Lean and Agile Enterprise How to get fitter and faster ! © The Delos Partnership 2004

Customers demand… Higher Quality Faster Response Greater Variety Lower Cost Tighter measurements © The Delos Partnership 2004

Customers demand ? Higher Quality Faster Response Greater Variety Lower Cost Tighter measurements Customer Service Department Warehouses of Inventory Large Product range Far East Manufacturing facility Ever higher levels of internal efficiency and more PPV © The Delos Partnership 2004

Today’s Value ? © The Delos Partnership 2004 Time is money... Time is waste...

© The Delos Partnership 2004 Before After Assembly time: -47% W.I.P.: -99% Lead time: -99% Floor space: -40% Lean example: oil cooler cell

Total supply chain costs © The Delos Partnership 2004 Physical = Production + Distribution + Storage Costs Costs Marketability = Obsolescence + Lost Sales + Sub-optimum Costs Costs - stockout Pricing - competition

Seeing the potential… © The Delos Partnership 2004 Lean and Agile Intro 7 Waste Variability Inflexibility (Volume and Mix)

The Value Chain © The Delos Partnership 2004 Retail Outlet Retail Outlet Consumer Customer ? Customer Distribution Customer Distribution Europe Americas Far East Europe Our Company Suppliers Transport GOODS CASH Shareholders/Stakeholders

People Values TraditionalNowFuture Process problems Not my jobOwnershipAccountability Management Style SuperviseFacilitator/ Team Leader Coach Working Style IndividualTeamEmpowered Teams Training and Education Non-existentLuxuryNecessity KnowledgeIgnorantUnderstandsExpert Attitude to People LiabilityCostAsset © The Delos Partnership 2004

Challenge Tradition FactorHistoricalNowFuture DeliveryPromiseRequiredNeed SuppliersAdversariesPartnersSeamless QualityAcceptable6 sigmaZero defects ScheduleForgetFollowAdhere InventoryAssetLiabilityZero MaintenanceRemedialPreventEliminated ComplexityNormalReducedEliminated TeamworkRareCIT’sConstant PeopleFollowersThinkersLeaders © The Delos Partnership 2004

Behavioural problem © The Delos Partnership 2004 Lean and Agile Intro 11 If you measure me rationally I will behave rationally But if you measure me irrationally I will behave irrationally If you measure me rationally I will behave rationally But if you measure me irrationally I will behave irrationally

Lean and Agile supply 12 © The Delos Partnership 2004 Draw the current state The “current state” shows what is really happening right now It identifies wasteful steps and provides opportunity to visualise and plan a “future state ”

METAL SUPPLIER PRODUCTION PLANNING SAP Manugistics Weekly Production Plan Daily Despatch Schedule 500 ft coils 18 days 2 per month WELDINGPRESSING STAMPING Weekly Fax 6 week Forecast day Forecasts EPE = 2 weeks C/O 1-2hrs OEE = 61% C/T 1 second EPE 1 week C/O 0.3-2hrs OEE = 57% C/T 3 seconds EPE 1 week C/O 0.3-1hrs OEE = 76% C/T 10 seconds EPE 1 week C/O N/A Capacity 70% C/T 440 seconds ASSEMBLY TEST EPE 1 week C/O 10 mins Capacity 35% C/T 34 seconds DESPATCH CUSTOMER 1 second 4 days 2 hours 30 days Current State Map Production Lead Time = 60 days Value Added Time = 8 min 8 sec Daily Order 1 x Daily 3 seconds 10 seconds 440 seconds 4 days 34 seconds 5 variants 156 variants

METAL SUPPLIER PRODUCTION PLANNING Daily Despatch Schedule 500 ft coils Vendor Managed Inventory STAMP + PRESS day Forecasts EPE shift C/O 10 mins OEE = 77% C/T 6 seconds EPE shift C/O N/A Capacity 70% C/T 300 seconds WELD + ASSY 1 EPE As required C/O N/A Capacity 55% C/T 164 seconds CUSTOMER 6 hours Future State Map Production Lead Time = 1.3 days Value Added Time = 7 min 50 s Daily Order 1 x Daily 6 seconds 300 seconds 1 day 164 seconds 5 variants156 variants 5 variants ASSY 2 + TEST + DESPATCH

Lean and Agile supply 15 © The Delos Partnership 2004 Extended mapping Joint mapping - with suppliers and customers - will help to identify the potential and opportunities for new ways of working  e.g. collaborative planning and supply chain re-designs.

Lean and Agile supply 16 © The Delos Partnership 2004 Steps for a current state map 1.Identify the family 2.Pick which component to follow 3.Complete a quick walk through to identify the main processes 4.Fill in process information 5.Document customer information 6.Document supplier information 7.Establish information flow (how does each process know what to make next?)

© The Delos Partnership 2004 The Seven Forms of Waste 1.Over production 2.Motion 3.Transportation 4.Waiting 5.Over Processing 6.Storage/Inventory 7.Defects

Lean and Agile supply 18 © The Delos Partnership 2004 The 5S’s 1.Sort out 2.Simplify 3.Sweep 4.Standardise 5.Self discipline

© The Delos Partnership 2004 OEE DEMAND TIME DEFECTS ‘MISSING MINUTES’ & SLOW RUNNING EQUIPMENT STOPPAGES & BREAKDOWNS UTILISATION AVAILABILITY QUALITY 24/7

Lean and Agile supply 20 © The Delos Partnership 2004 Pillars of TPM OEE IMPROVEMENT AUTONOMOUS MAINTENANCE PLANNED MAINTENANCE SKILLS DEVELOPMENT MAINTENANCE PREVENTION STANDARDISATION 5S (WORKPLACE ORGANISATION) RELIABILITY AND AVAILABILITY