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Supplier Development project
Tools for supplier development
Inspiration for tools to be used in workshops
Supplier Development project
Value stream mapping and the seven wastes
Supplier Development project
The five principles of Lean
1.1. Specify value from the customers’ perspective
2.2. Map the value stream to understand value and non-value added steps
3.3. Flow the work through the processes in the value stream
4.4. Schedule the work based on customer pull
5.5. Strive for perfection through continuous improvement and waste elimination
Supplier Development project
The seven types of waste
Overproduction Production of more and/or earlier than demanded by the customer.
Operator and/or equipment waits for materials and toolsWaiting
Unnecessary operator motion due to layout.Motion
Unnecessary processing to compensate for weaknesses other places, e.g. test and control.Processing
Inventory ties up capital, space and time and presents a risk of defect goods.Inventory
Unnecessary transportation due to poor layout.Transportation
Waste of time, resources and materials.Defects
Supplier Development project
IndustryWeek benchmark 25 quantile 50 quantile 75 quantile 90 quantileFinished-product first-pass yield 90% 95% 98% 99%
Scrap and rework cost as % of sales 5% 2% 1% 0.50%
Customer lead time, order to shipment 30 days 14 days 5 days 2 days
On-time delivery rate 90% 95% 98% 99%
Machine downtime (% of sched. uptime) 10% 5% 2% 1%Total inventory turns (per year) 4 8 14 26
Raw materials inventory turns 6 12 21 46Work-in-process inventory turns 6.5 13 33 90Finished goods inventory turns 6 12 25 60
Productivity (USD 1000 per employee) USD 108 USD 161 USD 266 USD 500
Benchmark data
Focus onown plant
Include the entirevalue chain
Supplier Development project
Value stream mapping method – step by step
Press Weld #1 Weld #2 Assembly 1 Assembly 2 Shipping
Korsørassemblyplant
Svendborg steel
Step 1: Processes in the value chain
Supplier Development project
Value stream mapping method – step by step
O/T = 10 min
OP = 100%
C/T = 39 sec
O/T = 10 min
OP = 80%
C/T = 46 sec
O/T = Ø
OP = 100%
C/T = 62 sec
O/T = Ø
OP = 100%
C/T = 1 sec
OP = 85%
O/T = 1 hour
C/T = 40 sec
Press Weld #1 Weld #2 Assembly 1 Assembly 2 Shipping
1 1 1 1 1
Korsørassembly plant
Svendborg steel 18,400 units per month
-12,000 V-6,400 H
Boxes = 20 units2 shifts
Step 2: Data boxes for processes
Supplier Development project
Value stream mapping method – step by step
Shipping
C/T = 1 sec
OP = 85%
O/T = 1 hour
Press
1
O/T = 10 min
OP = 100%
C/T = 39 sec
Weld #1
1
O/T = 10 min
OP = 80%
C/T = 46 sec
Weld #2
1
O/T = Ø
OP = 100%
C/T = 62 sec
Assembly 1
1
O/T = Ø
OP = 100%
C/T = 40 sec
Assembly 2
1
Korsørassemblyplant
Svendborg steel 18,400 units per month
-12,000 V-6,400 H
Boxes = 20 units2 shifts
Step 3: Transportation and inventories
2xweek
COIL
5 DAYS
L 4600 V2400 H
L
1100 V600 H
L
1600 V850 H
L
1200 V640 H
L
2700V1440 H
L
1xdaily
Supplier Development project
Value stream mapping method – step by step
Shipping
C/T = 1 sec
OP = 85%
O/T = 1 hour
Press
1
O/T = 10 min
OP = 100%
C/T = 39 sec
Weld #1
1
O/T = 10 min
OP = 80%
C/T = 46 sec
Weld #2
1
O/T = Ø
OP = 100%
C/T = 62 sec
Assembly 1
1
O/T = Ø
OP = 100%
C/T = 40 sec
Assembly 2
1
Korsørassemblyplant
Svendborg steel 18,400 units per month
-12,000 V-6,400 H
Boxes = 20 units2 shifts
Step 4: Information flow
2xweek
COIL
5 DAYS
L 4600 V2400 H
L
1100 V600 H
L
1600 V850 H
L
1200 V640 H
L
2700 V1440 H
L
1xdaily
Productionmanagement
MRP
90/60/30-dayforecast
Dailyorders
6-weekforecast
Weekly fax
920 units per day
Week plan Dailyorders
Supplier Development project
Value stream mapping method – step by step
Shipping
C/T = 1 sec
OP = 85%
O/T = 1 hour
Press
1
O/T = 10 min
OP = 100%
C/T = 39 sec
Weld #1
1
O/T = 10 min
OP = 80%
C/T = 46 sec
Weld #2
1
O/T = Ø
OP = 100%
C/T = 62 sec
Assembly 1
1
O/T = Ø
OP = 100%
C/T = 40 sec
Assembly 2
1
Korsørassemblyplant
Svendborg steel 18,400 units per month
-12,000 V-6,400 H
Boxes = 20 units2 shifts
Step 5: Lead time and value time
2xweek
COIL
5 DAYS
L 4600 V2400 H
L
1100 V600 H
L
1600 V850 H
L
1200 V640 H
L
2700 V1440 H
L
1xdaily
Productionmanagement
MRP
90/60/30-dayforecast
Dailyorders
6-weekforecast
Weekly fax
920 units per day
Week plan Dailyorders
1 sec 39 sec
7.6 days
46 sec
1.8 days
62 sec
2.7 days
40 sec
2.0 days 4.5 daysLead time23.6 days
Process time188 sec
5 days
Supplier Development project
Future situation – some good advice• What is takt time?• Is the production for orders or supermarket?• Where can we use continuous flow?• Where will we need to use supermarket pull systems?• Where in the production process do we initiate the production?• How do we level the mix in the pacemaker process?• How much of the work is initiated and removed by the pacemaker? • Which changes must be made?• Which improvements must be made?• Which process improvements are necessary?
