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Continuous Manufacturing Improvement Dzw


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The basic principles of Continuous Manufacturing Improvement (CMI).

Continuous Manufacturing Improvement Dzw

  1. 1. Continuous Manufacturing Improvement<br />Basic principles of <br />Continuous Manufacturing Improvement<br />Dave Zwarts<br />
  2. 2. Why CMI?<br /><ul><li>How to improve a production system, in such a way that it ‘s optimum for all kinds of changes...
  3. 3. Make the connections/relations between several “parameters” transparent
  4. 4. Understanding of the essence of “excellent” manufacturers</li></li></ul><li>Reasons for improvement of industrial systems<br />Continuous changes regarding (“outside”):<br />customer demands<br />expectations stakeholders<br />position other competitors<br />….<br />Continuous changes regarding (“inside”):<br />individual expectations<br />technology innovation<br />….<br />
  5. 5. “Stakeholders”<br />Shareholders<br />Competition<br />Government<br />Production<br />Customers<br />Suppliers<br />Employees<br />
  6. 6. Competition<br />Market<br />Performance<br />Suppliers<br />Customers<br />Product Realisation<br />Process<br />Distrib.<br />Why?<br />How?<br />What?<br />Key Improvement Drivers<br />“Model”<br />Market<br />Technology<br />Product Creation<br /> Process<br />
  7. 7. Competition<br />Market<br />Performance<br />Suppliers<br />Customers<br />Product Realisation<br />Process<br />Distrib.<br />What?<br />Why?<br />How?<br /><ul><li> Quality
  8. 8. Delivery
  9. 9. Price /Costs
  10. 10. Innovation
  11. 11. Service</li></li></ul><li>Performance: Customer (1/2)<br />Quality<br />conformance; ppm; call rate; reliability<br />perception of the customer<br />Delivery<br />order lead time and reliability; speed<br />diversity; frequency; batch size<br />Price / costs<br />margin = price - costs<br />costs = f(quality, time, waste)<br />
  12. 12. Performance: Customer (2/2)<br />Innovation<br />time to market / time to volume<br />market price; market share<br />learning curve; rate of improvement<br />Service<br />product support at the customer<br />customer satisfaction; =loyalty !<br />
  13. 13. Competition<br />Market<br />Performance<br />Suppliers<br />Customer<br />Product Realisation<br />Process<br />Distrib.<br />How?<br />Why?<br />What?<br />Design of:<br /><ul><li> Products
  14. 14. Processes
  15. 15. Means
  16. 16. Systems
  17. 17. Organizations</li></ul>Concepts: <br /><ul><li> Waste
  18. 18. Flow / JIT / SMED / Lay-out / ..
  19. 19. Zero defects / Cpk / ..
  20. 20. TPM / OEE / ..
  21. 21. TQM / Continuous Improvement / ..</li></li></ul><li>Improvement Drivers<br />1. Waste Reduction <br />2. Cycle Time Reduction <br />3. Yield Improvement <br />4. Asset Utilisation <br />5. People Involvement <br />
  22. 22. 1. Waste reduction<br />‘Added-Value’ versus ‘Non-Added-Value’<br />if it doesn’t add value, it is waste !<br />
  23. 23. Examples of “Waste”<br />
  24. 24. Examples of “Waste”<br />
  25. 25. Examples of “Waste”<br />
  26. 26. Examples of “Waste”<br />
  27. 27. Examples of “Waste”<br />
  28. 28. Examples of “Waste”<br />
  29. 29. Examples of “Waste”<br />
  30. 30. Examples of “Waste”<br />
  31. 31. Examples of “Waste”<br />
  32. 32. Examples of “Waste”<br />
  33. 33. Examples of “Waste”<br />
  34. 34. Examples of “Waste”<br />
  35. 35. Examples of “Waste”<br />
  36. 36. The “Seven Wastes”<br /><ul><li>Overproduction
  37. 37. Waiting Time
  38. 38. Transportation
  39. 39. Processing
  40. 40. Inventory
  41. 41. Motion
  42. 42. Product Defects</li></ul>+ not using People’s talent<br />
  43. 43. Overproduction<br />
  44. 44. “Waste related with time”<br />waiting on material<br />watching the machine run<br />production of defect products (scrap)<br />looking for tools<br />repairing the machine<br />producing needless products<br />..............etc.<br />
