TABLE OF CONTENTS There is only one boss the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.
Sam Walton
Although companies were eager to improve their processes, usually in the factories, they seemed unable to make customers needs the basis of those changes. Consequently, the industry is dotted with efficient factories and saddled with highly rigid order fulfillment. Remember Joe from chapter 7? Part of the reason he had to settle for a tan car instead of a green one is process inflexibility. Joe s green car simply could not be translated into decisions and operating mandates. In the current forecast-driven model, most companies cannot modify schedules or amend order flows in any reasonable time.
This lack of responsiveness should be no surprise. Process flexibility necessarily cuts across all parts of the value grid, which means manufacturers, suppliers, and distributors the ones who get along so famously right now must work together. If the climate in the supply chain is characterized by short-term cost-reduction initiatives, forget it. Process flexibility is achievable only with consensus, trusting relationships, and shared benefits.
Because its effects are far-reaching, process flexibility itself has three prerequisites. First, customers needs must drive the entire value grid. Second, production and demand must be directly linked, with actual demand triggering production. Third, the production system must be flexible enough to cope with the variety and lead-time requirements of the customers, which means that multiple players, including suppliers and logistics managers, must collaborate.
