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Supplier Process Improvement Strategies Improving Apparel Supply Chain without Major Investments

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Supplier Process Improvement Strategies Improving Apparel Supply Chain without Major Investments Presentation for Prime Source Forum March 30, 2011 – PowerPoint PPT presentation

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Title: Supplier Process Improvement Strategies Improving Apparel Supply Chain without Major Investments


1
Supplier Process Improvement Strategies Improving
Apparel Supply Chain without Major Investments
Presentation for Prime Source Forum March 30, 2011
Roger Nelson Managing Director Concepts 2 Results
Ltd. Hong Kong 852-9839-6987 mobile rogernelson.c2
r_at_gmail.com
2
Purpose
  • This session will discuss the methodologies of
    lean manufacturing and other process improvement
    strategies. Learn what is required for a
    successful implementation and also how to measure
    the impact of your improvements.

3
WHAT Does this Mean?
4
Global Trends
Total Cycle Time
  • Speed
  • First Time Quality
  • Accuracy in everything
  • On-time delivery all the time
  • Cost effectiveness
  • Collaborative, seamless processes

5
What determines competitive advantage?
  • Fastest Customer Responsiveness
  • Lowest Costs
  • Best Quality for the Money
  • High Speed Product/Service Development
  • High Productivity
  • Flexible Capacity with Optimized Resources
  • Excellent Value for all customers, owners,
    employees, suppliers

6
Solution
  • Improve the process from end-to-end
  • Consider all steps
  • Eliminate, combine, streamline
  • Measure progress
  • Cockpit charts

7
How do we address this?
Using Total Cycle Time Methodology
  • Everything is a process
  • Processes can be mapped, measured and improved
  • Processes are cross companies and cross
    functional within a company

8
Issues
  • Competing Objectives
  • Too long in total cycle time
  • Rework of samples
  • Inaccuracy in orders
  • Incomplete and late deliveries
  • Slow collection process
  • Disconnected processes

9
What use is a good process?
  • Achieving a GOAL requires a good process
  • Performed by the right resources
  • Utilizing the proper investment in
    People, Inventory Equipment
  • Executed with a set of high Value Added steps
  • Delivered within a range of repeatable outcomes
  • Delivered within a range of repeatable time
    frames
  • Actions to Achieve Goal
  • Analyze
  • Develop plan
  • Try it out
  • Review results
  • Standardize / correct / repeat

10
Lean Management
  • A process improvement strategy focused on
  • Meeting customer requirements Increasing
    satisfaction
  • Reducing variation Improving on-time
    performance
  • Eliminating waste Reducing cost
  • Cleanliness, organization Improved safety
  • Standardization Improved quality
  • The goal is to achieve perfection through the
    total elimination of waste in the value stream

11
5 Principles of Lean Management
1. Specify Value 2. Identify Value Stream 3.
Flow 4. Pull 5. Perfection
12
Lean Management Identify the Value Stream
  • Make the process visible
  • Process sequence descriptions
  • Process sequence flow maps
  • Value stream mapping (Value Added/Non-Value
    Added)
  • Make the process speak with data
  • Cycle time, first pass yields, productivity
  • Volumes, capacity, hours available, defects
  • Inventory levels at each process step
  • Staffing requirements, shifts
  • Set-up times and frequencies
  • Lot sizes

13
CORRECTION Repair or Rework. Doing it over. Not
getting it right the first time
WAITING Any non-work time waiting for tools,
supplies, parts, paperwork, engineering, QA, EE,
etc.
MOTION Any wasted motion to pick up parts or
stack parts. Also wasted walking, searching.
TRANSPORTATION Wasted effort to transport matls,
parts, or finished product into or out of
storage, or between processes.
OVERPRODUCTION Producing more than is needed
before it is needed. Batching
INVENTORY Maintaining excess inventory of raw
matls, WIP, or finished product. Managing WIP.
OVER PROCESSING Doing more work than is
necessary..
14
Understanding the Process
Questions to ask to identify constraints
  • If any of the following questions are
    answered yes, Throughput will improve
  • 1.  Will the decision result in a better use of
    the worst constrained resource?
  • 2.  Will it make full use of the worst
    constrained resource?
  • 3.  Will it speed up delivery?
  • 4.  Will it provide a product or service that
    is valuable?
  • 5.  Will it improve consistency?
  • 6.  Will it reduce scrap or rework?
  • 7. Will it reduce rework/replacement costs?