  45. 45. “Waste related with time””<br />Measuring<br /><ul><li>quick insight on time spending</li></ul> with Multi Moment Recording (MMR)<br />Improvement<br /><ul><li>Analyzing Workmethods and implementing Standards</li></ul> with Ready Work Factor (RWF)<br />
  46. 46. “Waste related with time”<br />Where are the losses?<br />What is the available time?<br />How much of this time is really used?<br />‘Total Productive Maintenance’ (TPM): <br />‘Overall Equipment Effectiveness’(OEE)<br />
  47. 47. “Waste related with time”<br />dimension = [time]<br />closed<br />Company (open)<br />Time available<br />No <br />production<br />
  48. 48. “Effective use of time”<br />AT = Available Time<br />OT = Operational Time<br />Standstill<br />Speed<br />PT = Production Time<br />ET = Effective Time<br />Quality<br />Dimension = [time]<br />
  49. 49. “The six big losses”<br />Standstill losses caused by:<br />adjustments<br />machine defects <br />Speed losses caused by:<br />many little stops<br />lower set point speed<br />Quality losses caused by:<br />producing defect products (‘yield’)<br />start up <br />PARETO !<br />
  50. 50. “Overall Equipment Effectiveness”<br />Definition of ‘Overall Equipment Effectiveness’:<br />O.E.E. = Availability x Performance x Quality<br />(deviation: low = 0,4 | high = 0,8)<br />
  51. 51. Processing (e.g. drilling a hole)<br />
  52. 52. Inventory<br />
  53. 53. Motion<br />Move  Work<br />
  54. 54. Product defects<br />Consequences:<br /><ul><li> waste of time
  55. 55. repair costs: labour + material
  56. 56. scrapping defect products
  57. 57. problems with planning and supply
  58. 58. guarantee (customer), claims</li></li></ul><li>Waste Reduction: ‘ELCOSI’<br />Eliminating: do we need this process step?<br />Combining: possibilities to combine process steps<br />Simplifying: Keep or make it simple<br />
  59. 59. House keeping<br />a place for everything & everything in its place<br />the first step to improve the factory<br />a ‘must’ for ‘manufacturing excellence’<br />
  60. 60. 2. Cycle time (reduction)<br />1. Concept <br />Why cycle time reduction<br />What is cycle time<br />How to measure cycle time<br />2. Approach<br />General conceptfor management ofcycle time improvement<br />What? Why?<br />How?<br />
  61. 61. Why cycle time reduction?<br />Creating an AGILE supply chain<br />Cycle time as THE strategic lead indicator <br />for business (chain) improvements<br />‘Exclusive’ speed in:<br /><ul><li> Innovations
  62. 62. Market introductions
  63. 63. Product supply</li></li></ul><li>“Messner”<br />“Reinhold Messner, the Italian climber, is one of the great sports heroes of Europe.<br />His claim to fame is not so much that he climbed all 14 of the world’s highest peaks.<br />Messner s primary achievement is that he introduced a totally new way of climbing - the direct alpine approach - which uses little equipment and no oxygen support to reach the top.<br />Source : Joel A Bleeke<br />“Peak Strategies”<br />McKinsey Quarterly Spring 1989<br />
  64. 64. “Messner”<br />Conventional mountaineering strategy is based on massive amounts of support, including extra oxygen, thought essential for climbs over 25,000 feet. <br />Men such as Sir Edmund Hillary and Chris Bonington relied on hundreds of guides who carried food, oxygen and other supplies; an American expedition to climb Everest in 1963 included 900 porters trudging up the mountain with 300 tons of equipment,<br />Messner argues that under this strategy, the slowest man sets the pace. His goal is speed of execution. Although assisted by guides up the base of the mountain, Messner usually makes the final assault by himself, or with one other person, in a single day. He scaled the north face of Everest solo, without oxygen - one of the most severe mountaineering challenges ever attempted.<br />
