more people than another to produce the same output, yes, it may be because it is less productive. But it may also be because it goes deeper into the manufacturing process.

The number of cars/employee/year cannot be used to compare productivity between car companies with di!erent manufacturing depths. Perhaps VW is lagging behind Toyota in productivity, but this metric does not prove it.

Question 22

Metrics of quality

Answer 22

Cost of Quality (COQ)
Quality is more effectively measured by using multiple, simpler metrics, covering different subtopics,
such as:
* Ratings by external agencies for consumer goods.
* Counts of customer claims.
* Rejection rates.
* First-Pass Yield, also known as Right-First-Time.

Question 23

Equipment metrics

Answer 23

The most commonly (mis)used metric for equipment performance is Overall Equipment Effectiveness
(OEE):
OEE = Availability × Performance × Quality

While the OEE summarizes metrics that are individually of interest, not much use can be made of it without unbundling it into its different factors. Since the meaning and the calculation methods for its factors vary across companies, it cannot be used for benchmarking. Yet, people erroneously use OEE for
benchmarking all the time.
The problem is that, in practice, increasing the OEE is often confused with increasing utilization.
Total Productive Maintenance (TPM)

Question 24

Problem with OEE

Answer 24

The 3 factors of the OEE are defined differently in different organizations. There are issues with all 3 factors in the OEE formula:

• Availability. The availability of any device is the probability that it can be used when needed, as in the probability that a spindle is up and ready whenever you have a workpiece to put on it. In the OEE context, it is usually calculated at the ratio of net time available to assign it work in a planning period to the length of this planning period. If, in a 480-minutes shift, a machine stops during a 30-minutes break and has up to 60 minutes of unscheduled downtime and setups, then the planner can count of 480 - 30 - 60 = 390 minutes in which to schedule work, which yields a ratio of: Availability = 390/480 = 87%
  This assumes that the machine’s ability to do work is proportional to the time it is up. For example, your connection to a server may work 99% of the time while uploading a large file and break
  every time you try to save it. The formula makes it look as if it has 99% availability when in fact it is 0%. This is not to say that the formula is wrong but only that it commingles the effects of many causes and that its relevance is not universal. There may be better ways to quantify availability depending on the characteristics of a machine and the work it is assigned. Companies that calculate OEEs often do not bother with such subtleties and simply equate availability with uptime.
• Performance. Performance is a generic term with many different meanings. As a factor in the OEE, it is the ratio of nominal to actual process time of the machine. If the machine actually takes 2 minutes to process a part when it is supposed to take only 1, its performance is 50%. The times
  used are net of setups and don’t consider any quality issue, because quality is accounted for in the last factor. This factor is meant to account for microstoppages and reduced speeds, and it is a relevant and important equipment metric in its own right.
• Quality. Quality is not a metric but a whole dimension of manufacturing performance with many relevant metrics. In the OEE, this factor is just the yield of the operation, meaning the ratio of good parts to total parts produced. It is not the First-Pass Yield, because reworked parts are still counted as good.

Question 25

Metrics of lead time

Answer 25

In its most general form, the lead time of an object through a system is the interval between the time it enters the system and the time it leaves it. Order Fulfillment Lead Time, also known as order fulfilment cycle time, or order lead time, is, in principle, well defined as the interval between the placement of the order and receipt of the goods by the cus- tomer. Inside the company, if production work is organized in jobs or workorders, you can measure the time between release by production control and completion, and that gives you an internal Manufacturing Lead Time, also known as production throughout time. Long lead times are bad to measure (If a part goes through 500 operations in 4 months, its actual lead time will commingle data about current conditions at the last operation with 4-month-old data about the first one. Since then, 3 additional machines may have been brought on line, 2 engineering changes to the process may have taken place, and volume may have doubled, all of which makes the old data useless.) ->> To get such a snapshot, we need to measure lead times for individual operations, also known as process cycle times. Attention: One mistake that must be avoided is to add all process times in the ERP system and use it as a standard for lead time. Process times in the ERP system are extreme values, set to their maximum to ensure processes have enough time. Adding extreme values will not represent the true lead time.

Question 26

Using inventory metrics to calculate lead times

Answer 26

Measuring lead time directly is hard because it requires tracking the full history of every unit through the system. In contrast, inventory and throughput are easier to measure, and under stable conditions, you can use Little’s Law to estimate average lead time: Lead Time = Inventory / Throughput * A snapshot of inventory and throughput gives a quick, approximate lead time. * Lead time estimates depend on stable consumption rates—if consumption changes, lead time estimates change too. In short, using inventory metrics offers a practical and efficient way to infer lead times when precise tracking isn’t feasible.

