Customer Order Cycle Time Reduction

Stop chasing waterfall (and vanity metrics)! Forget vanity metrics and focus on 4 simple Flow Metrics. Vanity metrics like velocity or the number of commits or pull request reviews by developer, can do more harm than good. "What gets measured, gets managed" Which means, what gets measured gets gamed - and developers are some really smart people who quickly learn to game the system. Flow Metrics are in your system anyway and can help you create a better narrative around metrics. You are not measuring individual contributions. You are not comparing one team with another. You simply want to create a more stable and system - by improving the flow of work. Here are the 4 Flow Metrics: -> Work In Progress: The number of work items started but not finished. Too much WIP? Expect delays, context-switching, and all the madness that follows. ->Throughput: The number of work items finished per unit of time. Think of it as a speedometer for value delivery. -> Work Item Age: The amount of elapsed time between when a work item started and the current time. High values here? Work is probably waiting around longer than it’s getting done. A crucial measure for predictability. -> Cycle Time: The amount of elapsed time between when a work item started and when a work item finished. How long work takes from start to finish - gives you an idea to determine "when it will be done" Follow me for more tips on improving your ways of working!

🚀 Excited to share my latest project: a fully autonomous Smart Warehouse Management System built using the Agent Communication Protocol (ACP)! This innovative system features four intelligent agents InventoryBot, OrderProcessor, LogisticsBot, and WarehouseManager working seamlessly together to manage stock, schedule deliveries, and handle reorders, all through standardized, real-time communication. 🌟 What is ACP?   ACP is a framework that enables autonomous agents to communicate effectively using structured messages with defined performatives (e.g., ASK, REQUEST_ACTION, TELL, CONFIRM). It ensures clear, reliable interactions, making it ideal for complex systems like smart warehouses where coordination is key. 🌟 How It Works:   Scenario 1: Stock Alert & Reorder - The OrderProcessor checks stock levels with InventoryBot and triggers reorders to maintain minimum availability (e.g., reordering to fill low laptop stock).  Scenario 2: Delivery Scheduling - The WarehouseManager directs LogisticsBot to schedule deliveries of goods, with LogisticsBot confirming the schedule including a tracking ID for transparency.  Scenario 3: Low Stock Management - InventoryBot alerts the WarehouseManager of low stock (e.g., 5 tablets), prompting a confirmation that 15 tablets are needed; the WarehouseManager then requests OrderProcessor to place an order for 15 tablets, with OrderProcessor confirming via a PO number.  The interactive frontend visualizes these interactions, complete with a Statistics dashboard (e.g., total messages: 6, active conversations: 3, registered agents: 4) to monitor performance, making it perfect for real-world adoption. 🏭Impact on Logistics: This solution transforms the logistics industry by reducing manual oversight, optimizing stock levels, and streamlining delivery schedules. With real-time data and automated reordering, warehouses can operate 24/7, cut costs, and improve customer satisfaction key drivers in today’s fast-paced supply chain. This showcase how AI and ACP can revolutionize warehouse management. Check out the demo video to see it in action!

S&OP is NOT IBP or FP&A. This infographic compares S&OP vs IBP (integrated business planning) vs FP&A (financial planning and analysis): Primary Purpose ↳ S&OP: balance demand and supply ↳ IBP: align strategy, operations, and finance ↳ FP&A: deliver financial planning and analysis Ownership ↳ S&OP: supply chain-led, cross-functional input ↳ IBP: finance or supply chain, enterprise-wide ↳ FP&A: finance-led, business-wide Level of Detail ↳ S&OP: product family, plant, region ↳ IBP: portfolio, business unit, strategic initiatives ↳ FP&A: P&L lines, revenue streams Decision Focus ↳ S&OP: service levels, production, inventory, capacity ↳ IBP: strategic trade-offs, portfolio, risks ↳ FP&A: earnings, cash flow, ROI Inputs ↳ S&OP: forecasts, capacity, inventory ↳ IBP: S&OP outputs + strategy + finance ↳ FP&A: actuals, budgets, market assumptions Output Format ↳ S&OP: consensus operating plan ↳ IBP: integrated business plan ↳ FP&A: budgets, forecasts, reports KPIs ↳ S&OP: forecast accuracy, OTIF, inventory turns ↳ IBP: growth, profitability, EBITDA, shareholder value ↳ FP&A: EBITDA, working capital, variance Any others to add?

