lean and agile supply 1 © the delos partnership 2004 lean and agile applying the ideas to the...

Lean and Agile supply 1 © The Delos Partnership 2004

Lean and AgileLean and Agile

Applying the ideas to the Supply side


The Delos ModelThe Delos Model

VisionVision

StrategyStrategy

PrioritisationPrioritisation

InnovationInnovationDemandDemand

SupportSupport

SupplySupply


Value stream mappingValue stream mapping

• Map out the flows of order information and physical goods for a product family as they happen now

• Picture and plan future states that leave out wasted steps and introduce smooth ‘stream-like’ flow

• Plan how to increase the value offered to customers e.g. increased responsiveness, easier to use packaging


Draw the current stateDraw the current state

• The “current state” shows what is really happening right now

• It identifies wasteful steps and provides opportunity to visualise and plan a “future state”

METALSUPPLIER

PRODUCTION PLANNING

SAPManugistics

WeeklyProduction

Plan DailyDespatchSchedule

500 ft coils

18 days

2 permonth

WELDINGPRESSINGSTAMPING

WeeklyFax

6 weekForecast 60 + 30 day

Forecasts

EPE = 2 weeks

C/O 1-2hrs

OEE = 61%

C/T 1 second

EPE 1 week

C/O 0.3-2hrs

OEE = 57%

C/T 3 seconds

EPE 1 week

C/O 0.3-1hrs

OEE = 76%

C/T 10 seconds

EPE 1 week

C/O N/A

Capacity 70%

C/T 440 seconds

ASSEMBLY TEST

EPE 1 week

C/O 10 mins

Capacity 35%

C/T 34 seconds

DESPATCH

CUSTOMER

1 second

4 days 2 hours 30 days

Current State Map

Production Lead Time = 60 days

Value Added Time = 8 min 8 sec

Daily Order

1 xDaily

3 seconds 10 seconds 440 seconds

4 days4 days

34 seconds

5 variants 5 variants 5 variants 156 variants 156 variants

METALSUPPLIER

PRODUCTION PLANNING

DailyDespatchSchedule

500 ft coils

VendorManagedInventory

STAMP + PRESS

60 + 30 dayForecasts

EPE shift

C/O 10 mins

OEE = 77%

C/T 6 seconds

EPE shift

C/O N/A

Capacity 70%

C/T 300 seconds

WELD + ASSY 1

EPE As required

C/O N/A

Capacity 55%

C/T 164 seconds

CUSTOMER

6 hours

Future State Map

Production Lead Time = 1.3 daysValue Added Time = 7 min 50 s

Daily Order

1 xDaily

6 seconds 300 seconds

1 day

164 seconds

5 variants 156 variants5 variants

ASSY 2 + TEST + DESPATCH


Extended mappingExtended mapping

Joint mapping - with suppliers and customers - will help to identify the potential and opportunities for new ways of working– e.g. collaborative planning and supply

chain re-designs.


Extended map – Potato snacksExtended map – Potato snacks

POTATOGROW

WHSE

ProductionControl

SNACK COMPANY

ProductionControl

PROCESS COMPANY

RDC

RETAILER

WHSEWHSEPOTATOPROCESS

SNACKPRODN.

ProductionControl

GROWING COMPANY

SEEDSUPPLIER


Potential…Potential…

• Manufacturing Value Adding Time = 1%• Total Supply Chain Value Adding Time = 0.01%

Supplier Factory Distributor Customer

• Not just more efficient, but more effective… How can waste be removed? How can value be increased?


Value Stream MappingValue Stream Mapping

How to do it in your plant


Steps for a current state Steps for a current state mapmap1. Identify the family2. Pick which component to follow3. Complete a quick walk through to identify

the main processes 4. Fill in process information5. Document customer information6. Document supplier information7. Establish information flow (how does each

process know what to make next?)


1.1. Identify the familyIdentify the family

What product family? Products that:

• Share the same designs, tools and fabrication/formulation processes

• Follow roughly the same fabrication/manufacturing/formulation steps


HomogenisingOil

Maizeflour

Salt Flavouring Pack Multibag

FriedSnack

FryingOil

• Look at the BOM and choose a key, long lead time component:

2. Pick which component to 2. Pick which component to followfollow


3. Identify the main processes 3. Identify the main processes and how ‘deep’ and ‘long’ to lookand how ‘deep’ and ‘long’ to look

PACKINGFRY/FLAVOURBULK/MIXING

PRIMARY CASING

HMB CASING

PALLETISING DESPATCH

Decide how much detail and how broad a scope is appropriate for the time and resources available:


