Enabling Lean Manufacturing through ERP - ciitcm.in · Enabling Lean Manufacturing through ERP 1...

Enabling Lean Manufacturing through ERP

1Enabling Lean manufacturing through ERP- CII - TGD

T.G.DhandapaniGroup CIO – Sundaram-Clayton Limited

11/28/2008

Agenda

• Introduction• Digitizing Lean in ERP

• Ecosystem• Problem and baseline metrics• Digitized Pull system• Digitized TPM• Benefits

• InteractionsEnabling Lean manufacturing through

ERP- CII - TGD 211/28/2008

Technology

“The first rule of any technology used in business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency”

- Bill GatesEnabling Lean manufacturing through ERP- CII - TGD 311/28/2008

Power of Digitization

• Lean your process – improve, eliminate and automate steps

• Manage by exception• Automate information flow from P2E

and E2E• Integrate people and their roles and

functions

Enabling Lean manufacturing through ERP- CII - TGD 411/28/2008

Power of Digitization

• Customize to individual work styles and decision making

• Manage and audit production process more effectively and consistently

• Share production best practices and collaborate on process


What is Lean?• Balanced use of people, equipment and

material that gives lowest manufacturing cost

• Lowest manufacturing cost assumes all wastes is eliminated

• Supply of material as per customer requirement as and when required with specified quality and quantity

11/28/2008 Enabling Lean manufacturing through ERP- CII - TGD 6

Lean = management of Waste

Drivers of LeanCost element Drivers

Material cost •Value engineering •Value addition

Processing cost

•Energy, logistics, consumables, equipment maintenancePersonal cost •Low cost automation, people

Finance cost •Inventory asset

11/28/2008 Enabling Lean manufacturing through ERP- CII - TGD 7

TQM journey and RecognitionsTQM journey and Recognitions

1987 1990 1994 1998 2002

TQM

Intro

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TQM

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TQM

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ACMA Technology

Award

Japan Quality Medal

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Deming Prize

TQM - Group’s TQM Journey

11Enabling Lean manufacturing through ERP- CII - TGD11/28/2008

Business ecosystem

• Single supplier

• Variety complexity

• Varying demand

• High value propriety products

• Non propriety small vendorsEnabling Lean manufacturing through

ERP- CII - TGD 1211/28/2008

Problem and base level metrics

Enabling Lean manufacturing through ERP- CII - TGD 13

Key performance areas Measure

Customer complaints per month 7

Delivery service level 70%

Premium dispatches pa 721

Stock in pipeline 20 croresNonmoving stock in transporters godown for > 60 days 3.30 crores

Line stopper due to supplier parts -% man hours lost 3.5%

Value added per employee 19

Inventory turn 2311/28/2008

Lean journey in TVS M


Seven step approach for Lean manufacturing

Steps Metrics

Step 1: Value stream mapping Process ratio in percentage

Step 2: Create a flow Single piece flow

Step 3: Balance to takt time Ratio between cell bottleneck time and takt time

Step 4: Stabilize the production - TPM

OLE of the cell, Lost cost tree

Step 5: Improve flow Percentage of missed cards per shift, service level, inventory turnover

Step 6: Zero defect PPM

Step 7: Leveled production Every part every day / every shift / every hour


Seven step approach for Lean manufacturing

Steps Metrics SAP tools/modulesStep 1: Value stream mapping - Process ratio in percentage

Step 2: Create a flow Single piece flow

Step 3: Balance to takt time - Ratio between cell bottleneck time and takt time

Routing

Step 4: Stabilize the production - loss elimination through TPM

OLE of the cell, Lost cost tree

PM, CO

Step 5: Improve flow - paced withdrawal pull system

Percentage of missed cards per shift, service level, inventory turnover

XI, PP, electronic Kanbhan, ITS server

Step 6: Zero defect – poka yoke ,

Kaizen, PM analysisPPM QM / PM

Step 7: Leveled production - Every part every day / every shift / every hour


Pull system using SAP


18

PurchaseSupplier

Production Marketing Customer

Units SWHStores

AssemblyM/c shop

WIP Transfer

I

Netting withMin.norms

GenerateMRP

MRPMRPSchedule

Produce

Resource planning

Produce Produce

Issue Order

2 weeks - daily4 weeks – Ten.