Question 27

Metrics of inventory

Answer 27

Many companies measure inventory in terms of its monetary value (Inventory Holding Cost = Lost returns, The expenses of operating warehouses, The quality cost of handling damage or deterioration, Obsolescence), of the time it would take to consume it (Inventory Days), or the turnover frequency (Inventory Turnover). Better for shopfloor: * Number of pallets, bins and units on hand by item. This is what Operations has to work with, regardless of item cost. student copy * Number of partial containers in store. The presence of “partials” in store is a sign of a mismatch between batch sizes in quantities received and consumed. * Floor space occupied by inventory. This is of interest because freed up space can be used to increase production. * Inventory accuracy. This is usually measured by the percentage of items for which database records agree with reality, as observed through cycle counting. * Product availability. A measure of the extent to which inventory fills its purpose of preventing shortages. Having an item in stock takes its order fulfillment lead time out of planning and scheduling. Being short an item takes order fulfilment lead time back in, with potentially disastrous consequences. We can count the shortages that do occur, and, in particular, those that cause a delay in delivery to a customer.

Question 28

Metrics of safety

Answer 28

Accident-proofing a factory floor is similar to mistake-proofing it. A common lagging indicator used for safety is Days since last injury with absence / accident. A lagging indicator is of limited use in hindering incidents from occurring. Therefore manufacturers use a lead measure to pick up trends and alert of possible future incidents: Near misses. This observation was popularized in Heinrich’s law, which says that the number of accidents is inversely proportional to the severity of those accidents. Heinrich’s law has made company track Reported Accidents and Near Misses in the hope that this will build a safety culture that avoids severe accidents. While these KPIs can be effective in their mission, it is very hard to track accurately. It is dependent on people’s reporting of accidents and near misses, which requires a discipline few organizations are able to maintain.

Question 29

Metrics of environmental performance

Answer 29

The Green Performance Map was developed as a response to increased awareness of sustainability. It is a simple framework manufacturers can use to frame their analysis of the environmental impact of their factories. It separates environmental impact into eight areas where the left- hand side represents four inputs to manufacturing processes (value-adding materials, non-value-adding material, energy, and water) and the right-hand side represents four outputs (products, residual material, emission to air, and emission to soil and water). Energy consumption Scrap quantity Water consumption Waste water disposal Waste disposal CO2 emission Percentage of energy sources coming from renewable sources

Question 30

Metrics of costs

Answer 30

One common accounting measure of costs is **Unit Cost**. A unit cost is supposed to be the total expendi- ture incurred to produce, store, and sell one unit of a particular product or service. Unit costs are aggregated into the **Cost of Goods Sold (COGS)** in operating statement. This metric looks simple but is based on questionable assumptions and has led many managers astray. Shared resources is the issue that creates problems for unit cost calculation. If you can break down your plant into focused factories, each with all the resources needed to make one product, you have eliminated the problem. Most factories, however, have not found a way to completely dedicate machines by product. Some of the support services usually stay centralized, including HR, Shipping and Receiving, IT, Technical Data Management, Safety, and others. Among products in a factory, only the runners get dedicated lines; repeaters, dedicated lines by product family; strangers, a shared job-shop.

Question 31

Metrics of costs: DCF, IRR, ABC

Answer 31

Generating schedules for both outflows and inflows is straightforward. It becomes complex when you apply a discount rate to the numbers for the future in order to make them comparable to the present and calculate various measures of performance. This is why it’s called Discounted Cash Flow Analysis (DCF) and it yields different results depending on the choice of the discount rate. One commonly used method is to find the discount rate that equalizes the net present values of the schedules of in- and out-flows. It’s called the Internal Rate of Return (IRR function in Excel) and is commonly used in evaluating projects. The problem of calculating costs “accurately” in manufacturing still persists. There is no universal solu- tion to this problem. In an attempt to solve it, Robert Kaplan developed Activity-Based Costing (ABC). ABC seek to allocate the accurate share of overhead that goes into a product. To do so, it maps all the activities needed to produce a product, and assign a share of this activity to each product produced. Although it is complicated to administer, ABC is reportedly used in many manufacturing companies and – when it works – it is superior to simple product cost metrics. However, ABC has its own prob- lems

Question 32

Performance boards

Answer 32

The primary objective of performance boards is to make current performance and performance gaps immediately visible to the people who can influence them. A secondary objective is to collect and summarize performance for higher-level management, who may need this information to do their job or provide it to other stakeholders.

Question 33

Shopfloor Meeting

Answer 33

5-15 minutes Information from meetings are cascaded when needed to the next management level. While any factory can put up performance boards, be it paper-based or digital screens, few are able to build the culture needed to work routinely every day to solve problems and improve the metrics based on information from the boards and effective daily meetings.

