BAE Lean 1 © The Delos Partnership 2004 Lean and Agile Applying the ideas to the Supply side

BAE Lean 2 © The Delos Partnership 2004 The Delos Model Vision Strategy Prioritisation Prioritisation Innovation Innovation Demand Support Supply Supply

BAE Lean 3 © The Delos Partnership 2004 Value stream mapping Map out the flows of order information and physical goods for a product family as they happen now Picture and plan future states that leave out wasted steps and introduce smooth ‘stream- like’ flow Plan how to increase the value offered to customers e.g. increased responsiveness, easier to use packaging

BAE Lean 4 © 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 Baan 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

BAE Lean 7 © 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.

BAE Lean 8 © The Delos Partnership 2004 Extended map – Potato snacks POTATO GROW WHSE Production Control SNACK COMPANY Production Control PROCESS COMPANY RDC RETAILER WHSE POTATO PROCESS SNACK PRODN. Production Control GROWING COMPANY SEED SUPPLIER

BAE Lean 9 © The Delos Partnership 2004 Potential… Manufacturing Value Adding Time = 1% Total Supply Chain Value Adding Time = 0.01% Supplier Factory Distributor Customer Not just more efficient, but more effective…  How can waste be removed?  How can value be increased?

BAE Lean 10 © The Delos Partnership 2004 Value Stream Mapping How to do it in your plant

BAE Lean 11 © 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?)

BAE Lean 12 © The Delos Partnership Identify the family What product family? Products that: Share the same designs, tools and fabrication/formulation processes Follow roughly the same fabrication/manufacturing/formulation steps

BAE Lean 13 © The Delos Partnership 2004 Homogenising Oil Maize flour Salt Flavouring Pack Multibag Fried Snack Frying Oil Look at the BOM and choose a key, long lead time component: 2. Pick which component to follow

BAE Lean 14 © The Delos Partnership Identify the main processes and how ‘deep’ and ‘long’ to look PACKINGFRY/FLAVOUR BULK/MIXIN G PRIMARY CASING HMB CASING PALLETISINGDESPATCH Decide how much detail and how broad a scope is appropriate for the time and resources available:

BAE Lean 15 © The Delos Partnership Fill in process information Typical information: Cycle time / Operation time Number of operators Working time (minus breaks) Process reliability (uptime) Scrap/Rework/Defect rate Changeover time and responsiveness (Every Part Every…) Number of product variations at each stage Production batch sizes Pack sizes

BAE Lean 16 © The Delos Partnership Document customer information 1.How many product variants are there? 2.What are the demand patterns? 3.What lead time do they require and would they like? 4.How and how often do they want deliveries? (include batch/pallet sizes, barcoding etc.) 5.What collaborative planning is there? 6.Are there problems, e.g. obsolescent stock or stock outs? 7.What other value is given, in addition to the product (e.g. advice, package sizes, responsiveness)? 8.What is their opinion of your product/service?

BAE Lean 17 © The Delos Partnership Document Supplier information 1.Lead times 2.Delivery frequency / flexibility / responsiveness 3.Batch sizes 4.Capacity 5.Scrap levels / quality problems 6.Delivery problems / reliability 7.Information requirements 8.What other value is given, in addition to the product (e.g. advice, package sizes, responsiveness)?

BAE Lean 18 © The Delos Partnership Establish the information flow How does each process know what to make next (does it use Works Orders or Kanbans or look and see what’s needed to make)?