  65. 65. .<br />Stage One: Baseline<br />Material<br />flow<br />Customer<br />service<br />Material<br />Control<br />Sales<br />Purchasing<br />Production<br />Distribution<br />Stage Two: Functional Integration<br />Material<br />flow<br />Customer<br />service<br />Materials<br />Management<br />Manufacturing<br />Management<br />Distribution<br />Stage Three: Internal Integration<br />Material<br />flow<br />Customer<br />service<br />Materials<br />Management<br />Manufacturing<br />Management<br />Distribution<br />Stage Four: External Integration<br />Material<br />flow<br />Customer<br />service<br />Internal Supply<br />Chain<br />Suppliers<br />Customers<br />
  66. 66. 10<br />9<br />Composite<br />Performance<br />Intermediary<br />steps are<br />transitional only<br />8<br />Extended <br />Enterprise<br />7<br />6<br />STEP 7<br />5<br />Integrated Supply Chain<br />4<br />3<br />2<br />STEP 4<br />Functional<br />1<br />STEP 1<br />Informal<br />Time<br />Supply Chain management: progressing through four distinct stages of maturity<br />
  67. 67. Lean & Agile<br /><ul><li>Lean : “having no surplus flesh or bulk”
  68. 68. Agile : “quick in movement : nimble”</li></ul>Hi<br />“Lean” works best in high volume, low variety and predictable<br />environments.<br />“Agility” is needed in less predictable environments where the demand for variety is high.<br />AGILE<br />Variety /<br />Complexity<br />LEAN<br />Lo<br />Lo<br />Hi<br />Predictability<br />
  69. 69. Total cycle time<br />SUPPLIERS<br />INTERNAL<br />CUSTOMERS<br />Attack non-value<br />adding time &<br />complexity. <br />Apply flow concepts<br />Partnership<br />sourcing and<br />synchronized<br />supply<br />Vendor managed<br />inventory &<br />continuous<br />replenishment<br />Total Cycle time (Days)<br />
  70. 70. Logistic service excellence<br />Phase 1:<br /><ul><li>Formalize w.o.w.
  71. 71. Start measuring Cycletime performance</li></ul>Unstable performance<br />Much waste<br />Unreliable forecasts<br />Long response time<br />Phase 2:<br /><ul><li>CTR of 70% byimplementation offlow concepts</li></ul>Sustainable competitive <br />advantage total business chain<br />“Entitlement”<br />
  72. 72. Importance of cycle time reduction:<br /><ul><li>Market share
  73. 73. Time to market
  74. 74. Price premium
  75. 75. Asset utilization
  76. 76. CTR has a positive effect on:
  77. 77. Cash flow
  78. 78. Receivables / payables
  79. 79. Non-quality cost
  80. 80. Learning cycles</li></li></ul><li>Total integral cycle time<br />‘Total integral cycle time’ is the sum of‘Horizontal cycle time’ & ‘Vertical cycle time’ <br />Adding horizontal and vertical cycle time<br />Taking the whole supply chain:“van zand tot klant” <br />
  81. 81. Horizontal & Vertical CT<br />‘Horizontal cycle time’:<br />The time of activities, like production planning, procurement, production, order processing, transport, etc. <br />‘Vertical cycle time’: <br />The time that an item spends on stock, keeping working capital and not generating income yet. This can be expressed in days of sales.<br />
  82. 82. Horizontal & Vertical CT<br /><ul><li>Horizontal CT: 28 days
  83. 83. Vertical CT: 87 days
  84. 84. Total integral CT: 97 days</li></ul>48<br />time<br />21<br />18<br />Transport to<br />customer<br />transport<br />to DC<br />Order processing<br />production: 20<br />1<br />3<br />4<br />distribution<br />center<br />time<br />Raw<br />materials<br />Finished product<br />warehouse<br />Horizontal, vertical and total integral cycle time can be expressed graphically:<br />
  85. 85. Agile versus traditional approach<br />Traditional Approach<br /><ul><li>Stock is held at multiple echelons, often based on organizational and legal ownership considerations</li></ul> (economy of scale)<br /><ul><li>Replenishment is driven sequentially by transfers from one stocking echelon to another.
