WHAT does it mean when a chief executive officer (CEO) says his company has successfully “streamlined” their production system? Ricky (not his real name) was responding to my social media post that explored one important strategy that we, Lean Thinkers, have learned from Japan’s famous industrial engineer and the much-revered Toyota icon Taiichi Ohno (1912-1990) who said: “The key is the timeline. It starts from the date of customer’s order up to supplier’s actual delivery of products or services. The goal is to reduce wastes and delay in the process so that the supplier can collect the payment right away.”
Ricky replied by boasting about his capacity to pay their suppliers on time even if he has not collected anything from his clients. In his industry, he claimed that the standard credit line is 30 days, but only a handful respect it. He’s a different breed. He’s doing a commendable act of helping his suppliers to survive, especially in this pandemic.
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