Professional Documents
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John Darlington
John Darlington is originally an accountant. John
qualified as a "Lean and Six Sigma Expert" through
the Renault Institute of Quality Management and as
a "Jonah" through the Goldratt Institute.
He
worked for Allied Signal for thirteen years in the
Turbocharger division.
His roles varied from
Financial Controller and IT Manager to Plant
Manager of the European Aftermarket. He spent
two years as Kaizen Director of the largest Forging
Group in the UK, where his role involved him
heavily in the systematic application of Lean
Manufacturing and Supply Chain Management. He
combines application with teaching for the
University of Buckingham on their MSc in Lean
Enterprise, specialising in Mapping, Capacity
Planning and Costing.
John has been a guest
speaker at APICS, and SAPICS where he won the
Toyota Prize for Best New Idea
Contact details:
j.darlington@valueflowconsulting.com
+44 (0) 7811 440847
VATX Analysis
Plants classified by the BOM shape/ material flow.
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Metals
Food
Chemicals
V plant.
Few raw materials
Wide variety of finished products
Points of divergence/differentiation
Specialised plant and machinery
Often process flow orientated
Issues:
V Plants
Plant utilisation important, often run campaigns
WIP too high
Lead time too long
Due date performance spread, late and early
Perceived to be not cost competitive
Always trying to reduce operating expense
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Capital goods
Aerospace
A plant.
Assembles products
Assembly driven
Many raw materials & bought out components
Process time a fraction of lead time
General purpose machines often in cells
Issues:
A Plant
Labour utilisation important, keep them busy
syndrome
WIP too high
Lead time too long
Due date performance poor, usually late
Lots of expediting, massive overtime
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Vehicle manufacture
Electronics
T plant.
Wide range of products customised at assembly
Core of common components
High bought-out content
Market/customer service orientation
The modern assembly plant
Issues:
T Plants
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Aftermarkets
Repair & Overhaul
Remanufacture
X plant.
Wide variety of components and finished products
Often short lead time response required
Different ratios of bought out and made in house
Contractual arrangements regarding product life
cycle support
Hub and local distribution issues
Issues
X Plants
Trade off between service and carrying costs
No statement of policy regarding target customer
service
Sourcing from suppliers
Inter company rivalries
Aged profile of stock
Pricing and copiers
10th International Conference of the TOC Practitioners Alliance - TOCPA
VAT Analysis
Plants classified by the BOM shape.
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VATX Analysis
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SPECIALISED MANUFACTURING
CAPABILITIES
Opportunities for products to be sold at
various stages of production
Or bought in for additional processing
One way or another spare capacity is sold
and a balanced plant emerges causing due
dates to be missed and creating extra
unplanned operating expense
Plant lurches from under activity and cost
saving mode when sales are low, to
bottleneck status and lates when sales are
high
10th International Conference of the TOC Practitioners Alliance - TOCPA
VATX Analysis
Unlikely to have a conventional MRP system
(What for? Doesnt address our needs)
Will Have:
-RAW MATERIAL STOCK (IN STORES)
-CUSTOMER ORDERS
SHOULD HAVE:
-ROUTINGS
-WIP TRACKING
VATX Analysis
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Parts manufacture
Often organised by type of
machine
Sometimes by part type in cells
Separate Assembly and sub assembly
areas
VATX Analysis
Plants classified by the BOM shape.
PRODUCT OR COMPONENT
SYNCHRONISATION IS THE KEY
VAT Analysis
Plants classified by the BOM/Route shape.
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Many finished products assembled
from common components
Models options variants specials
Parts often purchased
Competitive market
VAT Analysis
Plants classified by the BOM/Route shape.
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PRODUCTION
PRE
ASSEMBLY
BUFFER
ASSEMBLY
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VAT Analysis
Plants classified by the BOM/Route
shape.
MARKET ORIENTATED
PRODUCT ORIENTATED
COMPETITION
Customisation to maintain volume/priceOn time delivery (DAS)
Procurement planning
problems
Shortages*
Kit Robbing/Stealing
ISSUES
Delivery On time Lead Time
10th International Conference of the TOC Practitioners Alliance - TOCPA
Scheduling
The critical difference distinguishing scheduling is that it also
involves sequencing of work and the time horizon is much shorter.
