Modern Production Systems by Gaston Cedillo

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Modern Production Systems in the Automotive Industry.

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  • It is possible to reduce the complexity of variety basis on the delayed differentiation of products = mass customization.
  • China is a big challenge for innovation because her strong capability for imitating western products.
  • The Toyota’s site at Valenciennes is the first step for winning the European market.
  • A Production System is a group of organizational processes for being competitive in the market place. It is a holistic approach in order to improve the organizational interactions from a systems viewpoint. The main objective is to satisfy the market with profitable products. The focus of a Production System is to define the methods which help to reach the competitiveness targets.
  • Sometimes Acclimatization integrates Discipline.
  • The objective is to reduce the time use in activities without added value (yellow) or in activities that use resources inefficiently (red).
  • Source: Steven Spear and H. Kent Bowen (199).Decoding the DNA of Toyota Production System. Harvard Business Review, September-October.
  • In fact, the negative point about standardization describes the problems with a mass production approach. The secret is to improve on a continuous way the standardization processes and let the employees free for innovation.
  • Standardized systems: ODETTE in the automotive industry for example. In Germany: VDA 4905 VDA 4913 VDA 4919
  • Flexibility of production
  • It exists a relationship 1-10 between logistics costs and production costs. For 1% that logistics costs are increased, the production costs are reduced in 10%.
  • It depends of product
  • Va en contra del sentido de las manecillas del reloj porque la mayoría de la gente es derecha.
  • Modern Production Systems by Gaston Cedillo

    1. 1. PRODUCTION SYSTEMS IN THE AUTOMOTIVE INDUSTRY Dr. Miguel Gaston Cedillo Campos [email_address] http://gastoncedillo.com
    2. 2. Agenda <ul><li>Organizational </li></ul><ul><ul><li>Targets of the course </li></ul></ul><ul><ul><li>Expectations of participants </li></ul></ul><ul><li>Production Systems in the Automotive Industry </li></ul><ul><ul><li>Challenges of the market </li></ul></ul><ul><ul><li>Development of Production System </li></ul></ul><ul><ul><li>Characteristics of Toyota Production System </li></ul></ul><ul><ul><li>BREAK </li></ul></ul><ul><li>Mercedes Benz Production System </li></ul><ul><ul><li>Basics </li></ul></ul><ul><ul><li>Principles of Just In Time </li></ul></ul><ul><ul><li>Example </li></ul></ul>
    3. 3. Agenda <ul><li>Practical case: JIT simulation </li></ul><ul><ul><li>Introduction </li></ul></ul><ul><ul><li>First round and analysis </li></ul></ul><ul><ul><li>Second round and analysis </li></ul></ul><ul><ul><li>Third round and analysis </li></ul></ul><ul><ul><li>BREAK </li></ul></ul><ul><ul><li>Optimizing and design new process </li></ul></ul><ul><ul><li>Fourth round and analysis </li></ul></ul><ul><ul><li>Results and lessons learned </li></ul></ul><ul><li>Summary and Conclusions </li></ul>
    4. 4. Targets of the course <ul><li>To know about the development of production systems </li></ul><ul><li>To understand how to implement a production system </li></ul><ul><li>To understand the philosophy of Toyota Production System </li></ul><ul><li>To know about the main principles of Just in Time (JIT) </li></ul><ul><li>To understand the effects and results of Pull Production (practical part) </li></ul>
    5. 5. Agenda <ul><li>Organizational </li></ul><ul><ul><li>Targets of the course </li></ul></ul><ul><ul><li>Expectations of participants </li></ul></ul><ul><li>Production Systems in the Automotive Industry </li></ul><ul><ul><li>Challenges of the market </li></ul></ul><ul><ul><li>Development of Production System </li></ul></ul><ul><ul><li>Characteristics of Toyota Production System </li></ul></ul><ul><ul><li>BREAK </li></ul></ul><ul><li>Mercedes Benz Production System </li></ul><ul><ul><li>Basics </li></ul></ul><ul><ul><li>Principles of Just In Time </li></ul></ul><ul><ul><li>Examples </li></ul></ul>
    6. 6. The automobile industry is experiencing powerful consolidation processes 2004 = 12 1964 = 50 1970 = 37 1980 = 30 1990 = 19
    7. 7. The product range has been massively expanded Model versions 1950 1984 1984 2005 Mercedes Benz 2 models 5 models 26 models Example of optional extras for C-Class: 1,635,000,000,000,000 (quadrillions) Possible combinations ( Condition: Customer chooses 15 out of 80 optional extras )
    8. 8. The start-up curve has intensified since the mid-90s Run-up time (Job#1 up to full volume) 1993 1998 2002 2000 Time E-Class (93-02) Run-up Development and preparation 15 months S-Class (since 98) Development and preparation 8 months Run-up C-Class (since 00) Run-up Development and preparation 6 months E-Class (since 02) Run-up Development and preparation 3.5 months
    9. 9. Motivation for implementation production system <ul><li>The successful implementation of a production system is the substantial factor for success. </li></ul>Competence of technology -Depends on investment -Implementation possible short or medium term -Could be bought on external market - … Imitation possible Implementation of production systems -Depends on employees -successful implementation > 3-5 years -External purchasing not possible - … Imitation not possible
    10. 10. Motivation for implementation production system Imitation design Imitation technology Introduction of ESP/ABS in all vehicle classes Mercedes S-Class W140 (1991) SSangYong Chairman (1998) Opel Frontera (1998) JianlingMC Landwind (2005)
    11. 11. Current Automotive News- Pressure of Market MONTREUX, Switzerland Toyota's sales growth in Europe in the next seven years will be far more rapid than it was in the U.S. in the 1990s. That was the prediction of Takis Athanasopoulos, Toyota Marketing Europe’s executive vice president. Toyota aims to achieve European sales of 1.2 million in 2010. Last year the company sold around 800,000 units in Europe. “That growth rate will be twice as fast as we achieved in the U.S., where it took us 14 years to reach 1.2 million unit sales”, said Athanasopoulos. During the 1900s Toyota slowly built up North American sales to win 11 percent of the U.S. auto market. Toyota’s goal is to increase its market share in Europe to 8 percent as part of is “2010 Global Vision” strategy to become the world’s largest automaker. Athanasopoulos said Toyota’s strategic focus on quality will help boost growth. “That strategy already has driven us from being a niche importer to a major player”, he hold the Automotive New Congress in Montreux. … after conquest of the U.S. market, Toyota forces the same procedure in Europe.
