LEAN and Sustainable Supply Chains CHAPTER 13. Learning Objectives 1. Describe how Green and Lean...
Transcript of LEAN and Sustainable Supply Chains CHAPTER 13. Learning Objectives 1. Describe how Green and Lean...
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LEAN and Sustainable Supply Chains
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Learning Objectives
1. Describe how Green and Lean can complement each other.
2. Explain how a production pull system works.
3. Understand Toyota Production System concepts.
4. Summarize important attributes of a lean supply chain.
5. Analyze a supply chain process using value stream mapping.
6. Know the principles of supply chain design.
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What is Lean?
Is it skinny?
Is it less people?
Is it working harder?
Is it making less?
WhatWhat is Lean? is Lean?
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Why no Sir! Lean is none of those things. Lean is an ever evolving philosophy
based on proven principles and practices aimed at the
elimination of wastes.
WhatWhat is Lean? is Lean?
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Lean is a continuing process of change involving everyone
in the organization.
WhatWhat is Lean? is Lean?
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Designing processes for your business
1. Deliver exactly what the customer needs (defect free)
2. Be able to deliver customized value to each individual customer
3. Deliver on demand exactly as requested
4. Respond immediately to problems or changes
5. Have no waste
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LEAN in general Continued
Value chain: each step in the supply chain should create value If it does not create value, it should be removed
Customer value: something for which the customer is willing to pay
Waste: anything that does not add value from the customer’s perspective
LO 1LO 1
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Understanding Value-Added
Activity
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Understanding Value-AddedWhat would you be willing to pay for when
ordering a hamburger?___ Meat
___ Dough
___ Ketchup
___ Electricity to run ovens
___ Electricity to run outdoor lights left on accidentally
___ Person paid to inspect take-out orders
___ Cost of hamburgers not sold
___ Distribution Center
___ Cost of radio, TV, web ads
___ Cost of delivery truck signs
___ Cost of store manager
___ Cost of cleaning
___ Cost of menus
___ Employee training
___ Profit
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TOYOTA PRODUCTION SYSTEM
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The “4P” model
1P
2P
3P
4P
PROBLEM SOLVING(Continuous ImprovementAnd Learning)
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The “4P” model
1P
2P
3P
4P
PROCESS
(Eliminate Waste)
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The “4P” model
1P
2P
3P
4p
PEOPLE AND PARTNERS
(Respect, Challenge, and Grow Them)
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The “4P” model
1P
2P
3P
4P
PHILOSOPHY
(Long-Term Thinking)
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Understanding Waste
Waste: anything that adds cost or time without adding value
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Understanding Waste
Overproduction – producing work prior to it being required is waste and is the greatest of all the wastes• Producing reports no one reads or needs• Making extra copies• E-mailing, faxing same document• Entering repetitive information on multiple documents• Ineffective meetings
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Understanding Waste
Waiting – for people, signatures, and information is waste. This is “low hanging fruit” which is easy to reach and ripe for the taking.
• Excessive signatures or approvals• Dependency of others to complete tasks• Delays in receiving information• Computer program revision problems• Cross-departmental resource commitments• Not a priority for someone to complete
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Understanding Waste
Motion - any movement of people, paper, electronic exchanges that does not add value is waste
• Searching for computer files• Searching for documents in file cabinets• Repeatedly reviewing manuals for information• Hand carrying paper to another process• Cross-departmental resource commitments• Not a priority for someone to complete
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Understanding Waste
Transport - affects the time of delivery of any work within an office
• Delivering unneeded documents• Excessive filing of work documents• Over-addressed e-mail distribution lists• Hand-carrying paper to another process• Cross-departmental resource commitments• Mis-prioritization
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Understanding Waste
Overprocessing - putting more work or effort into the work required by internal or external customers is waste
• Duplicative reports or information• Repetitive data entry• Incorrect information being shared• Constantly revising documents• Ineffective meetings and no agendas• Duplicative documentation• Lack of accurate project planning
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Understanding WasteInventory (Time) - work piles, excessive
supplies, and excessive signature requirements are waste
• Files awaiting signatures or approvals• Work awaiting task completion by others• Obsolete files• Obsolete office equipment• Not sufficient training of back-ups• Purchasing excessive office supplies.