Question 34

Performance board design

Answer 34

Example: This template has 1 column for 3 selected dimensions of performance and 1 row for each type of information: 1 The top row is for the latest news, what happened this shift or last. 2 The second row is for historical trends in aggregate performance. 3 The third row is for a breakdown of the aggregate into its constituent parts, such as the most common injuries, defect categories, most frequently made products, or the employee skills matrix. 4 The bottom is about actions or improvement projects in progress in each of these areas. The 1-3-10 rule. This rule suggests that within 1 second, one should get an understanding of the purpose of the board. Within 3 seconds, one should have a rough understanding of the status: Is it going well or are there problems? Color coding with traffic light logic helps here. Is it getting better or worse? Trend charts can tell. Finally, within 10 seconds, one should have an idea what actions are taken to solve problems.

Question 35

Daily management

Answer 35

1) Shop floor team meeting (daily 5-15') 2) The daily production meeting (asaichi) (up to 30') 3) Daily management meeting (sometimes weekly) The daily management meeting involves the top layers of the plant management’s structure: * The plant manager * The production managers in charge of all the lines * The managers of the support departments: Accounting, Maintenance, HR, Supply Chain, etc. In a lean factory, every manager up to and including the plant management should know the status of operations on a daily basis. Hence, both front-line and middle management are involved in the daily meetings. Then, issues can be escalated up the hierarchy efficiently, and information shared quickly throughout the organization. The daily meetings break down silos between departments and ceilings between hierarchical levels.

Question 36

Manual or electronic performance boards?

Answer 36

✅ Advantages of Manual Boards: * More engaging: People pay more attention to hand-drawn charts from known colleagues. * Empowering: Encourages ownership and engagement in shop floor management. * Easy to annotate and experiment with: Structure and content can be changed quickly. * Visibly active: Annotated and marked-up boards show active use and problem-solving. * Low-tech reliability: No dependence on power, connectivity, or logins. * Simple backup: Annotations can be photographed for recordkeeping. ⚠️ Limitations of Manual Boards: * Labor-intensive: Updating boards manually is time-consuming and prone to delays. * Data can be outdated: Charts may not reflect the latest status. * Hard to read: Handwritten notes may be messy or unclear. * Limited historical tracking: No easy way to analyze trends over time. * Not attractive to younger workers: May seem outdated to digital-native employees. ⸻ ✅ Advantages of Electronic Boards: * Real-time data: Can reflect live updates across multiple locations. * Digital annotation: Interactive features (e.g. pen-style styluses) allow markup. * Scalable: One update can be mirrored on all boards across teams. * Improved collaboration: Easier to share actions and outcomes across teams. * Good for remote management: Especially useful during events like COVID-19. ⚠️ Limitations of Electronic Boards: * High cost: Requires investment in hardware, software, and IT infrastructure. * Complexity: Needs automatic data collection and smart summarization. * Reliability issues: Susceptible to log-in problems, blackouts, and system failures. * May disengage users: Risk of becoming “invisible” or ignored on the shop floor. * Annotation retention: Digital annotations require proper system for saving and organizing. ⸻ 🔄 Hybrid Approach: * Print digital charts for manual annotation — allows engagement without full tech investment. * Photograph manual annotations to retain insights without needing full digital infrastructure. * Combines the flexibility of manual with the data accuracy of electronic systems. ⸻ 🎯 Bottom Line: The effectiveness of performance boards depends more on how they are used than whether they are manual or digital. The key is relevant content, active engagement, and clear communication—regardless of format.

Question 37

Use of A3s for paper charts

Answer 37

The A3 report is a Toyota-pioneered practice of getting the problem, the analysis, the corrective actions, and the action plan down on a single sheet of large (A3) paper, often with the use of graphics The individual charts on performance boards are often printed on A4 paper, with text that operators can’t read from two feet away. A3s are used in operator instructions, problem solving, continuous improvement, and strategy deployment applications that have little in common beyond the value of presenting the key information in a structured, single-page format that is large enough for sharing as needed, yet supported by commonly available desktop publishing software, compatible with many copiers and printers, and with paper available as routine office supplies.

Question 38

Metrics gaming

Answer 38

KPIs looks great, but there is no effect on the bottom line. **Cherry-picking** (the easiest way to look good is to showcase selected metrics and hide others.) **Taking advantage of bad metrics** ( For example, “sales per employee” can be increased by outsourcing activities, which reduces headcount.) **Stealing from the future** (In business, the end of an accounting period is the end of a game, and, as it approaches, sales scrambles to close last-minute deals and manufacturing to ship a few more orders. This is what Eli Goldratt called the “hockey stick effect.” This is done by moving up activities that would otherwise have taken place a few days later, during the beginning of the next accounting period. As a consequence, the beginning of the period is quiescent. Not much is going on, but it is made up at the end.) **Redefining 100%** **Leveraging ambiguity** (If the product’s market share in the first quarter went for 1% to 2%, it doubled, but, if it went back to 1% in the second quarter, it went down by 1%.)