    12. 12. Current Automotive News- Increasing / decreasing market share +14.3 88 +16.6 77 Porsche … +2.6 1 104 +6.5 1 076 Mazda 11 +9.4 1 209 +4.5 1 105 BMW Group 10 +4.1 1 766 -8.8 1 695 Fiat Group 9 +4.2 2 489 -0.7 2 388 Renault-Nissan 8 +8.7 3 242 +3.3 2 983 Honda 7 +2.7 3 375 +0.6 3 286 PSA Peugeot-Citröen 6 +8.3 4 719 -4.1 4 356 DailerChrysler 5 -0.6 4 984 -1.2 5 016 Volkswagen 4 +0.9 6 798 -3.4 6 736 Ford 3 +10.8 7 518 +10.0 6 783 Toyota 2 +1.8 8 241 -3.8 8 093 General Motors 1 % of change 2004 % of change 2003 OEM
    13. 13. The top brands of the world <ul><li>In the year 2004 first time Porsche and Audi become to the 100 most valuable brands of the world (Ranking Interbrand Company) </li></ul>In millions of US Dollar --- 3 288 3 686 Audi 79 (81 / ---) --- 3 646 3 777 Porsche 74 (74 / ---) 6 938 6 410 5 617 Volkswagen 56 (48 / 42) … 17 066 14 475 13 159 Ford 22 (19 / 14) 15 625 14 874 15 788 Honda 19 (18 / 18) 15 106 15 886 17 126 BMW 16 (17 / 19) … 21 371 21 331 20 006 Mercedes 11 (11 / 10) 20 784 22 673 24 837 Toyota 9 (9 / 11) … 51 767 53 791 53 376 IBM 3 (3 / 3) 65 174 61 372 59 941 Microsoft 2 (2 / 2) 70 453 67 394 67 525 Coca Cola 1 (1 / 1) VALUE 2003 VALUE 2004 VALUE 2005 BRAND PLACE 2005
    14. 14. Agenda <ul><li>Organizational </li></ul><ul><ul><li>Targets of the course </li></ul></ul><ul><ul><li>Expectations of participants </li></ul></ul><ul><li>Production Systems in the Automotive Industry </li></ul><ul><ul><li>Challenges of the market </li></ul></ul><ul><ul><li>Development of Production System </li></ul></ul><ul><ul><li>Characteristics of Toyota Production System </li></ul></ul><ul><ul><li>BREAK </li></ul></ul><ul><li>Mercedes Benz Production System </li></ul><ul><ul><li>Basics </li></ul></ul><ul><ul><li>Principles of Just In Time </li></ul></ul><ul><ul><li>Examples </li></ul></ul>
    15. 15. Method of implementation production systems The focus of production systems is to define the methods which help to reach the target
    16. 16. Historical development of production systems 1900 1950 1990 2000 MIT-study: Comparison of Production Methods (catchword “lean”), Industrial companies in Europe and USA were startled. New: Consistent implementation of Integrated production systems Success by continuity? No effective great success Because of missing basic principles Continuous Improvement (plus specific “ western elements”) Dr. Shigeo Shingo Frederick Taylor Europe and USA Taylorism (mass production) Japan Toyota Production System Development First attempt Taiichi Ohno Henry Ford
    17. 17. Historical development of production systems This study was published in 1990 in the USA. Everybody was startled … The term “ Lean Production ” was born. Later it was developed to “ Lean Management ”. Lean Production was often connected with dismissal. In many companies the real sense of Lean Production was not understood.
    18. 18. Development of Production Systems 1902 Sakati Toyoda First application of automatic production stop (quality problems) 1945 Kiirdirio Toyoda Development of Just in Time philosophy, reducing set-up Time. 1960 Kiirdirio Toyoda Development of quality, visual management, standards, stability, implementation principles of JIT. 1995 Production systems of supplier and another OEMs (MB, Chrysler, Ford, Audi, Skoda …) 1940 Taichi Ohno Implementation of “standardized worksheets”. 1956 Development of Toyota Production System Just in Time (e.g. Pull, Kanban) 2000 Continuous “development” and introduction of Adapted Production Systems. JAPAN EUROPE USA 1982 NUMMI* Joint-Venture GM-Toyota First implementation of the principles of Lean Management in USA. * New United Motor Manufacturing Inc.
    19. 19. Development of Production Systems © M. Gaston Cedillo (2001)
    20. 20. Development of Production Systems © M. Gaston Cedillo (2001)
    21. 21. Definition of production system <ul><li>How would </li></ul><ul><li>you describe a production system? </li></ul>
    22. 22. Definition of production system Toyota Production System is an integrated production philosophy, which has the objective, to work with the existing equipment, materials and staff so efficient as possible. The target of Toyota Production Systems (TPS) is to reduce … … systematically, durable and totally. MUDA = waste MU DA
    23. 23. Definition of production systems Description of processes, methods and rules in plant Production System Basis for continuous improvement of products and production processes Basis order for plant Basis for education and promotion of employees Standards which can be continually improved Instruction for Employees and Managers, How to work Basis for daily work
    24. 24. Method for implementing production systems What can you see? What can’t you see … easily? <ul><li>Results: </li></ul><ul><li>Sales price </li></ul><ul><li>Brand </li></ul><ul><li>Delivery time </li></ul><ul><li>Service </li></ul><ul><li>Production lead time </li></ul><ul><li>Development speed </li></ul><ul><li>Production quality </li></ul><ul><li>Networking capabilities </li></ul>COMPETITIVENESS Iceberg analogy
    25. 25. Method for implementing production systems What can you see? What can’t you see … easily? S = Safety Q = Quality D = Delivery C = Cost E = Employees <ul><li>Just In Time </li></ul><ul><li>Robust Processes </li></ul><ul><li>Standardization </li></ul><ul><li>Working Structures </li></ul><ul><li>Improvement Process </li></ul>Black Box
    26. 26. Conditions of a successful implementation <ul><li>The implementation of a Production System is not a technical or economical challenge, but PSYCHOLOGICAL . </li></ul><ul><li>The main task of the Top Management is to explain the importance of the system continuously and credibly … and to be a shining example. </li></ul>
    27. 27. Five guiding ideas Five guiding ideas Proactive Thinking Future actions are designed Reasoned and foresighted. Economic Thinking Prevention of any kind of inefficient use of resources, operate economically. Potential Thinking Development and usage of all available resources. Sensitive Thinking Detection of the environment through all available senses to react adaptable. Holistic Thinking Consideration of the effect on the whole lot.
