21 st Century Manufacturing Not Without The Basic

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21ST CENTURY MANUFACTURING “NOT WITHOUT THE BASICS”

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EVOLUTION OF MANUFACTURING PROCESSES, SYSTEMS AND TOOLS

• 1950-1960 – Manual systems began migrating onto the fist computers, Order Point, Min-Max, EOQ, Scheduling Boards migrated into the first MRP systems

• 1970-1980 – Computer systems became more sophisticated (DBMOP, COPICS), MRP became MRPII

• 1990-2009 – Introduction of complex ERP systems, Internet, Extranet, new tools Lean, SCM, Six Sigma, Kanban, Kaizen, VMI, etc.

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DURING THIS EVOLUTION PROCESS, SYSTEMS AND TOOLS WERE BEING

IMPLEMENTED

• New concepts were being introduced

• Companies invested in education and training

• Manufacturing came out of the closet

• Investment in Technology was being made

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MANUFACTURING SEEMS TO HAVE A COMMON GOAL

• We were all in it together

• Learning the new tools and applying these techniques

• Manufacturing began to have a common language

• The Basics were being implemented in companies from small to large

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THE FUNDAMENTAL BUILDING BLOCKS (BASICS)

• Bill of Materials• Inventory Management• Shop Floor Control (Routings)• Formal Purchasing• Master Production Scheduling• Material Requirement Planning• Capacity Planning • Forecasting• Production Control• Material Management

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THE BASICS REQUIRED

• Accuracy that approaches 100%

• Detailed and continuous training and education

• Accountability

• Management Desire

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THIS EVOLUTION HAS NEVER STOPPED

• New systems, processes and tools exist today that have been developed to meet the demands of a very complex manufacturing environment

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THE NEW ENVIRONMENT BRINGS

• Challenging Global Competition

• Tremendous Cost Pressures

• Environmental Issues

• Fast Paced Technology Change

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WORK FORCE REDUCTION

Due To Cost Pressures Companies Have Been Forced To Reduce Their Workforce

“Few Skilled Employees Wearing Many Hats”

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EDUCATION AND TRAINING

Companies have drastically cut back on the amount they spend for education and training

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KNOWLEDGE DRAIN

• Continued employee drain starting in the 60’s and continuing today at an alarming pace.

• This is leaving a large knowledge void especially when it comes to the basics

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TO COMPETE TODAY, MANUFACTURING MUST FIND A

WAY TO EMBRACE AND IMPLEMENT 21ST CENTURY

SYSTEMS, TOOLS AND PROCESSES

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21ST CENTURY TOOLS AND PROCESSES

• LEAN MANUFACTURING• LEAN SUPPLY CHAIN MANAGEMENT• SIX SIGMA• ERP• MIX MODEL SCHEDULING• KANBAN• VMI• VALUE MAPPING• S&OP• DEMAND MANAGEMENT

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DESIRE TO CHANGE

In most cases we have found that the driving reason for a company to embrace new tools and systems is when their business is facing a major threat.

Formula for Change

x xVision

ofFuture

Discontentwith

Present

Pathof

Low Risk

Equals

CHANGE

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THE CHALLENGE

• Implementation of advanced

• Systems

• Processes

• Tools

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ROAD BLOCKS

The Basic Systems, Processes and Tools cannot support the desired change to 21st Century thinking.

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REASONS FOR THE ROAD BLOCKS

• Core competencies have eroded over time and cannot support new thinking without major improvement.

• Core competencies were never in place or accurate. (Company operating on manual)

• Management and workforce desire does not match need.

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REQUIREMENTS FOR IMPLEMENTING 21ST CENTURY TOOLS

1. Well trained workforce (APICS Trained and Certified).

2. The Basics in Place and being used to run the business.

3. Accurate Data Base (BOM’s, Routings, Inventory).

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REQUIREMENTS (CONT).

4. Basic workflows in place

• Forecasting• Master Production Scheduling• MRP• Inventory Management

• Shop Floor Control

• Capacity Requirements Planning• Purchasing

4. Optimization of your Operating Systems

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EDUCATION AND TRAINING REQUIRED

• APICS Basics

• Supply Chain Certification

• Team Building

• Systems Specific

• Applying The Tools

• Six Sigma

• ?

