Transcript Lean and the Strategic Plan

Lean and the Strategic Plan
H. David Paris, C.P.M., CFPIM, CIRM
V.P. Training
Industrial Solutions, Inc. (ISI)
R. Henry Migliore, Ph.D.
Professor Emeritus /Northeastern State University
President, Managing for Success
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SUCCESSFUL IMPLEMENTATIONS
• An enterprise must conduct change from the
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top
If strategic vision does not include the Lean
philosophy, radical changes taking place will
not follow the predetermined path of the
enterprise
Most US companies fail to implement Lean
because of wavering leadership
Use the strategic plan to drive successful
implementation
MODEL FOR PROVEN APPROACH
STRATEGIC PLANNING FOR EACH
FUNCTION
• PURCHASING
• MATERIALS
• LOGISTICS
• QUALITY
• FINANCIAL
• HUMAN RESOURCES
• DESIGN ENGINEERING
• MARKETING
• SALES
• SAFETY
• MANUFACTURING
PURCHASING
• Support production with the uninterrupted
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flow of material without excess inventory
Established through contracts with suppliers
Use MRP output for forecasting only
Track commodities our factory uses
Track commodities used by suppliers
Match purchased lot sizes with
manufacturing lot sizes
A-B-C analysis for inventory turns
MATERIALS
• Balance customer requirements and
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manufacturing capacity
Lean implementation of visual pull systems
Drive MPS and support the S&OP
Drive MRP output for forecasting capacity
constraints
Control the shop floor through visual signals
not through MRP
Produce to supermarkets
LOGISTICS
• Cease buying truckloads of one part number,
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and fill the same truck with a smaller
quantity of several part numbers
Consolidate shipments
Imported product can be held in local
warehouses at the supplier’s expense
QUALITY
• Identify problems as they occur, not final
inspection
• Prevention activities include
 6 sigma problem solving
 Run charts
 CEDAC
• Verify process control
 Simple process capability (Cp)
 Process capability to a central tendency (Cpk)
• Functionality check
• Continuous improvement
FINANCIAL
• Cost accounting
 Identify cost of each product
 Maximize return on investment (ROI)
 Maximize contribution
• Fixed cost will remain the same
• Improve the difference between revenue and
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variable cost to increase profit
Optimize the mix within constraints
 Sales possibilities
 Capacity constraints
FINANCIAL MEASURES
• Optimize the mix through linear
programming
 % of optimum sales
• % adherence to the production plan
• Variable cost variation
• Purchase price variation (PPV)
HUMAN RESOURCES (HR)
• Excellent hiring practices
 Background checks
 Literacy test
 Minimum education
• Training programs
 Cross training
 Job mapping
• Continuous improvement program
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Eliminate waste
Improve processes
Increase safety
Reward efforts
DESIGN ENGINEERING
• All functions must be linked during the
design stage to insure compatibility
 More likely to meet target completion date
 More likely to function properly
 More likely to meet objectives
 Size - Weight - Capabilities
• Quality Functional Deployment (QFD)
• Failure Mode Effect Analysis (FMEA)
• Design For Manufacturability (DFM)
• Design For Assembly (DFA)
MARKETING AND SALES
• Marketing concentrates on
 Long term planning
 New product development
• Sales
 Leads the sales and operations process (S&OP)
 Production plan by family
 Monthly production for 12 to 18 months
 Prepare all functions for fluctuations in demand
 Promotions
 New product growth
 Competition
SAFETY
• Comply with OSHA regulations
 Training is a must
• Post charts depicting
 Attendance
 Training
 Accidents
 Lost time accidents
• Deploy safety to every level
 Safety must be a part of every employee’s job
MANUFACTURING
• Radical changes outlined by value stream
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maps
Stop pushing large lots through production
Start pulling small lots (1-piece) through
production
Relocate some equipment to support
 Flow – Repetitive – Cellular Production
MANUFACTURING
• If possible, always flow production
 Balanced Operations – Close Layout – Mixed
Models - POUS – Visual Management
 Schedule the pacemaker process and flow to
product completion
• If not flow, then pull
 Unbalanced operations
 Distanced layout
 Setup long
 Uptime problems
MANUFACTURING
• Environments for flow and pull systems
 MTS
 ATO
 MTO
 DTO
MTS: PULL WITH BALANCED FLOW
Information Flow
Custome
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Raw
Supplier Matl
Process
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Process
B
FIFO LANE
Process
C
Fin.
Goods
MTS: PULL WITH IMBALANCED FLOW
Information Flow
Customer
Raw
Supplier Matl
Process
A
Process
B
MATERIAL FLOW
Kanban
Locations
Process
C
Fin.
Goods
ATO: PULL WITH BALANCED FLOW
Information Flow
Raw
Supplier Matl
Process
A
Process
B
FIFO LANE
Kanban
Locations
Process Fin.
Goods
C
Custome
r
ATO: PULL WITH IMBALANCED FLOW
Information Flow
Raw Process
Supplier Matl
A
Process
B
Parts Flow
Kanban
Locations
Process Fin.
Customer
Goods
C
MTO - DTO
Information Flow
Customer
Raw
Supplier Matl
Process
A
Process
B
FIFO LANE
Process
C
Fin.
Goods
CONCLUSION
• Implement Lean through the strategic plan
 Management lead
 All functions can work together
 Better financial support
 Common goals and objectives
H. David Paris, C.P.M., CFPIM, CIRM
[email protected]
R. Henry Migliore, Ph.D.
[email protected]
E10 Lean and the Strategic Plan
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