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Understanding Waste
Defects (or mistakes) - refers to all processing required creating a defect or mistake and the additional work required to correct it
• Data entry errors• Pricing errors• Forwarding incomplete documentation• Incorrect information on document• Inefficient file system on PC or in cabinet• Not appropriate staffing to service customer
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Understanding WasteUnderutilization of People - is a result
of not placing people where they can (and will) use their knowledge, skills, and abilities to the fullest (8th Waste)• Project deadlines not being met.• Work loads not evenly balanced due to lack of cross-training• High absenteeism and turnover• Inadequate performance management system• Incomplete job skill assessment prior to hiring
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JIT PULL SYSTEM
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Minimizing Waste: Kanban Production Control Systems
Storage Part A
Storage Part AMachine
Center Assembly Line
Material Flow
Card (signal) Flow
Withdrawal kanban
Once the Production kanban is received, the Machine Center produces a unit to replace the one taken by the Assembly Line people in the first place
This puts the system back were it was before the item was pulled
The process begins by the Assembly Line people pulling Part A from Storage
Production kanban
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Other Approaches
Kanban squares: marked spaces on the floor to identify where material should be stored
Container system: the container is used as a signal device
Colored golf balls: appropriate golf ball signals production
LO 2LO 2
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Determining the Number of Kanbans Needed
Setting up a kanban system requires determining the number of kanbans cards (or containers) needed
Each container represents the minimum production lot size
An accurate estimate of the lead time required to produce a container is key to determining how many kanbans are required
LO 2LO 2
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The Number of Kanban Card Sets
sizeContainer C
leadtime during demand of percentage a as expressedstock Safety S
demand) as timeof units (sameorder an replenish to timelead L
period timesomeover demanded units ofnumber Average D
card) a isset (a sets cardkanban ofNumber k
)(1
container theof Size
stockSafety timelead during demand Expected
C
SDL
k
LO 2LO 2
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Minimized Setup Time
Reductions in setup and changeover times are necessary to achieve a smooth flow
Kanban significantly reduces the setup cost The organization will strive for a lot size of
one
LO 2LO 2
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Work Center 1 Work Center 2
WorkCenter 3
Containerwith 2 parts(lot size = 2)
Flag orsignalmarker
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RunRun
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Lean Supply Chains
Value stream: the value-adding and non-value-adding activities required to design, order, and provide a product or service
Waste reduction: the optimization of the value-adding activities and the elimination of non-value-adding activities
LO 4LO 4
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Components of a Lean Focused Supply Chain
Lean suppliers Able to respond to changes Lower prices Higher quality
Lean procurement Key is automation (e-procurement) Suppliers must see into the customers’ operations and
customers must see into their suppliers’ operation Lean warehousing
Eliminate non-value-added steps and waste in storage process
LO 4LO 4
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Components of a Lean Focused Supply Chain Continued
Lean logistics Optimized mode selection and pooling orders Combined multi-stop truckloads Optimized routing Cross docking Import/export transportation processes Backhaul minimization
Lean customers Understand their business needs Value speed and flexibility Establish effective partnerships with suppliers
LO 4LO 4
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Value Stream Mapping
Value stream mapping: a special type of flowcharting tool for development of lean processes Used to visualize product flows through various
processing steps Need a full understanding of the business
including production processes
LO 5LO 5
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“If you can't describe what you are doing as a process, you don't know what you're doing.”
W. Edwards Deming
ART of OBSERVATION
Clip
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Manufacturing Process Map
LO 5LO 5
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Service Process Current Map CUSTOMERS
SUPPLIERS
INFORMATION FLOW
PROCESS STEPS
DATA COLLECTION
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Lean Implementation Requirements: Total Quality Control
Worker responsibility
Measure SQC
Enforce compliance
Fail-safe methods
Automatic inspection
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Lean Implementation Requirements: Work with Vendors
Reduce lead times
Frequent deliveries
Project usage requirements
Quality expectations
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Any Questions?