Welcome

1. Welcome Supply Management and Lean Manufacturing

2. Supply Chain Management ref: “Designing and Managing the Supply Chain”, Simchi-Levi et al., 2000. Chapters 1, 4 and 8.

3. Supply Chain Management The term supply chain was first introduced by Houlihan (1984), and has since been defined in different ways: • "A supply chain is a system through which organizations deliver their products and services to their customers." (Poirier and Reiter, 1996). • "A supply chain is an integrated process wherein raw materials are manufactured into final products, then delivered to customers (via distribution, retail, or both)." (Benita, 1999).

4. A Simple Supply Chain Model

5. Complexity of Supply Chains Likely to be complex due to: • The large mesh of inter-linked suppliers, manufacturers and distributors. • The fact that each participant (supplier, manufacturer and distributor) may be a member of a large number of other supply chains. • The dynamic nature of the supply chain.

6. Supply Chains • It takes a cereal carton more than three months to move from the factory to supermarkets (Simchi-Levi et al. 2000). • In 1997 supply chain issues in the United States consumed 10 percent of the U.S. Gross National Product (GNP) • Lead time reduction of increasing importance: • reduced inventory levels • reduced obsolescence • improved response to customers

7. Excel/Atwood Douglas & Lomason Collins & Aikman Specialty Screw Textileather Canadian Fab Supply Chain Example General Motors Chrysler Ford Johnson Controls Hardware Suppliers Soft Trim Suppliers Lear Favesa R. R. Spring Rockford Spring Dudek & Bock Spring Milliken & Company Technotrim

8. Supply Chains Chrysler Cost in the Average New Vehicle? 30% Chrysler 70% Supply Chain Trend

9. Lean Manufacturing

10. Lean Guiding Principles VALUE VALUE STREAM PERFECTION PULL FLOW

11. Types of Waste Waiting- Time spent waiting on items required to complete task (i.e., Information, material, supplies, etc.) Unnecessary Motion- Any motion that does not add value to product or service. Processing- Effort and time spent processing information or material that is not adding value Inventory- Material or information that is waiting for processing Moving items- Transporting information or material by mail, cart, conveyor, or foot travel Making too much -Producing more information or product than the ultimate customer requires Fixing defects- Time spent repairing or reworking material or information

12. Lean Toolkit Lean Tools • Workload Leveling • Flow Processes • Pull Systems • Standard Work • Visual Controls • Error Proofing

13. Lean Toolkit Workload Leveling • Enables the process to run as efficiently as possible, using the minimum number of people • Maximizes the utilization of each person • Makes a process more predictable

14. Lean Toolkit Workload Leveling Won’t Make Plan Lots Of Free Time TT TT Worker A B C D Worker A B C D Only 22 Sec. More To Save 25% On Labor Poor Balance TT 100 TT 100 Worker A B C D Worker A B C D

15. Lean Toolkit Establishing Flow and Pull • A basic principle of Lean is to make value flow as quickly as possible through the Value Stream • Must have quick decisions, made at the lowest possible level • Eliminate approvals • Must have information available to the “new” decision makers

16. Lean Toolkit Flow Processes • All operations within a process should be rearranged in a sequential fashion with minimal distance between operations • Isolated functional activities should be co-located as much as possible with the rest of the process activities • Office layouts should be process/activity oriented versus functional • Isolated machines should be moved and incorporated into the line as much as possible • Flow assumes that material/products will not be stagnant at any point and time from receiving to the shipping of finished products • The intent of continuous flow is to increase the velocity of and make the cycle time predictable

17. Lean Toolkit Pull Systems • A Pull System is a way to manage the Lean Enterprise System • Pull System vs. Push System • A Pull System occurs when the previous process produces only as many products that are consumed by the following process • A Push System produces just as many units as it can and sends them to the next process whether the next process needs them or not • Pull Systems minimize waste • Strive for Single-Piece Flow, to minimize wait times & queues

18. Lean Toolkit Pull Vs. Push PROCESS B PROCESS A PROCESS C PROCESS A PROCESS B PROCESS C

19. This pile of system requirements goes through the process like a rat through a snake. This engineer could be helping with requirements definition Pull Vs. Push in Product Development Design/ Code Requirements Definition Verification Requirements Definition Design/ Code Verification

20. Lean Toolkit Standard Work • Represents the current best, easiest, and safest way to do a job • Documented processes constantly change as employees make continuous improvements • Preserves know-how and expertise • Provides a way to measure performance • Provides a means for preventing recurrence of errors and minimizing variability • Improves schedule compliance, customer satisfaction, productivity, and cost competitiveness

21. Lean Toolkit Elements of Standard Work • Takt Time (Available Work Time / Daily Demand) • Work Sequence (Sequence of Tasks performed) • Standard WIP (The minimum number of parts in a process that are required for work to progress) Note: To apply these in the office environment, the process must be: • Observable • Repetitive

22. Lean Toolkit Visual Control & Visual Management • Visual Controls are means, devices, or mechanisms that help us manage our processes in order to: • Use Visual Controls to: • Make the problems, abnormalities, or deviation from standards visible to everyone so that corrective action can be taken • Display the process status in an easy to see format • Provide instruction • Convey information • Provide immediate feedback to the team

23. Lean Toolkit Visual Control - The Concept • “How we are doing” at a glance • What we are working on • The level of performance • Providing information immediately to people working in the area • Promotes communication Visual Management - The Concept “The ability to manage a system or process by metrics that are visual to the workplace”

24. Lean Toolkit Error Proofing • Error Proofing is a way to prevent an error from being created or potentially passed to the next operation of a process • Allows people to concentrate on their work without paying unnecessary attention to preventing mistakes • Error proofing techniques include: • Use of different colored paper for different processes • Colored files/binders • Checklists • Log sheets • Screen prompts

25. Lean Toolkit Early Detection of Errors Lowers Costs Defects Own Next End of Final End user’s Found at: Process Process Line Inspection Hand Cost to $1 $10 $100 $1000 $10000 the Company: Impact to Very Minor Rework/ Significant Warranty the Company: Minor Delay Reschedule Rework Reputation Delay Lost Market

26. Lean Toolkit Successive Checks Process B Problems 1. 2. Process A Problems 1. 2. 3. Process B Process A Check A Check B Process C SW Engineer A SW Engineer B SW Engineer C

27. Lean Toolkit Successive Checks in Product Development Engineers work with producers and customers of their processes in order to ensure a quality result. Also work with other experts and key end consumers to ensure that critical tasks can be accomplished. Verification, for example. Software Design Requirements Definition Peer Review Peer Review Code Software Engineer Systems Engineer Prevent problems at end of development cycle. Verification Engineer Systems Participation … Software Team Member Review Participation

28. Lean Toolkit Successful Lean Tool Implementations • Travel Expense Reporting • Single-piece flow, process standardization, error proofing • 50% reduction in cycle time • 48% productivity improvement • 60% reduction in travel distance