Best Management Practices for SMEs

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Transcript of Best Management Practices for SMEs

  • Best Management Practices for SMEsPresented by:Dr. Vinod KumarFeb 12, 2002

    *

  • Number of People Employed in Manufacturing Firms*Number of PeopleNumber of BusinessesPercent Employed

    0-4130,046395-961,1671810-1962,8971920-9967,05719100-49916,475 4500+ 4,923 1________Total342,565100*Source: Small Business Administration, 1996

  • A Typical Small BusinessServing a few customersMake-to-order operationsSeldom build to stockRarely able to forecastHundreds of part numbersKeeping customer happy through High Quality, Fast Delivery, and Good Price Enviable value-added ratios

  • 2.bin

  • 3.bin

  • Lean...A Working DefinitionA systematic approach to identifying and eliminating waste (non-value-added activities) through continuous improvement by flowing the product at the pull of the customer in pursuit of perfection

    Quoted from the MEP Network

  • Another Lean Definition Doing more with less:MaterialsElectricitySpacePaperworkTransportationWasteEffort

  • Lean manufacturing techniquesTotal organizational buy-inSales, production, inventory planningTotal quality managementLean Enterprise Key DriversVision

  • Chart1

    108

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    Sales, Production, Inventory Management

    Sales

    Sales

    108

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    104

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    108

    Sales, Production, Inventory Management

    Lean

    Lean

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    Goal

    Actual

    Lean Manufacturing Techniques

    Quality

    Quality

    106106106106

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    107107107107

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    106106106106

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    Total Quality Management

    TOB

    TOB

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    Total Organizational Buy-in

    all charts

    1234

    Lean Manufacturing TechniquesTotal Organizational Buy-inSales, Production, Inventory ManagementTotal Quality Management

    LMTGoalActualTOBGoalActualSPIPGoalActualTQMGoalActual

    Value stream mapping108Vision106PQR analysis108SPC106

    Takt time107Action plan107Forecasting107Best practices107

    One-piece flow106Policy deployment108Production smoothing108Process control108

    Pull system107Enfranchisement108Kanban107Poka-yoke108

    SMED (setup)108Performance-based pay108Supermarket106Waste reduction108

    OEE108Skills training107Visual pull signals1085-S107

    Flow velocity108CI culture108Capacity planning108ISO 9000 structure108

    Productivity (labor cost)107Kaizen promotion office107Standard WIP108Quality assurance107

    Facility layout108Morale108Inventory turns104Problem-solving tools108

    Standard work107Visuals/communication107Product introduction102Supplier quality106

    Jidoka (autonomation)108Lean training106Delivery performance108Information flow107

    Machine reliability107Change management108First-pass quality108

    TPM106WIIFM (incentives)108Prevention vs. detection108

    Value-added ratio108Safety focus108

    Line balancing108Profitability104

    Handling reduction108Team building103

    Sustainment of gains108Effective leadership109

    Right-sized equipment109

    all charts

    Goal

    Actual

    Lean Manufacturing Techniques

    Total Organizational Buy-in

    Sales, Production, Inventory Management

    Total Quality Management

  • Lean Manufacturing Techniques012345678910Value Stream MappingTakt timeOne-piece flowPull systemSMED (setup)OEEFlow velocityProductivity (labor cost)Facility layoutStandard workJidoka (autonomation)Machine reliabilityTPMValue-added ratioLine balancingHandling reductionSustainment of gainsRight-sized equipment

  • 1 x Weekly

    50,000 pieces weekly

    Warehouse

    Telecommunications

    Inventory

    Veneer prep planning

    Shipping

    Shipscommon carrier

    Clipper

    Long pine is hardto handle, slowsdown theoperation

    Butt joint

    CT calculated per 100

    Fleecebacker

    CT calculated per 100Butt joint tape runs upside down28 m/min

    Sand

    CT calculated per 10023 m/min(greatly depends onlength)

    Package

    100 pieces per bag20% waste betweenFB and pack

    Staging

    Total staging area27,000 ft2; thisproduct requires4,050 ft2 (15%)

    CT 240 sec

    SU N/A

    UT 2-3 shifts/week

    7,000 pieces/shift(should be 13,500)