Balancing lean operations with supply chain resilience amid escalating tariffs This requires strategic adjustments that address cost efficiency while building adaptability. Few thoughts on how businesses can navigate this challenge:   1. Strategic Inventory Management a) Lean Buffers with Flexibility: Maintain minimal inventory for non-tariff-impacted goods but introduce strategic buffer stocks for high-risk items affected by tariffs. This hybrid approach minimizes warehousing costs while preventing stockouts during disruptions.   b) Dynamic Demand Forecasting: Use AI-driven tools to predict tariff impacts and adjust inventory levels in real time, ensuring lean operations without sacrificing readiness.   2. Supplier Diversification & Proactive Sourcing a) Multi-Region Sourcing: Reduce dependency on single regions (e.g., China) by qualifying alternative suppliers in tariff-friendly zones like Mexico or Southeast Asia. This spreads risk while preserving lean supplier networks.   b) Nearshoring/Reshoring: Shift production closer to key markets (e.g., USMCA countries) to cut lead times and tariff exposure. While upfront costs rise, long-term resilience and reduced logistics complexity offset this.   3. Tariff Engineering and Cost Optimization a) Product Reclassification: Modify product designs or components to qualify for lower-duty categories. For example, adding safety features to machinery can reduce tariff rates by 10–15%   b) Leverage Trade Agreements: Utilize Free Trade Agreements (FTAs) and Foreign Trade Zones (FTZs) to defer or eliminate duties. For instance, assembling goods in FTZs before domestic entry cuts costs.   4. Technology-Driven Agility a) Real-Time Visibility Tools: Deploy IoT and blockchain for end-to-end supply chain monitoring, enabling rapid rerouting of shipments if tariffs disrupt planned routes.   b) Automated Compliance Systems: Integrate AI for tariff classification and customs documentation to avoid delays and errors, maintaining lean workflows.   5. Scenario Planning & Financial Hedging a) Stress-Test Supply Chains: Model scenarios like sudden tariff hikes or supplier failures to identify vulnerabilities. Resilinc AI tools, for example, simulate disruptions and recommend mitigation steps.   b) Dynamic Pricing Models: Build tariff cost fluctuations into pricing strategies to protect margins without overstocking inventory.   Conclusion The interplay between lean and resilient supply chains in tariff-heavy environments demands a “both/and” approach as shown in the below table. By integrating strategic buffers, diversified sourcing, and smart technology, businesses can mitigate tariff risks without abandoning lean principles. Success hinges on continuous adaptation, leveraging data, and viewing tariffs as a catalyst for innovation rather than a barrier. #tariff #supplychain #lean #resilience #balancingact #tradeoffs

I ask every OpEx professional I meet the same question: "What's your current capacity and where's your bottleneck?" About 70% can't answer. I assure you it's a serious problem when I get different answers from people in the same company: planning says one thing, production another, and maintenance something else. They talk about utilization rates or efficiency percentages or "running at capacity." But they can't tell me actual pieces per shift at each step. This tells me they're managing by feel, not data. Here's what strong OpEx leaders have ready: 1) A Process Capacity Sheet: Every process step listed with time breakdowns and capacity calculations. Head forming: 45.5 seconds total time = 633 pieces/shift Threads: 21.2 seconds total time = 1,358 pieces/shift Deburring: 30.0 seconds total time = 960 pieces/shift Deburring is the bottleneck at 960 pieces. That's where you focus. 2) A Standardized Operation Combination Table: Visual timeline of work elements and their duration. Shows the sequence and timing of every task. Displays where work overlaps and where gaps exist. Helps you redesign work flow based on actual timing, not assumptions. 3) An Operation Analysis Sheet: Physical diagram of equipment, material flow, and operator movement. Shows how far parts travel and where motion happens. Makes waste visible. Rearranging two workstations based on this diagram cut one client's cycle time by 14%. Why this matters: You can't improve what you can't measure. And you can't measure what you haven't documented. These three documents transform opinions into facts. They answer executive questions with numbers instead of estimates. They separate OpEx professionals who talk about improvement from those who deliver it. Build these for your top three processes this month. Update them when processes change. Then watch how differently people respond when you can answer capacity questions with data. 📌 In my Newsletter, I share the OpEx leadership playbooks I wish someone gave me in my 30's, the exact frameworks that get your initiatives funded, your results noticed, and your career accelerated. 👉 To Subscribe: Click "𝗩𝗶𝗲𝘄 𝗺𝘆 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿" just above this post. and Join 12,500+ OpEx leaders receiving it weekly. Yours, Mohammad Elshahat

