Hot Trends to Fire Up Your Production and Inventory ...mpcms.blob.core.windows.net/.../apics-conexusdec08rev.pdf · Advancing Productivity, Innovation, and Competitive Success Hot

Advancing Productivity, Innovation,

and Competitive Success

Hot Trends to Fire Up Your

Production and Inventory

Management

Jim Malone

President

APICS-CIND

Central Indiana Chapter

www.apics.org



Since 1957, individuals and companies have relied on APICS for its

superior training, internationally recognized certifications,

comprehensive resources, and worldwide network

of accomplished industry professionals.

The global leader and premier source of the body of

knowledge in operations management, including

production, inventory, supply chain, materials

management, purchasing, and logistics.



APICS-CIND


Chapter Background

Advancing Productivity, Innovation, and Competitive

Success

CentralIndiana

CIND geography covers much of

Central Indiana.

Viewed as One of the Top Chapters

in North America

A Platinum Award Winning

Chapter (consistent performance)

~ 450 Professional Members

Regular Chapter Meetings

Monthly Dinner Meetings

Plant Tours

Seminars

A Strong Instructor Base

APICS: Central Indiana Chapter


Success

APICS Chapters in Indiana

4 Chapters serve Indiana

Michiana

Fort Wayne

Central Indiana

Ohio Valley

Michiana

Fort Wayne

Central Indiana

Ohio Valley


Success

APICS Districts

APICS' more than 250 local chapters are divided into 9 geographic districts that span North America.


Success

Outside North America, APICS is represented by two types of orgaOutside North America, APICS is represented by two types of orgaOutside North America, APICS is represented by two types of orgaOutside North America, APICS is represented by two types of organizations:nizations:nizations:nizations:International Associates (IA):International Associates (IA):International Associates (IA):International Associates (IA): International Associates are non-profit membership organizations, who provide APICS certification exams and related products, and membership services such as local meetings, networking opportunities, and conferences in every region of the globe.Authorized Education Providers (AEP): Authorized Education Providers (AEP): Authorized Education Providers (AEP): Authorized Education Providers (AEP): Authorized Educational Providers teach APICS courses and provide consulting based on the APICS body of knowledge in every region of the world.

Currently there are over 90 APICS International Associates


Success

Membership in APICS-CIND

The real value in APICS-CIND membership is the fact that you are connected to a community of . . .

. . .nearly 40,000

professionals worldwideworldwideworldwideworldwide....


Success

Setting the record straight:

Manufacturing & Logistics Report Card

Conexus of Indiana Report

Conexus releases an annual Manufacturing & Logistics Report Card, assessing our strengths and weaknesses

The 2009 Report Card shows solid performance

Manufacturing and logistics are major components of Indianas economy

Our global position is strong foreign investment & exports

Pro-growth business climate

Human capital is our biggest

barrier to success


Success

APICS CIND was founded in the 1960s and is committed to the development of Indianas workforce by helping

build the knowledge and skills in operations management, including production, inventory, supply chain, materials management, purchasing, and logistics.

APICS-CIND offers localized services including:

Professional Development Meetings Educational programs Certification review courses Career placement opportunities Plant Tours & Seminars

APICS CIND supports 4 College Student Chapters


Success

The Indiana Alliance of Professional Societies, IAPS, is an alliance of local Indiana

Chapters of national organizations recognized for being the authorities in their

respective fields and providers of Professional Bodies of Knowledge. These

professional organizations share a core foundation and vision in building knowledge

and skills, advancing learning and knowledge exchange opportunities, to improve

business and help their members and organizations successfully compete and build a

stronger local and global economy.

As a member of the Indiana Alliance of Professional Societies, (IAPS), participating

professional associations recognize the advantages of co-venturing with complimentary

professional associations with the purpose of sharing resources and ideas in order to

broaden their scopes within operations, logistics, and supply chain management.

APICS-CINDA Founding Member of the I.A.P.S.



INVENTORY AND PRODUCTION

MANAGEMENT

SUPPLY CHAIN 101



The Supply Chain can and will

destroy your Career and maybe

your Company

SUPPLY CHAIN STORIES


Success

Supply Chain Story

In the mid-1990s, the Swedish car manufacturer

Volvo found itself with excessive stocks of green

cars. To move them along, the sales and marketing

departments began offering attractive special deals, so

green cars started to sell. But nobody had told the

manufacturing department about the promotions. It

noted the increase in sales, read it as a sign that

consumers had started to like green, and ramped up

production.

Source: Chain reaction, The Economist, Jan 31, 2002

On Internal communication and collaboration


Success

Supply Chain Story

US auto man.Suppliers

Suppliers Toyota

Toyota helped us dramatically improve our

production system. We started by making one

component, and as we improved, [Toyota]

rewarded us with orders for more components.

Toyota is our best customer.