    28. 28. Agenda <ul><li>Organizational </li></ul><ul><ul><li>Targets of the course </li></ul></ul><ul><ul><li>Expectations of participants </li></ul></ul><ul><li>Production Systems in the Automotive Industry </li></ul><ul><ul><li>Challenges of the market </li></ul></ul><ul><ul><li>Development of Production System </li></ul></ul><ul><ul><li>Characteristics of Toyota Production System </li></ul></ul><ul><ul><li>BREAK </li></ul></ul><ul><li>Mercedes Benz Production System </li></ul><ul><ul><li>Basics </li></ul></ul><ul><ul><li>Principles of Just In Time </li></ul></ul><ul><ul><li>Examples </li></ul></ul>
    29. 29. Principles of Toyota Production System (TPS) Stability (processes, human resources) Confidence between employees and management) Employees satisfaction <ul><li>Just In Time </li></ul><ul><li>Pull-System </li></ul><ul><li>Continuous flow </li></ul><ul><li>Clock cycle </li></ul><ul><li>Smoothing Production </li></ul><ul><li>Jidohka </li></ul><ul><li>Autonomation* </li></ul><ul><li>Andon </li></ul><ul><li>Poka Yoke** </li></ul><ul><li>Standards </li></ul>* Automatic processes ** Manual processes Customer orientation Quality Costs Delivery
    30. 30. Principles of Toyota Production System (TPS) Think Globally Act Locally Distributor Dealer TQM Manufacturing plant Supplier GLO-cal
    31. 31. Vision and target of TPS TPS improves … S = Safety Q = Quality D = Delivery C = Cost E = Employees (motivation) … and reduces or eliminates Waste (muda) Inflexibility Invariability Q uality C osts D elivery Process control
    32. 32. What is WASTE?
    33. 33. As a result Demand of clients Daily demand (average) = Production target Time Quantity
    34. 34. Basic rules for Production system (6s) Seiri Seiton Seiso Separating out no longer required part Clearing required parts Cleaning (Cleaning means checking / testing)
    35. 35. Basic rules for Production system (6s) Seiketsu Shitsuke Shukan Maintaining ordered situation Discipline (Repeating instructions, standardize the improvement) Acclimatization (practical repetition of what was learned))
    36. 36. Basic rules for Production system (6s)
    37. 37. Pointing out waste on team map <ul><li>Definition of categories on team map </li></ul><ul><li>Value adding: - Process time </li></ul><ul><li>( green card ) - Screwing </li></ul><ul><li>- Assembling </li></ul><ul><li>- … </li></ul><ul><li>No value adding: - Positioning </li></ul><ul><li>( yellow card ) - Fixing </li></ul><ul><li>- Switching / Preparing </li></ul><ul><li>- Engaging </li></ul><ul><li>- Reading codes/FIS-document </li></ul><ul><li>- Calibrating clips </li></ul><ul><li>Inefficient use of resources: - Walking distances </li></ul><ul><li>( red card ) - Putting down/picking up (tools/box/parts/…) </li></ul><ul><li>- Changing of positions </li></ul><ul><li>- Boarding/Deboarding </li></ul><ul><li>- Handling (documentation) </li></ul><ul><li>- Examination </li></ul><ul><li>- Placing (parts/tools/ …) </li></ul><ul><li>- Removing adhesive </li></ul>Time scale Employee No. 1, 2, 3, 4, 5 …
    38. 38. Principles, subsystems and methods of a production system Q C D Targets Principles Systemic approach in “process flow” Methods <ul><li>Standardization </li></ul><ul><li>Perfection </li></ul><ul><li>Continuous improvement </li></ul><ul><li>Subsystems: </li></ul><ul><li>Just In Time (JIT) </li></ul><ul><li>Flexible Manpower System (FMS) </li></ul><ul><li>Total Productive Maintenance (TPM) </li></ul><ul><li>Kanban </li></ul><ul><li>Single Minute Exchange of Dies (SMED) </li></ul><ul><li>Statistical Processes Controlling (SPC) </li></ul>
    39. 39. Four principles of TPS Continuous Improvement <ul><li>Toyota’s way of solving problems </li></ul><ul><li>Learn the learning – managers are . instructors! </li></ul><ul><li>Implementation down to the lowest level </li></ul>Standardized Activities <ul><li>All activities – precise laid down in terms . of dimension, order, schedule and result </li></ul><ul><li>In responsibility by the worker </li></ul><ul><li>Basis for training and evaluation </li></ul>Standardized Relations <ul><li>Customer / Supplier relations </li></ul><ul><li>Precise roles and responsibilities </li></ul><ul><li>Span of control </li></ul><ul><li>Infrastructure including Andon, Q-Stop </li></ul><ul><li>Qualification matrix </li></ul>Standardized Processes <ul><li>Processes </li></ul><ul><li>Material flow </li></ul><ul><li>Product segmentation </li></ul><ul><li>One piece flow </li></ul>
    40. 40. Solving problems in nature
    41. 41. Toyota’s way of solving problems Improvement is like competitive sports <ul><li>Improvement should </li></ul><ul><li>Be practiced </li></ul><ul><li>Have a precise method </li></ul><ul><li>Be lived under extreme discipline </li></ul><ul><li>Be continuous </li></ul>
    42. 42. Problem solving 1 <ul><li>Solution oriented – focus process </li></ul>Traditional approach Toyota approach 4 + 3 = 4 + 3 = 7
    43. 43. Problem solving 2 <ul><li>Practical – fieldwork </li></ul>The plant is the classroom Managers are teachers
    44. 44. Problem solving 3 <ul><li>Uncomplicated, pragmatic and fast </li></ul>No more people No more money No more space
