Lean Manufacturing

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Lean Manufacturing

• Andrew W. Dalziel
• Product Director - SCM
• Intentia International
• andrew.w.dalziel_at_intentia.co.uk

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Agenda Lean Manufacturing

• Introduction The Challenge
• Why Lean Manufacturing Makes Sense
• What is Lean Manufacturing?
• How Does Technology Support Lean?
• Intentia and Lean Manufacturing
• The Benefits of Lean Manufacturing
• Example of Where to Start the Lean Journey
• Summary

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The Challenge Low Cost Competition
Companies Increased Competition on Costs
of respondents facing competitive challenges

• gt70 facing some or significant low cost
  competition
• 95 of customers demanding lower prices
• 50 say competitors are producing higher valued
  added goods

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The Challenge Manufacturing Costs
Manufacturers Look Abroad
of companies employing competitiveness strategy

• 45 planning to or have outsourced manufacturing
  abroad
• 30 planning to or have invested abroad to
  replace capacity

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Why Lean Manufacturing Makes Sense

• Western manufacturers under cost pressure from
  low-cost countries
• Customers are demanding greater product variety
  and highly customized products
• Customers are demand more new products
• Customers demanding shorter delivery lead-times
  and lower prices
• Increasing transactional volumes
• Worker motivational issues
• Stricter Health Safety rules
• Cash flow issues with working capital tied up in
  inventory
• Competitive global environment - advantage
  through delivering greater added value
• .

Lean Manufacturing Makes a Lot of Sense
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Adoption of Lean Manufacturing
An ARC Group strategy report written by Simon
Bragg (2004) suggests that Today 36 percent of
US manufacturers and 70 percent of UK
manufacturers are using lean as their primary
improvement methodology.
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Defining Lean Manufacturing

• Lean manufacturing is essentially a philosophy
  that focuses on customer value-adding activities
  and the systematic identification and elimination
  of waste, as well as continuous improvement in
  flow manufacturing environments to increase
  productivity.

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Five Core Elements of Lean Thinking
1. Value Identify and deliver value to the customer
2. Value stream Identify the value stream to see what is necessary
3. Flow Make value flow
4. Pull Make as needed. Customer demand driven manufacturing
5. Perfection Continuous improvement in pursuit of perfection
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How Technology Can Support Lean Manufacturing

• Product data management for managing exploding
  product variety
• Electronic kanban offers many advantages over
  physical kanbans
• Avoids problems of loss or sabotage of physical
  kanbans
• Quicker transfer of information between
  production areas and partners
• Faster and easier to resize kanbans
• Easier to phase in new products
• Supplier and customer portals for kanban control
  or JIT call-offs
• Ability to support complex algorithms for Theory
  of Constraints planning
• Databases and powerful analytics tools to
  identify customer value and support continuous
  improvement
• Elimination of waste in administration, such as
  order entry, order management, invoicing, etc.

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Intentia Support for Lean Manufacturing
Lean Manufacturing
EDIElectronic Data Interchange
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Value Enterprise Performance Management
In competitive terms, value is the amount buyers
are willing to pay for what the firm provides
them. Value is measured by total revenue, a
reflection of the price a firms product commands,
and the units it can sell. Michael Porter
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Flow Total Productive Maintenance (TPM)

• Advanced enterprise asset management options
  increase equipment reliability and thus
• Improve availability
• Reduce downtime
• Reduce product scrap and wasted time managing
  that scrap
• Increase machine tolerances and thereby increase
  quality
• Diagnostics management features automatically
  identify situations where the current maintenance
  strategy is not working and trigger a continuous
  improvement review.
• Support for reliability centered maintenance
  (RCM), which can underpin the TPM strategy
• Synchronized maintenance and production planning
  maximizes the available production time
• Contributes towards throughput and OEE and
  supports simulation

Ultimately, provides focused support for reducing
the big six TPM losses.
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Pull Product Configurator

• Enables customers to configure their perfect
  order
• Added value for the customer
• Web-enabled

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Pull Kanban

• Support physical and electronic kanban systems
• One-card and two-card systems production and
  transportation kanbans
• External kanban requirements from customers and
  for call-offs to suppliers
• Manual or automatic dimensioning of kanban chain
  (number of cards in system)

Physical Kanban System
Electronic Kanban System
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Pull Theory of Constraints Production Planning

• Makes value flow through the bottleneck (and
  factory)
• Easy to communicate and intuitive for the planner
  to use
• Does not require high data quality
• 50 of the time and effort to implement of an
  advanced production planning solution
• Can result in less inventory overall than when
  using kanban

Remaining buffer on a non-bottleneck resource
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Some Benefits of a Lean Manufacturing Philosophy

• For the CEO
• Focus on customer value-adding activities
• Elimination of activities that do not contribute
  directly to customer value and built-in quality
• Support or pull-based manufacturing with quick
  response to customer orders
• For the CFO
• Reduced waste -gt removal of unnecessary
  activities and cost
• Removal of stock and work in progress (WIP) -gt
  improved inventory turns and less working capital
  employed in the business
• Improved return on capital employed (ROCE)
• For the Operations Director
• Shorter production cycle times and greater
  agility
• Productivity and quality improvements
• Increased employee motivation (through teams and
  empowerment)
• Promotes continuous improvement

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Example Lean Manufacturing in FB Where to
Start?
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Summary Whats the Issue?
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Thank You for Your Time and Questions