Lean Supply Chain

Mira Rahayu ST., MT Teknik Industri IT Telkom 2009

Kami melihat kesalahan sebagai peluang untuk belajar. Bukannya menyalahkan orang lain, organisasi mengambil tindakan korektif dan menyebarluaskan pengetahuan mengenai pengalaman masing-masing secara luas. Belajar merupakan proses berkesinambungan di seluruh perusahaan, ketika atasan memotivasi dan melatih bawahannya; ketika para pendahulu melakukan hal yang sama kepada penerusnya; dan ketika anggota tim di semua tingkatan berbagi pengetahuan dengan yang lain. (Dokumen Toyota Way 2001, TOYOTA Motor Corporation)

Simple in TalkTough in Walk

If you are determined, and try hard enough, you can squeeze water from a dry towel (Eiji Toyoda) Past President Toyota Motor Corp. Toyota, our exemplar company, continues to march from victory to victory (Jim Womack) President and Founder, Lean Enterprise Institute

Were not Toyota .spoken to me personally by 6 VPs, 13 Directors, 20 GMs and 27 Material Managers

Definition of Value Added

Waste in any activity that does not add value to the final product for the customer Value added is any activity that transforms or shapes raw material or information to meet customer requirements Non Value added is an activity that takes time, resources or space,but does not add to the value of the product or service it self

Core Concept of Lean

Creativity before capital Think! A Solution that is not do perpect implemented today is better that a perpect solution that is late Just do it Inventory is not asset,but a waste or cost Plan-Do-Check-Ac methodology Continuous Improvement, both incremental and breakthrough Lean is never-ending philosophy,a way of thingking and doing

8 Waste of Lean
OMIT What U DO 1. Overproduction 2. Motion 3. Inventory 4. Transportation 5. Waiting 6. Underutilized People 7. Defect 8. Over-Processing

Overproduction
Making more earlier-faster than the next process needs it

Motion
Any movement of people that does not add any value to the product of service

Inventory
Any Supply in exess of one piece flow

Transportation
Moving people, material and information around the organization

Waiting
Waiting for man, machine,material, information etc

Underutilized People
Not Utilizilng peoples experience, skills, knowledge, creativity

Defect
All products, service and information are accurate and complete

Over-processing
Effort that adds no value to product or service from the customers standpoint

The Lean Supply Chain

Best Quality - Lowest Cost - Shortest Lead Time Through Shortening the Production Flow By Eliminating Waste

Just in Time
The right part at the right time in the right amount

Built in Quality
Line Stop - Manual - Automate Error Proofing Visual Control
Flexible, Capable, Highly Motivated People

Preconditions
Continuous Flow Pull System Takt Time Level Production

Operational Stability
Standardized Work Total Productive Maintenance Robust Products & Processes Supplier Involvement

 The Toyota Production System is built on: Operational Stability. Built in Quality. Just-In-Time. Flexible, Capable, Motivated, People. TPS focuses on Best Quality, Lowest Cost, Shortest Lead Time through the elimination of waste. JIT and Jidoka and People are pillars for the building. Remove any of these and the building falls. Note: People are in the middle because this is where value is added. Operational stability is the foundation. Weaken efforts in operational stability and the whole building is shaky. The roof is the outcome: Best quality, lowest cost, shortest lead time.

Lean Vs.Traditional
Half the hours of engineering effort Half the product development time Half the investment in machinery, tools and equipment Half the hours of human effort in the factory Half the defects in the finished product

Half the factory space for the same output

A tenth or less of in-process inventories

Source: The Machine that Changed the World, Womack, Jones, and Roos, 1990.

Lean Vs Traditional
99.9% Customer Schedule Attainment 15 PPM or Better

4-6 Inventory Days of Supply

92%+ Operational Availability Leveled, Sequenced Production Order to Customer Use - 4 1/2 Hours Functioning Supplier Partnership Strong Production Control Function
Examples: Tier 1 Suppliers: Johnson Controls Seating, Litens Automotive Partnership, Cadimex, Denso Manufacturing, Toyota Motor Corporation.