Question 39

Preventing metric gaming

Answer 39

Stamp out fear Review the metrics themselves Focus on improvement, not benchmarking Eliminate piece rates Increase the measurement frequency Have third parties calculate the metrics Automate data collection and metric calculation Reduce the dependency on metrics

Question 40

Responding to emergencies

Answer 40

Emergencies are inevitable. Sooner or later, natural or human-made disasters will disrupt manufacturing operations. Most of this book discuss manufacturing during normal operations with activities subject to fluctuations around smooth trends. For events that are expected, you have pre-planned responses, like enough materials in-house to keep trucks delayed by traffic from stopping production or team leaders who can step in while an operator temporarily leaves the line. For events that are unexpected, you have to activate emergency plans or improvise. Emergencies test the resilience of any organization. Those who respond well come out strengthened relative to those who don’t.

Question 41

Companies that perform above average in times of crises usually focus on the following tactics:

Answer 41

* Use scenario planning. * Consider a dual source strategy for critical parts and products. * Increase the safety stock of critical parts, but not of all parts. * Increase supply chain vigilance. * Increase supply chain resilience. * Build fire-fighting capabilities but don’t worship them. * Use manufacturing repurposing to help others or take a business opportunity.

Question 42

Use scenario planning

Answer 42

Scenarios are stories of alternate futures. There are many different ways and suggested road maps on how to do scenario planning, but they always include fundamental steps like the following: 1 Identify possible future events and scenarios. 2 Answer “what happens if” questions for each scenario. 3 Plan countermeasures for the most likely and critical scenarios.

Question 43

Consider dual-sourcing critical parts and products

Answer 43

Dual sourcing means using two suppliers for a component, raw material, product, or service. Note that the term “dual sourcing” is also often used when there are more than 2 suppliers. The idea is simple: if something happens to a supplier’s site, the company can be served by the other supplier. This practice is widespread, often for the pure economical reason of playing the suppliers against each other in negotia- tions to drive down costs. The latter practice can be counter-productive in times of a crisis since it can result in low trust between suppliers and buyers. Don’t jump to the false conclusion that the suppliers have to be two different legal companies. In fact, if the only reason for dual sourcing is risk hedging, a company only needs to ensure that a supplier can supply from different sites and that these sites do not use the same suppliers. This allows both a collab- orative supply chain relationship, fewer relationships to manage, and lowered risk. Dual-sourcing does not only apply to suppliers but also to the focal firm. If you produce all your prod- ucts on one site, you are vulnerable if this site is closed for reasons like fire, flood, strike, contamination, war, transportation block, or trade sanctions.

Question 44

Virtual dual sourcing

Answer 44

What it basically suggests is to not invest in capacity, multiple suppliers, or inventory, but instead build the capability to quickly set up or outsource needed capacity in times of crisis by having all design information ready for digital transfer.

Question 45

Increase safety stock of critical parts

Answer 45

Safety stocks are needed to hedge for long lead times and variations in supply and demand. Some see inventory as the answer to all supply chain problems, but it is not. Inventory usually creates more prob- lems than it solves but not in the case of a shortage of critical parts. Here criticality means “time to recovery” of part supply. Es ist nicht als Lösung gedacht sondern um Zeit zu überbücken..

Question 46

Increase supply chain vigilance (Wachsamkeit)

Answer 46

Rather than inventory, a more effective strategy is to protect the supply chain by vigilance. This means keeping accurate inventory data, monitoring the in- and out-flows, monitoring the disruptions that can be anticipated, and responding quickly to events. Vigilance is the ability of a system to detect and inter- pret weak signals and alerts.

Question 47

Increase supply chain resilience

Answer 47

* Foster vigilance: Detect risks early through monitoring and awareness. * Invest in continuous improvement: Build internal flexibility and innovation capacity. * Strengthen supplier relationships: Use collaboration, not confrontation. * Establish long-term partnerships: Share technical/business info regularly. * Reduce part proliferation: Standardize components to simplify recovery. * Rethink global sourcing: Balance cost with risk (e.g., localize critical items). * Prioritize agility over inventory: Speedy response trumps stockpiling in many crises.

Question 48

Build fire-fighting capabilities but don’t worship them

Answer 48

Not all crises can be outsourced—effective emergency response often depends on dedicated, on-the-spot teams that improvise under pressure, but over-reliance on this “fire-fighting” mode can become a harmful workplace culture unless balanced with routine operations and continuous improvement.

Question 49

Manufacturing repurposing

Answer 49

Manufacturing repurposing is the rapid adaptation of existing production capacity to meet urgent demand for critical goods—such as PPE and medical supplies during COVID-19—when scaling up conventional sources is too slow, as seen with 3D printers used in hospitals to produce face shield parts.