Introduction to Lean Manufacturing SAP

Introduction to Lean Manufacturing

Enhancements Part 1: SAP as a Lean Manufacturing EnablerPart 2: Lean Manufacturing Enhancements

Part 1: SAP as Lean Manufacturing Enabler

Key Drivers and Business StrategiesHow does SAP Enable Lean?

© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka

Manufacturing Key Drivers and Pain Points

Long manufacturing lead times

Difficulty in achieving on-time delivery targets

Low inventory turns (unnecessary high inventory level)

High demand for storage space at a production line

Less labor productivity because of non-value-added activities

Limited flexibility to adapt to unplanned events


Customer Business Strategies

Production to customer demand or based upon consumption

Shifting to single-piece-flow approach

Poka yoke (mistake-proofing)

Visual management

Kanban

Event and exception based processes

Jidoka: operators empowered to stop line if there is an issue

Kaizen: continuous improvement

Organizational Strategies

Manufacturing Strategies


Top 10 Business Initiatives Influencing IT Investments

“AMR Research recently surveyed over 500 IT and business executives in 7 manufacturing vertical industries to determine the key business initiatives driving ITspending in 2005.

In all industries, Lean manufacturing was identified as the first or second most important initiative.”

Source: AMR Research: East Meets West – Lean Manufacturing and ERP Are a Better Fit Than You Think, October 2005


SAP as Enabler for Lean Manufacturing

“ Recent evidence [...] uncovered that automotive manufacturers that are backingtheir Lean efforts with an SAP platform are not only outperforming automotivecompanies that have chosen Oracle, they are even better equipped to beat thebest, with automotive SAP customers outranking even the Best in Class formanufacturing cycle time.

Maura Buxton, Aberdeen Group, Automotive Industry Leads the Lean Supply Chain Charge with SAP Solutions, August 2006


Lean Customers: Automotive

China MotorCorporation

GRUPO ANTOLIN-IRAUSA, S.A.

PT ASTRA

SIEMENSVDO

SOFEDIT

South Africa

TVS MOTOR COMPANYIndia

Part1: SAP as Lean Manufacturing Enabler

Key Drivers and Business StrategiesHow does SAP Enable Lean?


How is Lean Manufacturing Enabled by SAP?

Supply Chain ManagementCustomer & Supplier Collaboration

Mixed-Mode Manufacturing:

- Make-to-Order Manufacturing

- Repetitive ManufacturingOrder-less production

- Flow Manufacturing TechniquesLine DesignSequence of eventsOperational method sheetsCapacity line balancingTakt calculationsDetailed planning and sequencingBackflush

KanbanIn-house movement, stock transfers, and external procurementEvent-driven or one-time KanbanKanban replenishment with or without MRPInternet-based electronic Kanban for external procurement

Preventive/Predictive Maintenance

Quality ManagementStatistical Process Control

Business Intelligence & IntegrationxMIIKPIs, Analytics, AlertsRole-based configurable portals


Lean Manufacturing: Transactions in SAP ERP

Here you see standard transaction codes in SAP ERP associated with

functionality.


Sequence of Events: Tasks

Detailed tasks are listed with respective time for setup, labor,

machine, or move

Indicate if each task is Non-Value-Added (NVA)


Sequence of Events: Materials

Indicate component quantity used for each

task


Sequence of Events: Production Resources and Tools

May assign tools, equipment, and drawings to each task


Graphical Display of Line

Graphical display of line can show main path and all feeder paths

Critical path is designated by red highlighting


Operational Method Sheet

Material and Tasks are displayed for each workstation

Drawings or graphical representations are displayed

for each workstation

Tools and equipment may be listed for each workstation


Line Balancing: Volume Design and Takt

Total volume of units (products) planned to run on line is 150. Total time

available is 600 minutes. Therefore, Takt is 600/150 or 4 minutes.

Volume of each product to be produced on the line


Line Balancing: Total Product Cycle Time

For each product, you can see total execution time or Total Product Cycle Time (TPc/t) and the amount of time that is non-

value-added (NVA). NVA is muda, or waste, and may be targeted for elimination to

reduce cycle time.

Note: Takt violation for this product at this operation – 4.1 is greater than 4

minute takt or available time


Graphical Line Balancing: Takt Violation

In a graphical display of each product by workstation, you can

see the Takt violation for a product highlighted in red


Graphical Line Balancing

When task 70 is selected, you can see that it is system test and .90 minutes are

required at the workstation. If operators are cross-trained at each workstation, this

is a candidate for work to be moved to better balance the line.