Lean Six Sigma in Warehouse Management Lean Six Sigma (LSS) is a powerful methodology that improves warehouse management by minimizing waste, reducing errors, and enhancing efficiency. It combines Lean (which focuses on eliminating waste and improving process flow) and Six Sigma (which reduces defects and variability). Key Benefits of Lean Six Sigma in Warehousing Reduced Errors – Fewer picking and shipping mistakes. Faster Order Fulfillment – Streamlined processes reduce delays. Lower Costs – Eliminating waste leads to cost savings. Optimized Space Utilization – Efficient inventory storage and layout. Improved Safety – Standardized procedures reduce workplace hazards. Higher Customer Satisfaction – Fewer delays and errors lead to better service. Applying Lean Six Sigma in Warehouse Management 1. Identifying Waste (Lean Principles) Lean principles help identify and eliminate the 8 Wastes (DOWNTIME): Defects – Picking, packing, or shipping errors. Overproduction – Stocking excess inventory. Waiting – Delays in order processing or transportation. Non-utilized talent – Poor workforce utilization. Transportation – Unnecessary movement of goods. Inventory – Overstocking or understocking. Motion – Unnecessary employee movements. Extra processing – Unnecessary steps in order fulfillment. 2. Implementing Six Sigma (DMAIC Approach) The DMAIC (Define, Measure, Analyze, Improve, Control) approach is used to identify and fix warehouse inefficiencies: Define – Identify key warehouse challenges (e.g., high error rates, slow fulfillment). Measure – Collect data on warehouse performance (e.g., order accuracy, cycle time). Analyze – Identify root causes of inefficiencies using tools like Pareto charts, fishbone diagrams, and process mapping. Improve – Implement solutions like automation, standardized processes, and optimized layouts. Control – Maintain improvements through SOPs, KPIs, and continuous monitoring. Lean Six Sigma Tools for Warehouse Management 5S (Sort, Set in Order, Shine, Standardize, Sustain) – Keeps the warehouse organized. Kaizen (Continuous Improvement) – Small, incremental improvements in operations. Value Stream Mapping (VSM) – Visualizing and improving process flow. Kanban – Real-time inventory control system. Root Cause Analysis (5 Whys, Fishbone Diagram) – Identifying and fixing recurring problems. Real-World Example Amazon & Lean Six Sigma – Amazon optimizes its warehouses using automation, real-time inventory tracking, and Six Sigma methodologies to reduce errors and improve order fulfillment speeds. Conclusion Implementing Lean Six Sigma in warehouse management helps reduce costs, improve efficiency, and enhance customer satisfaction. By eliminating waste and reducing variability, warehouses can achieve higher productivity and streamlined operations.

Colombia just turned away two U.S. deportation flights—triggering an immediate 25% tariff. This highlights a critical reality: today's trade landscape is unpredictable. Businesses must rethink their supply chain strategies to balance risk, cost, and resilience. Strategic diversification is key to mitigating vulnerabilities and enhancing flexibility—whether sourcing from Colombia, Mexico, China, or beyond. How to drive strategic diversification effectively: 1. Dual-Sourcing & Multi-Region Models - Diversify critical supply nodes across multiple regions. - Balance cost efficiency with risk management by leveraging free trade agreements (e.g., USMCA, ASEAN). 2. Supplier Collaboration & Development - Build long-term partnerships and develop suppliers in emerging markets. - Ensure quality and compliance while maintaining cost competitiveness. 3. Regional Hubs & Nearshoring - Reduce lead times and logistics costs by producing closer to end markets. - Take advantage of reshoring incentives like the CHIPS Act and IRA. 4. Risk-Based Supplier Segmentation - Prioritize diversification efforts based on strategic importance and risk exposure. - Use frameworks like the Kraljic Matrix to identify critical suppliers. Diversification isn’t about abandoning China or any other region—it’s about creating a more resilient and agile supply chain. How is your organization approaching supply chain diversification in response to shifting trade dynamics?

