7 Lean Production & Value Stream Mapping PDF PDF

Preview

Summary

Lecturer: Stephen Disney...

Description

7 Lean Production & Value Stream Mapping The 3 Lean Wastes Muda • Any wasteful activity. • Two types: 1) The waste that can’t be easily eliminated and 2) The waste that can be easily removed with Kaizen. Mura • Variability in the load placed on production. • The waste caused by the variability in the demand and the variability introduced by the production planning and distribution scheduling activities. Muri • The waste of overburden. • The waste of overtime that is used to meet the peak loads on our production system or the waste of the excess capacity used to try to avoid the overtime. Key Questions to Ask from your Value Stream Map 1. What is your strategic objective? - Are you trying to minimise inventory, production, capacity, overtime, and rush transportation orders or a combination of some/all of these costs? 2. What is your pacemaker process? 3. How often should you create a production plan? 4. What forecasting method should you use? 5 Which replenishment algorithm should you use? 5. Which replenishment algorithm should you use? 6. What is the optimal sequence of production within the planning cycle? 7. How are you going to place orders on your supplier for raw materials and components? 8. What information should you pass to your suppliers to help them plan their activities?

Process Mapping Tips • Always collect current state (“as is”) information by walking the actual material and information flow yourself. Have a quick walk along the entire value stream first to get an overview of the flow. • - Afterwards go back and collect detailed information on each process. • Start at the shipping end and walk upstream. - Then you will understand how the customer sets the pace for the other processes.

• Use your own stopwatch and do not rely on information you have not personally collected (with the possible exception of machine uptime and scrap/ rework rate information). Map the whole process yourself. • • Always draw by hand, in pencil Over Production Definition: Producing more, sooner, or faster than required. Producing and pushing product down the value stream regardless of customer needs is wasteful because: • The product is not yet needed so it must be handled by people/machines counted, stored, retrieved from storage, delivered to the next process, reworked. • Defects must remain in inventory queues until the next step in the process discovers them by which time many could have been produced and the defects are hard to face. • Whilst the value adding time is small because of over production, the time a product is going through the factory is very long. Takt Time • Used to synchronise the production rate to the sales rate. FIFO Queues • In big picture maps, continuous flows of products are represented as a process box. • First-in-first-out (FIFO) lanes are useful when the two processes are far apart. Pacemaker Process • The process that is controlled by the customers orders. • All processes upstream from the pacemaker are controlled with supermarkets (kanbans). • You need to use a supermarket pull system (kanban) where continuous flow is interrupted and upstream processes must still operate in batch mode. • In a factory, supermarkets should be located near the supplying process so that they can see customer usage.

Bullwhip Effect in Supply Chains • Companies investing in extra capacity, extra inventory, work over-time one week and stand idle the next, while at the retail store the shelves of popular products are empty and the shelves with products that are not selling are full. Link between Muri, Mura & Bullwhip • The waste of variable load placed on the production system is known as Mura. • Mura causes the use of overtime and subcontracting to meet peak production and as well causing backlogs and inventory. • The use of overtime and subcontracting is the waste of Muri. • The variance of the production orders divided by the variance of the demand is known as the Bullwhip ratio. • The Bullwhip ratio can be used to measure and control Muri and Mura. NSAmp • A robust inventory performance measure. • Inventory availability is experienced, and costs are incurred, at all points in time, not just at one single moment. • Inappropriate institutional incentives easily contaminate instantaneous measures of inventory performance. - Eg. Rewarding staff for low inventory at the end of a financial reporting period can easily create a hockey stick effect. • The NSAmp measure is harder to manipulate as it measures inventory performance over a period of time. NSAmp is a measure that is independent of service level targets and costs, and because • it is normalised by dividing by the demand variance, it allows one to quickly compare inventory performance in different value streams. It • is a measure of the process itself, not a measure of the output of the process. • Statistical tests show that NSAmp is a better predictor of inventory levels than the variance of the inventory levels. 4 Measures of the Bullwhip Effect System recommended production requirements variance vs demand variance. Confirmed production variance vs demand variance. Actual or completed production variance vs demand variance. Variance of the purchase order to suppliers versus production variance.

Availability • A measure of inventory service. • Availability is the proportion of planning periods that end with inventory available. • Availability has a direct link to inventory holding and backlog costs. Fill Rate • Another inventory service measure. • The proportion of demand fulfilled directly from inventory. A • popular measure in the fast moving consumer goods industry. Difference between Availability & Fill-Rate Measures • Think of availability as the proportion of days where a bakery runs out of croissants. • Almost always the bakery runs out of croissants in the late afternoon. - Availability would, therefore, be near zero. • However, because most of the demand for croissants occurs in the morning, the baker’s fill-rate, the proportion of croissant demand satisfied from stock, could be very high (near one or 100%). What to Look For in an Eyeball Analysis of Dynamic VSM • Demand volume. - Is there a regular, repeating demand for the product (i.e. a demand in every period)? Or is the demand intermittent? • Trends. - Are there significant trends up or down? Are they linear or exponential? • Seasonality effects. - Are there any significant seasonality effects? Daily, weekly, monthly, yearly? • Bias. - Are the average levels for demand, forecasts, production and shipments the same? - Are there significant and systematic deviations? • Variance amplification. - Where in the information and material flow is the variability of the system amplified? • Batching. - Does the production and distribution experience any significant batching effect? - Are the batch sizes large relative to the average demand? • Production reliability. - Is there a reliable production and distribution system present which consistently meets targets? - If not, where is the variability in performance introduced? • Hockey stick effects. - Is there a monthly or quarterly dash to make the numbers?...