    45. 45. Problem solving 4 <ul><li>Accurate, find the reasons of a problem </li></ul><ul><li>Recognize the problem, start immediate measures, describe the problem clearly and analyze the causes. </li></ul><ul><li>Collect durable parking-measures, value, decide and implement them. </li></ul><ul><li>Check the measures effectiveness (control). </li></ul><ul><li>Define new standards. </li></ul><ul><li>Plan </li></ul><ul><ul><li>Describe the problem </li></ul></ul><ul><ul><li>Analyze the possible causes </li></ul></ul><ul><li>Do </li></ul><ul><ul><li>Collect and value measures </li></ul></ul><ul><ul><li>Decide the measures </li></ul></ul><ul><ul><li>Implement the measures </li></ul></ul><ul><li>Check </li></ul><ul><ul><li>Check the affectivity (effect control) </li></ul></ul><ul><li>Act </li></ul><ul><ul><li>If necessary: define new standards </li></ul></ul>
    46. 46. Problem solving 4 <ul><li>Example “fishbone diagram” (Ishikawa) </li></ul>Car doesn’t start Human Machine Method Material Environment Fuse burn through Distraction by music No Driver license Wrong key Not enough water Too old Battery empty Cable harness loose Automatic transmission not on “P” or “N” Mistake in manual Starter not OK No gas Forgot refuel No money Petrol-level Indicator faulty Start occurrence not correctly Too low temperature outside Garage door faulty Faulty isolation Car Not in garage
    47. 47. Problem solving 4 <ul><li>Method of the 5 “why?” </li></ul><ul><li>Deficient component – why? </li></ul><ul><li>Machine does not hold the allowance – why? </li></ul><ul><li>No time to instruct the staff – why? </li></ul><ul><li>High fluctuation – why? </li></ul><ul><li>Repetitive conditions of work – why? </li></ul><ul><li>Problem: Task sharing is to be improved. </li></ul><ul><li>Method of resolution: Change of the work organization. </li></ul>
    48. 48. A supply chain orientated business diagnostic Dyadic structure Supply chain structure Network structure Problem solving 5 Single business model Single business model Single business model Single business model Single business model Single business model Single business model
    49. 49. Problem solving 4 <ul><li>Quick scan mapping </li></ul>A Sample of Quick Scanned Companies in an Automotive Supply Network (Childerhouse, 2001)
    50. 50. The Major Steps in Conducting a Quick Scan Audit (Childerhouse et al, 1999) Identify a suitable supply chain business process Get buy in from the business champion <ul><li>Preliminary Presentation (Half a day, on site) </li></ul><ul><li>Identify product / issue questionnaires </li></ul><ul><li>Identify personnel for interview / Develop interview plan </li></ul><ul><li>Quick tour / Agree dates for feedback </li></ul><ul><li>Explain purpose / issue requests for data requirements </li></ul><ul><li>Conduct the Quick Scan Via 4 Data Collection Techniques </li></ul><ul><li>(2 days, on site) </li></ul><ul><li>Completing and collecting questionnaires </li></ul><ul><li>Process mapping / structured interviews </li></ul><ul><li>Data collection – Supply / Demand / Process & Control Uncertainties </li></ul><ul><li>Brainstorm initial findings and conduct a more detailed investigation via the 4 techniques </li></ul><ul><li>Analyzing the Findings (3 days) </li></ul><ul><li>Agree outline of the supply chain </li></ul><ul><li>Good / Bad first impressions </li></ul><ul><li>Quantify / Justify first impressions and debate </li></ul><ul><li>Identify additional data requirements and collect </li></ul><ul><li>Identify the key business cost drivers </li></ul><ul><li>Identify the major pain from bad points </li></ul><ul><li>Create a “Cause & Effect” diagram around the pain </li></ul><ul><li>Identify the root causes </li></ul><ul><li>Utilize the Best Practices Database to overcome root causes </li></ul><ul><li>Brainstorm the remaining problems </li></ul><ul><li>Identify improvement opportunities </li></ul><ul><li>Rank by EVA benefit / cost to implement / time to implemental </li></ul><ul><li>Select key points with most leverage </li></ul><ul><li>Feedback presentation (Half a day, On site) </li></ul><ul><li>Present findings to management & business champion </li></ul><ul><li>Initiate a round table discussion of findings </li></ul><ul><li>Develop an agreed action plan </li></ul>Write Up the Report (3 days)
    51. 51. Problem solving 5 <ul><li>Consequence </li></ul><ul><li>Basis for change management are “burning platforms”. </li></ul><ul><li>The necessity of the basic change should be seen evidently. </li></ul><ul><li>Management has to generate the change process. </li></ul>Buffer Inefficiencies Buffer Inefficiencies Buffer Inefficiencies - Stocks
    52. 52. Four principles of TPS Continuous Improvement <ul><li>Toyota’s way of solving problems </li></ul><ul><li>Learn the learning – managers are . instructors! </li></ul><ul><li>Implementation down to the lowest level </li></ul>Standardized Activities <ul><li>All activities – precise laid down in terms . of dimension, order, schedule and result </li></ul><ul><li>In responsibility by the worker </li></ul><ul><li>Basis for training and evaluation </li></ul>Standardized Relations <ul><li>Customer / Supplier relations </li></ul><ul><li>Precise roles and responsibilities </li></ul><ul><li>Span of control </li></ul><ul><li>Infrastructure including Andon, Q-Stop </li></ul><ul><li>Qualification matrix </li></ul>Standardized Processes <ul><li>Processes </li></ul><ul><li>Material flow </li></ul><ul><li>Product segmentation </li></ul><ul><li>One piece flow </li></ul>
    53. 53. Standards in daily life What about your next holidays with individual technical checks before departure. Your next business trip … Do you dream of this job?
