I’ll talk about non manufacturing examples of process improvement with kaizen events and automation
If demand is smooth and the volume is high the flow in terms of the Henry Ford model work well. But the reality is in a multi tier supply chain what starts out as flat demand become volatile down the line. Hence, there need to be different ways to think about Flow and pull
Talking about getting lean, not mean. Get Lean or Get Leaned Out! These suppliers must exhibit a history of flawless launches, meeting zero PPM and zero disruptions and improving first-time quality. They must be willing to work with their customer, early in the program design and development phase, to establish cost targets that satisfy model-to-model cost improvement goals. And they must be committed with the right attitude toward continuous waste reduction and lean thinking. That’s crucial, because not everyone is willing or able to travel this new path with us.
Lean works best in a highly repetitive manufacturing environment with dedicated lines. For example, in the packaging line. However, there are products, there being displayed at this show today, that will assist in your journey to be lean, even with imperfect conditions. For example. Smooth demand – take the lumpiness which raises havoc can help with finding the constraints and organizing the flow. Supply chain planning master planning and smooth demand; allocates capacity & orders across the network (where applicable) Factory schedule optimize a bottleneck or constraint i.e. paint booth or oven Planning system quickly reset the inventory buffers (they have an unbalanced manufacturing process) when demand changes. Sequence dependent requirements to customers use a planning tool to set the schedule. Replenishment of feeder lines is on a pull based system. Pull replenishment where possible (i.e. packaging) others are on scheduled release.
Focusing on actual demand -- pulling from suppliers based on actual demand. Many suppliers are still on a discreet order basis, striving toward a supermarket replenishment perspective
The relationship of demand visibility to business performance is tangible and profound. If we need to ship a certain number of units per week, we order ahead or forecast our need for the next 13 weeks. If there's a spike or a lull in demand, we work continuously with suppliers to provide immediate visibility to requirements rather than operating only on the long-term forecast. Shift from forecast to a pull system that allows suppliers the flexibility to respond to changes in overall demand.
We’ve talked about Lean in the plant, now let’s focus on the extended supply chain Lean and Six Sigma are complimentary… Smooth out demand, pull where you can, collaborate and
Get started don’t wait open your mind to opportunities within your organization to incorporate lean thinking and lean techniques. Common platform helps non-manufacturing ops. become lean Visibility to performance and standard processes among others…
Supply Chain ROI Driven Lean
Benefits of in the Lean 4-Walls <ul><li>5-15% increase in first pass yield </li></ul><ul><li>First-Pass Yield </li></ul><ul><li>35% -50% reduction </li></ul><ul><li>Space </li></ul><ul><li>35%-50% reduction </li></ul><ul><li>Product Development </li></ul><ul><li>50% reduction </li></ul><ul><li>Lead Time </li></ul><ul><li>50%–75% reduction thru-put time </li></ul><ul><li>Cycle Time </li></ul><ul><li>10%-40% reduction </li></ul><ul><li>Inventory </li></ul><ul><li>10%-20% gain by optimizing bottlenecks </li></ul><ul><li>Capacity </li></ul>Benefit Element
Waste in the Supply Chain Manufacturer Wholesale Distributors Consumers Multi-tier Suppliers Retailers Time Sales Sales Time Sales Time Sales Time “ Bull Whip Effect”
Industry Evolution Source: Conferences and Publications
Goal <ul><li>A methodology to establish stability in a System where Customer Demand is erratic…2 key elements: </li></ul><ul><ul><ul><ul><li>Leveling: Leveling of a process to reduce variation in output </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Sequencing: Defining the Sequence which work is processed </li></ul></ul></ul></ul>Filtering Demand Effects of Leveling & Sequence
Where Does Waste Reside? <ul><li>Drive lean supply chain-- on the factory floor and through supply base--more visibility between factory & supplier's factory. </li></ul>Manufacturing SubAssembly Component Supplier Raw Materials Minutes to Hours Days to A week Several Weeks EDI Fax Phone Material Flow Information Flow
Demand Visibility-Right to Bottom Line 10% 100% 90% 80% 70% 60% 50% 40% Demand Visibility Perfect Order 40% 50% 60% 70% 80% 90% 100% 20%
Pre-Requisites <ul><li>Knowing what you want to achieve helps determine what aspects of supply chain to measure. </li></ul><ul><li>Looking at trends beyond the four walls is another way to gauge supply chain performance. </li></ul><ul><li>Providing visibility to what's important to internal and external customers determines what gets measured. </li></ul>
Lean Supply Strategy Take-Away <ul><li>Lean principles before technology </li></ul><ul><ul><li>Simplify the process before automating…ask why, why, why… </li></ul></ul><ul><li>Use technology to eliminate waste </li></ul><ul><ul><li>Streamline information flow and data visibility </li></ul></ul><ul><li>Lean execution requires demand response </li></ul><ul><ul><li>Customer demand, product, and process change </li></ul></ul><ul><li>Demand visibility required across the supply chain </li></ul><ul><ul><li>Synchronize multi-tier supply and demand </li></ul></ul>