Unlocking the Potential in the Supply Chain through Lean Logistics

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Unlocking the Potential in the Supply Chain
through Lean Logistics
David Taylor Cardiff University
2004 Queensland Supply Chain Seminar Brisbane 10
11 June
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Agenda

• Yesterday The Background Theory
• Lean Thinking v Mass Production
• Understanding Waste
• The Lean Principles
• Today The Practice
• Lean Tools Techniques
• Case Studies of Lean Applications Benefits

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What have we Got So Far ?

• Mass Production Thinking
• V
• Lean Thinking

• The Five Lean Principles
• Specify value
• Identify the value stream
• Make the product flow
• So the customer can pull
• Manage towards perfection

The Seven Wastes
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Value Stream Management
The application of Lean Thinkingto improving
business processes
Lean Mapping ToolsLean Improvement Tools Lean
Strategic Techniques
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Value Streams
VSM Can Be Applied at All Levels
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Value Stream Management

• A Dis-Aggregated Approach
• It deals with individual value streams
  separately

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Dis-Aggregation By Product Family
Product Group A
Product Group B
Customer
Product Group C
Treat each product group as a separate Value
Stream
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Value StreamManagement Methodology

• Select a key value stream for pilot lean
  improvement - Key Product to Key Customer
• Situational Analysis - Using Mapping Tools
• Develop model lean value stream Using Lean
  Improvement Tools
• Roll out lean to other value streams

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Value Stream Mapping ToolsLean Tools For
Analysing the Current Situation Identifying
Waste

• Process Activity Mapping
• Current State Mapping
• Demand Amplification Map
• Quality Filter Map
• Physical Structure map
• Production Variety Funnel
• Decision Point Analysis

Create a Quantified Assessment of Process
Performance
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Process Activity Mapping

• The starting point for value stream improvement
• Go to the work place and record what actual
  happens
• Dont do it in the office where you record what
  you think is happening

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Process Activity Map Summary Statistics
Time Operations 2 mins Inspection 1
min Transport 41 min Delay 720
min Storage 960 min
Value Adding Operations Represent lt 1 of Total
time
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Huck Fasteners Birmingham

• Lean Improvement initiative
• Mapped a pilot value stream - Hucktainer
• Recorded measured every step in making a
  specific product
• Produced photo sequence as part of their
  internal lean education process

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Huck Fasteners Performance Improvements from
Lean

• On-time delivery 10
• 40 Increase in V.A. per employee
• 35 reduction in lead-times
• 20 reduction in inventory
• 40 of floor spaced freed - Cancelled 10m new
  factory
• 55 reduction in set-ups
• More than offset 5 loss in margin due to foreign
  competition

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Current State Mapping

• A Toyota tool
• A clear visual representation of a process
• Links Physical Product Flow Information Flow
  Time
• The first tool to do this !

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Current State Map Meat Processing Plant
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Identify Wastes Problems
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Develop a Future State Map
Reduced Total Time
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SMART Action Plan Specific Measurable
Achievable Resourced Timed)
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The Value Stream ManagementOverview
Current State Map
Future State Map
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Lean Tools for Improvement
All help you to move towards Flow, Pull
Perfection
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Lean Applied at the Cell Level
Lean Applied at the Plant Level
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Lean Applied at the Cell Level Meat Processing
Slice Pack Cell

• Mapping identified problems opportunities with
  this cell
• Master Class to Improve the cell performance in
  Quality, Cost Delivery
• 8-day Structured Project
• Led by a Lean expert
• Involved cell operators team leaders

• Pork loins Sliced to Chops Vacuum packed

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Meat Processing Company Slice Pack Cell
Lean Applied at The Cell Level
Measure Before After Change
Not right first time 11 5 - 54
No of people on the cell 7 to 11 4 -100
Floor Space 250 m2 140 - 44
Operator Productivity 16 cases/ hr 29 cases/hr 81
Stock turns 79 87 10

Annual cost Savings in Cell gt600,000
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Lean Applied to the Whole Supply Chain
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Extended Value Stream Maps Same structure
Information links between companies
Key Data by Firm
Time for whole chain
Transport Links
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Create a Joint Value Stream Mapping Improvement
Team

• One or two senior manager from each company in
  the chain

The Team then- Jointly map all steps along the
whole chain Jointly identify problems and
opportunities Jointly develop a Future State
Vision Jointly develop an Action plan
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Current State Map Whole Value Chain for Pork
Farm / Processor / Retailer
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Develop Future State Map Potential Operational
Improvements
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Value Chain Analysis Methodology
Introductory Meeting
Agree Team and Events
Day 1
Lean VCA Workshop
Team Build Lean Familiarisation
Construct big picture map
Day 2
VCA Current State
Mapping of processes within each facility
Day 3-6
In House Opportunities Confirm End to End Map
Company Future States
Day 7-8
Chain opportunities Cost/Benefit Matrix
Executive Report
VCA Future State
Day 9-10
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Value Chain Analysis Benefits

• A joint value chain mapping team a practical
  way to develop real cooperation a joint vision
• The whole team goes sees all the operations and
  gets a real understanding of each others issues
• Each firm identifies internal improvement
  opportunities
• Opportunities are identified that are only
  available when firms cooperate

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Corus Metsec Gateway Steel
coils Sections Caravan Chassis
Benefits from Supply Chain Cooperation

• Stock reduction across the Chain - 50
• On-time Delivery Improvement lt 90 to 98
• Quoted Order to delivery lead time 21 days
  to 3 days
• Increased Mutual Business 40

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Lean Applied to Supply Chain Information
Management
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Simplify Information Flows Remove Non-Value
Adding Steps
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Mapping Order Intake Processing
37 Steps in total 6 Value Adding
Non-Value Added
Necessary Non-Value Added
Value Added
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The 3 Day Car Project
Total lead time 40 days Making
distrib car 6 days Info Processing
34 days
European Car Makers Madeto-order CarAverage 40
days lead time
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Lean Applied in The Public Sector

• Local Government
• The BBC
• Hospitals

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Medway Hospital Emergency Medical GP Referral
Mapping by Walking the process With a pencil,
paper rubber
5- 8 days in-patient
1-5 hours to discharge
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Medway Lean Thinking Pilot
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Medway Value Stream Mapping

• For the first time people start to see
  understand the whole process of a patient coming
  into, through out of hospital
• Started patient-centred process thinking
• Identified wastes inconsistencies
• Led to immediate waste removal

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Lean Applied to Global Supply Chains

• Texon Shoe Components
• UK to SE Asia

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Current State Map Global Supply Chain Shoe
Components
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Future State Map Restructure the chain
operational improvements
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Future State Map Lean Principles Applied
Before After Processing /
Transport 52 35 days Inventory 50
23 days Total Pipeline Time 102
58 days
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Conclusions So why Lean?

• Lean shifts the focus from managing assets to
  managing end to end processes
• It reveals opportunities by distinguishing what
  creates value from what does not
• It gives people the tools to redesign their
  processes to cut unnecessary steps and time
• And it builds a social basis for collaboration
  between partners to achieve and sustain
  improvement

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What is Lean aiming for -
For Businesses Gaining Competitive Advantage
And More Business At More Profitable Levels
For Non-Profit Organisations Improving
Efficiency Better Service
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David Taylor Senior Research Fellow Lean
Enterprise Research CentreCardiff University
Unlocking the Potential in the Supply Chain
through Lean Logistics

• Email taylordh_at_cf.ac.uk
• Tel [phone]