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  1. 2. Breakout Session # 1810 Tim Ortel, CPCM, Materials Manager, Silicon Microstructures Date 12 April 2006 Time 2:25 PM Tomorrow’s Lean Supply Chain
  2. 3. Lean Supply Chain Leadership <ul><li>Sales & operations planning, supply chain management </li></ul><ul><li>New product design, end of life exit </li></ul><ul><li>Replenishment trade-offs and material flow </li></ul><ul><li>Assessing efficiency and yields </li></ul>
  3. 4. Supply Chain Overview Customer Needs Enterprise Value Add & Test Post Sales Support & Service Incoming Parts (Service) Solution Recipe
  4. 5. What drives lean supply chains <ul><li>Sales and operations planning </li></ul><ul><li>New product introduction </li></ul><ul><li>Current product optimization </li></ul><ul><li>End of life strategy </li></ul><ul><li>Outcome measurement (metrics) </li></ul><ul><li>Core versus non-core value add </li></ul><ul><ul><li>Outsourcing </li></ul></ul><ul><ul><ul><li>Offshore, near shore, on shore </li></ul></ul></ul>
  5. 6. Building the supply chain <ul><li>Defining which activities are internal or external including design & logistics </li></ul><ul><li>Identify and control risk(s) </li></ul><ul><li>Outsourcing (also off shore, near shore?) </li></ul><ul><ul><li>Design? (ODM) </li></ul></ul><ul><ul><li>Order management? </li></ul></ul><ul><ul><li>Build and test? (CM, EMS) </li></ul></ul><ul><ul><li>Post sale support? (3PL) </li></ul></ul>
  6. 7. Process Discipline Plan Do Check Adjust
  7. 8. Sales and Operations Planning <ul><li>Integrate firm orders & forecast </li></ul><ul><li>Preliminary business plan </li></ul><ul><ul><li>New products, current models, end of life </li></ul></ul><ul><li>Check: capacity, on hand, and on order </li></ul><ul><li>Firm up production schedules </li></ul><ul><li>Ensure on time delivery/completions </li></ul><ul><li>Ship to customers and measure results </li></ul><ul><li>Maximize leadership & minimize risk </li></ul>
  8. 9. Product Life Cycle Planning New Product Introduction Volume Production End of Life Trade Offs Capacity Lead Times Inventory Cost structure Infrastructure
  9. 10. Supply chain metrics – “Up Trend” <ul><li># of customers </li></ul><ul><li>Customer satisfaction </li></ul><ul><li>Quality (# good/total) </li></ul><ul><li>On time delivery % </li></ul><ul><li>Process compliance </li></ul><ul><li>Revenues </li></ul><ul><li># of new design wins </li></ul><ul><li>% of revenue from new products </li></ul><ul><li>Flexibility </li></ul><ul><li>Value add </li></ul><ul><li>Linearity </li></ul><ul><li>Profits </li></ul>
  10. 11. Desirable leadership “up trends” After Before On time delivery Revenues Profits Quality (#good/total) Linearity (#actual/#plan)
  11. 12. These are good “down trends” <ul><li># Late Shipments </li></ul><ul><li># Part defects </li></ul><ul><li>Indirect cost $’s </li></ul><ul><li>Total # of suppliers </li></ul><ul><li># Customer returns </li></ul><ul><li>Lead times </li></ul><ul><li>Inventory $’s </li></ul><ul><li>Variance $’s </li></ul>
  12. 13. Desirable Leadership “down trends” Before After # Late shipments # Customer returns Lead times Inventory $ Indirect cost $
  13. 14. What is “Lean”? <ul><li>No “fat” – minimize overhead/waste </li></ul><ul><li>Simple – KISS principle </li></ul><ul><li>Visual – can see process, issues </li></ul><ul><li>Process speed and lead time control </li></ul><ul><li>Kaizen, continuous improvement </li></ul><ul><li>Process measurement/adjustment </li></ul><ul><li>Simplified flows of materials/process </li></ul>
  14. 15. “Lean” Manufacturing/Service <ul><li>Work place organization </li></ul><ul><li>Process efficiency, discipline </li></ul><ul><li>Employee cross training </li></ul><ul><li>Common part/process utilization </li></ul><ul><li>Supplier integration </li></ul><ul><li>Simple and timely metrics measurement </li></ul><ul><li>Quick risk identification and control </li></ul>
  15. 16. Material Replenishment Issues <ul><li>Reducing lead time between send and receipt of parts/service </li></ul><ul><li>Reducing inventories throughout the supply chain </li></ul><ul><li>Reducing indirect transactions and costs </li></ul><ul><li>Reducing total supplier base </li></ul><ul><li>Simplifying flows to reduce risk(s) </li></ul>
  16. 17. Replenishment tools <ul><li>JIT – Just in Time </li></ul><ul><li>Kanban (Demand Flow) </li></ul><ul><li>Min/Max Stocking (Blanket Orders) </li></ul><ul><li>Safety Stock Provisions </li></ul><ul><li>VMI – Vendor Management Inventory </li></ul><ul><li>ATO – Assemble to Order </li></ul><ul><li>Outsourcing </li></ul>
  17. 18. Replenishment Success Send Need Quality, OTD % Cost, Inventory Lead Time Streamline!
