Rene Hendriksen Interim Management

Lean Manufacturing

 

Plan of attack for Lean Manufacturing

 

Lean Manufacturing is the systematic elimination of waste: overproduction, waiting, transportation, inventory, motion, and defective units.

 

There are several ways to reduce leadtime:

-         For evey step in your entire process, ask yourself: Why, What, Where, When, Who

-         Look at all the aspects of planning and synchronize:

o       demand planning

o       production planning

o       order release

o       Supply Chain Integration

 -         Work In Progress : this is most likely the biggest waste and waiting time. Reduce it and then reduce it more.

-         Cycle time

o       suppliers

§         check the leadtime in your ERP system and keep it updated

§         Introduce VMI

§         Check the supplier demand planning and synchronize

§         Check the supplier delivery methodology and check what is in your ERP system

o       warehousing

o       shop floor flow

o       order acceptance

o       order release

o       pick pack

-         Buy-in:

o       Sense of Urgency - why do you need to change?

o       You get what you measure : get the right metrics

o       Communication, communication and communication

o       Celebrate success

o       Evaluate

-         Capacity

o       utilization of equipment

o       effective labor hours

o       buffer management

o       constraints

o       flexibility

o       cross training

o       line balance

o       tools (small, personal)

o       flow on shop floor , lay-out

o       queues

o       material readiness to be used

o       motion/moving/walking times

o        

-         Quality

o       indexes

o       returns

o       yields

o       repair in the line

o       customer discrepancies

o       process checks/checkers

o       feedback loops

o       hous keeping (5 S)

o        

-         Systems

o       logical systematic

o       actual handling by the people

o       parameters in the system influencing timing

 

 


Example of a project I have led

Project approach:

1.      Overall project was kicked off with goals and expectations defined

2.      Team brainstormed to identify opportunities for improvement

3.      Small Project Teams were created to engage shop and engineering to address opportunities as follows:

  • Floor Plan and Material Presentation
  • Cross-Training
  • Inventory Flow and Controls
  • Line Ready Packaging
  • Process Checking
  • Tools Management
  • Visual Factory: Shop Signage, 5S Program (Sort, Set in Order, Shine, Standardize, and Sustain), and Communication Boards

4.      Developed/Implemented Lean Metrics to establish baseline to track operational improvements

5.      New shop layout was phased into production in January and February

6.      Educated shop associates/coaches on execution principles

7.      Continued to mentor and motivate teams

8.      Monitored lean metrics and took action to address underlying issues

9.      Celebrated team successes



Lean Metrics Developed:

  • Throughput by operation
  • Shop Efficiency
  • Days of Stock
  • Manufacturing Interval
  • In-Process Defects by Operation: Build, Wire, Test, Prepack
  • End-of-Line Defects Per Million Opportunities (DMPO)


Among the wastes identified were:

 

 

  • Excessive Work in Process created by discrete operations employing batch processing of large lots
  • Long manufacturing intervals caused by unbalanced operations and poor constraint management
  • Poor operation utilization due to lack of cross training
  • Lost time spent looking for and waiting on materials
  • Excessive WIP due to undisciplined ordering patterns from shift-to-shift
  • Excessive time removing materials from poorly designed packaging
  • Lost time looking for required calibrated torque tools.
  • Lost time troubleshooting and repairing problems due to lack of quick feedback
  • Lost time due to lack of daily goals being communicated and monitored

 

 

The Lean solution was multi-faceted highlighted by the implementation of a new shop layout.  Some of the key improvements made were:

 

  • Progressive Assembly or One-Piece Flow to increase product flow and reduce interval
  • Cross-Trained operators with flexibility to move and to optimize constraint and flow
  • Improved materials presentation techniques to reduce material travel distances and search time
  • New procedures and training to ensure disciplined methods for ordering materials
  • Line-Ready Packaging designed for key components to minimize unpacking time on the line
  • In-line process checkers to catch problems at the source and to provide quick feedback and resolution
  • New tools management program to instill operator ownership and accountability to have tools when needed
  • Visual communication boards to clearly communicate goals and expectations

 

 


Inventory reduction:

 

Project approach:

-          Plan:

Ø       Develop Input-Output model defining all inventory impacted processes

Ø       Brainstorm Sessions

Ø       Establish priorities and create sub teams around these activities

Ø       Model development to understand relationships of different parameters influencing inventory