PUT THE BASICS TO WORK

• Lean Tools and Processes

• Lean Concepts from Order to Cash

• Lean Accounting Let Finance lead the way to the money

• Lean Supply Chain Management

• Lean ERP (Optimize Your ERP Implementation)

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LEAN HOUSE WITHOUT WASTE

Customer focused – Inspired people – Community – Financial success

Reduce inventory, Increase thru-put, Reduce operating expense

Waste Elimination thru Continuous Improvement5-S Value Stream

MappingPull

ProductionKanban Visual

WorkplaceCellular

ProcessesSingle Piece

FlowSet up

Reduction

Multi-skilledWorkers

StandardWork

VariationElimination

ErrorProofing

Total ProductiveMaintenance

LeanTraining

RewardMechanisms

BalancedScorecard

Design ForManufacture

Quality FunctionDeployment

SupplierCertification

Recruiting& Initiation

ThinkingProcesses

ProblemSolving

CommunicationTools

LevelLoading

LeanAccounting

Results

Core values

Lean focus

Value-AddedMgmt.

Just-In-Time

The 5 pillars

HR Systems Mgmt. Behavior Communication TrainingEnablers

Lean Cycle

Lean Tools

Cost Quality Delivery

Flexibility Time Service

Safety Morale

TotalQualityMgmt.

Emp.Involve-ment

Supply

Chain

Mgmt.

ELIMINATION OF THE 7 WASTES

1. Waste of over-production– Quantity– Timing

2. Waste of waiting (delay)– Leveling of production flow– Line balancing– Lack of parts– Machine downtime

3. Waste of transportation– Improve plant layout– Decrease distance– Improve method

4. Waste of process itself– Should we produce these products?– Is this the best way?– Use of value engineering, value analysis

ELIMINATION OF THE 7 WASTES (cont.)

5. Waste of stock– Small lots– SMED– Inventory is costly– Space reduction

6. Waste of motion– Have parts nearby– Arm's length

7. Waste of making defective products– Prevention– Poka-yoke– Find it when made– Self-inspection– Successive inspection– Process capability

LEAN/AGILE MANUFACTURINGFACTORY FLOW CORE PRINCIPLES

1. Everything moves within four hours

2. If the downstream center can't use it – Don’t do it!

3. Everything moves to point of consumption

4. Eliminate steps in process

5. No paperwork

6. No material handling

7. No labor reporting

8. No computer transactions/systems

9. Assume "pipe line" flow (no backflow)

10. No inspection or testing (robustness)

LEAN/AGILE MANUFACTURINGFACTORY FLOW CORE PRINCIPLES (cont.)

11. No subassemblies

12. Carrier control (robustness)

13. All parts and processes under SPC control

14. No holding containers

15. Direct ship from last operation

16. Direct receipt for first operation

17. No inventory

18. Standardized processes

19. Standardized components

20. Standardized tools

21. Universal packaging

22. Universal assembly lines

23. Universal equipment

LEAN SCHEDULING THE ADVANCED PLANNER’S ROLE IN THE

LEAN MIXED-MODEL SCHEDULING PROCESS

1. Prepare ABC analysis2. Combine like items (product family - customer families)3. Identify business rules for customer service levels4. Develop inventory and shop floor philosophy

Lead time Lot sizes Safety stock5. Communicate with supply chain6. Develop setup matrix7. Develop order launch rules (priority planning)8. Develop manufacturing loading strategies Certain products to certain lines Standard setup tools for "A" items

Load leveling/final assembly scheduling rules9. Develop customer allocation matrix10. Load software order modifiers11. Document all rules12. Manage all exception messages13. Post implementation review (quarterly)

ABC ANALYSIS OF ADVANCED MANUFACTURING STRATEGIES

Primary Purpose• Inventory philosophy • Customer service philosophy

• Manufacturing strategy (mixed-model matrix)• Expediting or priority planning strategy• Purchasing strategy• Distribution strategy

InventoryClass

DollarVolume

Number ofUnits

“A” 80% 20%“B” 15% 30%“C” 5% 50%

LEAN SCHEDULING THE ADVANCED PLANNER’S ROLE IN THE

LEAN MIXED-MODEL SCHEDULING PROCESS

1. Prepare ABC analysis2. Combine like items (product family - customer families)3. Identify business rules for customer service levels

4. Develop inventory and shop floor philosophy

Lead time Lot sizes Safety stock5. Communicate with supply chain6. Develop setup matrix7. Develop order launch rules (priority planning)8. Develop manufacturing loading strategies Certain products to certain lines Standard setup tools for "A" items

Load leveling/final assembly scheduling rules9. Develop customer allocation matrix10. Load software order modifiers11. Document all rules12. Manage all exception messages13. Post implementation review (quarterly)

A B C D E F G H

(BxC) (.5xE) (BxF) (A÷Ex4)

