Stop the (end-of-quarter) Madness!!!

Ah, end of quarter time. Predictable craziness that happens four times a year. How are your lean efforts impacted by end of quarter? Does standard work and standard WIP get thrown out in an effort to “do everything you can to make the quarter?” At my site, all sorts of lean activities are always canceled and put aside the last few weeks of the quarter (lean strategy meetings, 5S audits, etc.). Does it mean those things are non-value-added and we shouldn’t be doing them at all?

This article that I’ve linked to here does a nice job of painting the picture of one common EOQ conflict — “pulling in orders” from next quarter to make this quarter’s revenue numbers. Of course, we’re stealing from next quarter’s revenue which means that, in September, we’ll be stealing from Q4 to make the Q3 numbers. I hear talk of the factory having to “generate revenue.” No, sales does that. The factory fulfills orders, we don’t “generate revenue” (except in the long term, we generate future revenue by delivering on time and with world-class quality).

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Mark Graban's passion is creating a better, safer, more cost effective healthcare system for patients and better workplaces for all. Mark is a consultant, author, and speaker in the "Lean healthcare" methodology. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. His most recent project is an book titled Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also the VP of Improvement & Innovation Services for the technology company KaiNexus.

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1 Comment on "Stop the (end-of-quarter) Madness!!!"

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  1. Mark Graban says:

    By pulling orders ahead, we are also increasing our costs — overtime, expediting, scrap, defects, stress, turnover, etc. Over the long-term, it’s easy to see that this practice of pulling ahead REDUCES profits over any measurable period of time — revenue is stable, but costs have increased. But, management needs to keep their jobs, so they can’t suck it up and stop the “cycle of madness”, can they? Again, it takes LEADERSHIP to do the right thing.

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