Depending upon the organisation and business the time buckets
can be hours or days but often not much more than a couple of
weeks
Constrained
Strategic
Planning
Tactical
Planning
Operational
Scheduling
Least
Most
Horizon
Bucketed
Years
Months/Quarters
Months
Weeks/Months
Days
Days/hours/minu
tes Bucket less
Purpose
Acquisition and Disposals
Major plant investment
Market strategy
Process Flow
Forecast &
Customer Orders
Material availability
Stock,
Orders,
BOM
Planning
Management Policy
The Rules
Working Capital
Headcount
Overtime
Customer Service
Capacity
availability
Resources,
Routes,
Calendars
Scheduling
MRP or DBR
Schedules
50
100
70
Shipping
Buffer
80
60
120
300
Raw Materials
10th International Conference of the TOC Practitioners Alliance - TOCPA
50
70
100
Shipping
Buffer
80
60
Inv
Inv
120
Inv
300
Raw Materials
Buffering of
Constraint
Processes
50
70
100
80
60
Inv
Inv
120
Inv
300
Raw Materials
Buffering of
Constraint
Processes
Shipping
Buffer
The size of
the
required
buffers are
a function
of process
variation
AND issues
around the
points of
divergence
Shipping Buffer
46
Buffering of
Constraint
Process
Assembly
Pre
Assembly
Buffer
48
Inv
78
100
100
75
120
120
280
300
300
Raw
Material
Raw
Material
Raw
Material
A detailed
schedule would
try to get to a
status where a
non constrained
parts should
never hold up a
constrained part
in the PreAssembly
Buffer.
Assemble to
order or finished
goods.
Manufacture by
replenishment
to the pre
assembly buffer
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Die Shop
Cutting
Control
Cooled
Shotblast
Heat
Treatment
Shotblast
Finish
South Line
Forge
Induction
Heating
Joy
Mining Line
Scheduling Points
Raw material
Work in Progress
Finished goods
28.10 days
34.70 days
11.30 days
Measure of Improvement:
More Sales & lead time
Manufacturing Lead Time as Measured by Days Inventory in WIP
35
20,000
28.1
30
29.1
29.0
25
22.9
20.1
20
20.0
18.4
16.7
10,000
15
14.6
13.0
12.4
9.0
8.9
5,000
Days
No. of Pieces
26.3
15,000
10
7.8
5
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Closing WIP (Pcs) 10409113441250712693 8812 9360 7336 8739 7633 6781 6159 5136 7352 4945 4207
Sales (Pcs)
WIP Days
111071174814275130851440113945110101144013700156002075912476151041647316216
28.1 29.0 26.3 29.1 18.4 20.1 20.0 22.9 16.7 13.0
8.9
12.4 14.6
9.0
7.8
Period
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Russian Factory
Contributing Factors
Tendency to stick with manufacturing to an annual plan no matter what was
really happening to demand
Large batch sizes compared to demand driven quantities made in the belief
it saves cost of set up
Some Piece Part Payments
DOS based system but had been sold Advanced Production Software
Complex Flow
Orders
Finished Stock
Shop 61
Assembly
Shop 26
Assembly
Shop 13
Purchased
Parts
Base Elements
Shop 15
Preparing
Shop 11
Mechanical
Shop 2
Raw Materials
10th International Conference of the TOC Practitioners Alliance - TOCPA
Months 3 6
Gathering sufficient
data at M/C centre
level to develop
Capacity Planning
and more accurate
Schedules (see
sample Slide 27)
Months 7 15
Identify logical
constraints and
apply a
combination of APS
if required, sensible
buffering and
pull/replenishment
systems
Months 16 24
To
Shop
Shop Area
Within Area
Move
40 hours
8 hours
2 hours
To
Move
Shop
Shop Area
Within Area
Shop
Shop Area
Within Area
40 hours
8 hours
2 hours
Time Based
Minimum
Batch Qty
Route
From
To
RC0201
RC0201
RC0202
8 HOURS
RC0202
RC0202
RC0401
40 HOURS
RC0401*2
RC0401
RC0402
8 HOURS
RC0402
RC0402
RC0403
8 HOURS
RC0403
RC0403
RC1001
40 HOURS
RC1001
RC1001
RC1002
8 HOURS
RC1002
RC1002
RC1099
8 HOURS
RC1099
RC1099
RC1101
40 HOURS
RC1101*1
RC1101
RC1102
8 HOURS
RC1102
RC1102
RC1103
8 HOURS
RC1103
RC1103
RC1307
40 HOURS
RC1307
RC1307
RC2601
40 HOURS
RC2601
RC2601
RC6099
40 HOURS
RC6099
RC6099
RC6199
8 HOURS
RC6199
TOTAL
304 HOURS
RC1101*1 Part 6B8680374-05 Current Batch Size 220 Covers Demand for 5 months
RC0401*2 Part 6B8126085 Current Batch Size 200 Covers Demand for 1 month
Note that as we
are working lot for
lot the quantities
are those really
required by the
customer work
centre
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Order Book
(due date sequence)
Order 1
1234
Order 2
42
Order 3
PRE
ASSEMBLY
BUFFER
3rd PARTY
SUPPLIERS
Kanbans card(?)
