True North, Part Two

When Eric noticed we "86 a product because we prepped too many of one size and not enough of another" he was talking about chopped liver. We sold two sizes. Half pound and one pound. We sold out of one but had some of the other.

How can we apply the principles to chopped liver? Remember, True North is Make each product as needed, on demand.

True North is a direction, not a reachable goal. We can't make almost any product from scratch on demand. Take chopped chicken liver. Somewhere, sometime, a chicken was involved. It's unrealistic to grow a chicken each time a customer orders a half pound of chopped liver.

We head towards True North by shortening the time between demand and the make. How can we do that? Here are five ways.

1. Have all the ingredients ready. Make chopped liver from scratch after it's ordered.
2. Make the chopped liver in bulk. Portion it into the right size after it's ordered.
3. Make the chopped liver and portion it. Decide how much to make of each size by creating a marketplace with kanban cues. (The way we do it now.)
   
4. Make the chopped liver and portion it when a low level is reached.
5. Make the chopped liver according to a forecast.
   

These ways don't nearly exhaust all options. I just wanted to lay out five options that go from closer to True North to further away. No. 1 is closest. It has no premade inventory. The second option has a little more inventory. It's a little further away from True North. The third, even more inventory, even further away. By the time we reach No. 5 we have the most inventory and we're furthest away from True North.

So why not just head on up to True North as fast as we can? For one, it's difficult and causes lots of problems. Big ones, some of which we feel every day. I'll talk about those in a post soon.