    54. 54. Effects of standards to employees <ul><li>What negative points could you combine with “standard”? </li></ul><ul><ul><li>More routine </li></ul></ul><ul><ul><li>More monotony </li></ul></ul><ul><ul><li>More control </li></ul></ul><ul><ul><li>Incapacitation of employees </li></ul></ul><ul><ul><li>Reduce confidence </li></ul></ul><ul><ul><li>… </li></ul></ul><ul><li>What are the positive points of standards? </li></ul><ul><ul><li>Problems are immediately solved and they don’t move towards the clients </li></ul></ul><ul><ul><li>Standards are the best and safest way to do a task at a specific point of time </li></ul></ul><ul><ul><li>Standards make a product profitable (same look and feel, quality, function …) </li></ul></ul>If standards change on continuously way by the employees => at every point of time we would have best solutions for every process!
    55. 55. Conflict between standards and individualism <ul><li>PROCESSES </li></ul><ul><li>Robust processes </li></ul><ul><li>Simple methods </li></ul><ul><li>Rules </li></ul><ul><li>… </li></ul><ul><li>EMPLOYEES </li></ul><ul><li>Group work </li></ul><ul><li>Different education / Levels </li></ul><ul><li>Routine </li></ul><ul><li>… </li></ul>STANDARDS Production Systems give orientation and support to employees. Standards aren’t static rules, but they are adaptable to the context of a systematic process of problem solving. Standardized rules Free space
    56. 56. Documented activities Standardized process / Working Sheet
    57. 57. Four principles of TPS Continuous Improvement <ul><li>Toyota’s way of solving problems </li></ul><ul><li>Learn the learning – managers are . instructors! </li></ul><ul><li>Implementation down to the lowest level </li></ul>Standardized Activities <ul><li>All activities – precise laid down in terms . of dimension, order, schedule and result </li></ul><ul><li>In responsibility by the worker </li></ul><ul><li>Basis for training and evaluation </li></ul>Standardized Relations <ul><li>Customer / Supplier relations </li></ul><ul><li>Precise roles and responsibilities </li></ul><ul><li>Span of control </li></ul><ul><li>Infrastructure including Andon, Q-Stop </li></ul><ul><li>Qualification matrix </li></ul>Standardized Processes <ul><li>Processes </li></ul><ul><li>Material flow </li></ul><ul><li>Product segmentation </li></ul><ul><li>One piece flow </li></ul>
    58. 58. Standardized relations (1) (2) (3) <ul><li>Standardized relationship supplier – customer </li></ul><ul><ul><li>Delivery quantity, time, etc. (KPI) </li></ul></ul><ul><ul><li>Quality parts, information flow (EDI-standard) </li></ul></ul><ul><li>Standardized roles and responsibilities </li></ul><ul><ul><li>Guide roll (tasks, communication, development of employees) </li></ul></ul><ul><ul><li>Support functions (Service and maintenance, logistics, quality) </li></ul></ul><ul><li>Standardized service agreement / management by objective </li></ul><ul><ul><li>Target: Top Management => Team (review objectives every day, week, month, etc.) </li></ul></ul><ul><ul><li>Balanced and clearly verbalized </li></ul></ul>Supplier OEM
    59. 59. Standardized infrastructure, organization and connection <ul><li>Infrastructure </li></ul><ul><ul><li>Andon Board and Fixed Position Stop (Q-Alarm, Q-Stop) </li></ul></ul><ul><ul><li>Autonomation, Poka Yoke </li></ul></ul><ul><ul><li>Visual Standards </li></ul></ul><ul><ul><li>Supervised Buffer </li></ul></ul>
    60. 60. Standardized infrastructure, organization and connection <ul><li>Organization </li></ul><ul><ul><li>Continuous improvement process </li></ul></ul><ul><ul><li>Organization of continuous improvement process </li></ul></ul><ul><ul><li>Group size / Span of control </li></ul></ul>Senior Group Leader Team Leader Team Leader Team Leader Team 1 : 5 - 7 Group Leader
    61. 61. Standardized infrastructure, organization and connection <ul><li>Connection </li></ul><ul><ul><li>Tasks / responsibility Team Leader </li></ul></ul><ul><ul><li>Intention of organization </li></ul></ul><ul><ul><li>Qualifying Matrix </li></ul></ul>
    62. 62. Standardized infrastructure, organization and connection <ul><li>Tasks / responsibility Team Leader </li></ul><ul><ul><li>Reaction on Q-Alarm / Q-Stops </li></ul></ul><ul><ul><ul><li>Identification of problems </li></ul></ul></ul><ul><ul><ul><li>Support at critical station </li></ul></ul></ul><ul><ul><ul><li>Rework </li></ul></ul></ul><ul><ul><li>Support employees </li></ul></ul><ul><ul><ul><li>Define standard </li></ul></ul></ul><ul><ul><ul><li>Qualification </li></ul></ul></ul><ul><ul><ul><li>Substitute employee in the event of illness </li></ul></ul></ul><ul><ul><li>Moderation continuous improvement process </li></ul></ul><ul><ul><ul><li>Support solving problems </li></ul></ul></ul><ul><ul><ul><li>Statistic </li></ul></ul></ul>
    63. 63. Standardized infrastructure, organization and connection <ul><li>Intention of organization </li></ul><ul><ul><li>Line-balancing </li></ul></ul><ul><ul><li>Fast localization of problems </li></ul></ul><ul><ul><li>Fast and direct reacting on problems in the production process </li></ul></ul><ul><ul><li>Direct motivation of the team (support team dynamic) </li></ul></ul><ul><ul><li>Concentration of the tasks (“Junior” Manager at shop floor) </li></ul></ul>
    64. 64. Standardized infrastructure, organization and connection <ul><li>Qualifying matrix </li></ul><ul><ul><li>Dynamically </li></ul></ul><ul><ul><li>Competence orientated </li></ul></ul><ul><ul><li>Evaluated on base of standardized activities </li></ul></ul>Balboa, Rocky Garcia, Henry Wiseman, George Hammer, Peter Qualification Cost Qualification Cost 2006 2005 Name Qualifications Team : XXX
