les for managers• cv control and test ... rajan suri, bash’shar el-jawhari, and aaron armstrong...
TRANSCRIPT
LES for Managers
An executive level overview of the Lean Enterprise System
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Michael G. Beason - Chairman for the SEA Organization
“The supplier of the future will be capable of 99.5% on-time delivery; lead time variation of less than two hours; six sigma quality; inventory turns in excess of 15; and year-on-year cost improvements of 5-8%
The future supplier will do all of this and still maintain a 10-15% profit before taxes.”
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Purpose Provide information about SEA and the
reasons for the industry conversion effort
Provide an executive overview of the entire Lean Enterprise System, the Conversion Plan, and the linkages between the various elements of the plan
Prepare the manager for the implementation of SEA LES models and methodologies and the SEA annual certification
Our Industry Lean Effort
Consultants
Tiers Two - Four
Boeing Northrop Lockheed And more
MEPs
Public and private entities providing
services
Tier One Suppliers DoD
LAI
NACFAM
AIA
Various entities developing tools, standards, and
policies
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SEA SEA is the Joint Program Office for the aerospace, defense, and space supply chain conversion effort.
SEA Supplier Development Policy The members of SEA have determined that the SEA Conversion Plan encompasses all
requirements for lean and continuous performance improvement for SEA’s member companies.
Therefore if a supplier meets the definition of “engaged” reported quarterly to SEA, the supplier will be listed on the SEA National Directory with the status “Engaged.” Engaged has been defined by the SEA Board of Directors as meaning that a supplier has established monthly action towards meeting the requirements as listed in the SEA Roadmap.
SEA member companies will do the following:
1. Strive to coordinate developmental visits – take SEA engagement as meeting the desirable level of effort to satisfy contractual requirements for lean and continuous improvement.
2. Strive to eliminate redundant audits – take the SEA engagement as evidence that the supplier is committed to achieving or sustaining the desirable level of continuous improvement.
3. Strive to eliminate duplicate effort – take the SEA “Engaged” status as evidence that the supplier is investing in developing its process management and lean capability and that the supply chain needs an appropriate and parallel effort from its customers to reduce duplicate systems and requirements that increase supplier costs.
4. Strive to establish a common framework – for suppliers engaged in SEA, members will strive to engage with suppliers on the basis of the SEA framework and integrate efforts with existing initiatives.
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Automotive According to A.T. Kearney, there is a case to be
made for the comparison of what happened in the automotive supply chain to what is happening now in the Aerospace supply chain
What happened in the automotive industry?
They’ve already done this for the past 15 years - what can we learn?
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Four Major Trends Globalization
Consolidation
Supply Chain Integration
Lean Manufacturing
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Accelerating Supply Chain Performance
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Inventory Turns & Lean For a $200M Aircraft
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Joint Strike Fighter • Center Fuselage • Weapons Bay Door Drives • Arresting Gear • CV Control and Test • Radar
• Software • LO Support System • Training Courseware and
Management Systems
• Aft Fuselage • CV Wing Fold • Fuel System • Crew Escape • Life Support • EW System • U.K. Support Center • Throttle/Side Stick • Horizontal/Vertical Tails • Flight Control Computer • STOVL Control and Test • U.K. Rqts/Stores/SW
DISTRIBUTION STATEMENT A. Approved for public release; distribution is unlimited.
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Boeing 787
Boeing 737
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Pratt & Whitney “To capitalize on an emerging market that will be booming in a few years, Pratt & Whitney Canada needs to deliver a jet engine every four hours—a feat that would be impossible without the input of its supply base.”
Purchasing.com
"We have to drive a pulse or drum beat that triggers the supply chain to deliver to a takt time (customer demand rate) of every four hours," says DiPerna.
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Changes & Impacts
Adapted by SEA from Filling the Gap - rethinking supply management in the age of global sourcing and lean - APICS
Paul Ericksen, Rajan Suri, Bash’Shar El-Jawhari, and Aaron Armstrong
Seasonality of build-to-demand products can max out supplier capacity. Without finished goods inventory, insufficient production means lost sales.
With buffers in place, lost production could eventually be made up with overtime.
Firm zones are being reduced. Building ahead puts suppliers at financial risk.
Suppliers were given forecast “firm zones.” Suppliers built ahead.
OEM forecasts are revised in real time. Suppliers must vary quantities and mix on a daily basis.
OEM forecasts were set annually and updated infrequently. Suppliers scheduled “level production.”
Obsolescence is accelerating. Building ahead carries significant market and financial risk.
The market is more demanding. Mass customization is replacing inventory-based product offerings.
Suppliers must support higher magnitudes of OEM order variability.
Asset reduction initiatives have led OEMs to adopt build-to-demand strategies.
OEM operational effectiveness increasingly depends on supply chain order fulfillment capability.
Purchased content of OEM’s products has risen significantly.
The Impact The Change
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Supply Chain Lean Practices 1. Pull Signal 2. Kitting 3. CBO/ Min-Max 4. E-commerce 5. Direct line feed (Point of use) 6. Response to Supplier Technical Questions & Problems 7. Supplier managed inventory 8. Performance based payment 9. Statement of Objectives (vs. SOW) 10. Applications of company-specific specifications where
adequate industry standards exist 11. Adjust quantity price break thinking 12. Alignment 13. Continuous improvement 14. Directed Sources
Source: SEA Joint Committee on Supply Chain Practices 2005
The LES Works!
Purple - precision machining Red - electronic assembly Green - rubber products and seals
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Process Maturity Model “PMM”
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Process Maturity & Cost
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Roadmap
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Processes & Owners
Standard Work Definition, Master Trainers & SMEs
Vision - Mission - Strategic Goals
Leadership &
Culture
Workforce Development
Operational Excellence
Process Champions
SEA Process Architecture
Value Stream
Kaizen
Roadmap – Step by Step
Long Term Conversion Plan
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Implementation Considerations
Conversion Plan - Managing the Sequence Managing Inputs & Outputs - Linkages Roles & Accountabilities This is not a training program Leadership, Leadership, Leadership Lower the Waterline - Change Management
Membership Process SEA Supplier Registry
Quarterly Report
Roadmap Assessment & Planning
Annual Membership
Authorized Service Provider* Internal
Annual SEA Certification*
*Third Party Fees may apply
Startup*
Process Owner Forums*
SSR Engaged
Status
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Process Owner Forums
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Sharing Best Practices Process-focused All Process Owners IPL Leadership Never leave the office
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Quarterly Report Annual Improvement Plan
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Quarterly Report Annual Improvement Plan
Annual Improvement Plan
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Preparing for the Annual Certification
Champion of each track and Value Stream Process Owner for each numbered process Target minimum PMM level 3 on each
numbered process Self-Assessment using online survey Set date with auditor - 3 days onsite nominal Receive and review feedback report with
team Set improvement action plans and report
progress via quarterly report
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Thank You