1. Operational Excellence Data Accuracy – the Foundation

2. JM Data - 2 © The Delos Partnership 2004 The Delos Model For Business Integration Innovation Innovation Vision Strategy Prioritisation Prioritisation Demand Support Supply

3. JM Data - 3 © The Delos Partnership 2004 Data Quality Items that are foundation for valid Planning Inventory Bills of Materials Routings Planning Data –Item Master –Lead Time –Order Quantity –Safety Stock Work Centre Data

4. JM Data - 4 © The Delos Partnership 2004 Requirements for Data Quality Items that are foundation for valid MPS Bills of Materials> 98 % Routings> 98 % Inventory> 98 % Planning Data –Item Master> 98 % –Lead TimeValid –Order QuantityThought about –Safety StockThought about Work Centre Data> 98 %

5. JM Data - 5 © The Delos Partnership 2004 We need one database Planning Finance Stores Manufacturing Design Development Industrial Engineering Quality Sales Marketing Purchasing

6. JM Data - 6 © The Delos Partnership 2004 Steps to getting BOM Accuracy 1.Identify how to get to one single Database 2.Assign responsibility for accuracy 3.Check accuracy of control group 4.Get over emotional issues of part numbers 5.Create BOM policies 6.Get Control group to 100 % 7.Fix Database 8.Implement Strong Change control process 9.Continuously Monitor accuracy

7. JM Data - 7 © The Delos Partnership 2004 Bill of Materials Structure CITRIC.C Citric Acid 934.5794 GC Purchased 400001 78N_C1R1.2 39.7720 GM Manufactured 0040.042 143.8x108.0/400/0.165 1 EA Purchased SIRALOX.P Siralox 30/200 (Si stabilised) 800 GC Purchased ZEBETA.P Beta Zeolite (CP814E) 200 GC Purchased 200028 AS1Z3_R1.1 214.1000 GC Manufactured P10.2406 DF88P(min)/40/1:0:0 1 EA Manufactured PU2406 DF88P(min)/40/1:0:0 1 EA Manufactured PT/PTNIT.S Pt as Pt Nitrate 65.4206 GM Purchased One Single Level Bill Of Material One Single Level Bill Of Material Accurate ? Part Number Description Quantity per Unit of Measure Scrap Factor Part Number Description Quantity per Unit of Measure Scrap Factor

8. JM Data - 8 © The Delos Partnership 2004 Definition of Accuracy Number of Single Level Bills of Materials right Number of Single Level Bills Audited X 100 %

9. JM Data - 9 © The Delos Partnership 2004 Ways to check accuracy of BOM  Knowledgeable experts review in BOM meeting  Check as parts are issued from stores  Follow the Bill of Material in manufacture !  Take the product to pieces : record and compare  Serial over or underusage of raw materials

10. JM Data - 10 © The Delos Partnership 2004 ROUTING ACCURACY Basis : Represents the way that the product is made and moves through the factory via work centres Missing/Unnecessary Operation Missing Work Centre Wrong Operation Sequence Wrong Work Centre No REALISTIC Standard Missing/Unnecessary Operation Missing Work Centre Wrong Operation Sequence Wrong Work Centre No REALISTIC Standard Types of Error :

11. JM Data - 11 © The Delos Partnership 2004 Steps to getting Routing Accuracy 1.Identify how to get to one single Database 2.Assign responsibility for accuracy 3.Check accuracy of control group 4.Create Routing and Work Centre policies 5.Get Control group to 100 % 6.Fix Database 7.Implement Strong Change control process 8.Continuously Monitor accuracy

12. JM Data - 12 © The Delos Partnership 2004 Definition of Accuracy Number of Routings right Number of Routings Audited X 100 %

13. JM Data - 13 © The Delos Partnership 2004 Ways to check accuracy of Routing  Check with knowledgeable people  Track product through manufacture  Assemble absolutely according to routing  Performance measures shows  Late or early completion of product

14. JM Data - 14 © The Delos Partnership 2004 How Accurate Is This Data ? ItemCounted Quantity Value ( £’s)Computer Record Value ( £’s) 12351995 1000 12352996 1000 12353997 1000 12357998 1000 12358999 1000 123591000 123601001 1000 123721002 1000 123731003 1000 123741004 1000 123751005 1000 TOTAL11,000£ 11,00011,000£ 11,000

15. JM Data - 15 © The Delos Partnership 2004 How Accurate Is This Data ? Inventory status Stores Location ST001 Factory F0001 Part Number 91121 200 Location ST001 200 Location F0001 0 Count 100

16. JM Data - 16 © The Delos Partnership 2004 Definition of Accuracy Number of correct counts Number of items counted Item = product by location X 100 %

17. JM Data - 17 © The Delos Partnership 2004 Definition of Accuracy - Tolerances Count is accurate if item is within preset tolerance Computer 100 Count 97 98 99 100 101 102 103 Computer 100 Count 97 98 99 100 101 102 103 E.g. suppose tolerance = +/- 2 % Accurate within these limits

18. JM Data - 18 © The Delos Partnership 2004 How Accurate Is This Data ? ItemCounted Quantity Computer Record Tolerance =/- % Hit/Miss 123519951000 123529961000+/-2 % 123539971000+/-5 % 123579981000+/-2 % 123589991000 123591000 1236010011000 1237210021000+/- 2 % 1237310031000 1237410041000+/-5 % 1237510051000 TOTAL11,000

19. JM Data - 19 © The Delos Partnership 2004 Steps to Gaining Inventory Accuracy 1.Establish levels of current accuracy 2.Establish control group to identify causes of errors 3.Review material flows 4.Create Limited Access 5.Define systems and processes 6.Educate users 7.Train users 8.Cycle count 9.Eliminate annual physical 10.Never give up the challenge

20. JM Data - 20 © The Delos Partnership 2004 8. Carry out cycle counting Three recognised ways to cycle count 1. By part number 1.Random selection of parts 2.ABC Cycle Count 2. By Location Product Class % of Volume % of Value% Tolerance Counts per annum Interval - weeks “A” Class20 %80 %+/- 0%413 “B” Class30 %15 %+/- 2%226 “C” Class50 %5%+/- 5%152

21. JM Data - 21 © The Delos Partnership 2004 Process Control cycle counting Divide Warehouse into locations For cycle counting Week 1 Week 2 Week 3 Week 4 Week 5`

22. JM Data - 22 © The Delos Partnership 2004 Process Control Count –When Easy to count Low balance high exposure –Obvious errors Eyeball large quantities –By Location Efficient All physical inventory Ensures physical locations recognised Reconciliation easier

23. JM Data - 23 © The Delos Partnership 2004 Process Control cycle counting LocationPart QuantityCountHit/ NumberMiss A345223654 100100 Hit A3453245681245 A345424367 22 20 Miss A345570659 2,234 A345639060 101 101 Hit A345739081 43 43 Hit A345842020 75 75Hit 4 hits 5 counts = 90 %

24. JM Data - 24 © The Delos Partnership 2004 Item Master Data Used in Planning Part number Description Unit of measure Make or buy Lead time Firm Planned Fence Order quantity Minimums and multiples Safety stock Scrap factor Yield factor Engineering drawing number Commodity code Family code Planner/buyer code Customer address and code number Suppliers address and code number All must be accurate And thought through correctly

25. JM Data - 25 © The Delos Partnership 2004 Data Accuracy 1.Data quality essential for a valid plan to be calculated by the computer 2.Needs to be kept up to date all of the time 3.Needs to reflect the way products and parts are made. 4.Requires discipline and the right attitude