Successfully reported this slideshow.
Measuring Modeling and Managing
Supply Chain Capacity
Approach for understanding
and Managing Capacity
Capacity Planning

Plan Do Check Act
• Plan
–
–
–
–

Establish operating plan
Assess current capacity
Define demand
Identi...
Value Stream Perspective

• Holistic view of
– Capacity and capability
– Internal and external

• Current State and Future...
Understand the 5 Ms and Effect on Capacity

•
•
•
•
•

Measurement (OEE and OAE)
Machinery (Capability…Gross, Eng., Actual...
Perspective Customer versus Supplier

Customer
• Demand based on
contracted agreement
• Operating plan…
– APW/LCR 5 Days
–...
Measuring Capacity
Align Measures

OPERATIONS PERFORMANCE METRICS
MANAGEMENT PROBLEM DEFINITION TIME PERIOD
DATA TYPE
Management or
1 EXECUTI...
Capacity and Time
• Gross
– 24 hours day x 7 days week
– Cycle time has significant impact on gross pieces

• Operating Pl...
Measurement
• Overall Equipment Effectiveness (OEE)
– Availability x Efficiency x First Time Yield
– Measure of Production...
Measure to Plan
• Visual management of the constraint
• Variance to plan WHY? Why?

10
Measurement Goal, Actual and Plan
• Trend, Pareto, and Sufficiency Plan

11
Modeling Capacity
Capacity Analysis Workbooks

Strengths
• Simple to use/understand
– Production processes
– Static data

• Internal process...
MRP System

Strengths
• Plans internal and external
processes.
• Considers Machinery,
Manpower, Methods,
Material
• Demons...
Value Stream Mapping

Strengths
• Identifies throughput
improvement opportunities
• Provides a visual for
understanding pr...
Production Simulation

Strengths
• Considers the
interrelationship of all
processes.
• Includes machinery,
methods, materi...
Manage Capacity
Capacity Management
•
•
•
•

Identify product families
Value Stream Map product families
Collect process flow and informat...
Deploy Theory of Constraints
• Only by increasing flow through the constraint can overall
throughput be increased.
• Assum...
Summary

•
•
•
•
•
•
•

Define Product Family Value Steam
Understand 5 Ms of the Production System
Assure demand is accura...
Upcoming SlideShare
Loading in …5
×

