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Jakarta, November 3rd, 2011
J.F. Ferry Yanto
LEAN SUPPLY CHAIN MANAGEMENT
[Toyota Indonesia Case]
Sharing on 6th Indonesia Supply Chain and Logistics Conference and Expo 2011 (ISCL) “New Era of Indonesia
Supply Chain and Logistics : Center of South East Asia
Safety awareness : I will not use hand phone during drive the car
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
OUTLINE
OVERVIEW [Lean in Toyota]◙
LEAN MANAGEMENT STRATEGY <simple Concept>◙
Sample of LEAN IMPLEMENTATION◙
SUMMARY◙
CHALLENGE LEAN MANAGEMENT IMPLEMENTATION◙
Items to be Considered for Lean Management Implementation◙
1/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
OVERVIEW
GOAL of LEAN ACTIVITY COST REDUCTIONPROFIT INCREASE◙
In TOYOTA CASE ,
No Cost Reduction , No Profit IncreaseNo Cost Reduction , No Profit Increase
as Basic Philosophy
(1) SALES PRICE = COST + PROFIT
(2) PROFIT = SALES PRICE - COST
Sales Price Determined by CUSTOMERS
PROFIT ( ) = SALES PRICE ( = ) – COST ( )
◙
2/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
OVERVIEW
TO REDUCE COST ELIMINATE WASTE ( MUDA )[ Reduce Non Added Value Work ]
MUDA OVER PRODUCTIONWAS THE WORST !
MUDA OVER PRODUCTIONWAS THE WORST !
(1) OVER PRODUCTION HIDE PROBLEMS and MAKE IT IMPOSSIBLE TO BE SOLVED
(-) Excess Man Power or machine capacity ?
COST DEPENDENT ON PRODUCTION METHODE
COST BREAKDOWN ANALYSIS
[ 7 TYPE OF MUDA]
◙
◙
Traditional Production
Operator B
Operator A
Finished Products
Operator C
Material
3/17
IMPACT TO COST INCREASE
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Continuous Flow Production
Material
Operator A Operator B Operator C
Finished
Products
Comparison as the traditional way production & continuous flow production:- √ Eliminate MUDA stock- √ Eliminate MUDA move- √ Save more space
OVERVIEW
In TOYOTA PRODUCTION SYSTEM : Always “CUSTOMER FIRST” Attitude
( Produce Good Products with Low Cost in a Timely Manner )
4/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
LEAN MANAGEMENT STRATEGY < SIMPLE CONCEPT >
Lead Time
TOTAL LEAD TIMETOTAL LEAD TIME
(1) SHORTENING LEAD TIME
(2) REDUCE INVENTORY LEVEL
● Simplifying the Process
● Continuous Flow ( One Piece Flow Process )
Lead Time
Lead Time
Lead Time
Lead Time
Lead Time
Lead Time
Lead Time
5/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
SAMPLE of LEAN IMPLEMENTATION
VENDOR MANUFACTURING DEALER CUSTOMER
Dealer PC store ProductionReceivingDock
Local Parts
Import Parts Customer
SUPPLY CHAIN IN MANUFACTURING
6/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
VENDOR MANUFACTURING DEALER CUSTOMER
Dealer PC store ProductionReceivingDock
Local Parts
Import Parts Customer
SAMPLE of LEAN IMPLEMENTATION
7/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Domestics Logistics / Conveyance
SINGLE DELIVERY
(A)
(B)
(C)
4x / day
8x / day
1x / day
4 Hour
2 Hour
16 Hour
Stock
(A)
(B)
(C)
12x / day
1Hour
Stock
1Hour
1Hour
MILK RUN
Running StockVariety
2 ~ 16 Hour1 HourStock Reduction
SAMPLE of LEAN IMPLEMENTATION
8/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Domestics Logistics / Conveyance
(D)
(E)
(F)
Plant 1
Plant 2
(D)
(E)
(F)
Plant 1
Plant 2
(D)
(E)
(F)
Plant 1
Plant 2
X-Dock
SINGLE DELIVERY
MILK RUN X-DOCK andINTERPLANT
MILK RUN , INTERPLANT
SAMPLE of LEAN IMPLEMENTATION
9/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
VENDOR MANUFACTURING DEALER CUSTOMER
Dealer PC store ProductionReceivingDock
Local Parts
Import Parts Customer
SAMPLE of LEAN IMPLEMENTATION
10/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Internal LogisticsSimplify Process Re-arrangement of Process
SAMPLE of LEAN IMPLEMENTATION
11/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Linked between internal and vendor&
STOCK REDUCTION USING KANBAN ( Kanban Cyclic )
SEQUENTIAL PARTS DELIVERY
etc.
