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

2. Lean and Agile supply 2 © The Delos Partnership 2004 The Delos Model Vision Strategy Prioritisation Prioritisation Innovation Innovation Demand Support Supply Supply

3. Lean and Agile supply 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

4. Lean and Agile supply 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”

5. 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 60 + 30 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

6. METAL SUPPLIER PRODUCTION PLANNING Daily Despatch Schedule 500 ft coils Vendor Managed Inventory STAMP + PRESS 60 + 30 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

7. Lean and Agile supply 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.

8. Lean and Agile supply 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

9. Lean and Agile supply 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?

10. Lean and Agile supply 10 © The Delos Partnership 2004 Value Stream Mapping How to do it in your plant

11. Lean and Agile supply 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?)

12. Lean and Agile supply 12 © The Delos Partnership 2004 1.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

13. Lean and Agile supply 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

14. Lean and Agile supply 14 © The Delos Partnership 2004 3. 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:

15. Lean and Agile supply 15 © The Delos Partnership 2004 4. 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

16. Lean and Agile supply 16 © The Delos Partnership 2004 5. 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?

17. Lean and Agile supply 17 © The Delos Partnership 2004 6. 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)?

18. Lean and Agile supply 18 © The Delos Partnership 2004 7. 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)?

19. Lean and Agile supply 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

20. Lean and Agile supply 20 © The Delos Partnership 2004 1. 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

21. Lean and Agile supply 21 © The Delos Partnership 2004 Downstream vertical integration Raw materials supplier Component maker Assembly operation Wholesaler Retailer Raw materials supplier Component maker Assembly operation Wholesaler Retailer Upstream vertical integration Stages owned by the organisation 2. Reassess the Make / Buy position

22. Lean and Agile supply 22 © The Delos Partnership 2004 3. 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)

23. Lean and Agile supply 23 © The Delos Partnership 2004 - Hewlett Packard - deskjet printers: power supply module, power cords & manual mfg D.C. Factory localisation D.C. mfg Distribution Centre localisation Postponed assembly

24. Lean and Agile supply 24 © The Delos Partnership 2004 4. 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?

25. Lean and Agile supply 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

26. Lean and Agile supply 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

27. Lean and Agile supply 27 © The Delos Partnership 2004 5. 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

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

29. © 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

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

31. Lean and Agile supply 31 © The Delos Partnership 2004 Motion

32. Lean and Agile supply 32 © The Delos Partnership 2004 Transportation

33. Lean and Agile supply 33 © The Delos Partnership 2004 Waiting

34. Lean and Agile supply 34 © The Delos Partnership 2004 Over-Processing How do you spell that?

35. Lean and Agile supply 35 © The Delos Partnership 2004 £ £ £ £ £ £ £ £ £ £ £ £ Storage / Inventory

36. Lean and Agile supply 36 © The Delos Partnership 2004 Defects / Rejects / Re-work

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

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

39. Lean and Agile supply 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

40. Lean and Agile supply 40 © The Delos Partnership 2004  PPM% Non Defective 2308,53769.1% 366,80793.32% 46,21099.379% 523399.9767% 63.499.99966% Effectiveness

41. Lean and Agile supply 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

42. Lean and Agile supply 42 © The Delos Partnership 2004 Reliable Always able to run Machine reliability: 5S TPM

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

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

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

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

47. Lean and Agile supply 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

48. Lean and Agile supply 48 © The Delos Partnership 2004 Maintain the disciplines through continued application Self Discipline

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

50. Lean and Agile supply 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

51. © 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.

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

53. Lean and Agile supply 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

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

55. Lean and Agile supply 55 © The Delos Partnership 2004 Adequate – with capacity to avoid bottlenecks Machine Capacity (OEE)

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

57. Lean and Agile supply 57 © The Delos Partnership 2004 Capacity mapping

58. Lean and Agile supply 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