I met 20 C-suite leaders earlier this week in Zurich, and one theme stood out: We are living in the toughest business environment in decades. ⭕ Economic pressure is squeezing margins. ⭕ Geopolitical risks are at their highest in recent times. ⭕ Uncertainty is at an all-time high. ⭕ Climate risks, if ignored, will disrupt business even more. ⭕ AI and digital transformation demand both investment and speed. If you want to successfully navigate these waters, you can’t afford misalignment across functions and organizational levels. You can’t afford silos. Cross-functional collaboration sounds nice, but it is grossly inadequate in the face of these challenges. The ONLY way to balance these competing pressures is with ONE GAME PLAN—or ONE BATTLEPLAN. This is precisely what a strong Integrated Business Planning (IBP) process delivers: ✅ One battle plan that connects sales, supply chain, finance, and operations. ✅ One plan where functional targets and initiatives align with the overall business strategy. ✅ One approach that increases speed, reduces conflicts, and makes execution unstoppable. This is the power of Integrated Business Planning (IBP). Is it easy? Not really. Is it possible? Yes. Is it necessary? Absolutely. Is it urgent. YES – super urgent. ❓ Are you progressing on the IBP journey? ❓ What is your suggestion for breaking down silos and operating as one team? ♻️ Please share this message with your network to provoke their thoughts. (The attached video was recorded by o9 as part of the IBP series. The o9 IBP link is in the comments below.) #strategy #leadership #IBP #Supplychain

Yet another reason estimates are ridiculous. One of the silliest things about time estimates is that the vast majority of time it takes for a team to finish something is spent waiting. For the average development team to create something of value, only 10-20% of the total start-to-finish completion time is spent actively working on the item. The majority of the time is spent waiting. 🔵 Waiting for Reviews 🔵 Waiting for team member hand-offs 🔵 Waiting on other teams or departments So much time is spent waiting… instead of asking, “How much time will it take WORKING to complete this?” You’d be better off asking, “How much time will it take WAITING to complete this?” This, of course, is impossible to answer since most teams have zero control (or even awareness) of waiting time. You’re far, far better off ditching time estimates entirely and focusing on reducing wait states instead. But how? 1] Use Flow Efficiency ↳ Few teams are even aware of the most critical flow metric: Flow Efficiency. ↳ Flow Efficiency tells you how much time is spent actively working on increments of value (features, assets, stories, etc.). ↳ Flow Efficiency (%) = Active Time / Total Time X 100 ↳ Any good workflow tool will calculate your Total Time (Cycle Time). 2] Determine Active Time ↳ To figure out Active Time, you need to track your wait states by adding a “Done” state to every existing stage in your workflow. ↳ For Example: Development -> Development Done -> Testing -> Testing Done -> Review -> Review Done -> Released ↳ The “Done” columns are your wait states.  ↳ Now, you can effectively determine Active Time for each item in your flow vs. Wait Time. 3] Improve Flow Efficiency ↳ Once you can visualize and track wait times, you can focus on fixing the worst offenders. ↳ Add team members, reduce work in progress, remove dependencies… there are many ways to minimize wait states. ↳ Any reduction made to any of your wait states will improve Flow Efficiency An average team will have a Flow Efficiency of 20%. Your team should achieve a Flow Efficiency of 40% or greater to be considered high-performing. Will this take some effort? Of course! But far less effort and total team time (and annoyance) than asking for estimates. Plus, the increase in productivity will far outweigh any loss in imagined predictability.