Supplier Development project Tools for supplier development Inspiration for tools to be used in workshops

Supplier Development project 2 Value stream mapping and the seven wastes

Supplier Development project The five principles of Lean 3 1. Specify value from the customers’ perspective 2. Map the value stream to understand value and non-value added steps 3. Flow the work through the processes in the value stream 4. Schedule the work based on customer pull 5. Strive for perfection through continuous improvement and waste elimination

Supplier Development project The seven types of waste Overproduction Production of more and/or earlier than demanded by the customer. Operator and/or equipment waits for materials and tools Waiting Unnecessary operator motion due to layout. Motion Unnecessary processing to compensate for weaknesses other places, e.g. test and control. Processing Inventory ties up capital, space and time and presents a risk of defect goods. Inventory Unnecessary transportation due to poor layout. Transportation Waste of time, resources and materials. Defects

Supplier Development project IndustryWeek benchmark25 quantile50 quantile75 quantile90 quantile Finished-product first-pass yield90%95%98%99% Scrap and rework cost as % of sales5%2%1%0.50% Customer lead time, order to shipment30 days14 days5 days2 days On-time delivery rate90%95%98%99% Machine downtime (% of sched. uptime)10%5%2%1% Total inventory turns (per year) Raw materials inventory turns Work-in-process inventory turns Finished goods inventory turns Productivity (USD 1000 per employee)USD 108USD 161USD 266USD 500 Benchmark data Focus on own plant Include the entire value chain

Supplier Development project Value stream mapping method – step by step 6 Press Weld #1 Weld #2Assembly 1Assembly 2Shipping Korsør assembly plant Svendborg steel Step 1: Processes in the value chain

Supplier Development project Value stream mapping method – step by step O/T = 10 min OP = 100% C/T = 39 sec O/T = 10 min OP = 80% C/T = 46 sec O/T = Ø OP = 100% C/T = 62 sec O/T = Ø OP = 100% C/T = 1 sec OP = 85% O/T = 1 hour C/T = 40 sec Press Weld #1 Weld #2Assembly 1Assembly 2Shipping Korsør assembly plant Svendborg steel 18,400 units per month -12,000 V -6,400 H Boxes = 20 units 2 shifts Step 2: Data boxes for processes

Supplier Development project Value stream mapping method – step by step Shipping C/T = 1 sec OP = 85% O/T = 1 hour Press 1 O/T = 10 min OP = 100% C/T = 39 sec Weld #1 1 O/T = 10 min OP = 80% C/T = 46 sec Weld #2 1 O/T = Ø OP = 100% C/T = 62 sec Assembly 1 1 O/T = Ø OP = 100% C/T = 40 sec Assembly 2 1 Korsør assembly plant Svendborg steel 18,400 units per month -12,000 V -6,400 H Boxes = 20 units 2 shifts Step 3: Transportation and inventories 2x week COIL 5 DAYS L 4600 V 2400 H L 1100 V 600 H L 1600 V 850 H L 1200 V 640 H L 2700V 1440 H L 1x daily

Supplier Development project Value stream mapping method – step by step Shipping C/T = 1 sec OP = 85% O/T = 1 hour Press 1 O/T = 10 min OP = 100% C/T = 39 sec Weld #1 1 O/T = 10 min OP = 80% C/T = 46 sec Weld #2 1 O/T = Ø OP = 100% C/T = 62 sec Assembly 1 1 O/T = Ø OP = 100% C/T = 40 sec Assembly 2 1 Korsør assembly plant Svendborg steel 18,400 units per month -12,000 V -6,400 H Boxes = 20 units 2 shifts Step 4: Information flow 2x week COIL 5 DAYS L 4600 V 2400 H L 1100 V 600 H L 1600 V 850 H L 1200 V 640 H L 2700 V 1440 H L 1x daily Production management MRP 90/60/30-day forecast Daily orders 6-week forecast Weekly fax 920 units per day Week plan Daily orders

Supplier Development project Value stream mapping method – step by step Shipping C/T = 1 sec OP = 85% O/T = 1 hour Press 1 O/T = 10 min OP = 100% C/T = 39 sec Weld #1 1 O/T = 10 min OP = 80% C/T = 46 sec Weld #2 1 O/T = Ø OP = 100% C/T = 62 sec Assembly 1 1 O/T = Ø OP = 100% C/T = 40 sec Assembly 2 1 Korsør assembly plant Svendborg steel 18,400 units per month -12,000 V -6,400 H Boxes = 20 units 2 shifts Step 5: Lead time and value time 2x week COIL 5 DAYS L 4600 V 2400 H L 1100 V 600 H L 1600 V 850 H L 1200 V 640 H L 2700 V 1440 H L 1x daily Production management MRP 90/60/30-day forecast Daily orders 6-week forecast Weekly fax 920 units per day Week plan Daily orders 1 sec39 sec 7.6 days 46 sec 1.8 days 62 sec 2.7 days 40 sec 2.0 days 4.5 days Lead time 23.6 days Process time 188 sec 5 days