  18. 19. Supplier Scorecards <ul><li>Measure, analyze and improve </li></ul><ul><ul><li>On time delivery </li></ul></ul><ul><ul><li>Quality, yields, and product returns </li></ul></ul><ul><ul><li>Lead times </li></ul></ul><ul><ul><li>Total cost of business </li></ul></ul><ul><ul><li>Flexible capacity and value add stream </li></ul></ul><ul><ul><li>Problem solving and resolution </li></ul></ul>
  19. 20. Enterprise Supply Chain IT Tools <ul><li>ERP </li></ul><ul><ul><li>Sales and operations planning </li></ul></ul><ul><ul><li>Inventory, Financials </li></ul></ul><ul><li>PLM </li></ul><ul><ul><li>Drawings, Specifications, Bills of Material </li></ul></ul><ul><li>MES </li></ul><ul><ul><li>Work flow, control sequence </li></ul></ul><ul><ul><li>Data collection and measurement </li></ul></ul>
  20. 21. Manufacturing Execution Systems <ul><li>Known as “MES” </li></ul><ul><li>Translates design to process </li></ul><ul><li>Aligns with workplace and tools </li></ul><ul><li>Tie to factory automation </li></ul><ul><li>Used to capture/measure data </li></ul><ul><li>Assemble and analyze data </li></ul>
  21. 22. MES Data Measurements <ul><li>Cycle time </li></ul><ul><li>Work content (total work times) </li></ul><ul><li>Yields and quality data </li></ul><ul><li>Equipment status and alert </li></ul><ul><li>Can generate paretos </li></ul><ul><li>A tool for risk identification, mitigation </li></ul>
  22. 23. MES For Tomorrow <ul><li>An enabling enterprise tool </li></ul><ul><li>Is stand alone from ERP, or PLM </li></ul><ul><li>Can feed ERP (actuals, financials) </li></ul><ul><li>Can validate PLM (design effectiveness) </li></ul><ul><li>Can support customer audits </li></ul>
  23. 24. Process Discipline Plan (PLM, ERP) Do (ERP, MES) Check (MES, ERP) Adjust (PLM, MES, ERP)
  24. 25. Tools & Metrics Summary Yes Yes Inventory Yes Yes Linearity Yes Yes Quality Yes Yes Lead Time Yes Yes Yes Cost MES PLM ERP Category
  25. 26. Supply Chain Overview Customer Needs Enterprise Value Add & Test Post Sales Support & Service Incoming Parts (Service) Solution Recipe
  26. 27. Tomorrow’s Lean Supply Chain <ul><li>Driven by effective sales and operations planning </li></ul><ul><li>Allows effective supply chain planning </li></ul><ul><li>Balances new and current products and services </li></ul><ul><li>Employs timely, effective replenishment </li></ul><ul><li>Enables timely success measurement </li></ul><ul><ul><li>MES, ERP generate data/analysis/correction </li></ul></ul>
  27. 28. Tomorrow’s Lean Supply Chain <ul><li>Questions? </li></ul><ul><li>[email_address] </li></ul>

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