4. Fill in process information 4. Fill in process information

Typical information:

• Cycle time / Operation time• Number of operators• Working time (minus breaks)• Process reliability (uptime)• Scrap/Rework/Defect rate• Changeover time and responsiveness (Every

Part Every…)• Number of product variations at each stage• Production batch sizes• Pack sizes


5. Document customer 5. Document customer informationinformation1. How many product variants are there?2. What are the demand patterns?3. What lead time do they require and would they like?4. How and how often do they want deliveries? (include

batch/pallet sizes, barcoding etc.)5. What collaborative planning is there?6. Are there problems, e.g. obsolescent stock or stock

outs?7. What other value is given, in addition to the product

(e.g. advice, package sizes, responsiveness)?8. What is their opinion of your product/service?


6. Document Supplier 6. Document Supplier informationinformation1. Lead times2. Delivery frequency / flexibility / responsiveness3. Batch sizes4. Capacity5. Scrap levels / quality problems6. Delivery problems / reliability7. Information requirements8. What other value is given, in addition to the product

(e.g. advice, package sizes, responsiveness)?


7. Establish the information 7. Establish the information flowflow

• How does each process know what to make next (does it use Works Orders or Kanbans or look and see what’s needed to make)?


Steps for a future state Steps for a future state mapmap1. Reassess the Value Position

2. Reassess the Make / Buy position

3. How best to make and stock?

4. How best to schedule?

5. Improve process capability

6. Organisational issues


1. Reassess the Value 1. Reassess the Value PositionPosition

Customer Intimacy

•Responsive and reliable deliveries•Configurable product / service solutions•Customer partnerships•Service support

Product Leadership

•Product / service reliability•Premium product functionality

Operational Excellence

•Cost effective products•Source product from lowest cost area


Downstream vertical integration

Raw materials supplier

Component maker

Assembly operation

Wholesaler Retailer

Raw materials supplier

Component maker

Assembly operation

Wholesaler Retailer

Upstream vertical integration

Stages owned by the organisation

2. Reassess the Make / Buy position2. Reassess the Make / Buy position


3. How to make and stock?3. How to make and stock?

• What is the production lead time compared to the customer required (or desired) lead time?

• Which planning model (MTS,ATO, MTO etc) is most appropriate?

• Where can improved collaboration over planning and schedules help reduce uncertainty and improve responsiveness?

• Should new planning systems (e.g. Vendor Managed Inventory or direct line feed) be used?

• How can value be increased along the chain at minimum cost? (e.g. pack sizes, technical advice)


- Hewlett Packard - deskjet printers: power supply module, power cords & manual

mfg D.C.

Factory localisation

D.C.mfg

Distribution Centre localisation

Postponed assemblyPostponed assembly


4. How to schedule?4. How to schedule?

EPE…• Should the process be batch build or build to

customer Takt (or vary by process)?• Takt time? (How do you understand customer

demand?)• Where can you flow? • Where should you use supermarket-based pull? • At what single point in the production chain do you

trigger production?• How much work do you release and take away?• How do you level the production mix?


TaktTakt

Definition:“The stroke in keeping time”

(Chambers’s Dictionary)

The frequency at which parts should be produced in order to meet the customer’s requirements; the ‘heartbeat’ of the process.

Takt Time = Available Working TimeNumber of pieces required

Takt Time = Available Working TimeNumber of pieces required


Scheduling systemsScheduling systems

• Make to Forecast (push)• Make to Demand (pull)• Kanban trigger signals• CONWIP trigger signals• MRP/Works Orders• Supermarkets (and FIFO lanes) control

production between points of flow without a written schedule

• Pacemaker process


5. Improve process 5. Improve process capabilitycapabilityWhich problems (e.g. bottlenecks, inventory,

long changeovers) to focus on improving ?

Each step in the process should be:– Valuable – of value to the customer – Capable – right every time – Reliable – always able to run– Flexible – able to change mix and volume in line

with demand– Adequate – with capacity to avoid bottlenecks


ValuableValuable

– of value to the customer

1. Waste elimination

2. Leadtime reduction (Flow)

© The Delos Partnership 200404/18/23

The Seven Forms of WasteThe Seven Forms of Waste

1. Over production

2. Motion

3. Transportation

4. Waiting

5. Over Processing

6. Storage/Inventory

7. Defects


CALL IT CALL IT TWENTY?TWENTY?

……22 TO BE 22 TO BE ON THE SAFE ON THE SAFE

SIDE!SIDE!

TEN TEN PLEASE!PLEASE!