  86. 86. Production is planned by discrete organizational units with batch feeds between discrete systems.
  87. 87. Majority of stock is fully finished goods, dispersed geographically, waiting to be sold.</li></ul>Agile Approach<br /><ul><li>Stock is held at the fewest echelons, if at all with finished goods sometimes being delivered direct from factory to customer. (economy of choice)
  88. 88. Replenishment of all echelons is driven from actual sales/usage data collected at the customer interface.
  89. 89. Production is planned across functional boundaries from vendor to customer, through highly integrated systems, and minimum lead-times.
  90. 90. Majority of stock is held as ‘work in progress’ awaiting build/configuration instructions.</li></li></ul><li>The agile organization…<br /><ul><li>Focuses on understanding customer and consumer value preferences and re-engineers processes around them
  91. 91. Uses performance measures that are market-facing and process related, e.g. time-to-market, cost-to-serve, customer retention
  92. 92. Reduces complexity, but not necessarily variety
  93. 93. Encourages cross-functional, team-based working
  94. 94. Seeks to manage the ‘extended enterprise’</li></li></ul><li>Approach<br />1. Concept <br />Why cycle time reduction<br />What is cycle time<br />2. Approach<br />General conceptfor management ofcycle time improvement<br />What? Why?<br />How?<br />
  95. 95. General concept for cycle time improvement<br />A. Clarifying supply chain structure<br />B. Mapping of processes<br />C. Benchmark study<br />D. Logistic assessment, based upon structural <br /> evaluation of time aspects of all processes<br />E. Action plan<br />F. Measure and control<br />
  96. 96. A. Clarifying supply chain structure<br /><ul><li>Map the total goods flow from component to customer in order to identify the main processes and de-coupling points</li></ul>Material production<br />22 days<br />Distribution<br />Assembly processes<br />Customer 1<br />Source<br />Packing process<br />21 days<br />Make<br />Deliver<br />Make<br />Deliver<br />Source<br />4 days<br />48 days<br />52 days<br />Source<br />Make<br />Deliver<br />Customer 2<br />Make<br />Deliver<br />Source<br />Source<br />Deliver<br />Packaging Supply<br />21 days<br />Source<br />Deliver<br />Make<br />Customer 3<br />22 days<br />8 days<br />40 days<br />21 days<br />Source<br />Customer 4<br />40+ days<br />
  97. 97. B. Mapping of processes<br />Factory 1<br />Dx.2<br />Dx.3<br />Receive<br />Reserve<br />Resources &<br />Enter &<br />Schedule<br />Validate<br />Delivery<br />Order<br />Mx.1<br />Mx.2<br />Mx.3<br />Mx.3<br />Schedule<br />Visibility for Available To Promise ?<br />Manufacture<br />Issue<br />Manufacturing<br />& Test<br />Material<br />Activities<br />subassy<br />P?<br />Daily Fax - 2pm<br />Visibility<br />from fact. 1<br />Plan<br />Sx.2<br />Sx.3<br />Receive and<br />Transfer<br />1d<br />Verify<br />Material<br />Fax<br />Material<br />Factory 2<br />2/3days<br />D+1<br />4pm<br />3pm<br />Dx.2<br />Dx.3<br />Dx.13<br />Sx.1<br />Dx.11<br />Dx.10<br />Dx.9<br />Receive<br />Reserve<br />Invoice &<br />Load<br />Schedule<br />Receive &<br />Enter &<br />Resources &<br />Vehicle<br />Pick<br />Receive<br />Material<br />Verify at<br />Schedule<br />Validate<br />Generate<br />Product<br />Payment<br />Delivery<br />Delivery<br />Customer Site<br />Docs & Ship<br />Order<br />Dx.8<br />P?