1. Supply Chain Doctors The Supply Chain Doctors Supply Chain Management Kimball Bullington, Ph.D. www.supplychaindocs.com

2. Supply Chain Doctors 18 SCM Fundamentals Introduction Planning Sourcing Making Warehousing Transporting Sharpening the Saw

3. Supply Chain Doctors 18 Making – Performance Excellence What is your model for performance excellence?

4. Supply Chain Doctors 18 Making – Performance Excellence Malcolm Baldrige National Quality Award Quality Tools Lean Variation

5. Supply Chain Doctors Malcolm Baldrige National Quality Award Criteria include –Leadership –Information & analysis –Strategic planning –Human resource dev. & mgt. –Process management –Business results –Customer focus & satisfaction

6. Supply Chain Doctors Benefits of Baldrige Competition Financial success Winners share their knowledge The process motivates employees The process provides a well-designed quality system The process requires obtaining data The process provides feedback

7. Supply Chain Doctors Criteria Category Importance High, Medium, Low For High-Importance Areas Stretch (Strength) or Improvement (OFI) GoalWhat Action Is Planned?By When?Who Is Responsible? Category 1—Leadership Strength 1. 2. OFI 1. 2. Category 2—Strategic Planning Strength 1. 2. OFI 1. 2. Category 3—Customer and Market Focus Strength 1. 2. OFI 1. 2. Category 4—Measurement, Analysis, and Knowledge Management Strength 1. 2.

8. Supply Chain Doctors Benefits of State Awards Internationally known Baldrige Award criteria Training Different Levels of Awards

9. Supply Chain Doctors 18 Making – Performance Excellence Malcolm Baldrige National Quality Award Quality Tools Lean Variation

10. Supply Chain Doctors Basic Quality Tools Flowcharts Check sheets Histograms Pareto Charts Scatter diagrams Control charts Cause-and-effect diagrams Run charts

11. Supply Chain Doctors Flowchart Process Check Process Check

12. Supply Chain Doctors Billing Errors Wrong Account Wrong Amount A/R Errors Wrong Account Wrong Amount Monday Check Sheet

13. Supply Chain Doctors Histogram frequency ABCDE

14. Supply Chain Doctors Pareto Analysis 80% of the problems may be attributed to 20% of the causes. 80% of the problems may be attributed to 20% of the causes. Wrong Qty Inventory Inaccuracy Wrong Location Missing label Damage Other

15. Supply Chain Doctors Scatter Diagram Customer Cycle Time

16. Supply Chain Doctors UCL LCL UCL Process not centered and not stable Process centered and stable Additional improvements made to the process Control Charts

17. Supply Chain Doctors Cause-and-Effect Diagram Effect MaterialsMethods EquipmentPeople Environment Cause

18. Supply Chain Doctors Run Chart Time (Hours) Diameter

19. Supply Chain Doctors 18 Making – Performance Excellence Malcolm Baldrige National Quality Award Quality Tools Lean Variation

20. Supply Chain Doctors Sources of Waste Overproduction Waiting time Unnecessary transportation Processing waste Inefficient work methods Product defects

21. Supply Chain Doctors Process Design Small lot sizes Setup time reduction Manufacturing cells Limited work in process Quality improvement Production flexibility Balanced system Little inventory storage

22. Supply Chain Doctors Benefits of 5S Improve safety Clean, orderly workplace Improve efficiency Improve employee morale Standardized work methods

23. Supply Chain Doctors Smooth flow of work (the ultimate goal) Elimination of waste Continuous improvement Eliminating anything that does not add value Simple systems - easy to manage Use of product layouts to minimize moving materials and parts Quality at the source Elements of JIT

24. Supply Chain Doctors Poka-yoke – mistake-proof tools and methods Preventative maintenance Good housekeeping Set-up time reduction Cross-trained employees A pull system Elements of JIT (cont’d)

25. Supply Chain Doctors 18 Making – Performance Excellence Malcolm Baldrige National Quality Award Quality Tools Lean Variation

26. Supply Chain Doctors UCL LCL UCL Process not centered and not stable Process centered and stable Additional improvements made to the process Control Charts

27. Supply Chain Doctors Quality Chain Reaction

28. Supply Chain Doctors Cost of Poor Quality Lost Opportunity Downtime Rework Inspection Overtime Rejects Lost sales Late delivery Long cycle times Expediting costs Inaccurate Reports (less obvious) Lost Customer Loyalty Redundant Operations Cost of Capital Excessive Planning 5-8% of Sales 15-22% of Sales

29. Supply Chain Doctors Two Ways to Improve Quality