Pull system in manufacturing

Pull

Enabling Lean manufacturing through ERP- CII - TGD11/28/2008

Replenishment signal in a “pull system”


Vendor

Strategic buffer – on site

6 days vendor lead time

3 Days Manufacturing lead time

Strategic buffer –WH near customer

JIT supply to customer

Consumption

Replenishment signal “PO”

Replenishment signal for Mfg”

11/28/2008

• Kanban card for triggering production

• Identification label

• Documentation of production confirmation

• Documentation of back-flushing

• Delivery document creation

• FIFO control

SCL - Multi purpose bar coded cards


e Kanban status for vendors

22Enabling Lean manufacturing through ERP- CII - TGD

Vendor Kanban details on-line display in WEB

11/28/2008

TPM through SAP Plant Maintenance module


TPM Targets

P – Productivity - Achieve 85% OEE minimum

Q – Quality - Reduce rejections by 50%. Zero defect products to customer.

C – Cost - Reduce manufacturing cost by 20%.

D – Delivery - Supply 100% as per customer requirement

S – Safety - Achieve Zero accident

M – Man - Achieve 30 suggestions per employee per year


Plant Maintenance

Equipment & FunctionalLocation maintenance

PM plans &Check list

Work order management for preventive and

breakdown maintenance

Linkage to MM and FI for Purchasing and cost centre-wise

tracking

Mean Time Taken to Repair (MTTR) / Mean Time between

Failures (MTBF)Notification

analysis

Breakdown analysis

Why-Why analysis

Breakdown matrix

SMS alerts Horizontal deployment


Internet

SMS messageOnline printing

SMS alerts on breakdown


Performance measurement

• Key measurement task– Define measurement variables– Perform baseline measurement– Perform final measurement– Analyze results and calculate benefits

32

If you can’t measure, you can’t manage it

– Andy

If you can’t measure, you can’t manage it

– Andy Enabling Lean manufacturing through ERP- CII - TGD11/28/2008

Lost cost tree in TPM

Link the benefits intobusiness results

Prepare loss cost tree forplant

Link the losses with financial elements

Identify & implement projects to reduce the losses – Pillar wise

Review the project implementation


Loss due to Equipment effectiveness


Break up of availability loss


Break Up of Quality Loss



Stratification –manufacturing unit wiseStratification –manufacturing unit wise

Measurements• Focused• Deployable• Simple• Visible

Measurements• Focused• Deployable• Simple• Visible

11/28/2008


Stratification –warehouse wiseStratification –warehouse wise

11/28/2008

360 degree view of inventory


The more inventory a company has, less likely they are of what they need

………Taiichi Ohno11/28/2008

Inventory analysisRed, Gray, Green


11/28/2008

Performance measure in indirect areas


2882

4926 32 41 16

0

750

1500

2250

3000

0-4 5-9 10-20 20-49 50-100 >100

GRN creation time for local supplies

11/28/2008

Reduce Information systems downtime

Bette

r

UOM : PPM Downtime

Performance measurement for IT in PPM


Over all business results


Key performance areasBase level

Measure

Measure after LEAN

%

Customer complaints per month 7 2 > 100%

Delivery service level 70% 90% 30%

Premium dispatches pa 721 174 76%

Stock in pipeline 20 cr 10 cr 50%

Nonmoving stock in transporters godown for > 60 days

3.30 crores 0 >100%

Line stopper due to supplier parts - % man hours lost 3.5% 0.45% 87%

Value added per employee 19 28 37%

Inventory turn 23 26 22%11/28/2008

Summing up………


• IT plays a critical role in Lean manufacturing as business driver• Gateway to success comes out of:

•“Lean” physical processes thro TQM • Integrating business processes thro IT solutions – ERP• Extending IT support to supply partners • Instituting performance measures for

• Continuous improvements• Sustained controls on

• Inventories• Productivity measures• Assets utilization• Wastes and non value adds

11/28/2008

Question and answers


Thank you

[email protected]


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