Reid Lifting - QuickScan Feedback Session Friday 11 July 2014

Quick Scan Process Naim et el. (2002) A supply chain diagnostic methodology’

3 Objectives of the Quick Scan To understand the nature of demand To examine the operations of Reid Lifting To understand the challenges and constraints that affect Reid Lifting To identify opportunities to better satisfy demand: – Now – New Factory – Beyond Support for servitization project (KTP)

4 Focal Products Porta-Gantry RAPIDE – Annual volume – Variety – Stats Porta-Gantry 5000kg – Annual volume – Variety – Stats

Impact of the Supply Chain Decoupling Point Agile response Lean supply (Naylor, Naim and Berry, 1999)

6 Current State Value Stream Map Steve to add

7 Slide on demand for Rapide Explains why you can’t really do MTS effectively

Cheek Plates: A proxy for total demand

9 Lead times for Anodizing Explains why you can’t really do MTS effectively

10 Water jetting Batches of 560 Lead-times of 10 days to 1 month

11 Perceived Long Lead Times relative to customer requirements (Losing orders) Drilling Bottleneck Variety Management Complexity Issues Component Commonality Control Issues WIP Control Lead Times in Outsourced Processes Water Cutting Lead Times Anodizing Lead Times Batching Logic Lack of Visibility of WIP No SOPs Lacks Systematic Analysis of Product Families and Assemblies Lack of Formal Planning Cycle This there a Service Level Agreement? Active Management of Lead times ? Knowledge in experienced heads, rather than in documented / shared systems Lack of defined ‘to order’ and ‘to stock’ No Integrated IT Systems Inventory management process

12 On-time Delivery Performance (8 days late average) Variable Lead Times (see previous diagram) Lack of Visibility of Metric to all employees Target date is Subjective and Changes OTDP stats for manufactured parts All product lines treated the same Different ways of defining OTDP

13 Future state Value Stream Map 1

14 Assembly To Order Assembly is a pacemaker. What is assembled is tested, wrapped and placed in GO as a flow Spares and subassemblies could be MTS Cellular layout, short lead-time 3-4 hours Supermarket held before assembly. – Allows batching to occur upstream, downstream is single piece flow – Replenished by a Kanban system – Stock in supermarket sized to cover the demand variable over the supply lead-time Three options upstream from the supermarket – Kanban pull system – Another Pacemaker (cutting) – Outsource all upstream operations, buy in anodized components

15 Future state Value Stream Map 2

16 The good news Great products Relatively simple manufacturing process as a result of good product design Good working relationship with supply base Positive working environment Opportunities to offer short lead-times to customers for standard, off the book products Opportunities to increase capacity to do more custom work if increase design capacity New factory will create the prefect to make positive change

17 Some recommendations 1.Outsources the operations upstream from the pacemaker – Suppliers deliver cut, drilled, welded, anodizing components for assembly – Frees up the upstream activities for more custom work – Core skill the is ATO of products in short lead-time 2.Bottleneck management – Utilization of man and machine 3.Move to Assemble-to-Order for Porta-Gantry – See VSM

18 Some recommendations 4. Improved Layout – Move people to work, not work to people – Cellular layout around product families – Kitting of small components – Line-side delivery of larger components – Stores of common components 5. Look for product design-optimization opportunities – Exploit component commonality in the design of product portfolio – Eliminate out welding operations

19 Echelon Elimination Information Transparency Time Compression Control and Synchronisation Engineering / Product Short Term -Share WIP information within internal departments -More granularity in the OTDP -Optimise use of drilling bottleneck -Active management of lead times for outsourced processes -2 bin systems -Replenishment Kanban -Establish buffer stock policy for decoupling point -Review and define subassemblies Medium Term -Share forecasts with Aalco -’Tough’ Books -Use Heijunka boards to communicate production plan and to load level -MOPs for lead times of outsourced processes -Optimise push/pull elements of ATO system -SOPs for processes -Standardization of Part numbers -Review component commonalities -Product lines anodized as well as non anodized product range Long Term -Review subcontracting arrangements for delivered subassemblies (to focus on bespoke work) -Investment in integrated IT systems -New drilling equipment -Business system for all SOPs -Service level agreements for long lead time items

20 The pacemaker process The pacemaker process is the process that is controlled by the customers orders All processes upstream from the pacemaker are controlled with supermarkets (kanbans) You need to use a supermarket pull system (Kanban) where continuous flow is interrupted and upstream processes must still operate in batch mode In a factory, supermarkets should be located near the supplying process so that they can see customer usage

21 The pacemaker process Customers Supermarket Pull system Process 2Process 1Process 3Process 4 Pacemaker process Flow Customers Process 2Process1Process 3Process 4 Pacemaker process Flow

22 Supermarket pull systems (kanbans) Customer process goes to the supermarket and withdraws what it needs when it needs it Supplier process produces to replenish what was withdrawn Purpose. This controls production at the supplying process without trying to schedule. Process 2Process 1 Product Production KanbanWithdrawal Kanban Product