A case study on volatile demand

Transcription

1 A case study on volatile demand Connecting craftsmanship, QRM and Lean at Eijkelkamp Agrisearch Equipment BV Stef Tiggeloven,

2 Contents Introduction Current state Problem definition Leagility concept Steps to implement Lectoraat Lean / WCP 2

3 Introduction Lectoraat Lean / WCP 3

4 Introduction Eijkelkamp Agrisearch Equipment (EAE) system supplier of a wide range of equipment for soil and water research. Founded 1911 auger range: Small but important No sample, no... Strong focus on efficiency Mix of ERP and kanban-system Lectoraat Lean / WCP 4

5 Current state Starting point of project Lectoraat Lean / WCP 5

6 FTMS/Productrange 1 product family (+ 1 family related but not in project) 155 SKU's in total. 32 varieties of forged bodies. 1-2 FTE are directly involved (total 2-3 in related family) yearly demand 8000 assemblies Low risk of changes Relatively low costs of inventory Lectoraat Lean / WCP 6

7 MCT map 13 steps, 62 days leadtime Lectoraat Lean / WCP 7

8 Value stream map Lectoraat Lean / WCP 8

9 Classification of demand Variability of the demand size The coefficient of variation (CV), CV^2 =squared (standard deviation/average). Average demand interval The average number of time periods between successive demands (total number of periods devidedby the number of time periods with demand) Lectoraat Lean / WCP 9

10 Classification of demand source: Syntetos et al Lectoraat Lean / WCP 10

11 Demand characterisation EAE Source: author, based on Syntetos et al, 2005 Lectoraat Lean / WCP 11

12 Aggregated demand Aggregated demand full range of augers, , weekly demand total numbers of SKU sold year-week Total per week 4 week average 12 week average Lectoraat Lean / WCP 12

13 Demand analysis at EAE Lumpiness" of demand Forecasting is not possible with simple statistical tools. Also on semi aggregated level, demand is still Erratic or Lumpy. Inventory Management System therefore must have high responsiveness to meet demand. Aggregated level of full product range is relatively constant (compared to single SKU s). Total workload and capacity are within manageable limits. Current buffers not sufficient for required service level Lectoraat Lean / WCP 13

14 Problem definition 1. Demand of single SKU s is volatile and can not be forecasted with common methods. 2. Level of WIP is high, long lead times of subs, up to 9 weeks. 3. Planning and scheduling of processes is complex takes 2 days per week (!) daily changes in schedule Chaos ( flexotic?), disturbes rest of manufacturing 4. Service level is unsatisfactory (not measured for range, response time estimated 1-2 weeks 5. Workload is unbalanced and difficult to anticipate on (one week overtime, next week idle) Lectoraat Lean / WCP 14

15 Aim of the project (according to EAE) 1. Simplify and reduce planning and control effort on product range, 2. Service level of 95-99%: next day delivery, for as many products as possible (99%?) 3. Level demand to constant workload, make required 4. Reduce WIP and stocks (more: reduce the complixity). Lectoraat Lean / WCP 15

16 Leagility source: Christopher and Towill, 2001 Lectoraat Lean / WCP 16

17 Surge/base Demand Separation source: Christopher and Towill, 2001 Lectoraat Lean / WCP 17

18 Leagility 80/20 not an option, keep full range in same proces Decoupling point Product range is modular, parts are recurrent DP can be moved to assemble (weld) to order (#SKU from 155 to appr60) Surge base demand separation can level demand to capacity. Lectoraat Lean / WCP 18

19 Steps to implement (1) Move the customer decoupling point option 2 (Cristopherand Towill, 2001)to "partially create and deliver to order Create single kanbancontrolled buffers of heads, with sufficient safety levels Assemble products daily on customer sequence. Lectoraat Lean / WCP 19

20 Steps to implement (2) Give assembly of customer orders the highest priority in the group, option 3 (Cristopherand Towill, 2001), Spend rest of capacity on adding to buffers of heads. Add capacity when buffers are below safety level. Direct customer orders direct from sales to production Lectoraat Lean / WCP 20

21 Steps to implement (3) Work towards a situation with minimal setup times to be able to make every full end product on customer order Lectoraat Lean / WCP 21

22 Conclusion/summary QRM was starting point of analysis Smoothing of demand covered by leagility concept Next steps: Implement cell High level planning, POLCA(?): Planning and control simplified Various routings and combining of processteps to reduce leadtime Reduce setup times and batch (kanban) quantity to... Reduce buffers to minimal capacity buffer Lectoraat Lean / WCP 22

23 Lectoraat Lean / WCP 23

24 SKU classification Glenday Sieve Colour code Cumulative % of Sales Cumulative % of SKU range green 50% 6% yellow 95% 50% blue 99% 70% red last 1% last 30% Source: Glenday(2005) Lectoraat Lean / WCP 24