PRODUCTION
ASSEMBLY
32
Significant
characteristic:
Commonality of
parts
Scheduling options:
DBR
Kanban
Hybrid systems
Kanban movements
10th International Conference of the TOC Practitioners Alliance - TOCPA
Introduction
Introduction
Inventory: What inventory do we have where, for how long, for who?
Financials: What sales did we achieve, with what working capital, at what operating expense? What was the throughput?
Forecasting Map
Financial Map
Uneveness
Average
Source
UKMANUF
FACTORED
FACT_PACK_UK
Check total
Grand Total
Average
Finished
Finished
Goods
Goods
Inventory
Overall
Inventory
last 3
Saving /
Min
overall in
months in
(Additions)
Order
Days
Days
's
Qty
Time
Time
Level
10
100
20
7
84
14
7
7
7
95
95
95
51.24
205.24
56.23
55.00
211.46
62.39
147.37
152.12
320,152
3,637,292
(94,860)
4280314
4,280,314
Target
Lead Review
Service
Over 's
Under 's
Nett 's
1,148,195
5,113,549
271,461
(828,043)
(1,476,257)
(366,321)
320,152
3,637,292
(94,860)
6,533,205
(2,670,620)
3,862,584
4.
Technical
1.
5.
6.
We need finished goods if customers will not tolerate manufacturing lead times
We need intermediate inventories e.g. pre-assembly buffers to indicate by
consumption what must be replenished by upstream processes
Operational Kanban Structure
Primaries
Primaries
Final Assembly
Secondary Ops
Whse = [W2]
BO PARTS
Sequencing
Board/Planner
Painting
RAW MATERIAL
Plating
VOLUME
MORTICE
MACHINING
VOLUME
MORTICE
ASSEMBLY
SPECIAL
MORTICE
MACHINING
SPECIAL
MORTICE
ASSEMBLY
CYLINDERS
MACHINING
PRESSED
PARTS
CYLINDER
RIM
MACHINING
TURNED
PARTS
Subcontract
PADLOCKS
MACHINING
CYLINDERS
ASSEMBLY
CYLINDER
RIM
ASSEMBLY
PADLOCKS
ASSEMBLY
CASTING
Key
Flow
Flow of
of Parts
Parts between
between Secondary
Secondary ops
ops
Flow
of
Parts
out
of
Kanban
Site
Flow of Parts out of Kanban Site
Formal
Formal Kanban
Kanban Site
Site
Kanban
Replenishment
Kanban Replenishment Signal
Signal
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Demand Categories
Type
Description
Normal
Erratic
Lumpy
Slow
Management
Control
New
Sales Analysis Y Co
Demand Class
No of
Demand as
No of Parts Parts as a Demand
%
%
Normal
56
36.13%
18514
95.4%
Erratic
29
18.71%
611
3.1%
Lumpy
30
19.35%
280
1.4%
Management
Control
40
25.81%
0.0%
New
0.00%
0.0%
Active Demand
155
100.00%
19410
100.0%
No Demand last
12 months
63
Total
218
Summary:
For real optimum results, the One schedule fits all strategy is not true
To optimise results and flow, planning and scheduling has to use the most
appropriate solution for the department/ plant/ supply chain
The VATX concept is a simple way to understand typical characteristics and
issues of the systems
By studying the demand profile carefully and understanding the type of
plant you work in you can make an informed decision about which pull
system to adopt to deliver high customer service with less inventory which
will significantly improve bottom line performance.