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Welcome
Supply Management
and
Lean Manufacturing
Supply Chain Management
ref: “Designing and Managing the Supply Chain”, Simchi-Levi et al., 2000. Chapters 1, 4 and 8.
Supply Chain ManagementThe 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).
A Simple Supply Chain Model
Supplier
Distribution
Manufacturing
Customer
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.
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
Supply Chain Example
Johnson Controls
Chrysler FordGeneralMotors
Canadian Fab
Douglas &Lomason
Technotrim
Milliken &Company
Lear Favesa
Collins & Aikman
Textileather
Soft Trim Suppliers
Dudek &Bock Spring
Rockford SpringR. R. Spring
Specialty Screw
Excel/Atwood
Hardware Suppliers
Supply Chains Chrysler
30%Chrysler
70%Supply Chain
Cost in the Average New Vehicle?
Trend
Lean Manufacturing
PERFECTION
PULL FLOW
VALUE STREAM
VALUE
Lean Guiding Principles
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 processingMoving items- Transporting information or material by mail, cart, conveyor, or foot travelMaking too much -Producing more information or product than the ultimate customer requiresFixing defects- Time spent repairing or reworking material or information
Lean Toolkit
• Workload Leveling• Flow Processes• Pull Systems• Standard Work• Visual Controls• Error Proofing
Lean Tools
• 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
Workload Leveling
Lean Toolkit
Workload Leveling
TT
Worker A B C D
Won’t Make Plan
Worker A B C D
Lots Of Free TimeTT
TT
Worker A B C D
Poor Balance
Worker A B C D
TT100 100
Only 22 Sec. More ToSave 25% On Labor
Lean Toolkit
• 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
Establishing Flow and Pull
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
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
Lean Toolkit
Pull Vs. PushPROCESS
CPROCESS
BPROCESS
A
PROCESSC
PROCESSB
PROCESSA
Lean Toolkit
Pull Vs. Push in Product DevelopmentVerificationDesign/
CodeRequirements
Definition
VerificationDesign/Code
RequirementsDefinition
This engineer could be helping with requirements definition
This pile of system requirements goes through the process like a rat through a snake.
• 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
Standard Work
Lean Toolkit
• 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
Elements of Standard Work
Lean Toolkit
• 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
Visual Control & Visual Management
Lean Toolkit
• “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 Control - The Concept
Visual Management - The Concept“The ability to manage a system or process by metrics
that are visual to the workplace”
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
Lean Toolkit
Early Detection of Errors Lowers Costs
Defects Own Next End of Final End user’sFound at: Process Process Line Inspection Hand
Cost to $1 $10 $100 $1000 $10000the Company:
Impact to Very Minor Rework/ Significant Warranty
the Company: Minor Delay Reschedule Rework Reputation Delay Lost Market
Lean Toolkit
Successive Checks
ProcessB
CheckA
CheckB
ProcessC
ProcessA
SW Engineer A SW Engineer B SW Engineer C
Process AProblems1.2.3.
Process BProblems1.2.
Lean Toolkit
Review Participation
Successive Checks in Product Development
SoftwareDesign
Peer Review
Peer Review CodeRequirements
Definition
Systems Engineer
Software Engineer
Software Team Member
Engineers work with producers and customers of their processes in order to ensure a quality result.
Systems Participation
Verification Engineer
…
Prevent problems at end of development cycle.
Also work with other experts and key end consumers to ensure that critical tasks can be accomplished. Verification, for example.
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
Lean Toolkit