October 30, 2024

Breaking the MRP Insanity Trap: Jerry Wright on Lean Systems and Supply Chain Transformation

55 minutes

My guest for Episode #518 of the Lean Blog Interviews Podcast is Jerry Wright, author of the new book The Insanity Trap: What Your MRP Consultant Won't Tell You.

Jerry M. Wright, PE, MBA, is an accomplished operations executive and teaching professional with over 39 years of experience in the manufacturing and service sectors.

His extensive career spans various industries, including aerospace, consumer goods, healthcare, medical devices, diagnostics, and industrial sectors, where he has held leadership roles in engineering, operations, quality assurance, and operational excellence (OpEx).

He is an expert on taking businesses from MRP "insanity" to Pull Systems (Kanban) and driving operational excellence through the implementation of Toyota Production Systems (TPS/Lean) tools and methods.

He's a Master Black Belt and only the 7th person in the world to receive the Lean Gold Certification (LGC) from the joint alliance of ASQ, AME, SME, and the Shingo Institute.

In this episode, Jerry shares his insights and hard-earned lessons about the pitfalls and inefficiencies of Material Requirements Planning (MRP). Jerry reflects on his career, starting with his early Lean experiences at Kimberly Clark, where he encountered the challenges of forecasting, production scheduling, and the recurring "insanity trap" of MRP. He discusses the implementation of Kanban systems, the impact on inventory management, and how turning off MRP systems helped teams dramatically reduce shortages and excess inventory.

Through real-life examples, Jerry illustrates how companies can shift from traditional MRP-driven processes to more effective demand-driven and Kanban-based systems, leading to operational improvements, better employee engagement, and more reliable supply chains. The episode also touches on the psychology of change management, navigating the resistance from those invested in outdated systems, and how leadership can foster a more adaptive, efficient environment by embracing simplicity over complexity.

Questions, Notes, and Highlights:

What is your Lean origin story?

Were your parents open to Kaizen opportunities or suggestions from you as a child?

Was your first introduction to the "insanity trap" of MRP at Kimberly Clark?

Can you describe the challenges of dealing with MRP at Kimberly Clark?

What was Bill Holbrook's role when he suggested unplugging the MRP?

How did your team transition from MRP to Kanban, and what were the results?

Can you explain the issues with relying on forecasts and lead times in MRP systems?

What do you think about demand-driven MRP as an alternative?

Why do you think demand-driven MRP isn't more widely adopted?

How do you balance the risk of excess inventory versus lost sales?

How did Dell handle material constraints and lead time reduction when you were there?

How does Toyota manage its supply chain and production planning without relying heavily on MRP?

Can you talk about how Toyota's system recovers quickly from supply chain disruptions?

What was the origin of your book The Insanity Trap?

How can leaders and companies overcome the psychological barriers to changing their supply chain systems?

How do you help employees transition from roles like expediting to managing Kanban systems?

What are your thoughts on the promise of AI in demand forecasting and supply chain management?

Who is the target audience for your book?

What are your thoughts on supply chain planning versus execution in lean environments?

The podcast is brought to you by Stiles Associates, the premier executive search firm specializing in the placement of Lean Transformation executives. With a track record of success spanning over 30 years, it's been the trusted partner for the manufacturing, private equity, and healthcare sectors. Learn more.

This podcast is part of the #LeanCommunicators network.

...more

View all episodes

By Mark Graban

4.6