View
220
Download
0
Category
Preview:
Citation preview
8/12/2019 Aska - Mhd50_52
1/3
m a n a g i n g d e m a n d f l o w5 0
MHD Supply Chain Solutions March / April 200550
Within manufacturing processes the focus is
traditionally on direct labour cost. For this
reason we see a number of companies that
move their production to Asian countries,
expecting further reductions in labour cost.
The savings that can be achieved through relocating the
production sites to these areas are getting marginal and
will be smaller and smaller as the developing countries
develop themselves. That is why focus should be moved
from labour cost to where there is really something to
save, such as material consumption, fixed and variable
costs involved in the overhead of a company. Companiesaround the world have seen very impressive results such
as reduced production flow time and reduced working
capital when this technology has been implemented.
Adding value, reducing cost and eliminating waste are
the founding principles of lean manufacturing. The
principal focus of agile manufacturing is flexibility.
Demand Flow Technology encompasses both lean and
agile manufacturing principles and goes further to
become a demand-driven strategy for the enterprise.
What is DFT?Demand Flow Technology is a scalable, mathematically-
based business strategy, specifically designed to allow
manufacturers to respond faster and more efficiently to
the needs of their customers and the marketplace.
DFT is a simple strategy designed to keep the
methodology of manufacturing goods and servicing the
customer as simple as possible. Attention is directed at
using mathematically-based tools to simulate and
design production processes that are balanced and flex-
ible. Material replenishment systems are designed to
provide flexibility, reduce overhead and provide early
visibility of shortages.
Employees are given tools to facilitate fast response
and quality assurance. In fact for all aspects of thebusiness, from Sales and Marketing, Finance,
Engineering and Employee Relations to IT and
Information Systems, there are tools and proven busi-
ness models provided that facilitate the most respon-
DEMAND FLOW TECHNOLOGY:An absolute business discipline
by Ashok Kay*
Forget all about labour cost and focus on where there is really
something to save. This is the essence of Demand Flow Technology.
Demand Flow Technology (DFT) is a complete business strategy that
allows manufacturers and distributors to adjust product volume and
mix every day in the direction of actual sales. It is a demand driven
strategy that is used by B2B or B2C operations.
sive, flexible and lowest cost method of meeting cus-
tomer demand requirements.
DFT provides a method of addressing issues such as
how to balance batch processes and link them into
downstream processes without unnecessary inventory
investment, how to flatten bill of material structures
without sacrificing planning and design capability, how
to cost your products and report your performance
without departments and labour based absorption, how
to pull material (both purchased and manufactured)
without work orders, routings and schedules, and how
to utilise Kanban while still maintaining inventoryintegrity, revision control and lot traceability.
Understanding the difference betweenDemand Flow Technology, Lean andother theoriesThe commonly used business process tools fall more
into the realm of philosophical and less tangible recom-
mendations rather than proven technological tools and
techniques. The following sections will address the key
features of the popular tools and techniques that are
used by manufacturers and how these are incorporated
into DFT and complemented to form a comprehensive
and definitive business strategy.
Figure 1: Demand Flow Technology is a comprehen-
sive strategic umbrella that is completely synergistic
with any incremental improvement efforts currently
underway and underpins the business processes and
technology to deliver and exceed customer demand.
Change ManagementThis is designed to provide the basis to educate profes-
sional change management agents, people who can lead
projects to success within the company. Project man-
agement, people leadership, and change management
techniques are required to support the projects that acompany undertakes. As such the change management
activities are very supportive programs for DFT. For
example, a benchmarking exercise begins the process
for a need for a change and re-engineering and socio-
Ashok Kay
8/12/2019 Aska - Mhd50_52
2/3
m a n a g i n g d e m a n d f l o w
MHD Supply Chain Solutions March / April 2005 51
TheAssociationfor Australianlogisticsprofessionals
Dinner
meetings
Site
visits
Seminars
Brea
kfast
meetings
Secretariat
assistance
Networ
kin
g
opportunities
technical empowerments provide good team building
exercises that are required within the operations.
5S/Visual FactoryThese are two different but complementary
management programs. 5S aims to bring order
cleanliness and discipline to the working envi-
ronment. The 5 S are from the Japanese Seiri
(Sort), Seiton (Set in order), Seiso (Scrub),
Seiketsu (Shine), and Shitsuke (Sustain). The
Visual Factory program builds upon the orderly
facility to make the measurements and controls as
visual as possible to people. The typical visual tools are
Kanban, Flow line control boards, Wait/work boards, and
Employee involvement boards.
Supply Chain Management (SCM)SCM focuses attention to the improvement of all aspects of the supply chain surrounding
and within a factory, which will maximise the companys service to their customers whileminimising cost. This is an extensive effort over multiple years for most companies but
the results justify the effort expended. It is important to create a stable responsive man-
ufacturing environment within the company first before moving outside to address either
distribution to the customers or supply from the vendors. This program is an excellent
follow-on program to a DFT activity.
Lean Manufacturing (Toyota Production System TPS)This program is often used as an overall strategy naming convention since the term
lean is related to cost reduction, efficiency, and productivity. The Lean title from this
technique was introduced in the USA to encompass the Toyota Production System (TPS)
methodology created in Japan by Toyota Motor Company. This technology is very similar
to Demand Flow Technology in its mathematical approach and benefit objectives.
Flow Based Costing or Activity Based CostingFlow Based costing provides methods and calculations to cost the products the company
builds in a flow manufacturing environment. The flow based costing approach is simply in
many ways the collection of cost data and the creation of different absorption rates and
cost drivers to suit different costing elements. DFT promotes activity based costing done
according to the process Takt time. Takt is a German word for music measure and is
used in DFT to denote the heartbeat of the operations as determined by the customer.
