Post on 31-Dec-2015
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Session 21 Session 21
Implementing JIT ManufacturingImplementing JIT Manufacturing
John Striebich
Copeland Corporation
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CopelandCopeland
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Copeland WorldwideCopeland WorldwideCopeland WorldwideCopeland Worldwide
5 Plants 14 Plants 5 Plants
Belgium
Berlin,Welkenraedt,England
Thatcham,
Kolin,
Germany
Cookstown, N. Ireland
Reynosa,
Brantford,Ontario
Rushville,Indiana
Lebanon, Missouri
Ava, Missouri
MexicoHartselle,Alabama
Shelby,N. Carolina (2)
Sidney,
Ohio (4)
Fishers, Indiana
Natchitoches, Louisiana
Shenyang,ChinaShenyang,China
Atit, IndiaAtit, India
Karad, IndiaKarad, India
Rayong,ThailandRayong,Thailand
Suzhou,ChinaSuzhou,China
75 Suppliers75 Suppliers 300 Suppliers300 Suppliers 300 Suppliers300 Suppliers
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Current Environment (FY99)
• MRP II System – Home Grown/Customized• Weekly MRP Runs• Nightly Batch Updates Of Transactions• No Long Term Capacity Planning• Short Term Capacity Planning – Push Out Orders• Forecast Driven Suppliers• Inventory Management – Hold PO’s At Month End
Performance Customer Metrics Requirements
Delivery 70-90% 98+%Lead Time 3-5 Weeks ConsignmentInventory 5-6 Turns Double in 5 Years
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Market Environment
• Customer Consolidation
• More Competitive Environment• Competition Offering Consignment• Pricing/Profit Pressure
• Customer’s Customers Waiting Until Last Minute To Order• Tight Capital Spending Market
We Had To Change To Meet These Requirements - Lean Was The Only Way - Priorities:
1. Stabilization2. Responsiveness
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Stabilization And Responsiveness
• Sales And Operations Planning
• Stabilization – Use Of Pull Systems
• Manufacturing Cycle Time (MCT)/ Lead-time Reduction
• Supply Chain Management
• Metrics
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Sales and Operations Planning
Sales and Operations Planning
Material CapacityPlan from Supplier
Forecast
Manpower Constraints/Flex
EquipmentConstraints/Flex
Resource AnalysisMarketing Forecast
Plant Part Forecasts
Inputs
Available to PromiseReport
Auto-AcknowledgeTakt Times/ Line Rates
And Inv Plan
Metrics
Outputs
MarketingFeedback
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Sales And Operations Planning
• Define Capacity/Resource Constraints
• Develop High Level Plan To Meet Forecasted Demand• Within Constraints• With Upside “Flex” Potential• Use Planned Inventory Build-Up If Needed
• Develop Tactics And Obtain Approval For: - Labor Plan - Planned Line Rates (Set Takt Times) - Sales Programs, Promos, Etc.
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Forecasts
• Forecasts Are Inaccurate (Fact or Fiction?)• Some Forecasts Are Accurate• Customers Have To Schedule/Plan Lines• Emergencies, New Demand, Surprises Will Still Occur
• Communication/Collaboration With Customers Is Key
• Mix Model Forecasting• Stable Business – Repeatable, Predictable• New Business – Volatile Demand, Unpredictable
• Small As % Of Total Business• Minimal Impact To Overall Forecast
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Stabilization
• Develop System To Eliminate Need For Expediting•Expediting Needed:
- Customers Needed Product Inside of Planned LT - Customers Didn’t Order What Was Forecast - Plants Were Not Building What Customers Needed - Material Needed by Customers Not Available - Available Capacity Not Being Used Efficiently
• Pull System Established To Order Material Consumed - Stock Maintained To Support Most Customer Demand
• Purchased Part Ordering Decoupled From Customer Orders• Key To Responsiveness
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Stabilization
• Sub-Assemblies - Sub-Assemblies Previously Scheduled By MRP - Heavily Forecast Dependent - Forecast Is Never Right - Extra Changeovers Needed When Forecast Wrong
- Sub-Assemblies Now Scheduled By Pull Systems - Simplified Scheduling Of Subs - Shortages Virtually Eliminated, Less WIP - Visual Scheduling – Passed to Supervisor/Operator - Productivity Improved, MCT reduced - More Responsive, More Flexible
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Customers Demanding Shorter Lead-Times
• Step 1 – Change Customer Ordering Practices - MRP Frequency - Quantity Price Breaks - Communicate The Correct Lead-Time - Confidence In Delivery - Freight Issues Limit Responsiveness
• Once Customer Makes Changes, Reduce Lead-Time - Document The Value Generated
- Customers Do Not Always Know- Can We Get Some Value In Return?
- Use Metrics To Track Performance
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Benefits From Shorter Lead-Times
• Lower Customer Inventory - Less Storage/Handling Costs, Less Obsolescence, Etc
• Less Variability Impacting Delivery, Problems Resolved Faster
• Better Response Capability To Customer’s Customer
• Potentially More Business Opportunities In Supply Chain
• Fewer Changes To Schedules, Less Maintenance
• Productivity Improvements Possible
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Example - Three Tier Supply Chain (Internal)
CustomerOrder Distribution Manufacturing Manufacturing
CustomerOrder
Distribution Manufacturing Manufacturing
Monthly ScheduleDaily Pass ThroughDaily Orders
12 Days20 Days
5 Days MCT 7 Day MCT 20 Day MCT
Daily Orders Daily Pull Signals Daily Pull Signals
5 Day MCT 1 Day MCT 5 Day MCT6 Days 10 Days
64 Days
27 Days
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Metrics
• On-Time Delivery• Cost Per Piece• MCT (Manufacturing Cycle Time)• Lead Time • First Pass Yield• Inventory Turnover/ WIP Levels• Shortage Tracking• Purchase Exceptions
Generally Metrics Are More Customer Focused
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Planning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland CorporationPlanning and Scheduling Lean OperationsPlanning and Scheduling Lean OperationsCopeland CorporationCopeland Corporation
Summary
• Customers Are Demanding More Value, Faster Response
• Competitive Pressures High To Offer More Value To Customers
• Stability Eliminates Many Costs Associated With Shortages
• Stability In Supply Enables More Responsiveness
• Responsiveness Increases Customer Satisfaction/ Loyalty
• Customers Value Shorter Lead-Times