    65. 65. Four principles of TPS Continuous Improvement <ul><li>Toyota’s way of solving problems </li></ul><ul><li>Learn the learning – managers are . instructors! </li></ul><ul><li>Implementation down to the lowest level </li></ul>Standardized Activities <ul><li>All activities – precise laid down in terms . of dimension, order, schedule and result </li></ul><ul><li>In responsibility by the worker </li></ul><ul><li>Basis for training and evaluation </li></ul>Standardized Relations <ul><li>Customer / Supplier relations </li></ul><ul><li>Precise roles and responsibilities </li></ul><ul><li>Span of control </li></ul><ul><li>Infrastructure including Andon, Q-Stop </li></ul><ul><li>Qualification matrix </li></ul>Standardized Processes <ul><li>Processes </li></ul><ul><li>Material flow </li></ul><ul><li>Product segmentation </li></ul><ul><li>One piece flow </li></ul>
    66. 66. Standardized processes Layouts Layout in production <ul><li>Lot goes to the next machine with free </li></ul><ul><li>capacity </li></ul><ul><li>Error and source of error can be realized </li></ul><ul><li>in following processes </li></ul><ul><li>Product have a definite material flow </li></ul><ul><li>in one piece flow </li></ul><ul><li>Quality problems are identified </li></ul><ul><li>immediately </li></ul>Functional orientated A B C D Process orientated A B C
    67. 67. Standardized processes Different demands -> different processes Layout in production Number of pieces Time 1 2 3 4 5 6 4 employ 3 employ 1 2 3 4 5 6 2 employ 1 2 3 4 5 6 Number of pieces Number of employees 100 200 300 0 2 3 4
    68. 68. Standardized processes Different demands -> different processes Flexible Capacity System (FCS) Flexibility ! Number of pieces Time Number of employees Number of pieces 0 100 200 300 2 3 4 Normal production Overtime Extra shift work Work time account Outsourcing
    69. 69. Standardized processes Material flow Material flow and assembly logistics <ul><li>Optimum: One part in reach of 1.2 – 1.6m </li></ul><ul><li>Material provision on the line with an optimal ergonomic orientation </li></ul><ul><li>Employee is responsible for replenishment </li></ul><ul><li>Produce in smaller batches </li></ul><ul><li>Production potentially for inventory </li></ul>(a) (b) (3) (1) (2) Assembly line Supply area
    70. 70. Standardized processes Material flow Min. Log. part for worker => No need for action High Log. part for worker => No need for action Min. Log. Part for worker => No need for action If there’re many parts at station in the assembly line, optimize the cycle (one piece flow reducing variants) and / or reduce the size of boxes Example 1 Example 2 Example 3 4 parts, 12 square meter Conclusion 9 parts, 16 square meter 10 parts, 12 square meter
    71. 71. Process of implementation
    72. 72. Process of implementation <ul><li>Autonomous study groups (Toyota and supplier group) </li></ul><ul><li>Topic definition once a year supported by TPSC / OMCD </li></ul><ul><li>Based on management by objectives </li></ul><ul><li>Operational Management Consulting Division, founded by Dr. T. Ohno </li></ul><ul><li>Support and training of the leading TPS-Consultant </li></ul><ul><li>Management by objectives process supported by planning as well as </li></ul><ul><li>by implementation </li></ul><ul><li>Machine operator or team member change suggestion </li></ul><ul><li>Managed and coordinated by the team manager </li></ul><ul><li>The goals derived from Jishuken Plan are initiated from the team manager </li></ul><ul><li>Duration of 3 days to 3 months supported by consultant (TPSC / OMCD) </li></ul>Plant / Organization Team Jishuken OMCD / TSSC Quality circle Kaizen
    73. 73. Process of implementation TRANSITION LEAN 1. Performance gap identification 2. Build change capacity 3. Build performance system and performance organization 4. Mobilization and increase of the sharing force 5. Reception, expansion, refine
    74. 74. Agenda <ul><li>Organizational </li></ul><ul><ul><li>Targets of the course </li></ul></ul><ul><ul><li>Expectations of participants </li></ul></ul><ul><li>Production Systems in the Automotive Industry </li></ul><ul><ul><li>Challenges of the market </li></ul></ul><ul><ul><li>Development of Production System </li></ul></ul><ul><ul><li>Characteristics of Toyota Production System </li></ul></ul><ul><ul><li>BREAK </li></ul></ul><ul><li>Mercedes Benz Production System </li></ul><ul><ul><li>Basics </li></ul></ul><ul><ul><li>Principles of Just In Time </li></ul></ul><ul><ul><li>Examples </li></ul></ul>
    75. 75. Evolution of DaimlerChrysler Production System <ul><li>COS </li></ul><ul><li>RPS </li></ul><ul><li>MB USI </li></ul><ul><li>KVP-Toolbox </li></ul><ul><li>Etc. </li></ul>Old Production System Plant Unterürkheim Quality Management / Leadership Qualification Material supply Visualization Employment policy Safety, cleanness, organization/ order Planning of plant, assets and processes Standardized processes and techniques Support/ supervision of production facility and assets/equipment/ machines Protection of environment and employment NEW Production System Plant Unterürkheim
    76. 76. Connection between subsystems JUST IN TIME Production in plant Waste Standardization Work structures / Teamwork Quality and robust processes / products Continuous improvement
    77. 77. Mercedes-Benz Production System Structure Results Number of techniques Principle of production Sub-system Management / Leadership 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 2 1 3 4 5 Work structures / Compositions and Teamwork Standardization Quality and robust process / Products Just in Time Continuous improvement 12 3 6 8 5 8 2 8 12 4 2 4 6 2 10 12 10 24 14 10 92 Detailed MPS-Techniques and Tools S = Safety, Q = Quality, D = Delivery, C = Cost, E = Employees Participation / Cooperation & development of staff Clear tasks and roles Structures of Teamwork Job safety & environmental awareness Standardized processes and techniques Visual management Rapid identification of problems and problem solving Stable processes / Products & Preventive quality management Customer orientation (In house & external) Category of production Pull production Line production Pulse production Elimination of waste 92