<br />Receive<br />Product<br />Plan<br />Mx.1<br />Mx.5<br />Mx.4<br />Mx.3<br />Mx.3<br />Mx.2<br />Schedule<br />Manufacture<br />Stage<br />Issue<br />Package<br />Manufacturing<br />& Test<br />Product<br />Material<br />Activities<br /><ul><li>Clarify main processes within and between organizational entities to see which activities are the main building blocks of cycle time</li></li></ul><li>C. Benchmark study<br />Order Fulfillment lead Time<br />Source Make Cycle Time<br />Planning Cycle Time<br />Total Supply Chain Response Time<br />101 Days<br />(Worst Case)<br />120<br />101 Days<br />90 Days<br />(Best Case)<br />100<br />80<br />Total Supply Chain Response Time<br />(Calendar Days)<br />49 Days<br />60<br />40<br />20<br />0<br />Best-in-Class<br />Average<br />Assessed company<br /><ul><li>Make a comparison with benchmark data of the Performance Measurement Group* shows that the overall supply chain response time of the pilot is more than double the best-in-class.</li></li></ul><li>Survey tools<br /><ul><li>Use “Supply chain management survey tools” to assess the supply chain and determine where improvements can be made</li></li></ul><li>CTR: continuous process<br />Optimize<br />Optimize<br />Optimize<br />Structural CTR improvements<br />2010 2011 2012<br /> 50% reduction 30% reduction 10% reduction<br />Cycle time reduction is a continuous process:<br />Optimize current structures and realize quick wins, using plan-do-check-action<br />Realize structural improvements through breakthroughs in logistic concept<br />Total plan for CTR in the coming years<br />
  98. 98. Cycle time reduction on the production floor /contents<br />Setup time reduction<br />Product oriented layout<br />Flexible skills<br />Leveled/mixed production<br />KANBAN<br />
  99. 99. Setup time reduction<br /><ul><li>Increasing variety in products
  100. 100. Shorter product life cycles
  101. 101. Ever decreasing batch sizes
  102. 102. Need to reduce integral cycle time
  103. 103. Des-interest in setup operations?</li></li></ul><li>Steps to reduce setup time:<br />1 Separate internal from external setup time<br />2 Re-organize the work: internal => external<br />3 Reduce internal time (ElCoSi)<br />4 Reduce external time (ElCoSi)<br />
  104. 104. Typical internal<br /><ul><li> attachments
  105. 105. adjustments
  106. 106. test run</li></ul>Separation Internal - External<br />Typical external<br /><ul><li> preparation dies
  107. 107. transfer dies
  108. 108. selecting tools
  109. 109. reading setup procedure</li></li></ul><li>Reduce internal setup examples<br />
  110. 110. Reduce internal setup examples<br />
  111. 111. Reduce internal setup examples<br />
  112. 112. Reduce external setup examples<br />
  113. 113. Reduce external setup examples<br />
  114. 114. Contents<br />Setup time reduction<br />Product oriented layout<br />Flexible skills<br />Leveled/mixed production<br />KANBAN<br />
  115. 115. Process oriented layout<br />
  116. 116. Process oriented layout<br />Dis-advantages<br /><ul><li>difficult co-ordination and production scheduling
  117. 117. transportation waste
  118. 118. accumulation of in-process inventory
  119. 119. multiple handling of material
  120. 120. long production lead time
  121. 121. difficult to trace back causesof defects
  122. 122. flow of materials is hard not standardize</li></ul>Advantages<br /><ul><li>clear areas of responsibility
  123. 123. maximum use of machine capacity; esp.. large machines with high capacity
  124. 124. people can be trained fast:operators, maintenance
  125. 125. breakdown of one machine can easily be “solved”
  126. 126. specific tools can be stored together
  127. 127. efficiency of individual operations can be optimized</li></li></ul><li>Product oriented layout<br />
  128. 128. Product oriented layout<br />Dis-advantages???<br /><ul><li> clear areas of responsibility?