Over - ProductionOver - Production


MotionMotion


TransportationTransportation


WaitingWaiting


Over-ProcessingOver-Processing

How do you spell that?


££££

££££££

££££

££

££

££££££

Storage / InventoryStorage / Inventory


Defects / Rejects / Re-workDefects / Rejects / Re-work


Throughput Efficiency (TE) = Work content x 100%Time in system

5 Weeks

15 hours total work

Minimise lead timesMinimise lead times


CapableCapable

– Right every time

Process quality:

- Specialist Quality Control (e.g. 6 )

- Workplace Management (Genba Kanri)


What is 6 sigma?What is 6 sigma?

Simple:- Eliminate defects- Eliminate the opportunity for defects

Complex- Vision - Measurement of performance - Philosophy - Tool for:

> Customer focus> Breakthrough improvement> Continuous improvement > People involvement


PPM % Non Defective

2 308,537 69.1%3 66,807 93.32%4 6,210 99.379%5 233 99.9767%6 3.4 99.99966%

EffectivenessEffectiveness


Workplace ManagementWorkplace Management

Real OperationalTeamwork

StandardOperating

Procedures

SOS / EOSTeam

Meetings

TeamPerformance

Targets

The Role of the Supervisor


ReliableReliable

Always able to run

Machine reliability:

• 5S

• TPM


The 5S’sThe 5S’s

1. Sort out

2. Simplify

3. Sweep

4. Standardise

5. Self discipline


Sort outSort out

Get rid of all unnecessary items


SimplifySimplify

A place for everything… and everything in its place.A place for everything… and everything in its place.


Wear on

seals

Pipes & cables: interference & wear,

loose

Worn, loose or missing fasteners & attachments

Sweep: identify problemsSweep: identify problems


Introduce standards, routines and trainingIntroduce standards, routines and trainingIntroduce standards, routines and trainingIntroduce standards, routines and training

StandardiseStandardise

• Set standards for what is acceptable

• Communicate the purpose and standards

• Be disciplined to maintain the standards

• Set a plan; who will do what, when, where and how


Maintain the disciplines through continued application

Self DisciplineSelf Discipline


Total Productive MaintenanceTotal Productive Maintenance

TOTAL - Business wide

PRODUCTIVE - Improve equipment performance

MAINTENANCE - Machine systems support


Pillars of TPMPillars of TPM

OEE IMPROVEMENT

AUTONOMOUSMAINTENANCE

PLANNEDMAINTENANCE

SKILLSDEVELOPMENT

MAINTENANCEPREVENTION

STANDARDISATION

5S (WORKPLACE ORGANISATION)

RELIABILITYRELIABILITYAND AVAILABILITYAND AVAILABILITY


Autonomous MaintenanceAutonomous Maintenance

‘Maintenance is like looking after children. On a day to day basis you don’t require a doctor. In a factory your machines don’t require a technician. Production operators should think of their machines in the same way as a mother thinks of her children.’

Senior Japanese Maintenance Adviser, Nissan (U.K.) 1986.


FlexibleFlexible

– to change mix and volume on demand

Machine flexibility (SMED)

Manpower flexibility


PurposePurpose

1.To increase equipment availability and efficiency through less machine downtime

2.To increase process flexibility and responsiveness through smaller batch sizes and reduced lead times

3.To increase capital productivity through reduced stock levels


V. Jones

P. Daniels

R. Hope

B. Crosby

Op. 1 Op. 2 Op. 3 Op. 4

Manpower flexibility - ILUDOManpower flexibility - ILUDO


AdequateAdequate

– with capacity to avoid bottlenecks

Machine Capacity (OEE)


OEEOEE

DEMAND TIME

DEFECTS

‘MISSING MINUTES’& SLOW RUNNING

EQUIPMENT STOPPAGES & BREAKDOWNS

UTILISATION

AVAILABILITY

QUALITY

24/7


0

20

40

60

80

100

120

140

160

Cutting Grinding Drilling Printing Furnace

Ho

urs

in

wee

k

Planned Non-run

Breakdown losses

Changeover losses

Quality losses

Good Running

Capacity mappingCapacity mapping


Extended capacity Extended capacity mappingmapping

Capacity per weekin equivalent units

raw materialsupplier

first tier supplier

Time

finalass

paint

subass

press blank

pickle

cold roll

hot roll

servicecentre

secondtier supplier

lean and agile supply 1 © the delos partnership 2004 lean and agile applying the ideas to the...

Documents

agile supply

delos partnership

seconds customer

seconds epe shift

seconds despatch customer

days value

future state slide

total supply chain value