25 SKU classification SKU Cum percentage Type Percentage Sales number Sales Combi boorlich. 7 40,4% 40,4% Combi boorlich. 5 16,2% 56,6% Combi boorlich. 4 6,1% 62,7% Klei boorlich. 7 5,8% 68,5% Grind boorlich. 7 5,1% 73,6% Riverside boorlich. 7 4,1% 77,7% Combi boorlich. 10 4,0% 81,7% Zand boorlich. 7 2,9% 84,6% Riverside boorlich. 10 2,3% 86,9% Combi boorlich. 15 2,0% 88,9% Zachte klei boorlich. 7 1,9% 90,7% Grofzand boorlich. 7 1,7% 92,4% Combi boorlich. 6 1,5% 93,9% Combi boorlich. 12 1,2% 95,1% Klei boorlich. 10 1,22% 96,4% Grind boorlich. 10 0,75% 97,1% Combi boorlich. 8 0,68% 97,8% Zand boorlich. 10 0,59% 98,4% Riverside boorlich. 5 0,42% 98,8% Zachte klei boorlich. 10 0,27% 99,1% Klei boorlich. 8 0,25% 99,3% Combi boorlich. 20 0,22% 99,5% Grofzand boorlich. 10 0,20% 99,7% Riverside boorlich. 8 0,16% 99,9% Riverside boorlich. 15 0,10% 100,0% Combi boorlich. 4,5 0,0064% 100,0% Combi boorlichaam linksdr. 10 0,0024% 100,0% Combi boorlichaam linksdr. 7 0,0012% 100,0% Grind boorlich. 15 0,0000% 100,0% Cum percentage of product range 7% of SKU = 56,6% cum sales 48% of SKU = 95% cum sales 66% of SKU = 99% cum sales last 34% SKU = 1 % of sales Lectoraat Lean / WCP 25

26 Inventory management strategies (IMS) Inventory Optimisation high service level is key factor: a well defined buffer in the process is acceptable as long as it pull based (products are relatively low priced). reduction of WIP: use inventory to facilitate aspects 2 and 3. Reduce WIP to only one stage Lectoraat Lean / WCP 26

27 Inventory management strategies (IMS) Production and Scheduling Reduction in planning and control: costs are relatively high (17 hours per week) and non value adding. Group in manufacturing should be "self-managing" Capacity Management Balanced workload: Variability in total aggregated demand seems relatively low (appendix 2) Craftsmanship of forgers is not exchangeable Lectoraat Lean / WCP 27

28 EPEC Lean perspective: Glenday Sieve results Green: Optimize to one stream Yellow: standardize,add to green (or add to:) Blue: separate from green/yellow Red: eliminate? Pricing? Lectoraat Lean / WCP 28

29 Safety stocks Veiligheidsvoorraad: Voorraad bovenop afzet Meest eenvoudige benadering, bij wekelijkse bestelling: Vraag+ k x st.devvraag Betrouwbaarheid K (sigma) 95% 1,65 sigma 98% 2,06 sigma 99% 2,33 sigma Lectoraat Lean / WCP 29

30 Safety stocks Required safety stock Cum percentage Average 2013 Cum percentage Average Average per week 2013 Artikelnummer dim Omschrijving Groep Current stock 99% Saldo stock st.dev Totaal combi 7 Combi boorlich ,42% 46,2553% 63,792 48, Totaal combi 5 Combi boorlich ,18% 15,8575% 25,528 46, Totaal combi 10 Combi boorlich ,99% 6,8250% 6,302 4, Totaal combi 12 Combi boorlich ,22% 1,4648% 1,925 3, Totaal combi 15 Combi boorlich ,97% 2,7976% 3,113 3, Totaal combi 20 Combi boorlich ,22% 0,4725% 0,340 0, Totaal combi 4 Combi boorlich ,13% 5,0621% 9,679 9, Totaal combi 45 Combi boorlich. 4, ,00% 0,1309% 0,000 0, Totaal combi 6 Combi boorlich ,48% 2,4293% 2,340 2, Totaal combi 8 Combi boorlich ,68% 1,7823% 1,075 1, Totaal klei 10 Klei boorlich ,22% 1,7399% 1,925 3, Totaal klei 7 Klei boorlich ,79% 7,5713% 9,132 8, Totaal klei 8 Klei boorlich ,25% 0,6240% 0,396 0, Totaal links 10 Combi boorlichaam linksdr ,00% 0,0012% 0,000 0, Totaal links 7 Combi boorlichaam linksdr ,00% 0,0024% 0,000 0, Totaal z klei 10 Zachte klei boorlich ,27% 0,3502% 0,434 0, Totaal z klei 7 Zachte klei boorlich ,85% 1,7811% 2,925 2, Totaal zand 10 Zand boorlich ,59% 1,2261% 0,925 1, Totaal zand 7 Zand boorlich ,87% 4,3206% 4,528 3, Totaal grind 10 Grind boorlich ,75% 1,0904% 1,189 3, Totaal grind 15 Grind boorlich ,00% 0,0061% 0,000 0, Totaal grind 7 Grind boorlich ,06% 6,5233% 7,981 10, Totaal grofzand 10 Grofzand boorlich ,20% 0,3792% 0,321 0, Totaal grofzand 7 Grofzand boorlich ,72% 2,1882% 2,717 2, Totaal riv 10 Riverside boorlich ,34% 2,8654% 3,698 3, Totaal riv 15 Riverside boorlich ,10% 0,0642% 0,151 0, Totaal riv 5 Riverside boorlich ,42% 0,6821% 0,660 1, Totaal riv 7 Riverside boorlich ,11% 6,4852% 6,491 3, Totaal riv 8 Riverside boorlich ,16% 0,3465% 0,245 0,989 Totaal 553, , ,00% 157, ,273 Lectoraat Lean / WCP 30