    I5,000pieces

    CT 700 sec

    SU 5 min

    UT 90% D/S

    10,000 pieces/shift

    CT 575 sec

    SU 3 min

    UT 80% D/S

    12,200 pieces/shift

    CT 240 sec

    SU 5 min

    UT 100%/D 80%/S

    12,750 pieces/shift

    CT 333 sec

    SU 3 min

    UT 100%/D 40%/S

    9,000 pieces/shift

    I4 rolls

    I21 rolls

    I3,000pieces

    I25,000ft2

    I250,000ft2

    15 min

    1 day

    4 hour

    2 hour

    1 day

    1 day

    1 day

    2 hr

    Value StreamAnalysis

    Planning

    Daily lineups(work assignments)

    Note: 50% yield on log run pine

    Warehouse

    Warehouse

    Warehouse

    Warehouse

    Warehouse

    Warehouse

    Warehouse

    Telecommunications

    Packaging

  • Value Added vs. Non-value AddedValue added: Transforms raw material and information into parts or products

    Non-value added: Consumes resources but does not contribute directly to the production of materials or product

  • Typical Value-added % of Lead TimeValue-added activities 5%Non-value added activities 95%

    Chart2

    5

    95

    Sheet1

    5

    95

    Sheet1

    Typical Value-added %of Lead Time

    Sheet2

    Sheet3

  • Chart3

    106106106106

    107107107107

    108108108108

    108108108108

    108108108108

    107107107107

    108108108108

    107107107107

    108108108108

    106106106106

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    Total Quality Management

    Sales

    Sales

    108

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    104

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    Sales, Production, Inventory Management

    Lean

    Lean

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    108

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    109

    Goal

    Actual

    Lean Manufacturing Techniques

    Quality

    Quality

    106106106106

    107107107107

    108108108108

    108108108108

    108108108108

    107107107107

    108108108108

    107107107107

    108108108108

    106106106106

    107107107107

    108108108108

    108108108108

    Total Quality Management

    TOB

    TOB

    106

    107

    108

    108

    108

    107

    108

    107

    108

    107

    106

    108

    108

    108

    104

    103

    109

    Total Organizational Buy-in

    all charts

    1234

    Lean Manufacturing TechniquesTotal Organizational Buy-inSales, Production, Inventory ManagementTotal Quality Management

    LMTGoalActualTOBGoalActualSPIPGoalActualTQMGoalActual

    Value stream mapping108Vision106PQR analysis108SPC106

    Takt time107Action plan107Forecasting107Best practices107

    One-piece flow106Policy deployment108Production smoothing108Process control108

    Pull system107Enfranchisement108Kanban107Poka-yoke108

    SMED (setup)108Performance-based pay108Supermarket106Waste reduction108

    OEE108Skills training107Visual pull signals1085-S107

    Flow velocity108CI culture108Capacity planning108ISO 9000 structure108

    Productivity (labor cost)107Kaizen promotion office107Standard WIP108Quality assurance107

    Facility layout108Morale108Inventory turns104Problem-solving tools108

    Standard work107Visuals/communication107Product introduction102Supplier quality106

    Jidoka (autonomation)108Lean training106Delivery performance108Information flow107

    Machine reliability107Change management108First-pass quality108

    TPM106WIIFM (incentives)108Prevention vs. detection108

    Value-added ratio108Safety focus108

    Line balancing108Profitability104

    Handling reduction108Team building103

    Sustainment of gains108Effective leadership109

    Right-sized equipment109

    all charts

    Goal

    Actual

    Lean Manufacturing Techniques

    Total Organizational Buy-in

    Sales, Production, Inventory Management

    Total Quality Management

  • Quality System ManagementSpokes of TQM wheel symbolize a few critical indicators used to measure how well a company has addressed the quality aspects of doing business.Some Routine TQM Tools

    Spaghetti diagramValue stream mappingLinearity charts (productivity and waste)Ishikawa diagram (cause and effect)Quality mapsProcess flow diagramsPareto analysis

  • MudaWaste

    Activities that absorb resources but create no value

    Antidote: Lean thinking

  • Waste Causes (In no particular order)Facility layoutExcessive setup timesIncapable processPoor preventive maintenanceUncontrolled work methodLack of training BoredomProduction planning/schedulingLack of workplace organization Lack of supplier quality and reliabilityLack of concern (accountability)

  • Waste Causes (continued)

    Passing on defective part