    78. 78. Agenda <ul><li>Organizational </li></ul><ul><ul><li>Targets of the course </li></ul></ul><ul><ul><li>Expectations of participants </li></ul></ul><ul><li>Production Systems in the Automotive Industry </li></ul><ul><ul><li>Challenges of the market </li></ul></ul><ul><ul><li>Development of Production System </li></ul></ul><ul><ul><li>Characteristics of Toyota Production System </li></ul></ul><ul><ul><li>BREAK </li></ul></ul><ul><li>Mercedes Benz Production System </li></ul><ul><ul><li>Basics </li></ul></ul><ul><ul><li>Principles of Just In Time </li></ul></ul><ul><ul><li>Examples </li></ul></ul>
    79. 79. Principles of Just in Time (JIT) Production smoothing Pull production Continues flow manufacturing Cycle time production
    80. 80. Principles of Just in Time (JIT) Production smoothing Pull production Continues flow manufacturing Cycle time production
    81. 81. Principle of “Pearl Necklace” KLUG, Florian (2005). Synchronised automotive logistics: An optimal mix of pull and push principles in automotive supply networks. [On Line] http://www.bw.fh-muenchen.de Classical principle of control Allocation body to customer order at start body shop Principle of control “Pearl Necklace” Allocation variants in body shop and paint shop to customer order at the beginning of assembly line Body shop Paint shop Selector Assembly line Customized body shop production Order Mr. Miller - 32h + 8h - 8h + 4h Body shop Paint shop Selector Assembly line V6 V1 V2 V1 V2 V6 … … V6 V1 V2 V6 V1 V2 V2 V1 V6 Blue Yellow Red Order Mr. Miller Neutral body shop Production and painting
    82. 82. Principle of Pearl Necklace Assignment of parts and aggregates Sequence Fixed data X-10 X-5 Classical principle of control Principle of control “Pearl Necklace” OEM Powertrain Requirement Planning Body shop Paint shop Assembly line Supplier Planning Assembly Warehouse Daily volume Fixed data Shift volume Fixed data X-10 X-5 X-4 X-2 X OEM Powertrain Sequence Planning Body shop Paint shop Assembly line Supplier Planning Assembly Warehouse Sequence Fixed data X-4 X-2 X
    83. 83. Principle of Pearl Necklace Supply Plant Rastatt (mercedes A-Class) (700 cars = Approx. 16h) 40 engines kept in reserve 120 engines in sequence Assembly line 540 engines in sequence Trailer yard Fixed planning Body shop Paint shop Assembly line Final acceptance X X Sequence Fixed data Plant Rastatt Plant UT X-10 Planning Assembly line Sequencing
    84. 84. Principles of Just in Time (JIT) Production smoothing Pull production Continues flow manufacturing Cycle time production
    85. 85. Classical job shop production Job shop production Process A Process B Process C Process D Zz z Stocks
    86. 86. Characteristics of job shop production <ul><li>Funtional separation </li></ul><ul><li>Restricted knowledge of total process </li></ul><ul><li>Missing customer orientation </li></ul><ul><li>Only sub-optimizing </li></ul><ul><li>Production in high lots (because of efficiency of machines) </li></ul><ul><li>High stocks </li></ul><ul><li>No localization of failures </li></ul><ul><li>High standby time in process </li></ul>
    87. 87. Visual results of job shop production
    88. 88. Characteristics of JIT Logistics -1- <ul><li>Range of material at assembly station : 30 -120 minutes </li></ul><ul><li>“ Water Man” is responsible for </li></ul><ul><li>Time-phased delivery of material to line </li></ul><ul><li>Using “logistics trains” instead of forklifts </li></ul><ul><li>Inbound delivery based on timetable </li></ul><ul><li>Ship to Line delivery </li></ul><ul><li>(no stocks in the receiving area) </li></ul>
    89. 89. Characteristics of JIT Logistics -2- <ul><li>Picking in “supermarket”, if many variants </li></ul><ul><li>Delivery of variants in sequence </li></ul><ul><li>Replenishment by Kanban </li></ul><ul><li>Delivery of external parts by “Milk Run” </li></ul>
    90. 90. KANBAN 1. Customer orders demand to previous process 2. Previous process only if necessary Previous Process (supplier) Following Process (customer) <ul><li>Communication between </li></ul><ul><li>Customer and supplier: </li></ul><ul><li>Verbal: “More material” </li></ul><ul><li>Delivery of empties </li></ul><ul><li>Empty space </li></ul><ul><li>Kanban card </li></ul><ul><li>Information Technologies </li></ul>Different kind of communication Stocks
    91. 91. KANBAN <ul><li>Pull system example </li></ul>Customer Supplier Process A Raw Material Supermarket WIP Supermarket WIP Supermarket Finished Goods Supermarket Product Flow Kanban Signal Flow Process B Process C
    92. 92. KANBAN Pull system Customer Manufacturing plant Vehicle Assembly Supplier Supplier Supplier
    93. 93. KANBAN <ul><li>Cycle of Kanban cards </li></ul>Production control by principle of PULL Manufacturing (customer) Return of the card gives the information about the consumption Manufacturing (supplier) Buffer
    94. 94. KANBAN <ul><li>Signal Kanban </li></ul><ul><li>Kanban Racks </li></ul><ul><li>Kanban Post Office </li></ul>407 408 409 409 408 407
    95. 95. KANBAN + <ul><li>Kanban card </li></ul><ul><li>Barcode </li></ul><ul><li>Order material requirement by scanning </li></ul><ul><li>Transfer data to ERP - System </li></ul>
    96. 96. KANBAN <ul><li>Kanban board </li></ul>
    97. 97. KANBAN <ul><li>Electronic Kanban </li></ul>Buffer Manufacturing (customer) Manufacturing (supplier) Production order
    98. 98. KANBAN <ul><li>Impulse Control System </li></ul>SAP Parts list System for storage (SAP) Assembly System Control (MAS2) Reading point X Reading point X+1 … Installation e.g. oil pump Minimum stock level Control system <ul><li>Evaluation usage of parts </li></ul><ul><li>Move order </li></ul><ul><li>Disbursement order </li></ul>Aknowledgement receiving assembly
    99. 99. KANBAN <ul><li>Light signal as Kanban </li></ul>
    100. 100. KANBAN Route train Synchronized processes in one piece flow reduces stocks Substitution big boxes for small boxes which are shipped to line by route trains
    101. 101. Principles of Just in Time (JIT) Production smoothing Pull production Continues flow manufacturing Cycle time production
    102. 102. Typical types of assembly lines 1. Square 2. U-Form 3. Line 4. Special form Starting point Optimize set-up costs and man, material flow Optimize set-up costs and conveyor technique Without work holder With work holder Requirement Rough planning Detailed planning Realizing
