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Lean Consumption meets Lean Provision

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by Ricardo Lopes of Grupo Fernando Simao shown at the Frontiers of Lean Summit 2005 on 31st October 2005 run by the Lean Enterprise Academy

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Lean Consumption meets Lean Provision

  1. 1. Lean Enterprise Academy www.leanuk.org1 Lean Consumption Meets Lean Provision Ricardo Lopes Lean Process Manager Grupo Fernando Simao
  2. 2. Lean Enterprise Academy www.leanuk.org2 Grupo Fernando Simao • Family business founded 1947, Oporto • 3rd largest car dealer group in Portugal • Represent 16 brands in total • Including some in a joint-venture operation • Largest seller of Opel in Portugal • Recently expanded into Spain (another 5 brands) • Expect to sell 9000 new cars in 2005 (5% share) • 950 people in 38 businesses including: • 14 used car showrooms, body-repair shops, parts wholesaling operation, property company
  3. 3. Lean Enterprise Academy www.leanuk.org3 How our Lean journey began • Oct 99: Pedro Simao to ICDP seminar • Kiff / Brunt: Lean Dealer presentation • Dec 99: Simao & Kiff met in London • Vision of ‘Hunting to Farming’ • Jan 00: Simao request for help • “How do I implement Lean?” • Mar 00: Dave Brunt visit to Oporto • Walked the process. Masking tape • Taught value stream mapping (Provision)
  4. 4. Lean Enterprise Academy www.leanuk.org4 What we learned • We were optimising each separate area • But cars waited between each area • Our housekeeping was poor • Much more than rolls of masking tape! • We also: • Launched jobs by loudest customer • Had no idea if we were behind or ahead • Pushed work through the shop
  5. 5. Lean Enterprise Academy www.leanuk.org5 What we needed to do • See the process as a whole • Try to flow vehicles • Not launch any jobs until had all parts • Create a process control board • Separate jobs from simple to complex • Measure our Customer Fulfilment • “Right first time on time, every time” • Root-cause reasons for failure to fulfil
  6. 6. Lean Enterprise Academy www.leanuk.org6 What we then planned for the next 12 months • Used car preparation process • Prepare & deliver a car to order in 3 days • Body repair • Reduce waste, reduce lead times by 30% • After-sales • Raise customer fulfilment to 80% • Parts process • Develop a JIT system to support the above
  7. 7. Lean Enterprise Academy www.leanuk.org7 Example 1: Used Cars Aim: Prepare to order in 3 days • ‘Bodyfit’ facility • Designed by ‘experts’ • 3x too big, wrong layout • Lean improvements: • Value Stream Map, Takt Time • Process Activity Maps, Standardised Work • All aimed at developing Flow and Pull • Sales interface: sell from sample • Stock visible to salesmen who ‘pull’ car
  8. 8. Lean Enterprise Academy www.leanuk.org8 Value Stream Map and Takt
  9. 9. Lean Enterprise Academy www.leanuk.org9 Process Activity Mapping to achieve standardised work
  10. 10. Lean Enterprise Academy www.leanuk.org10 Flow and Pull at Bodyfit Visual signal: ‘take this one next’
  11. 11. Lean Enterprise Academy www.leanuk.org11 Interface with Sales Small showroom, sell from sample
  12. 12. Lean Enterprise Academy www.leanuk.org12 Example 2: After-Sales Aim: Raise customer fulfilment to 80% • Dealer workshops • Were poorly planned • Had poor fulfilment • Lean improvements: • Pre-diagnosis of cars • Planning board • Jobs allocated to teams • Standard work on service jobs • All supported by 5S
  13. 13. Lean Enterprise Academy www.leanuk.org13 Pre-diagnosis of cars
  14. 14. Lean Enterprise Academy www.leanuk.org14 Planning boards Allocating jobs to teams
  15. 15. Lean Enterprise Academy www.leanuk.org15 Standard work and 5S
  16. 16. Lean Enterprise Academy www.leanuk.org16 Measuring fulfilment
  17. 17. Lean Enterprise Academy www.leanuk.org17 Example 3: Parts Supply Aim: Support the Value Streams JIT • Each dealer had its own stock of parts • Result: too much wrong stock, expediting • Customer fulfilment failure – and cost! • Lean improvements: • Centralise parts stores for main brands • Centralise ‘consumables’ stores • Frequent, JIT deliveries each day • Minimise parts at dealer workshops • Automatic replenishment by supplier
  18. 18. Lean Enterprise Academy www.leanuk.org18 Centralised parts JIT delivery
  19. 19. Lean Enterprise Academy www.leanuk.org19 Centralised consumables JIT delivery
  20. 20. Lean Enterprise Academy www.leanuk.org20 Lean Provision: Not Enough Need Lean Solutions • Lean: customers happier, more profit • But still not perfect for customers • Strategic objectives: • 100% customer’s motoring spend for life! • Retain all cars of the brands we sell • Depends not only on Lean Provision but also on the other element of the Hunting to Farming concept: • Customer Account Management
  21. 21. Lean Enterprise Academy www.leanuk.org21 Customer Account Management Team • Objectives: • Win 100% of motoring spend • With Lean process, build lifetime loyalty • Base: Simao HQ • Managed with visual boards + database • Team of 10, focus: high-mileage drivers • Huge increase in loyalty and profit
  22. 22. Lean Enterprise Academy www.leanuk.org22 Current Status & Conclusion • Not all complete in 12 months • But all projects were in operation • Since 2001 continuously improving • And extending to other parts of the group • Now centralising parts for all brands • Centralising body repair too • More space for more sales and after-sales! • Lean and Customer Account Managers • Core part of our ongoing strategy
  23. 23. Lean Enterprise Academy www.leanuk.org23 Lean Consumption Meets Lean Provision Ricardo Lopes Lean Process Manager Grupo Fernando Simao Thank you!

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