Graphical Line Balancing: Drag & Drop Operation

Task 70 can be dragged and dropped to a different workstation. This is a simulation until saved – once saved, it will update Sequence of

Events (SOE) and may be pulled into the Operational Method Sheet.


Planning Board - Level Loading for Production

Pool of orders that need to be scheduled and sequenced on the line.

This section shows Primary and Alternate Lines or work centers where orders may

be scheduled and sequenced.


Planning Strategy

Scheduling Stategy Profile


Planning Board

Work is sequenced according to strategy profile. Here, setup times are not optimized.


Planning Strategy – Optimize setups

Designate to optimize based upon setup time.


Planning and Sequencing – Setup Optimization

Work is now scheduled in a different order to minimize setup times. Some of the setups are

now shorter. Throughput time is shorter.


Kanban Board: Demand Source View

Kanbans may be selected and click on “To Empty” or “To Full” to change status and

respective transactions occur automatically.

The boxes above represent Kanban containers which are color-coded to

indicate status.


Kanban Control Cycle

View the number of kanbans and kanban quantity as well as designating maximum

amount of empty containers that may generate an alert to take action.

Control cycle details such as supplying area and plant.

The vendor and agreement designated will be used to automatically generate releases

to the supplier.

Part 2: Lean ManufacturingEnhancements

Enhancements to existing Kanban Processes

Alert-based Kanban Process Monitoring

RFID-enabled Kanban

Reporting Point Kanban (Kanban for WIP Material)Production Leveling based on Heijunka Processes

Kanban Analytics


Kanban Board – Automatic Refresh

Benefits:• Kanban Boards can be used for monitoring the shop floor with user

interaction only for exceptions


Kanban Board – Tabular view

Benefits:Provides the same information as the graphical board in a tabular displayEasy to configure, easy to useExtensible to display additional system and customer-specific fields Sophisticated print function Can be displayed in web-based user interfaces (Portal)


Kanban – New Business Application Interfaces

New BAPIs for Kanban Data and Control Cycles:

• BAPI_KANBANCC_EXISTCHECK• BAPI_KANBANCC_GETLIST_ALL• BAPI_KANBAN_GETLIST_ALL• BAPI_KANBANCC_CREATE• BAPI_KANBANCC_CHANGE• BAPI_KANBANCC_DELETE• BAPI_KANBAN_CHANGE

Benefits: Supports customer-specific process control and development




RFID-enabled Kanban


Kanban Analytics


Kanban Alerting

New alerts supported in the Kanban process:1. Alert when errors occur while changing Kanban status2. Alert when replenishments are deleted3. Alert when maximum limit of EMPTY Kanbans is exceeded4. Alert when deliveries are delayed

Benefits:- Manage by exception – if there is no alert/message, no action is

required- Ease of exception handling- Can configure alerts so only appropriate parties are alerted with

their preferred communication method




RFID-enabled Kanban


Kanban Analytics


Kanban – Process with RFID

Kanban (with RFID Tag)

Source

MaterialFullFull

FullFull

Empty

RF Gate

Automatic Kanban status change, goods receipt posting and

creation of the material document

Automatic Kanban status change and creation of a replenishment element,

e.g. a PO


RFID in Kanban – Business Benefits

Cost Reduction:Time savings through automatic status changeNo interaction with screens for end usersReduced labor costsReduced cost of incorrect data

Better Process stabilityLess dependence on worker, thus less human error




RFID-enabled Kanban


Kanban Analytics


In-house Production in Repetitive Manufacturing

In-house Production with Kanban (current): Operation 1 Operation 2 Operation 3

mat mat mat

RP 1 RP2 RP3Routing Operation 1 Operation 2 Operation 3

mat1

StorageLocation0002

StorageLocation0003

mat1 mat1

Final backflush

Supply Areamat1

StorageLocation0001

Component

Control cycle mat1


In-house Production with Reporting Point Kanban (new)

In-house Production with Reporting Point Kanban (new):

Operation 1 Operation 2 Operation 3mat mat mat

RP 1 RP2 RP3Routing Operation 1 Operation 2 Operation 3

mat1Component

StorageLocation0001

StorageLocation0002

StorageLocation0003

mat1 mat1

Final backflush

SA 1 SA 2 SA 3CC 1 CC 2 CC 3


In-house Production with Reporting Point Kanban (new)