    103. 103. Design production Focus on production subjects / objects Focus on production subjects: Operation of many machines Unready products Machine 1 (to turn) A B C D Machine 2 (to mill) Machine 3 (to drill) Threading Ready products Focus on production objects: Operation of many processes Unready products Machine 1 (to turn) A B C D Machine 2 (to mill) Machine 3 (to drill) Threading Ready products
    104. 104. Design production Classical <ul><li>Process starts are far from </li></ul><ul><li>other machines. Mostly </li></ul><ul><li>workers are needed </li></ul><ul><li>everywhere. </li></ul><ul><li>Results: </li></ul><ul><li>Under-utilization </li></ul><ul><li>Producing stocks (turrets) </li></ul>
    105. 105. Design production <ul><li>Development from Line Production to U-Line </li></ul>Advantage U-Line <ul><li>Ensuring FIFO </li></ul><ul><li>One-Piece-Flow </li></ul><ul><li>Optimal material flow and </li></ul><ul><li>rapid response time </li></ul><ul><li>Material to be produced and </li></ul><ul><li>maintenance machines from </li></ul><ul><li>outside of line </li></ul>
    106. 106. Design production <ul><li>Machine are placed counter </li></ul><ul><li>clockwise </li></ul><ul><li>The way back is because of </li></ul><ul><li>the U-form short </li></ul><ul><li>One person works in process </li></ul><ul><li>Production in cycle time </li></ul><ul><li>Standardized buffer </li></ul><ul><li>Work in one piece flow </li></ul>
    107. 107. Design production U-Line Before: Processing the waves “block likely” with buffer wagons (20 side shafts/wagon)
    108. 108. Effects on the material provision Previous state Characteristics: * Two boxes at the line * High stocks at the line * Much space Big carrier (GLT) Assembly line
    109. 109. Effects on the material provision New state Reading points: in – and outbound supermarket Range on line approx. 2h – reaction time for logistics Set definition Line Supermarket Samall carrier ( KLT ) Commission from supermarket into empty container
    110. 110. Single-level warehousing <ul><li>Standards Inbound Logistics (IBL) -1- </li></ul>Conventional Warehouse Consignment Warehouse / Supplier Logistics Center Supplier Warehouse Warehouse OEM Supplier Warehouse OEM
    111. 111. Single-level warehousing <ul><li>Standards Inbound Logistics (IBL) -2- </li></ul>Direct Supply (JIT) Direct supply in Sequence (JIS) FAVORITES Supplier OEM Supplier OEM
    112. 112. Types of strategic logistics Coordination Delivery Time Quality of Service Order Fulfillment Cost Cost LEAN (Reduction of waste) Synchronization Order Fulfillment Delivery Time Service Level Cost AGIL KEY PERFORMANCE INDEX ELEMENTS TYPE
    113. 113. Strategic Logistics Assembly to Order ACTIVIDADES DE VALOR AGREGADO Make to Stock Buy to Order Design to Order Pull Make to Order Push Pull Ansamblado Venta Consumidor Enfoque clave Push Push Pull Push Pull Pull Diseño Suministro de componentes Almacenamiento de productos Producción
    114. 114. Strategic logistics Supply chain classification based on product type and product life cycle
    115. 115. Define necessary handling steps in the supply chain Basics for Material Planning … … … … FOCUS <ul><li>Which handling steps are necessary? </li></ul><ul><li>How should be the material flow to the assembly line at optimal cost? </li></ul><ul><li>(material in the package, which is ordered by production) </li></ul>Additional question: Which package should be used at the work station? Assembly Line Supplier Transport Receiving Unloading & buffering Transport Buffering Picking Log. Time for worker Manuf. Return of empties Transport empties RA Supermarket Yellow Line WS Supply Chain External Parts
    116. 116. Principles of Just in Time (JIT) Production smoothing Pull production Continues flow manufacturing Cycle time production
    117. 117. Definition of cycle time Cycle time is the frequency in which a product has to be manufactured in order to fulfill the demand of the customer <ul><li>* Only times for organizational tasks considered: </li></ul><ul><ul><li>Coffe break </li></ul></ul><ul><ul><li>Midday break </li></ul></ul><ul><ul><li>Team meeting </li></ul></ul><ul><ul><li>Cleaning workstation </li></ul></ul>Total customer demand Total available time * Cycle time = 9 660 minutes per week Example: 1 000 units per week The cycle time doesn’t consider down time (as brake downs, setup time)
    118. 118. Cycle time There are three main areas of application for the cycle time 1. Base for the employee correlation 2. Output control 3. Tool and capacity planning Final shift report User Time User Time Tact 1 – 2 12 – 1 11 – 12 10 – 11 9 – 10 8 – 9 7 – 8 6 – 7 Estimated Actual Time A B C A B C
    119. 119. Cycle time Customer demad decreases Cycle time increases If the cycle time changes, job content also have to be reallocated in order to keep the waste to a minimum Customer demand increases Cycle time decreases <ul><li>Increase of available time </li></ul><ul><li>Increase of capabilities </li></ul><ul><li>Retained labor productivity </li></ul><ul><li>Reallocation of job content </li></ul>Course of instruction for the user and flexibility
    120. 120. Cycle time Cycle time has to change as customer demand changes <ul><li>Customer demand can fluctuate because of the following reasons: </li></ul><ul><li>Seasonal products </li></ul><ul><li>Lack of planning and communication </li></ul><ul><li>… </li></ul>It would be a realistic trade-off to define the cycle time for about one month on base of an average customer demand Cycle time Customer demand
    121. 121. Cycle time Bullwhip effect Increase across a single business Smart design reduces bullwhip
    122. 122. Thank You ! Discussion … Further Questions ?
    123. 123. Dr. Miguel Gaston Cedillo Campos <ul><li>Researcher in Logistics & </li></ul><ul><li>Supply Chain Management </li></ul><ul><li>Mail: [email_address] </li></ul><ul><li>Web: http://gastoncedillo.com </li></ul>

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