Changing Costing Methods

Principles of Cost Plus: SALES PRICE = COST+ PROFIT
Profit Profit

SALES
Sales Price

Traditional View
Sales Price

Profit Mfg. Cost Mfg. Cost

Mfg. Cost

Principles of Cost Reduction: PROFIT = SALES PRICE - COST

Profit

Profit Profit

Modern View

Sales Price

Mfg. Cost

Mfg. Cost
Mfg. Cost

Lean Supply - Global Purchasing Strategies

Common Strategy - Buy Cheapest in the world
- Support with dual sourcing Toyota Strategy - Buy to achieve lowest total cost - Buy in country where manufacturing

is performed
- Minimize Number of Suppliers - Keep supply chain short as possible - Toyota is as strong as its weakest

supplier

Consequences of Cheapest Price

Long Distance Supply - Long lead times
- increases structural cost: people, travel, premium freight, packaging, obsolete material, scrap due to handling damage Buying cheapest restricts buying from best supplier and achieving total lowest cost VS. Buying from best supplier, then get lowest cost

Consequences of Long Supply Chains

Long Value Streams Result in: High Risk - Quality Spills - Availability of Supply - Engineering Changes High Cost

- Transportation (Premium and Standard)

- Engineering Support/Supplier Development - Plant Overtime

Automotive Supply Chain

Supply Chain = Value Chain
Retail Customer Ore in Ground

OEM

Tier # 1

Tier # N

Objectives:

Highest Quality Lowest Cost Shortest Lead Time

The Lean Enterprise

World Class Lean Supply Chain Implemented Full Benefits of Lean Supply Chain Traditional Manufacturing & Support Functions

Lean Supply Chains are not just a Materials Management Effort

Automotive Customers
Which group drives lean supply chains?

Toyota GM Ford Honda

NUMMI Saturn Nissan

Chrysler

Demand/Schedule Variance Causes

Planning/Scheduling System Mechanics: Push Scheduling

PRODUCTION FLOW

All production operations receive same schedule

Supplier Machining Assembly

Customer

Production Scheduling

Reaction to Changes Occurs Only Weekly

Typical Demand/Scheduling Model

OEM

Schedule

Tier #1

Tier #2

Actual Demand

Traditional Scheduling Systems 1. Demand and schedule are usually different 2. Noise increases moving down stream 3. Affected most by changes in order quantity, delivery time and lead time

Lean Supply Chain - Pull Production System

Ship Ship Ship

Raw Material

Customer
Machining Assembly
Leveled Production Plan

Pull Schedule

Pull Schedule

Assembly Schedule

06/07/98

SME Lean Supply Chain

OEMs Lead Supply Chain Management Process

Process: Smoothing Production to Reduce Supply Chain Cost
O.E.

Ship

Ship
Tier 1 Tier 2

Leveled Sequenced Pull Leveled Sequenced Pull Signal Signal Production Production Action Steps-All Customers

1. 2. 3. 4. 5.

Smooth production build and communicate plan to suppliers Maintain daily production levels as planned (maintains smooth flow) Minimize parameter changes in system (lot size, quantity, & lead time) Convert from push scheduling to pull scheduling Maintain open communications with supplier - Provide Supplier access or view of actual demand

Takt Time Vs. Cycle Time An Important Distinction

Takt Time = Time (Available seconds per working day) Volume (Daily production requirement)

Sets pace of production to match pace of sales.

Cycle Time =

Actual time required for a worker to complete one cycle of his job process

Implementing the Lean Supply Chain Level Sequenced Production

producing a repeatable pattern by volume and mix within each day of the monthly production plan Characterized by: a smoothed production plan over an extended time every model made every day daily adjustment can be made a predictable production process

Implementing the Lean Supply Chain Summary

Find the best supplier and engage early in the design process Partner with key suppliers that have high capability for design and supply Suppliers should be located in the country where you build your product Shorten the supply chain by having suppliers close, frequent deliveries, and leveled production plans Develop pull systems with suppliers Know production capacity by comparing effective cycle times with Takt times.

 Drive your dream . Practice make perfect Moving Forward