Background:Kanbans are more effectively used for the shop-floor controlPull principle in shop-floor control (work load for each operation/reporting point is represented by an empty kanban); operation n controls the previous operation n-1 (not vice-versa)The allocation of material to the work center is assigned dynamically -- due to the stock level, capacity, etc.Reporting Points monitor the production progress between operationsManufactured parts at each reporting point are backflushed to the reporting point

Benefits:Visibility and reduction of WIPAssemblies are only produced when needed and in the quantity neededAvoiding reworkElimination of waste Simplified and flexible production process


In-house Production with Reporting Point Kanban




RFID-enabled Kanban


Kanban Analytics


Heijunka – Definition & Business Benefits

Heijunka: Toyota Production System (TPS) term

“The distribution of production volume and mix evenly over time”

Business Benefits:Convert uneven customer pulls into an even and predictable manufacturing scheduleStabilize the material and value flow Decrease production lead times and inventoriesIncreases production flexibility and delivery reliability

Mission: Produce every product, every day, several times


Heijunka – Process Requirements

Load Leveling Volume and Mix

Material A

Material B

Material C

M T W T F

Uneven production volume and product mix

Material A

Material B

Material C

M T W T F

Leveling production volume

Material A

Material B

Material C

M T W T F

Leveling product mix


Heijunka – Process Requirements

Load Leveling Volume and Mix

Material A 30 PC Requirement situationof a shift or day20 PCMaterial B

Material C 60 PC

Material A 10 PC Lot calculation by MRP or Kanban controlcycles

Material B 5 PCMaterial C 20 PC

Material AMaterial BMaterial C

Heijunka: Sequencing/Leveling of finishedgoods

Heijunka: Sequencing/Leveling of semi-finished goods

Material DMaterial EMaterial F


Heijunka – Leveling/Sequencing

Several tools and functions already in the SAP portfolio to support Leveling/Sequencing:

Tools and functions for demand leveling: SOP (mySAP ERP)Demand Management (mySAP ERP, mySAP SCM)Model Mix Planning (mySAP SCM)

Tools and functions for production leveling: SOP (mySAP ERP)Demand Management (mySAP ERP, mySAP SCM)MRP (mySAP ERP, mySAP SCM)Tabular Planning Board (mySAP ERP, mySAP SCM)Capacity Planning (mySAP ERP, mySAP SCM)Sequence Planning (mySAP ERP, mySAP SCM)


Heijunka – Leveling/Sequencing

Enhancements leverage key features and functions of mySAP ERP to support Lean Manufacturing processes:

Pull principle for the control of in-house production, external procurement and transport processes using KanbansOrder-less or order-independent production planning and control using Repetitive ManufacturingTakt-based planning and scheduling in the Sequence planning

Newly designed process uses the following application areas of mySAP ERP:

Material Requirements Planning (MRP)Repetitive Manufacturing (REM) KanbanSequence Planning


Enhanced Heijunka Process:

1) MRP calculates requirements Lot size calculation within the leveling/sequencing horizon uses fixed lots representing the relevant Kanban quantities Fixed lots in short time horizon, daily or weekly lots in long time horizon

2) MRP creates planned orders and projects capacity requirementsCapacity leveling and sequencing is possible based on MRP planned orders

3) Kanban process control production based on actual demand (internal or external)

Extension of the current process: The Kanban module (change status to EMPTY) does not create a new planned order which replaces existing MRP planned ordersInstead the system searches for a suitable scheduled MRP planned order and links it to the KanbanThis enables keeping the scheduling/sequencing situation stable within the planning horizon Additional scheduling/sequencing algorithms


Heijunka Board - Execution

1. Sequence planning board – supporting sub-day time segments


Heijunka Board - Execution

2. Kanban board (graphical or tabular format)




RFID-enabled Kanban


Kanban Analytics


Kanban Analytics: KPIs available in BI content 7.1.2

Actual replenishment lead time / replenishment lead time from control cycle Actual quantity delivered / call-off quantity from control cycle Wait time (time span between status empty and full), other interoperation times like empty-transit, transit-full, etc. Number of defects per time unitCorrection of defects per time unit (time span from defect status to productive status) Stock in production supply area (number of full boxes)Actual empty boxes / maximum of empty boxes from control cycle


Summary - Key Takeaways

- Lean is a top priority in today’s manufacturing environment

- SAP enables Lean Manufacturing processes through current functionality such as Kanban

- SAP will continue to provide value to our Manufacturing customers by enhancing our solutions to more effectively support Lean


Your Turn!

[email protected]

Jutta Wesemann-RuzickaSolution Manager

Q&A


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Introduction to Lean Manufacturing SAP

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