  129. 129. maximum use of machine capacity; esp.. large machines with high capacity
  130. 130. people can be trained fast:operators, maintenance
  131. 131. breakdown of one machine can easily be “solved”
  132. 132. specific tools can be stored together
  133. 133. efficiency of individual operations can be optimized</li></ul>Also a production line can be a clear area of responsibility<br />Do we need them in the first place? Increasing diversity, shorter life cycles!<br />Machines can be simplified; operators can broaden their skills<br />Machines in a flowline urge to solve reasons of breakdowns<br />Efficiency of the total process can be optimized! <br />
  134. 134. Process oriented layout<br />Advantages???<br /><ul><li> difficult co-ordination and production scheduling
  135. 135. transportation waste
  136. 136. accumulation of in-process inventory
  137. 137. multiple handling of material
  138. 138. long production lead time
  139. 139. difficult to trace back causesof defects
  140. 140. flow of materials is hard to standardize</li></ul>A production line for one product group can be easily planned<br />Transportation eliminated<br />Inventory in a production line is usually very low<br />Short lead-times<br />Tracing back errors is quite easy!<br />Flow of materials is standardized<br />automatically!<br />
  141. 141. Model for comparison<br />
  142. 142. Flow production<br />From Undeveloped flow...<br />Conditions for Flow Production:<br /><ul><li> product oriented layout
  143. 143. synchronized processes (to avoid accumulated inventory)
  144. 144. short change over times
  145. 145. reliable processes:
  146. 146. breakdowns
  147. 147. product quality
  148. 148. flexible skills </li></ul>…to developed flow<br />
  149. 149. Flow production Example<br />
  150. 150. Contents<br />Setup time reduction<br />Product oriented layout <br />Flexible skills<br />Leveled/mixed production<br />KANBAN<br />
  151. 151. Flexible skills<br />Multifunctional skills<br />Skill Development<br />Job Rotation<br />Multiprocess handling<br />
  152. 152. Flexible skills/ skill development<br />
  153. 153. Flexible skills/ job rotation<br />
  154. 154. Contents<br />Setup time reduction<br />Product oriented layout <br />Flexible skills<br />Leveled/mixed production<br />KANBAN<br />
  155. 155. Leveled/mixed production<br /><ul><li>Mixed production
  156. 156. Leveled production
  157. 157. Synchronized production(Suzaki: “cycle time control”)</li></li></ul><li>Leveled/mixed production<br />
  158. 158. Leveled/mixed production<br />
  159. 159. Leveled/mixed production<br />
  160. 160. Synchronized production<br />
  161. 161. Contents<br />Setup time reduction<br />Product oriented layout <br />Flexible skills<br />Leveled/mixed production<br />KANBAN<br />
  162. 162. Kan Ban “Supermarket concept”<br />
  163. 163. Kan Ban<br />Kan Ban concept throughout the factory<br />
  164. 164. Kan Ban<br />Improvements after introduction of Kan Ban<br /><ul><li>optimization of number of cards  optimization of inventory
  165. 165. elimination of warehouse (depends on lead-time, demand </li></ul> pattern, distance) = ‘one card system’<br /><ul><li> use 1 card per standard batch quantity (e.g. 1 tray)
  166. 166. use the tray or container as Kan Ban card
  167. 167. electronic data gathering (e.g. barcode readers) to enhance the system </li></li></ul><li>Kan Ban /conditions<br /><ul><li>Production capacity has to be in accordance with demand levels
  168. 168. Leveled/mixed production may be necessary to prevent up swing effects in the supply chain
  169. 169. Production processes need to be controlled in order to eliminate potential disruptions
  170. 170. Infrequently ordered items (specialties), hardly fit within a Kan Ban system</li></ul>Fabrication<br />Final-assembly<br />Sub-assembly<br />
  171. 171. Total Quality Control / Total Productive Maintenance<br />Total Quality Control (Total Quality Management)<br /> Total Productive Maintenance (Total Productivity Management)<br />
  172. 172. TPM versus TQC<br />
  173. 173. TQC<br />
  174. 174. TQC<br />
  175. 175. TQC /identifying defects at the source...<br />
  176. 176. SPC: Statistical Process Control<br />
  177. 177. SPC<br />
  178. 178. Visual Control<br />
  179. 179. Visual Control<br />
  180. 180. Visual Control<br />
  181. 181. TQC / TQM =<br />The right person for the right job<br />
  182. 182. TQC / TQM =<br />Controlling the process<br />
  183. 183. TQC / TQM =<br />Make sure that you don't have to repeat it<br />
  184. 184. TQC / TQM =<br />Only possible with support from the management<br />
  185. 185. TQC / TQM =<br />Control your work<br />
  186. 186. TQC / TQM =<br />Listen to the customer<br />