Measuring Modeling and Managing Supply Chain Capacity

1,348 views

Published on

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

Measuring Modeling and Managing Supply Chain Capacity

  1. 1. Measuring Modeling and Managing Supply Chain Capacity
  2. 2. Approach for understanding and Managing Capacity
  3. 3. Capacity Planning Plan Do Check Act • Plan – – – – Establish operating plan Assess current capacity Define demand Identify sufficiency plan to close gap • Do – Implement actions • Check – Measure performance • Trend, Pareto • Act – Use 8 D to resolve problems 2
  4. 4. Value Stream Perspective • Holistic view of – Capacity and capability – Internal and external • Current State and Future State – Plan, Do, Check and Act • Identify constraint(s) • What can you Influence or Control 3
  5. 5. Understand the 5 Ms and Effect on Capacity • • • • • Measurement (OEE and OAE) Machinery (Capability…Gross, Eng., Actual) Methods (Lean Tools…SMED, TPM) Manpower (Standard work and Training) Material (Right…Place, Time, Amount) 4
  6. 6. Perspective Customer versus Supplier Customer • Demand based on contracted agreement • Operating plan… – APW/LCR 5 Days – MPW/MCR 6 days Supplier • Demand based on market forecasts • Operating plan… – 6 to 7 days per week • Shutdown losses limited • Shutdown losses for extended holidays. • Forever requirement APW=Average Production Week MPW=Maximum Production Week LCR=Lean Capacity Rate MCR=Maximum Production Rate 5
  7. 7. Measuring Capacity
  8. 8. Align Measures OPERATIONS PERFORMANCE METRICS MANAGEMENT PROBLEM DEFINITION TIME PERIOD DATA TYPE Management or 1 EXECUTIVE Business Process / Year / Month Aggregate $ Systems Product / Workshop Product Line / Asset Allocation 2 DIRECTOR Month / Weekly Function ($ / %) 3 MANAGER Process / Work centers Weekly / Daily 4 SUPERVISOR Group Workflow 5 OPERATOR Individual Workflow Process / Material Allocation ($ / %) ANALYSIS & REPORTING FOCUS Financial Data Driven Reports / Directional Analysis Policy Trend Charts (Material, Resources, Business Processes / Timing) Interdisciplinary Systems Workshop Resource Pareto / Trend Charts (Material Flow Capability / Capacity / / Quality) Flexibility Work and Material Flow Charts / Standardize Work Waste Elimination (Kaizen) Material / Quality Statistics & Daily / Hourly Analysis Material / Quality Attributes (5S Hourly Status to Target (RYG) G0/NO GO) Quality 7
  9. 9. Capacity and Time • Gross – 24 hours day x 7 days week – Cycle time has significant impact on gross pieces • Operating Plan – Gross minus time not scheduled • Run Time – Operating minus planned downtime • Availability %= – (Run time – documented lost time) /Run time • Efficiency % – Ideal cycle time/(Available time/Total pieces) • First Time Yield % – Good pieces/Total pieces 8
  10. 10. Measurement • Overall Equipment Effectiveness (OEE) – Availability x Efficiency x First Time Yield – Measure of Production Team • Overall Asset Effectiveness (OAE) – ((Op Plan– Planned DT)/Op Plan)) x OEE – Measure of Operations Team • Total Equipment Performance (TEP) – ((Gross Hrs.- Not Scheduled)/Gross Hrs)). x OAE x OEE – Measure of Executive Team performance 9
  11. 11. Measure to Plan • Visual management of the constraint • Variance to plan WHY? Why? 10
  12. 12. Measurement Goal, Actual and Plan • Trend, Pareto, and Sufficiency Plan 11
  13. 13. Modeling Capacity
  14. 14. Capacity Analysis Workbooks Strengths • Simple to use/understand – Production processes – Static data • Internal processes • Based on data from actual production runs – PPAP 300 piece – Run at Rate • Identifies constraints • Mandated by OEMs Weaknesses • Minimizes effect of non value added processes – Buffers, Material movement • Data isn’t dynamic – Time between failures – Time to Repair • Focused on individual process not the production system. • Focus on up level BOM • Not good at what if? 13
  15. 15. MRP System Strengths • Plans internal and external processes. • Considers Machinery, Manpower, Methods, Material • Demonstrates capacity versus demand overtime • Analysis of BOM • Identifies constraints Weaknesses • Uses static data sets – Cumbersome to maintain • Analysis of planned to actual generally performed through spread sheets. • Reliant on accurate production reporting 14
  16. 16. Value Stream Mapping Strengths • Identifies throughput improvement opportunities • Provides a visual for understanding product and information flow • Working document • Captures process data • Future State Maps Weaknesses • Static Data • Manual process requires team involvement to be effective 15
  17. 17. Production Simulation Strengths • Considers the interrelationship of all processes. • Includes machinery, methods, material, manpower. • Considers variation • Evaluates capacity overtime • Validates Production System Weaknesses • Must have software license • People must be trained in usage • Models are unique to flow 16
  18. 18. Manage Capacity
  19. 19. Capacity Management • • • • Identify product families Value Stream Map product families Collect process flow and information flow data Use value stream and associated data to develop simulation of the process flow • Validate capacity plan with simulation model • Use Kaizen to improve constraint throughput – Question all reasons for losses • Why? • Can the lost event time and /or frequency be reduced • Update VSM and simulation 18
  20. 20. Deploy Theory of Constraints • Only by increasing flow through the constraint can overall throughput be increased. • Assuming that demand has been defined the steps are: – Identify the system's constraint(s) – Decide how to exploit the system's constraint(s) (how to get the most out of the constraint) – Subordinate everything else to the above decision (align the whole system or organization to support the decision made above) – Elevate the system's constraint(s) (make other major changes needed to increase the constraint's capacity) – Warning! If in the previous steps a constraint has been broken, go back to step 1, but do not allow inertia to cause a system's constraint 19
  21. 21. Summary • • • • • • • Define Product Family Value Steam Understand 5 Ms of the Production System Assure demand is accurate Collect and Analyze operational data Base capacity on historical performance Deploy Theory of Constraints Validate improvements with appropriate models 20

×