BAE Lean 19 © The Delos Partnership 2004 Steps for a future state map 1.Reassess the Value Position 2.Reassess the Make / Buy position 3.How best to make and stock? 4.How best to schedule? 5.Improve process capability 6.Organisational issues

BAE Lean 20 © The Delos Partnership Reassess the Value Position Customer Intimacy Responsive and reliable deliveries Configurable product / service solutions Customer partnerships Service support Product Leadership Product / service reliability Premium product functionality Operational Excellence Cost effective products Source product from lowest cost area

BAE Lean 21 © The Delos Partnership 2004 Downstream vertical integration Raw materials supplier Component maker Assembly operation Final Assembly Customer Raw materials supplier Component maker Assembly operation Final Assemblyr Customer Upstream vertical integration Stages owned by the organisation 2. Reassess the Make / Buy position

BAE Lean 22 © The Delos Partnership How to make and stock? What is the production lead time compared to the customer required (or desired) lead time? Which planning model (MTS,ATO, MTO etc) is most appropriate? Where can improved collaboration over planning and schedules help reduce uncertainty and improve responsiveness? Should new planning systems (e.g. Vendor Managed Inventory or direct line feed) be used? How can value be increased along the chain at minimum cost? (e.g. pack sizes, technical advice)

BAE Lean 23 © The Delos Partnership Hewlett Packard - deskjet printers: power supply module, power cords & manual mfg D.C. Factory localisation D.C. mfg Distribution Centre localisation Postponed assembly

BAE Lean 24 © The Delos Partnership How to schedule? EPE… Should the process be batch build or build to customer Takt (or vary by process)? Takt time? (How do you understand customer demand?) Where can you flow? Where should you use supermarket-based pull? At what single point in the production chain do you trigger production? How much work do you release and take away? How do you level the production mix?

BAE Lean 25 © The Delos Partnership 2004 Takt Definition: “The stroke in keeping time” (Chambers’s Dictionary) The frequency at which parts should be produced in order to meet the customer’s requirements; the ‘heartbeat’ of the process. Takt Time = Available Working Time Number of pieces required Takt Time = Available Working Time Number of pieces required

BAE Lean 26 © The Delos Partnership 2004 Scheduling systems Make to Forecast (push) Make to Demand (pull) Kanban trigger signals CONWIP trigger signals MRP/Works Orders Supermarkets (and FIFO lanes) control production between points of flow without a written schedule Pacemaker process

BAE Lean 27 © The Delos Partnership Improve process capability Which problems (e.g. bottlenecks, inventory, long changeovers) to focus on improving ? Each step in the process should be: –Valuable – of value to the customer –Capable – right every time –Reliable – always able to run –Flexible – able to change mix and volume in line with demand –Adequate – with capacity to avoid bottlenecks

BAE Lean 28 © The Delos Partnership 2004 Valuable – of value to the customer 1.Waste elimination 2.Leadtime reduction (Flow)

© 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

BAE Lean 30 © The Delos Partnership 2004 CALL IT TWENTY? …22 TO BE ON THE SAFE SIDE! TEN PLEASE! Over - Production

BAE Lean 31 © The Delos Partnership 2004 Motion

BAE Lean 32 © The Delos Partnership 2004 Transportation

BAE Lean 33 © The Delos Partnership 2004 Waiting

BAE Lean 34 © The Delos Partnership 2004 Over-Processing How do you spell that?

BAE Lean 35 © The Delos Partnership 2004 £ £ £ £ £ £ £ £ £ £ £ £ Storage / Inventory

BAE Lean 36 © The Delos Partnership 2004 Defects / Rejects / Re-work

BAE Lean 37 © The Delos Partnership 2004 Throughput Efficiency (TE) =Work content x 100% Time in system 5 Weeks 15 hours total work Minimise lead times

BAE Lean 38 © The Delos Partnership 2004 Capable – Right every time Process quality: - Specialist Quality Control (e.g. 6  ) - Workplace Management (Genba Kanri)

BAE Lean 39 © The Delos Partnership 2004 What is 6 sigma? Simple: - Eliminate defects - Eliminate the opportunity for defects Complex - Vision - Measurement of performance - Philosophy - Tool for: > Customer focus > Breakthrough improvement > Continuous improvement > People involvement

BAE Lean 40 © The Delos Partnership 2004  PPM% Non Defective 2308, % 366, % 46, % % % Effectiveness

