Lean Manufacturing Strategic Initiative Guidebook

Transcription

1 Lean Manufacturing Strategic Initiative Guidebook Working Group Chair: Ganesh Wadawadigi, Ph. D. SAP Contributors: - Chad Vincent, Baxter - Charlie Gifford, 21 st Century Manufacturing - Conrad Leiva, ibaset - Ganesh Wadawadigi, SAP - John Dezelme, Independent - John Smith, Ease Inc. - Nancy Glenn, Independent - Robert Quinlan, GE Healthcare - Stephanie Green, Valent Group - Tom Knight, Invistics North American Plant-to-Enterprise Conference September 21-23, Orlando, FL

2 Definition Lean Manufacturing principles anchor on customer value and continually seek to identify and eliminate non-value added activities in the production processes. Lean synchronizes and sequences these processes to customer demand by creating a smooth flow of material using pull based replenishment. Further, by creating a visual and standardized work environment, relevant and timely information provided to employees empowers them to rapidly diagnose and resolve issues thus improving their productivity, raising quality standards, and lowering production costs. Business value in increased manufacturing efficiency gained with Lean Manufacturing lies in higher inventory turns, lower lead times and improved customer service levels. Lean is a journey, and use of appropriate technology and business applications is essential to sustain and scale the initiative not only within an enterprise but to extend the benefits to the supplier network.

3 Lean is a Journey

4 Three Pillars of Lean

5 Process: Manufacturing Styles High Mix High Volume Project Job Shop Line Flow/Batch Assembly Line Continuous Examples Satellites Commercial Printing Heavy Equipment Automotive Sugar Refinery Source: Integral Logistics Management: Operations and Supply Chain Management in Comprehensive Value-Added Networks, Paul Schönsleben

6 Process: Comparing High-Volume and High-Mix Manufacturing Characteristic High Volume, Repetitive e.g., Toyota High Mix Demand Volume Product mix Utilization Changeovers Equipment Quality Time frame for product changes Stable High Low Low (3rd shift free) Short, infrequent Reliable Consistent Long (2+ years) Variable Variable High High Long, frequent Unreliable Inconsistent Short

7 Extending TPS to Address High-Mix Lean Techniques Extended operations value chain Value streams Organization Performance measures High Volume Stable, high-volume, make-to-stock processes Dedicated cells for similar products Dedicated people for each cell Visual line of sight metrics like Heijunka boards High Mix High-variety, make-to-order or engineer-to-order processes Flow paths through shared equipment Focused factories aligned to flow paths Flow path metrics leveraging enterprise software Bottlenecks and capacity planning Fixed bottlenecks & rules of thumb to dedicate capacity Shifting bottlenecks & optimization of capacity buffers Inventory optimization Pull scheduling Lot sizing Rules of thumb to slowly lower water levels Part-specific Kanban Rules of thumb like EPEI Optimization of inventory buffers using operations research Part-generic techniques like CONWIP Optimization of lot sizes and/or campaign sizes

8 Information: Role of Technology? Real-time data collection and actionable insights through visibility Internal linkages to adjacent and enterprise business processes External linkages to supplier ecosystem Flexibility to rapidly adapt to changing business conditions

9 How can Technology be Leveraged?

10 Making a Case for ROI Focus on shareholder value: Believable financial metrics Accurate evidence from Mfg. Operations metrics to financial metrics Top-line metrics expected are: Return on Investment (ROI) Payback Period Net Present Value (NPV) Internal Rate of Return (IRR) Modified IRR Total Cost of Ownership (TCO) Tie each to the 3 Basic Operations Metrics using Tangible Benefits

11 Aligning to COO s Goals 1. Increase revenue with Throughput Tied to top Business Drivers Time- To-Market & To-Volume 2. Decrease Inventory and Operational expenditures Tied to top Business Drivers Tied to reduced CAPEX Reduce Labor & Material Expense 3. Reduce Operating Risk ROI, fines, shutdowns, safety claims, project failure

12 Quantifiable Benefits Direct Materials: Waste: Mfg. Productivity: Quality Inspections: Facility Cost: Admin Productivity: Revenue: Maintenance: Reduce: Rejects and WIP Inventory Reduce: Waste Disposal Cost Increase: Data Collection, Throughput and Root Cause Analysis Capability Reduce: Rejects, Rework, Retest and Downtime Reduce: Data Collection and Compliance Audits Reduce: Safety Stock, Energy, Space Cost Reduce: Return Processing, Handling, Write-offs, Warranty Claims & Contract Concessions Increase: Market Share, Price Premium, Capacity Accelerate: NPI Reduce: Planned and Unplanned Downtime Benefit Calculations Based on Resource Optimization & Reduction: Labor, Material, Equipment, Space, Energy

13 Next Steps Taking the Guidebook to Completion Provide feedback Become a contributing member of the Working Group Additional case studies that exemplify benefits and showcase lessons learned in your Lean journey