15
What is Process Improvement Implementation?
The implementation of a standard logic for the
efficient layout of a production line including
work stations, machines, personnel assignments,
skill levels, constraints, lot sizes, etc. This
also applies to any related process such as
design development, product launch, supply chain
steps, collection, etc.
16
How Do We Do It?
Organized Structure and Approach
Cross Functional Teams/CFT
BRT
BRT
BRT
17
Map the Process
FPY First Pass Yield
Process Improvement Methodology
18
Measure The Process Steps Establish Baseline and
Entitlement
Entitlement Where you should be
Results
Process Improvement Impact
Barriers
Baseline Where you are today
Time
19
What is a Required for Successful Process
Improvement Implementation?
Managers who
  • are willing to learn new concepts,
  • are willing to accept risks,
  • are willing to accept failures as COLs (Cycles
    of Learning),
  • are willing to commit the required investment in
    time and support,
  • are willing to take initiatives to see that
    unforeseen difficulties are quickly resolved,
  • will insist that good preventative maintenance
    and quick equipment repair is practiced,
  • thoroughly understand the concept and potential
    huge benefits, and
  • will work cross-functionally with other managers
    as a team.

20
What is a Required for Successful Process
Improvement Implementation ? (continued)
Workers who
  • are top performers,
  • want maximum pay,
  • are team players,
  • understand that Improvements will make their jobs
    more enjoyable,
  • understand that experimentation and frequent
    changes are necessary,
  • understand that change is necessary for a company
    to survive in the present climate of intense
    competition, and
  • have a spirit of cooperation and willingness to
    share positive experiences with others.

21
Everyone Benefits !
  • Process Improvements Do This
  • Identify and minimize bottlenecks
  • Eliminate unnecessary steps
  • Simplify remaining steps
  • Reduce waiting
  • Reduce movement of people
  • Reduce movement of material
  • Cause us to produce only what is needed downstream
  • That Result In
  • Higher pay
  • Better working conditions
  • Happier workers
  • Better on-time delivery
  • Better quality
  • Happier customers
  • Lower costs
  • Greater profits
  • More business
  • More worker opportunities
  • Which Contribute to
  • Much less WIP (work-in-process)
  • Improved productivity
  • Shorter Cycle Time
  • High First Pass Yields
  • Less rework
  • Efficient use of material
  • Less scrap
  • Less clutter
  • Less confusion

22
Measure Progress
  • We Know Baseline
  • How are we progressing towards entitlement?
  • What Drives improvement?
  • What are the results?
  • How do we identify stalls in improvement progress?

23
(No Transcript)
24
Supply Chain
Monthly
US (month)
(monthly)
(YTD)
Total Inventory Divided by Cost of Goods Sold
Matrix Components TBD


Percentage of Styles planned for release to
production during the reporting period which were
released, complete, And on time. Both Material
and Non Material related support activities
Inventory Turns
Customer Satisfaction INT/ EXT
(Monthly
US (month)
YTD
Rework ScrapICC Cost Purchased Lost Margin
Write Off Expedite Total
Incoming Freight Cost divided by The Turnover

Total Received Divided by Turnover



MMMMMM
Material Non Material Schedule
Adherence Hit Rate
Material Cost Turnover
Cost of Ownership Of Turnover

CT (days) FPY ()
CT (days) FPY ()
CT (days) FPY ()
CT (days)

Days from Receipt of Tech Pak to the Final Sample
Approval of Sample Styles Produced To
Converted to Volume Orders
Days from Issue of the BOM Until the receipt on
the Material at the Production Factory,
Received as scheduled Fabric Only




Days from Order Confirmation to BOM complete
Days From receipt of Goods at Factory until
goods are Ready for consumption of Goods
Passing Initial Inspection

CC CU














Dock To Stock CT/ FPY
Suppliers CT/FPY
Sample C/T FPY Hit Rate
Order Management CT
25
Implementation - Road to Entitlement

CFT Selects Next Barrier
BRT Dissolved
Entitlement
Barriers
Barrier
BRT Commissioned
Baseline
Process Improvement Management (PIM) Methodology
26
Process Improvement Dos and Donts
  • Do
  • Involve operators and maintenance personnel
  • Check machines, samples of thread tension at
    beginning and lunch break
  • Visually manage by walking around
  • Make needed changes immediately
  • Recognize good performance
  • Make daily target achievable
  • Emphasize it is a team effort
  • Dont
  • Say it cannot be done
  • Be negative
  • Ignore bottleneck problems
  • Wait for someone else to solve the problems, take
    action

27
Process Improvement Guidelines
  • Release XX pieces from cutting every XX minutes
  • Walk around and look for WIP buildup or no WIP at
    each station
  • Watch potential bottlenecks
  • Add operator
  • Move part of work to another operator
  • Look for excessive moving of material, relocate
    stations if possible
  • Monitor output and record production