BAE Lean 41 © The Delos Partnership 2004 Workplace Management Real Operational Teamwork Standard Operating Procedures SOS / EOS Team Meetings Team Performance Targets The Role of the Supervisor

BAE Lean 42 © The Delos Partnership 2004 Reliable Always able to run Machine reliability: 5S TPM

BAE Lean 43 © The Delos Partnership 2004 The 5S’s 1.Sort out 2.Simplify 3.Sweep 4.Standardise 5.Self discipline

© The Delos Partnership 2004 Sort out Get rid of all unnecessary items

© The Delos Partnership 2004 Simplify A place for everything… and everything in its place.

© The Delos Partnership 2004 Wear on seals Pipes & cables: interference & wear, loose Worn, loose or missing fasteners & attachments Sweep: identify problems

BAE Lean 47 © The Delos Partnership 2004 Introduce standards, routines and training Standardise Set standards for what is acceptable Communicate the purpose and standards Be disciplined to maintain the standards Set a plan; who will do what, when, where and how

BAE Lean 48 © The Delos Partnership 2004 Maintain the disciplines through continued application Self Discipline

© The Delos Partnership 2004 Total Productive Maintenance TOTAL - Business wide PRODUCTIVE - Improve equipment performance MAINTENANCE - Machine systems support

BAE Lean 50 © The Delos Partnership 2004 Pillars of TPM OEE IMPROVEMENT AUTONOMOUS MAINTENANCE PLANNED MAINTENANCE SKILLS DEVELOPMENT MAINTENANCE PREVENTION STANDARDISATION 5S (WORKPLACE ORGANISATION) RELIABILITY AND AVAILABILITY

© The Delos Partnership 2004 Autonomous Maintenance ‘Maintenance is like looking after children. On a day to day basis you don’t require a doctor. In a factory your machines don’t require a technician. Production operators should think of their machines in the same way as a mother thinks of her children.’ Senior Japanese Maintenance Adviser, Nissan (U.K.) 1986.

BAE Lean 52 © The Delos Partnership 2004 Flexible – to change mix and volume on demand Machine flexibility (SMED) Manpower flexibility

BAE Lean 53 © The Delos Partnership 2004 Purpose 1.To increase equipment availability and efficiency through less machine downtime 2.To increase process flexibility and responsiveness through smaller batch sizes and reduced lead times 3.To increase capital productivity through reduced stock levels

BAE Lean 54 © The Delos Partnership 2004 V. Jones P. Daniels R. Hope B. Crosby Op. 1Op. 2Op. 3Op. 4 Manpower flexibility - ILUDO

BAE Lean 55 © The Delos Partnership 2004 Adequate – with capacity to avoid bottlenecks Machine Capacity (OEE)

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

BAE Lean 57 © The Delos Partnership 2004 Capacity mapping

BAE Lean 58 © The Delos Partnership 2004 Extended capacity mapping Capacity per week in equivalent units raw material supplier first tier supplier Time final ass paint sub ass press blank pickle cold roll hot roll service centre second tier supplier

BAE Lean 59 © The Delos Partnership 2004 Final Assembly “Final Assembly” Current Map of “Goods” flows T45 JSF Airbus Typhoon CentralLogisticsFacilityCentralLogisticsFacility BAE Salmesbury site Intermediate Manufacture and assembly CFC Treat Fabs M/C Spares External Suppliers/BAEsites Subcontract and purchased parts Components Sub-contract operations Sub-contract operations Sub-assemblies

BAE Lean 60 © The Delos Partnership 2004 Final Assembly “Final Assembly” Key Project Issues T45 JSF Airbus Typhoon CentralLogisticsFacilityCentralLogisticsFacility BAE Salmesbury site Intermediate Manufacture and assembly CFC Treat Fabs M/C Spares External Suppliers/BAEsites Subcontract and purchased parts Components Sub-contract operations Sub-contract operations Sub-assemblies Can these flows be eliminated or simplified?