SAMPLE of LEAN IMPLEMENTATION
12/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
VENDOR MANUFACTURING DEALER CUSTOMER
Dealer PC store ProductionReceivingDock
Local Parts
Import Parts Customer
SAMPLE of LEAN IMPLEMENTATION
13/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Process PRODUCTIVITY UP with elimination MUDA
► Others Example how to proceed ?Reduce MP with same output
MP Output
: 10λ: 200 Unit
: 9λ: 200 Unit
Yamazumi Chart MP Process Line #1
Unbalance Loading MP in Process Line #1
Problem :
Highest CT
Target Reduce
Process Analysis
Improvement / Kaizen
Achieve Target
SAMPLE of LEAN IMPLEMENTATION
14/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
SUMMARY
TOYOTA Indonesia utilize Toyota Production System as the base of manufacturing process, and Lean was blend inside of TPS as the focus point in TPS Basic Philosophy : Cost Awareness with Customer First and Quality as priority.
Currently, Continuous Improvement/Kaizen is implemented with PDCA cycle .
15/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
CHALLENGE LEAN MANAGEMENT IMPLEMENTATION
2nd TIER and 1st TIER are NOT CENTRALIZED
Base on Demography or Mapping Area
Ideal Condition : All in 1 Area
Good Infrastructure
MUTUAL UNDERSTANDING in BUSINESS (LEAN)
Gap of Knowledge
Development and Growth Together
COMMITMENT MANAGEMENT
Inconsistency Condition
Be a Coy Culture & Reflected in People Development
OTHERS
Government Regulation / Policy in IndustrialHow to link with Lean Concept
NEW CHALLENGE … … Flexible Market Demand
SAME DIRECTION / VISION ( Mutual Understanding )
Need Support From Government
WEAK In INDUSTRIAL RELATIONSHIP ( Coy VS Union )
1.
2.
3.5
.
4.
16/17
Optimizing Current
●
●
►
IT / SYSTEM Development Readiness Company Adopt ?
►
Less Localization ? Enhance Localization►
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Items to be Considered for Lean Management Implementation
Skillful RESOURCES is the key point
Supply Chain Management is one complete cycle and have synergy with one another
Strong COMMITMENT Management
• Knowledge and break through idea/creative idea
• Top Management concern and monitoring required
Business Relations [company with vendor]• Mutual understanding Spirit of Efficient Process
• Good relationship between company and employee (union)
Infrastructure [road condition, others facility etc]
• Good TEAM WORK
Force LOCALIZATION , as a big opportunity for reducing Lead time CR
17/17
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
POOR METHODE of CONVEYANCE and LOGISTICS
◙ Poor method results in stagnation
■ Basically : Conveyance is NON ADDED VALUE operations
Eliminating conveyance is the best way
■ If Conveyance is Needed,
Best possible way is to make JIT material flow
When it is needed
Only what is needed
In the amount needed
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
SUPPLY CHAIN
1. Grasp Current Situation Accurately ( Time and Volume Stagnation included )
2. Procure Parts from Supplier close by
(1) SUPPLY CHAIN MANAGEMENT BECOMING MORE IMPORTANT
(2) SIMPLIFY THE FLOWa) Macroscopic Flow
a) Microscopic Flow ( Demerits of Complicated Flow )
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Kanban Pulling System
SUPPLY CHAIN
REDUCE LOT SIZE
REDUCE LOT SIZE
1 Pieces Production No Stagnation Guarantee
Quality
Goal
Production Lead Time
= Processing Time + Lot Size
1 Hour 10 Lot = 10 days
1 Lot = 1 hours
Productivity Up
( Improve Chance )
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
production line
Logistics Kaizen 物流改善
(2) Reduction of Production Lead Time
Lead Time
(1)
Customer
• Leveled frequent supply 平準化した多回納入
S h ipping Customer
What is Needed to Reduce Inventory
23
INVENTORY
(3) Increase reliability of Production Line
(4) Reduce and Limit variety
(1) Logistic Kaizen
Leveled Frequent Delivery
Leveled Frequent Pick Up
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
SUPPLY CHAIN IN MANUFACTURING
VENDOR MANUFACTURING DEALER CUSTOMER
Dealer PC store ProductionReceivingDock
Local Parts
Import Parts Customer
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Long lead time conveyance/Logistics [Import parts]√Lot Based
AA AA-2
AA-1
10 Part No.a
bc
de
f
gh
ij
15 Part No. a
bc
de
f
gh
ij
k
lm
no
Order 1 lot = 10 Unit
√X-Dock
√PxP Based
abc
de
f
gh
ij
Part No. Order Box
1020
56
Minimum = 5 ~ 10 % reduction
1 box : 10 pcs
1 box : 12 pcs
LEAN MANAGEMENT STRATEGY
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
Delivery ~ Customers
Reduction the Stock with giving Flexibility for absorbing miss forecast
→ Monthly Firm to Monthly Firm with Weekly Order Change
LEAN MANAGEMENT STRATEGY
THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA
SUPPLY CHAIN IN MANUFACTURING
VENDOR MANUFACTURING DEALER CUSTOMER
Dealer PC store ProductionReceivingDock
Local Parts
Import Parts Customer