McGraw-Hill/Irwin Strategic Management, 10/e Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved. Ocena I ulepszanie sieci – Model SCOR Element 6

4-2 S. Chopra/Operations/Lean Ops2 Paradigm of Lean Operations: The Ideal Process Synchronization of all flows 1 x 1 production on demand defect free At lowest possible cost Waste = Gap between ideal and actual è How do we set up a system to continually reduce waste ?

4-3 S. Chopra/Operations/Lean Ops3 Toyota’s waste elimination in Operations 1. Overproduction 2. Waiting 3. Inessential handling 4. Non-value adding processing 5. Inventory in excess of immediate needs 6. Inessential motion 7. Correction necessitated by defects

4-4 S. Chopra/Operations/Lean Ops4 Implementation: Kanban Production Control Systems Kanban Processing center i Processing center i + 1 WI P Job

4-5 S. Chopra/Operations/Lean Ops5 Synchronize to reduce waste: Quality at the Source

4-6 S. Chopra/Operations/Lean Ops6 Synchronize to reduce waste: Just-In-Time operations JIT = have exactly what is needed, in the quantity it is needed, when it is needed, where it is needed. Reduce transfer batches Level load production Pull rather than push work Quality at source Set up cells

4-7 S. Chopra/Operations/Lean Ops7 Continuous Improvement: Kaizen Increase visibility of waste Targeted improvements – Active worker involvement – Time for experimentation – Supplier involvement Exploratory stress * Human infrastructure

4-8 S. Chopra/Operations/Lean Ops8 Information Distortion: The Bull Whip Effect What is the Bull-Whip Effect? – The variance of orders is greater than that of sales, and the distortion increases as one moves upstream. Causes Managerial Implications Source: “Information Distortion in a Supply Chain: The Bullwhip Effect”, Lee, Padmanabhan, and Whang, July 1996.

4-9 S. Chopra/Operations/Lean Ops9 Comparison of Cycle Times Before and After ECR DRY GROCERY CHAIN BEFORE ECR Supplier Warehouse 38 days Distributor Warehouse (Forward buy 9 days, Inventory turn 31 days) 40 days Retail Store 26 days 104 days Packing Line Consumer Purchase Packing Line Supplier Warehouse 27 days Distributor Warehouse 12 days Retail Store 22 days Consumer Purchase 61 days DRY GROCERY CHAIN AFTER ECR Source: Kurt Salmon Associates

4-10 S. Chopra/Operations/Lean Ops10 Payback on ECR Investment is Excellent Chain1.9 years Wholesalers2.2 years Manufacturers3.0 years Brokers3.0 years Retailer Investment Priorities Headquarter Systems: IS/IT Education/Training Category Management Discipline Business Process Re-engineering Store Level Systems Manufacturer Investment Priorities Information Technology Education/Training Customer Alliances Business Process Re-engineering Sales and Sales Promotion ECR Industry Update: Investments Source: Kurt Salmon Associates

4-11 Figure 3.6 Break-even chart A Source: Courtesy of Sri Srikanthan

4-12 Figure 3.7 Break-even chart B Source: Courtesy of Sri Srikanthan

4-13 Figure 3.8 Cost–time profile for poultry product Source: After Bernon et al., 2003, reprinted by permission of EIASM

4-14 Figure 3.10 Traditional and balanced priorities

4-15 Figure 3.11 Linking supply chain management to the balanced scoreboard Source: After Brewer and Speh, 2000

4-16 Table 3.6 Supply chain performance is tied to measurements that can be Benchmarked Source:

4-17 Table 3.7 Supply chain performance evaluated within the context of the competitive environment

4-18 Table 3.7 Supply chain performance evaluated within the context of the competitive environment (Continued)

4-19 1/3/ The End