Ø       Quarterly target setting with stringent follow-up

Ø       Developed the reporting process

 

 

-          Do/Check/Act

Ø       Weekly executive calls

Ø       Weekly working-level calls with functional teams

Ø       Weekly working-level calls with operational teams

Ø       Special task forces (PSS, Unicom)

Ø       Tool development / improvement

Ø       Escalations and feedback based on Inventory outlook

Ø       Clear analysis and oversight to facilitate identification and resolution of risks

Ø       Create website communication tool

Ø       Implement standards and practices

Ø       Used special email communication to trigger breakthrough thoughts

 

 

The project focus areas included:

Deployment time

Transportation intervals

Number of warehouses

Forecast accuracy

Lucent-owned manufacturing

Buffer sizes

Excess & obsolete inventory

Reverse logistics

Inventory visibility system

New product introduction

Use of common components in design

Post sales support

 

 

Example 1:

Based on the business model, which varies by customer, a Market Unit inventory model was developed enabling a prediction of the Turns by customer. The model is used as a method for target setting and to prioritize the inventory reduction actions by customer as well as on which issue to focus on. Elements in the model used are:

          delivery, transportation, warehousing and deployment interval

          acceptance interval

          customer projected revenue

          customer order mix (Engineered, Furnished and Installed (EF&I) and Material Only Orders)

          revenue recognition rules

 

The innovation was the development of the theoretical Turns per customer calculation, which was a complete different approach taken. Working through contract by contract the data was collected . In a spreadsheet all the different elements were put together and allowed a comprehensive overview. It showed the gap between what could be reached in theory and where we were in reality. It allowed to focus on the right parameters, what to influence and which priorities to put. It shows different business models and forces a Lucent internal discussion about the way we want to serve our customer and the impact it has on our bottom line.

 

Example 2: Buffer analysis formula and application process

 

In order to improve the delivery and inventory performance of  Lucent, buffers of inventory need to be in place. Existing Buffer sizes were unique to the locations: 28 separate formulas, predominately for Safety Stock. In cooperation with Bell labs a standard formula was developed and introduced in Lucent and our main EMS’.   
 

Total
Inventory
Position

Variance
 Factor

X

X

Daily
Forecast

 

Period of Uncertainty (PU)

=

Variance Factor =

1 + 1.65 x SQRT(5) x

SQRT(PU)
     (PU)

 

Example 3 - Theoretical Turns calculation

 

Based on the business model, which varies by customer, a Market Unit inventory model was developed enabling a prediction of the Turns by customer. The model is used as a method for target setting and to prioritize the inventory reduction actions by customer as well as on which issue to focus on. Elements in the model used are:

          delivery, transportation, warehousing and deployment interval

          acceptance interval

          customer projected revenue

          customer order mix (Engineered, Furnished and Installed (EF&I) and Material Only Orders)

          revenue recognition rules

 

The innovation was the development of the theoretical Turns per customer calculation, which was a complete different approach taken. Working through contract by contract the data was collected . In a spreadsheet all the different elements were put together and allowed a comprehensive overview. It showed the gap between what could be reached in theory and where we were in reality. It allowed to focus on the right parameters, what to influence and which priorities to put. It shows different business models and forces a Lucent internal discussion about the way we want to serve our customer and the impact it has on our bottom line.

 

Example 4 - Bell Labs Math center developed a model correlating forecast error, lead time and inventory. This model is used in supply chain modeling to optimize investment and delivery performance. This picture is a three dimensional graph which shows the correlation between forecast error (X-axis), lead time (Z-axis) and total pipeline inventory turns (Y-axis) 

 

 

Which lessons were learned?

 

Ø      Establish a sense of urgency

Ø      Mathematical relationship between forecast, lead time and inventory

Ø      Key statistical formula’s and data range for proper buffer sizing

Ø      Defining elements in turns calculation

Ø      Form a guiding coalition

Ø      Guide others through the required cultural change by:

Ø      Being accessible to others for help, information and direction

Ø      Provided accurate information

Ø      Meeting all commitments

Ø      Treating everybody with respect

Ø      Management conflict of interests

Ø      Management conflict of cultures

Ø      Team work extended to a  global and diverse environment

Ø      Communicate positive and negative results, celebrate successes, get early wins

Ø      Break down walls that inhibit communication

Ø      Ongoing process improvement simultaneously with day to day mitigation of problems and issues

Ø      Manage and control a large-scale global project