-Senior executive, supplier to Ford, GM, Chrysler,

and Toyota, July 2001**

The Big Three [US automakers] set annual cost-

reduction targets [for the parts they purchase]. To

realize those targets, theyll do anything. [Theyve

unleashed] a reign of terror, and it gets worse

every year. You cant trust anyone [in those

companies]

-Director, interior systems supplier to Ford, GM,

and Chrysler, October 1999*

* And ** Source: Building Deep Supplier Relationships, HBR,

December 2004

Arms Length

Partnership


Success

Supply Chain Management at

Work

The Opportunity $13.5 m in Inventory

4 Inventory turns per year

Stock Outs of FGI

Location Inventory accuracy of 56%

Global Inventory accuracy of 89%

$75 K in obsolete inventory each year

The Results $6.18 m in Inventory

7 Inventory turns per year

100 % Order fulfillment

Location Inventory accuracy of 98.6%

Global Inventory accuracy of 99.39%

$20 K in obsolete inventory each year


Success

Supply Chain Management at

Work

Inventory Accuracy

Benchmarking TachTime

Establish Kanban for all inventory (min/max)

100% Shipping attainment


Success

Evolution of Operations and

Supply Chain Management

Supply chain management management of the flow of information, products, and services

across a network of customers, enterprises, and supply chain partners


Success

Evolution of Operations and

Supply Chain Management


Success

Key Performance Indicators

Metrics used to measure supply chain performance Inventory turnover

Total value (at cost) of inventory

Days of supply

Fill rate: fraction of orders filled by a distribution center within a specific time period

inventory of valueaggregate Average

sold goods ofCost turnsInventory =

= ) item e(unit valu) itemfor inventory (averageinventory of valueaggregate Average ii

days) sold)/(365 goods of(Cost

inventory of valueaggregate Average supply of Days =


Success

Positioning the Supply Chain

Cost

Speed

Quality

Flexibility


Success

Positioning the Supply Chain:

Cost Waste elimination

relentlessly pursuing the removal of all waste

Examination of cost structure looking at the entire cost

structure for reduction potential

Lean production providing low costs

through disciplined operations


Success


Speed Fast moves, Fast adaptations,

Fight linkages

Internet conditioned customers to

expect immediate responses

Service organizations always competed on speed

Manufacturers time-based competition: build-

to-order production and efficient supply chains


Success

Positioning the Supply Chain :

Quality Minimizing defect rates

Conforming to design specifications

Please the customer

Six Sigma, ISO, TS, QMS


Success


Flexibility

Ability to adjust to changes in product mix, production volume, or design

Disasters Natural Man Made

Political/Labor Unrest

Economic


Success

TLS

LEAN

SIX SIGMA

THEORY

OF

CONSTRAINTS


Success

Strategy Provides direction for achieving a mission

Five Steps for Strategy Formulation Defining a primary task

What is the Organization in the business of doing? What is the Organization not in the business of doing (Outsourcing)?

Assessing core competencies What does the Organization do better than anyone else?

Determining order winners and order qualifiers What qualifies an item to be considered for purchase? What wins the order?

Positioning the Organization How will the firm compete?

Deploying the strategy

Strategy and Operations Of the

Supply Chain


Success

Supply Chain Improvement

ToolsTheory of Constraints is based on the premise that the rate of goal

achievement is limited by at least one constraining process. Only by increasing flow through the constraint can overall throughput beincreased. Assuming the goal of the organization has been articulated the steps are:

Identify the constraint Decide how to exploit the constraint Subordinate all other processes to the above decision Elevate the constraint If, as a result of these steps, the constraint has moved, return to Step 1 and

repeat the process. Don't let inertia become the constraint.

The end goal for Supply Chains using this tool is to move from using a forecast model in determining inventory and manufacturing levels to a replenishment to consumption model


Success


Tools

Lean manufacturing or lean production, often simply, "Lean," is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to bewasteful and should be eliminated. Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for. There are 7 areas of waste:

Transport (moving products that is not actually required to perform the processing)

Inventory (all components, work in process and finished product not being processed)

Motion (people or equipment moving or walking more than is required to perform the processing)

Waiting (waiting for the next production step)

Overproduction (production ahead of demand)

Over Processing (resulting from poor tool or product design creating activity)

Defects


Success


Tools

Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts", "Green Belts", etc.) who are experts in these methods. Continuous efforts to achieve stable and predictable process results

Manufacturing and business processes have characteristics that can be measured, analyzed, improved and controlled

Achieving sustained quality improvement requires commitment from the entire

organization, particularly from top-level management

A clear focus on achieving measurable and quantifiable financial returns

An increased emphasis on strong and passionate management leadership

Special infrastructure of "Champions," "Master Black Belts," "Black Belts," "Green Belts",



Thank You

APICS-CIND


www.apics-cind.org

Documents

Hot Trends to Fire Up Your Production and Inventory ...mpcms.blob.core.windows.net/.../apics-conexusdec08rev.pdf · Advancing Productivity, Innovation, and Competitive Success Hot