(e.g. running time, changeover, training)
Supplier Development project
Expanded value stream mapping method – Step by step
Customer
OEMCompanySupplier
Raw materialsupplier
Cross-dock
Step 1: Processes in the value chain
Supplier Development project
Expanded value stream mapping method – Step by step
Customer
OEMCompanySupplier
Raw materialsupplier
Cross-dock
Step 2: Data boxes for processes
RV = 10 d
VIA = 8 d
FV = 1 d
EPE = 2 d
RV = 32 d
VIA = 20 d
FV = 8 d
EPE = 2 d
RV = 8 d
VIA = 1 d
FV = 3 d
EPE = 1 d
10,000 items per unit
Supplier Development project
Expanded value stream mapping method – Step by step
Customer
OEMCompanySupplier
Raw materialSupplier
Cross-dock
Step 3: Transportation
RV = 10 d
VIA = 8 d
FV = 1 d
EPE = 2 d
RV = 32 d
VIA = 20 d
FV = 8 d
EPE = 2 d
RV = 8 d
VIA = 1 d
FV = 3 d
EPE = 1 d
Daily
1 x 4 – 8 weeks
180 km
DP = 23%
11,070 items per month
500 m
1 x week
180 km
DP = 83%
2,500 items per month
1 x week
180 km
DP = 83%
2,500 items per month
10,000 items per unit
65 km
DP = 100%
1 unit = 28 units
Supplier Development project
Expanded value stream mapping method – Step by step
Customer
OEMCompanySupplier
Raw materialsupplier
Cross-dock
Step 4: Information flow
RV = 10 d
VIA = 8 d
FV = 1 d
EPE = 2 d
RV = 32 d
VIA = 20 d
FV = 8 d
EPE = 2 d
RV = 8 d
VIA = 1 d
FV = 3 d
EPE = 1 d
Daily
1 x 4 – 8 weeks
180 km
DP = 23%
11,070 items per month
500 m
1 x week
180 km
DP = 83%
2,500 items per month
1 x week
180 km
DP = 83%
2,500 items per month
10,000 items per unit
65 km
DP = 100%
1 unit = 28 units
OEMplanning
Companyplanning
SupplierPlanning
Daily call-off
Weekly call-off
Monthly call-off
Weekly P-plan
Dailyplan
Weekly confirmation
Weekly confirmationWeekly
plan
Daily confirmation
Dailyplan
Supplier Development project
Expanded value stream mapping method – Step by step
Customer
OEMCompanySupplier
Raw materialsupplier
Cross-dock
Step 5: Lead time and value time
RV = 10 d
VIA = 8 d
FV = 1 d
EPE = 2 d
RV = 32 d
VIA = 20 d
FV = 8 d
EPE = 2 d
RV = 8 d
VIA = 1 d
FV = 3 d
EPE = 1 d
Daily
1 x 4 – 8 weeks
180 km
DP = 23%
11,070 items per month
500 m
1 x week
180 km
DP = 83%
2,500 items per month
1 x week
180 km
DP = 83%
2,500 items per month
10,000 items per unit
65 km
DP = 100%
1 unit = 28 units
OEMplanning
Companyplanning
Supplierplanning
Daily call-off
Weekly call-off
Monthly call-off
Weekly P-plan
Dailyplan
Weekly confirmation
Weekly confirmationWeekly
plan
Daily confirmation
Dailyplan
19 days 68 days 2 days 12 days3 hours 3 hours 2 days L/T = 104 days1 plant = 99 dTransportation = 5 dTotal steps = 59VA steps = 10
Supplier Development project
Problem-solving
Supplier Development project
Root cause analysis – 5 WhysThe car
cannot start
Forgot tofill up the car
No petrol station
Ran outHole in the fuel tank
AHA – The countermeasure is to introduce a warning light in the car.
No signal
Nopetrol
Engine failure
Why?
Supplier Development project
The Pareto chartThe method is used for identifying key factors and thus focus the effort.It is typically one of the first tools we use after the data collection process.
• The chart is named after the Italian economist Wilfredo Pareto, who studied the distribution of wealth in the population of Rome. Pareto observed that 80% of income was received by 20% of the population.
• Other examples
– 80% of a company’s sales come from 20% of its products.
– 80% of the total number of cases come from 20% of the case types.
PARETO CHART
0
25
50
75
100Per cent
TYPE OF ERRORA good idea to identify where to start the problem-solving is to categorise the causative conditions and arrange them in columns.
Supplier Development project
Fishbone diagramThe fishbone diagram is a tool for root cause analysis. The diagram breaks down the problem into its various causes.
Materials Man power
Methods Machines
xxxx
xxxxxxxx
xxxx
xxxxxxxx
xxxx
xxxxxxxx
xxxx
xxxx
xxxx
Problem
The problem is displayed to the right – that is the head of the fish:
• Identify the root causes – write them down at the end of the fishbones.
• Causes can be traced back to root causes with one or more of the six Ms: man power, machines, methods, materials,measurements and management.
• Break down the root causes to the problem.
• Circle the most relevant causes.
• Find the connection between the root causes.
• Take countermeasures against the most important causes and casual relations.