# of Items

% ofTotal

Weeks Supply SafetyStock

SafetyStock

Weighted

Lot SizeWeeksSupply

AveCycleStock

Lot Size

Weighted

# of Setups

Per Month

A ITEMS 50 80% 2.0 1.6 1 .5 .4 200

B ITEMS 500 15% 4.0 .6 4 2 .3 500

C ITEMS 1000 5% 8.0 .4 8 4 .2 500

TOTALS 2.6 .9 1200

MIXED-MODEL MATRIX

TOTAL 3.5 WEEKS OF INVENTORY

LEAN SCHEDULING THE ADVANCED PLANNER’S ROLE IN THE

LEAN MIXED-MODEL SCHEDULING PROCESS

1. Prepare ABC analysis2. Combine like items (product family - customer families)3. Identify business rules for customer service levels4. Develop inventory and shop floor philosophy

Lead time Lot sizes Safety stock5. Communicate with supply chain

6. Develop setup matrix7. Develop order launch rules (priority planning)8. Develop manufacturing loading strategies Certain products to certain lines Standard setup tools for "A" items

Load leveling/final assembly scheduling rules9. Develop customer allocation matrix10. Load software order modifiers11. Document all rules12. Manage all exception messages13. Post implementation review (quarterly)

LEAN JOB SEQUENCINGSETUP/CHANGEOVER MATRIX (HOURS)

EXAMPLES:Sequence: D - A - C - B - ES/U hours: 10 + 4 + 4 + 2 = 20 HOURSSequence: A - B - D - E - CS/U hours: 1 + 1 + 3 + 3 = 8 HOURS

FROM

TO A B C D E

A - 3 1 10 2

B 1 - 4 2 4

C 4 6 - 4 3

D 2 1 3 - 6

E 3 2 2 3 -

KAIZENKAIZEN: KAIZEN means improvement. Moreover it means continuing improvement in personal life, home life, social life, and working life. When applied to the workplace KAIZEN means continuing improvement involving everyone – managers and workers alike.

Policy Deployment: the process of implementing the policies of a KAIZEN program directly through line managers and indirectly through cross-functional organization.

TQM (Total Quality Management): organized KAIZEN activities involving everyone in a company – managers and workers – in a totally integrated effort toward improving performance at every level. This improved performance is directed toward satisfying such cross-functional goals as quality, costs, scheduling, manpower development, and new product development. It is assumed that these activities, ultimately, lead to increased customer satisfaction.

TYPICAL KAIZEN BLITZ

1. Education KAIZEN Lean Blitz process One piece flow 5S Takt time

1. Form into teams Team training

1. Review target area Tour Process instructions Blueprints

1. Clean area Floors Machines Cabinets

Day One:

Start cell designs

1. Brainstorm flow (type of machines)

2. Identify utilities

3. Identify tooling

4. Identify inventory (signaling)

5. Identify type of parts (SMED)

6. Identify inbound and outbound suppliers and customers (carrier control)

TYPICAL KAIZEN BLITZ

Day Two:

Rough out new cell design

1. Machine and bench placement

2. Tool and fixture placement (5S)

3. Utility drops

4. Hand tool storage

5. Kanban squares (size carriers)

6. New setup reduction methodology

7. Chalk up floor

Some teams “split up” into sub teams

TYPICAL KAIZEN BLITZ

Day Three:

1. Move machines and connect

2. Move tools and fixtures onto/into position

3. Move inventory into Kanban areas

4. Practice “rapid” setup/changeover

5. Run cell

6. Start documentation

7. Painting Machines Lines on floor Etc.

TYPICAL KAIZEN BLITZ

Day Four:

1. Realign cell

2. Make changes/adjustments, etc.

3. Install sustaining processes Education/training Documentation (step-by-step) Measurements Control boards Disciplines Safety

3. Final cleanup Touch up, painting etc.

3. Final presentation

4. Victory dinner

TYPICAL KAIZEN BLITZ

Day Five:

Refine Refine Refine

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LETS DISCUSS THE FOLLOWING:

• Lean Manufacturing

• Supply Chain Management

• Vendor Managed Inventory

• Kanban

• Six Sigma

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DISCUSSION (CONT)

• ERP Implementation

• Back Flushing

• Purchasing Portals

• Capacity Planning

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PATH FORWARD

1. This begins with desire, without desire change will not take place.

2. Develop internal champions and teams that will work on optimizing the basics

3. Develop an education and training matrix by employee

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PATH FORWARD (CONT)

4. Review all business rules

5. Review and update all order modifiers

6. Implement Inventory, Bill of Material and Routing, and Cycle Counting

7. Value Map your existing systems and bench mark against 21st Century best practices

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SUMMARY

• To Meet The Competitive Challenges That Face Manufacturing Companies In The 21st Century, It Is Critical That We Continue To Evolve And Embrace Change. This Change Can Only Happen If Its Built On A Solid Foundation Of The Basics.

THERE ARE TWO WAYS TO GET ON TOP OF AN OAK TREE

YOU CAN CLIMB IT,

OR

YOU CAN SITON AN ACORN