060 lean supply chain value stream mapping
TRANSCRIPT
LEAN SUPPLY CHAIN
• Change is needed to increase competitiveness
LEAN SUPPLY CHAIN
• If we stand still, our competitors will pass us by
LEAN SUPPLY CHAIN
• In hard economic conditions, only the fittest will survive
LEAN SUPPLY CHAIN
• Reducing costs and providing the highest value to our customers is crucial for success
LEAN SUPPLY CHAIN
•“Lean” is one way forward
A process management
philosophy
Derived mostly from the Toyota
Production System (TPS)
A set of principles with the goal of cost
reduction through the elimination of waste
Known for its focus on reducing
waste
Can be applied anywhere
– Production
– Distribution
– Office and administration
– Anywhere that work exists
Waste is everywhere
• Companies have traditionally worked to maximize shop floor efficiency
Waste is everywhere
• Companies have ignored the importance of functions outside the shop floor
Non-manufacturing tasks in the supply chain represent from 50%
to 80% of the total lead-time, from receiving the request for products through to delivery
These tasks consist of as much as 95% non-value
added time and represent more than 25% of the
operational costs
Value
• Any action that enhances the fit, form or function of a product or service in accordance with customer requirements
• What the customer is prepared to pay for
Waste
• Any action that does not enhance the fit form or function of a product or service in accordance with customer requirements
• What the customer doesn’t want to pay for
T for Transportation-Movement of goods or information that is not required to perform the processing
I for Inventory -Components, work-in-process and finished product not being processed
M for Motion -People or equipment moving more than is required to perform the processing
Expediting of late orders
Correction of billing errors
Returns and warranty costs
Write-down and disposal of excess
inventory
Rework of purchased
material
Parts inspection and
testing
Re-keying data into multiple
systems
Export and manual
analysis of data
Kaizen
Process reengineering
Value stream mapping
Kanban Poka-yoke
Measurement of outputs
Each output in the chain must add value
Focus on customer requirements
Management of tasks to achieve outputs
Inputs
Task Task Task
CustomerRequirements
Output s
Why do we accept failure in other processes as being less
important?
What would be the result if 99% of orders arrived successfully?
Consistency99% is not good enough—would you fly in airplanes if they landed
safely 99% of the time?
What happens if requirements are exceeded?
Can you think of an example of a requirement being
exceeded that would not be favourable?
Precision
Must meet requirements exactly
Process time typically comprises less than x % of the cycle time
Value is only added during the process time
Cycle time is the elapsed time to complete a single cycle of work
Process time is the working time within the cycle
The goal is to get cycle time to equal
process time
1. Select team members
2. Prepare a value stream map
3. Identify process requirements
4. Collect process statistics
– Volumes
– Cycle times
– Process times
– Staffing
5. Identify waste
– Conduct a detailed walk-through
– Determine if requirements are met
– Classify each task as adding value
or waste
6. Develop solutions to eliminate waste
7. Implement solutions
– Test
– Document
– Train
– Implement
8. Repeat. Go back to step 5 and
select another area to work on
9. As success takes hold, go back to
step 1 and create new teams to look
at other processes in the business
A timber trading company facilitates deals between buyers in one country and sellers in another country
A total of 100,000 such transactions is processed each year
An analyst has prepared a value stream process map on the following page
The cycle time (“CT”) per order is 20 hours, 5 minutes plus shipping
The process time (“PT”) per order is 1 hour, 18 minutes
Reduce the time to enter orders
Reduce the wait time for a back-office process
Shorten the lead time to obtain raw materials
Automate production of shipping documentation
Redesign a job to reduce walking distances
Create a lean work cell for an assembly or production process
Reduce excess work-in-process inventory
Reduce the elapsed time to pick, pack and ship an order
‘Fail-safe’ a process to
eliminate errors or defects
Eliminate double entry of
information into spreadsheets
