LEAN

SUPPLY CHAINS

Program MM Eksekutif Muda

Sekolah Tinggi Manajemen PPM
"Whenever there is a product for a customer, there is a
value stream. The challenge lies in seeing it.”

PHILIP (PHIL) M. CONDIT

Chairman and Chief Executive office
The Boeing Company
Lean Manufacturing is:
the relentless elimination of waste

Waste is using resource…

…without adding value
Waste is all around us,
but it can be very hard to see
8 - 6
Value Stream Maps
(VSM)

help us see
Where value is created
And where waste exists
…
Value

A capability provided to a customer

● of the highest quality
● at the right time
● at an appropriate price

as defined by the customer.

"There is only one boss: the customer.
And he can fire everybody in the
company, from the chairman on down,
simply by spending his money
somewhere else."

Samuel M. Walton
Wal-Mart Stores, Inc.
Chairman & Chief Executive Officer
Value Stream Map
A Value Stream is the set of all
actions (both value added and non
value added) required to bring a
specific product or service from raw
material through to the customer.
Value Stream Mapping
• Helps you visualize more than the single process level
• Links the material and information flows
• Provides a common language
• Provides a blueprint for implementation
• More useful than quantitative tools
• Ties together lean concepts and techniques
 Value Stream Analysis
u Involves a current state drawing, a
future state drawing and an
implementation plan

u Optimizes results of eliminating

wastes

u Especially powerful for illustrating

the wastes of Overproduction, Idle
Material & Transportation
VSM Icons
VSM Example
 Critical Success Factors

• Management must understand, embrace, and lead the

organization into lean thinking
• Value stream managers must be empowered and enabled
to manage implementations
• Improvements must be planned in detail with the cross
functional Kaizen teams
• Successes must be translated to the bottom line and/or
market share
Why do You Need to Manage Your Supply Chain?
The Case Study
SC Performance
Attribute Measurement
Delivery On-time delivery % of orders delivered complete and on the date requested
by the customer
Fill rate % of orders filled completely from inventory
Lead time Time it takes from when the order is taken to when it is
delivered to the customer
Quality Performance of the product or service
Conformance to specifications
Customer satisfaction
Flexibility Volume flexibility Time it takes to increase or decrease output by a fixed
amount (e.g., by 120%)
Mix flexibility Time it takes to change the mix of products or services
delivered
Time Total SC throughput time Sum of cycle times of each of the entities in SC
Cash-to-cash cycle time How quickly a firm is paid by its customers relative to how
quickly it has to pay its suppliers
Cost Unit cost Total manufacturing cost (labor, materials, overhead)
divided by the number of units produced