KaizenKaizen has been used within manufacturing companies for some considerable time. The
Japanese word for continuous improvement, this program looks to identify areas that jus-
tify improvement and provides a Kaizen Blits approach to an area or complete line. The
Kaizen approach provides steps in a continuous improvement journey that a company
undertakes. Kaizen is compatible with DFT as a follow on program that takes advantage of
the knowledge of those areas identified for improvement during the DFT implementation.
Value Stream MappingValue stream mapping is an analysis methodology to identify areas of the companys oper-
ations that would be a candidate for improvement. It is not a series of isolated Kaizen
efforts but rather a structured analysis capability, to identify overall improvement areas.
Value stream mapping gathers and displays a far broader range of information than a typi-
cal process map yet tends to be higher level than many process maps. It can be used to iden-
tify where to focus future projects, subprojects, and/or Kaizen events. DFT uses flow mapping
at a detail level and applies production mathematics based areas for improvements.
Simultaneous Design EngineeringThis is an engineering program that provides the methodology and approach to concur-
rent or simultaneous engineering activities within the company. The program provides
Figure 1
8/12/2019 Aska - Mhd50_52
3/3
m a n a g i n g d e m a n d f l o w
MHD Supply Chain Solutions March / April 200552
Basics of
Supply ChainManagementAPICS Basics is a stand-alone course, or the
first step towards the internationally recognized
APICS CPIM (Certified in Production andInventory Management).
APICS Basics
provides these
benefits:
The knowledge
necessary to
manage the flow of
material in your
organizations
supply chain
Essential business
information aboutsupply chain
management
Increased
professional
competence and
recognition
A certificate of
achievement
The groundwork for
pursuing additional
modules in the
APICS CPIM
program
Basics of Supply Chain
Management topics:
Enterprise-wide
concepts for
satisfying customer
expectations
Determining and
managing customer
demand
Managing the
transformation of
demand into supply Managing supply
activity
For more information on
this subject contact your
local APICS chapter.
Victoria 03 9249 9515
New South Wales 02 9891 1411Queensland 07 3282 8393
South Australia 08 8243 7911
Western Australia 08 9322 1444
TRAINING CLASSES AND WORKSHOPS:JCIT will hold a series of four-day DFT business strategy workshops in Australia.
Initial workshops are held in Melbourne & Sydney on April 12-19 & April 19-22.
For further details refer to www.aska.net.au or call +61 2 9965 3737
the steps required to formalise the engineering change and process order change within
the operations. The main technology delivered by the program provides the steps neces-
sary to marry the new or changed product design process to the ability to simultaneously
incorporate these new and changed products into existing or new manufacturing flow
lines in the plant. The objective is to reduce the time taken to deliver new and changed
product to the market.
Six SigmaThis management program provides a very structured approach to improvement activity
that is designed to systematically bring high quality levels to as many management proj-
ects as the company requires. This technique focuses on statistical methods to put in
place a parts-per-million performance metric. The Six Sigma binomial distribution pro-
vides the quality goal to be pursued throughout the organisation. Certainly a business
strives for this level of quality, and can use the measurement techniques to support
progress. Companies that have the most success embed quality within the process,
beginning in manufacturing and then extending proven techniques through the support
functions. Formal training reinforces the quality checks to be used by all personnel.
Machine capability is understood by utilising well-recognised statistical methods such as
X-Bar/R charts, Pareto analyses, and histograms.
This program is very compatible with DFT in that many companies have employed SixSigma to follow DFT implementations and thus maintain the benefits of both.
Total Preventive Maintenance (TPM)This management program is a close relative to both Kaizen and 5S in that the objective
is to provide maintenance to all equipment, buildings, tooling etc. to maximise the effec-
tiveness of the people both providing the maintenance service and the people building
our products. This program would be thoroughly recommended as an extension of the
work done during a DFT implementation, particularly in a machine shop.
ConclusionDemand Flow Technology is a comprehensive business strategy that utilises many of the
exact same tools already employed by businesses. There is no need to change the strate-gic path and tactics designed to optimise response and quality and minimise cost.
The mathematical basis of DFT removes as much subjectivity as possible, letting the
numbers guide the decision-making process. Developing an understanding of DFT tools
and their appropriateness for specific applications is a must for anyone looking for a
business strategy that delivers results. DFT provides the fundamental structure within
which progress is planned, documented and tracked objectively.
These days, customers are demanding products once thought to be absolutely unique and
completely made-to-order, at the lowest possible cost. Increasingly impatient, customers
are expecting high quality and low cost products. Companies that fully embrace DFT as their
comprehensive business strategy will have the ability to meet changing customer demand
on a daily basis without significant layout rearrangement and frequent employee retraining.
Implementation of Demand Flow Technology will not only optimise and make consistent the
production response, but by definition will put in place an overall organisation that has the
tangible tools and techniques to achieve unparalleled response, quality and low cost objec-
tives wall-to-wall, plant-to-plant, and throughout the entire corporation.
All initiatives related to specific parts of a business are wrapped within the compre-
hensive strategic umbrella of DFT, and are completely synergistic with any incremental
improvement efforts that may or may not be adopted by the companies currently.
*Ashok Kay B.E.(Chem), M.Eng., MBA has over 15 years of industry experience and has worked
in process (Mining & metals and Petroleum) industries and manufacturing environments.
Ashok has worked in Australia, USA and Southeast Asia. He is the Director of Aska Consulting
(www.aska.net.au), a boutique consulting firm that has developed a strong partnership with
leading business process solutions providers including JCIT (www.jcit.com).
Recommended