Supplier Development project Future situation – some good advice 11 What is takt time? Is the production for orders or supermarket? Where can we use continuous flow? Where will we need to use supermarket pull systems? Where in the production process do we initiate the production? How do we level the mix in the pacemaker process? How much of the work is initiated and removed by the pacemaker? Which changes must be made? Which improvements must be made? Which process improvements are necessary? (e.g. running time, changeover, training)

Supplier Development project Expanded value stream mapping method – Step by step 12 CustomerOEMCompanySupplier Raw material supplier Cross- dock Step 1: Processes in the value chain

Supplier Development project Expanded value stream mapping method – Step by step 13 CustomerOEMCompanySupplier Raw material supplier Cross- dock Step 2: Data boxes for processes RV = 10 d VIA = 8 d FV = 1 d EPE = 2 d RV = 32 d VIA = 20 d FV = 8 d EPE = 2 d RV = 8 d VIA = 1 d FV = 3 d EPE = 1 d 10,000 items per unit

Supplier Development project Expanded value stream mapping method – Step by step 14 CustomerOEMCompanySupplier Raw material Supplier Cross- dock Step 3: Transportation RV = 10 d VIA = 8 d FV = 1 d EPE = 2 d RV = 32 d VIA = 20 d FV = 8 d EPE = 2 d RV = 8 d VIA = 1 d FV = 3 d EPE = 1 d Daily 1 x 4 – 8 weeks 180 km DP = 23% 11,070 items per month 500 m 1 x week 180 km DP = 83% 2,500 items per month 1 x week 180 km DP = 83% 2,500 items per month 10,000 items per unit 65 km DP = 100% 1 unit = 28 units

Supplier Development project Expanded value stream mapping method – Step by step 15 CustomerOEMCompanySupplier Raw material supplier Cross- dock Step 4: Information flow RV = 10 d VIA = 8 d FV = 1 d EPE = 2 d RV = 32 d VIA = 20 d FV = 8 d EPE = 2 d RV = 8 d VIA = 1 d FV = 3 d EPE = 1 d Daily 1 x 4 – 8 weeks 180 km DP = 23% 11,070 items per month 500 m 1 x week 180 km DP = 83% 2,500 items per month 1 x week 180 km DP = 83% 2,500 items per month 10,000 items per unit 65 km DP = 100% 1 unit = 28 units OEM planning Company planning Supplier Planning Daily call-off Weekly call-off Monthly call-off Weekly P-plan Daily plan Weekly confirmation Weekly confirmation Weekly plan Daily confirmation Daily plan

Supplier Development project Expanded value stream mapping method – Step by step 16 CustomerOEMCompanySupplier Raw material supplier Cross- dock Step 5: Lead time and value time RV = 10 d VIA = 8 d FV = 1 d EPE = 2 d RV = 32 d VIA = 20 d FV = 8 d EPE = 2 d RV = 8 d VIA = 1 d FV = 3 d EPE = 1 d Daily 1 x 4 – 8 weeks 180 km DP = 23% 11,070 items per month 500 m 1 x week 180 km DP = 83% 2,500 items per month 1 x week 180 km DP = 83% 2,500 items per month 10,000 items per unit 65 km DP = 100% 1 unit = 28 units OEM planning Company planning Supplier planning Daily call-off Weekly call-off Monthly call-off Weekly P-plan Daily plan Weekly confirmation Weekly confirmation Weekly plan Daily confirmation Daily plan 19 days 68 days 2 days 12 days 3 hours 2 days L/T = 104 days 1 plant = 99 d Transportation = 5 d Total steps = 59 VA steps = 10

Supplier Development project 17 Problem-solving

Supplier Development project Root cause analysis – 5 Whys The car cannot start Forgot to fill up the car No petrol station Ran out Hole in the fuel tank AHA – The countermeasure is to introduce a warning light in the car. No signal No petrol Engine failure Why?

Supplier Development project The Pareto chart 19 The method is used for identifying key factors and thus focus the effort. It is typically one of the first tools we use after the data collection process. The chart is named after the Italian economist Wilfredo Pareto, who studied the distribution of wealth in the population of Rome. Pareto observed that 80% of income was received by 20% of the population. Other examples – 80% of a company’s sales come from 20% of its products. – 80% of the total number of cases come from 20% of the case types. PARETO CHART Per cent TYPE OF ERROR A good idea to identify where to start the problem-solving is to categorise the causative conditions and arrange them in columns.

Supplier Development project Fishbone diagram 20 The fishbone diagram is a tool for root cause analysis. The diagram breaks down the problem into its various causes. MaterialsMan power MethodsMachines xxxx Problem The problem is displayed to the right – that is the head of the fish: Identify the root causes – write them down at the end of the fishbones. Causes can be traced back to root causes with one or more of the six Ms: man power, machines, methods, materials, measurements and management. Break down the root causes to the problem. Circle the most relevant causes. Find the connection between the root causes. Take countermeasures against the most important causes and casual relations.