28
The Model Is Changing Zaras Speed to Market
Q1
Q2
Q3
Q4
Q5
Zara
35
Design Raw Material Sourcing
65
40-50
External Manufacturing
55
Sales Markdowns
85
Internal Manufacturing
15
SEASON
Source Inditex
29
Case Study Apparel Manufacturing
  • Global garment manufacturer of Womens Fashion,
    Outerwear and Casual Pants
  • Headquartered in Hong Kong with 17 factories in
    Hong Kong, China, Philippines, Thailand, Laos,
    Viet Nam, and Taiwan
  • Results
  • Reduced Sample Cycle Time 20
  • Improved Sample First-Time Quality 317
  • Improved Sample On-Time Delivery 136
  • Reduced Fulfillment Total Cycle Time 30
  • Improved Production On-Time Delivery 154
  • Reduced WIP Inventory 40
  • Challenges
  • Improve Sample Process
  • Improve Inventory Management
  • Improve First Time Quality

The consultants teamwork, communications, and
coaching lead to strong trust among our people
and helped us develop a new way of doing business
across all segments of our business Country
Manager, Philippines
30
Case Study Global Supply Chain
  • Supply Chain Management Company headquartered
    in Hong Kong
  • Coordinates the manufacture and distribution of
    goods through offices located in 40 countries
  • Results
  • Reduced Administrative costs 30
  • Reduced Sales Order process 33
  • Reduced A/R collection time 20
  • Developed Structure and Global Sales Processes
    Returning Operations to Profitability
  • Challenges
  • Execution of the Global Business Strategy in
    chaos Administrative costs too high
  • Sales generation activities too slow and
    expensive
  • Inefficient sales order process

The Consultants introduced world-class
methodology that resulted in transforming a
national business into a highly responsive,
customer focused distribution organization
providing unparalleled service to principal
clients. CEO, Country Logistics Subsidiary
31
Concept to Rack Phases (Overlaid with Retail
Promotions Phases)
Concept
Rack
Concept to Rack

RETAIL EXECUTION
Concept Development
DC/Store
Logistics
Garment Production
Country Allocations
-- 6 --
3
2
4
1
Cut - Sew Finish
5
13 Weeks
13 Weeks
16 Weeks
6 Weeks
4 Wks
8 (E) Weeks
9 (E) Weeks
? (E) Weeks
8 (E) Weeks
? (E) Weeks
52 Weeks
4 Wks
4 Wks
5 Wks
4 Wks
Retail Promotions Planning

Advance Planning
Forecast Validation
Planning
Ad Finalization
DC/Store Implementation
Gate 1
-11 wks
-15 wks
32

Typical Example of CT Reduction

139
109
79
72
37
30
Greige Weaving
Fabric Dyeing
30
In-Factory to Cut
30
Cut to X Factory
7
X Factory to X Country
35
7
X Country to In-W/H
30
33

50 Commitment on greige
Greige Forecast
139
109
79
72
37
30
125
95
Days saved
Greige Weaving
30
Greige Weaving
7
Dyeing
30
Fabric Dyeing
2
In-Factory to cut
23
5
Production
30
In-Factory to Cut
44

5
95 days
CT
Cut to X Factory
7
30
X Factory to X Country
35
7
X Country to In-W/H
30
34
Textile/Apparel Supplier Improvement Potentials
  • Measure

    Potential
  • Customer Response Time
    improve by over 10
  • Fill rate (completed orders)
    improve at zero cost
  • On time delivery to customers
    improve by over 10
  • Supplier on time delivery
    improve to over 10
  • Supplier Lead time reduction
    10
    to 20
  • Inventory reduction//cost improvements
    10 to 20
  • Cost Reduction

    5
  • Rework reduction/Improved Quality
    10 to 20
  • Productivity Improvements

    10
  • These improvements are based on each Factory
    implementing this approach without outside
    process improvement expert support.


35
Textile/Apparel Supplier Improvement Potentials
  • Measure

    Potential
  • Customer Response Time
    improve by over 30
  • Fill rate (completed orders)
    improve at zero cost
  • On time delivery to customers
    improve by over 40
  • Supplier on time delivery
    improve to over 40
  • Supplier Lead time reduction
    to over
    50
  • Inventory reduction//cost improvements
    10 to 20
  • Cost Reduction

    5
  • Rework reduction/Improved Quality
    40 to 50
  • Productivity Improvements

    20
  • These improvements are based on each Factory
    implementing this approach
  • USING
  • outside process improvement expert support.


36
Go For it !!!!
37
Who We Are
  • Resultsdramatically impact cash creation
  • Process Focusradical increases in speed and
    reliability
  • Methodologytop-down focus drives and manages
    change
  • People20 years of management, industry
    experience
  • Clientsoperate in diverse, global markets

Years of success in fundamentally changing
corporations management processes and
dramatically improving their bottom-line results
38
Presentation for Prime Source Forum March 30,
2011 Supplier Process Improvement Approach
About PowerShow.com