Pull Manufacturing
Kanban, Just in Time, Demand Flow
Superfactory Excellence Program™
www.superfactory.com
© 2004 Superfactory™. All Rights Reserved.
1
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Disclaimer
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© 2004 Superfactory™. All Rights Reserved.
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Outline
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Why Pull Manufacturing?
The Problem of Inventory
Just In Time
Kanban
One Piece Flow
Demand / Pull
Standard Work & Takt Time
Production Smoothing
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Why Pull Manufacturing?
Lean manufacturing is really about minimizing the
need for overhead
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which is about concentrating precisely on only what
is necessary
which is about linking interdependent supply
system decisions, and actions
which needs to be visual, responsive and simple to
manage
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4
Push Vs. Pull Scheduling
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Push Scheduling
• traditional approach
• “move the job on when finished”
• problems - creates excessive inventory
Pull scheduling
• coordinated production
• driven by demand (pulled through system)
• extensive use of visual triggers
(production/withdrawal kanbans)
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Inventory: Root of all evil
If the meaning of production control is truly understood,
inventory control is unnecessary.
-- Taiichi Ohno
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Inventory Hides Problems
Work in process inventory level
(hides problems)
Unreliable
Vendors
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Scrap
Capacity
Imbalances
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Lowering Inventory Reveals Problems
Accommodate lower inventory levels by:
•Reducing variability
•Eliminating waste
•Streamlining production and material flows
•Accurate information
Unreliable
Vendors
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Scrap
WIP
Capacity
Imbalances
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What is Just-in-Time?
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Management philosophy of continuous and forced problem
solving (forced by driving inventory out of the production
system)
Supplies and components are ‘pulled’ through system to
arrive where they are needed when they are needed
Goal: Achieve the minimal level of resources required to
add the necessary value in the production system.
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Objective of JIT
To eliminate waste
by
Producing the needed item
at the right time
and the exact quantity
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Objective of JIT
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Produce only the products the customer wants
Produce products only at the rate that the customer
wants them
Produce with perfect quality
Produce with minimum lead time
Produce products with only those features the customer
wants
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Objectives
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Produce with no waste of labor, material or equipment -every movement must have a purpose so that there is zero
idle inventory
Produce with methods that allow for the development of
people
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JIT Principles
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Create flow production
• one piece flow
• machines in order of processes
• small and inexpensive equipment
• U cell layout, counter clockwise
• multi-process handling workers
• easy moving/standing operations
• standard operations defined
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JIT Principles
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Establish “TAKT” time
• rate at which the customer buys a product
Build Pull Product
• use of kanban system
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JIT Tactics
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Single Minute Exchange of
Dies (SMED)
Statistical Process Control
Use of standard containers
Doable stable schedules with
adequate visibility
TAKT-Time
5-S Program
Kaizen Event
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Visual control
Flexible workers
Tools at the point of need
Product redesign
Group Technology
Total Productive Maintenance
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Just-in-Time Success Factors
Flexible/
Empowered
Employees
Quality
Total
Productive
Maintenance
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Suppliers
JIT
Flexible
Layouts and
Processes
Small Lot
Production/
Short Setup
Demand/Pull
Scheduling
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JIT Scheduling Tactics
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Build products to stock or order
Plan level schedules (Constant rate of production)
Produce in small lots/mixed model production (dictated by
set-up and thru put times)
Demand initiates lower level production/supplier deliveries—
Use of kanbans
Suppliers plan to forecast/build to demand
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Quality enables JIT
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Processes are easy to understand—visible
Quality issues are apparent immediately
Scope of problems are limited because of lower
inventory levels
TQM management methods are very important
Quality of execution typically determines how
low inventories can be reduced!
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Characteristics of JIT Suppliers
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Few
Nearby (if possible)
Repeat business/Longer Term Agreements
Analysis to enable desirable suppliers to become or stay
price competitive
JIT Logistics:
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Frequent Deliveries/Smaller Quantities
Exact Quantities
Consumption initiates deliveries
Deliveries directly to the point of use
Perfect Parts
Concurrent engineering design practices
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Streamlined Production
Traditional Flow
Production Process
(stream of water)
Suppliers
Flow with JIT
Suppliers
Customers
Inventory (stagnant
ponds)
Material
(water in
stream)
Customers
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JIT Reduced Waste at Hewlett-Packard
Waste Reduction (%)
Setup Time
20%
Scrap
30%
Finished Goods
30%
Space
40%
Lead Time
50%
Raw Material
50%
Work-in-Process
82%
0%
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20%
40%
60%
80%
100%
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JIT production, AKA…
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ZIPS (Zero Inventory Production System) -- Omark industries
MAN (Material As Needed) -- Harley Davidson (Also: “Quality Machine
Through Jelly-Beans,” where jelly beans refers to running one-piece
lots, or mixed models, in final motorcycle assembly)
MIPS (Minimum Inventory Production System) -- Westinghouse
Stockless Production -- Hewlett Packard, Greeley Div.
Continuous Flow Manufacturing (CFM) -- IBM
Kanban -- Many companies both in North America and Japan
Toyota System -- Many companies in Japan
Ohno System (after Taiichi Ohno, a Toyota vice president and mastermind of the system) -- Many companies in Japan
Just-In-Time (JIT) Production -- Most popular term both in North
America and Japan
Lean Manufacturing -- The most recent term
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JIT Logic in two simple formulas
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Formula 1: Little’s Law
Average
WIP
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=
Throughput
Rate
X
Average
Production Lead
Time
Formula 2: Average Production Lead Time
Average
Production
Lead Time
=
Average
Processing
Time
X
Measure of
System
Utilization
Measure of variance in
the processing times of
jobs
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X
C
2
S
C
Measure of variance of
interarrival times of
customer orders
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2
A
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Effects of JIT production
(F)
Heightened
awareness of
problems and
problem causes
Ideas for
cutting lot
sizes
Ideas for
improving
JIT delivery
performance
Lot size
reductions
(A)
Less
inventory
in the
system
Ideas for
controlling
defects
JIT
production
(H)
Reduced buffer
inventories and/or
workers
(E)
Fast feedback
on defects
Deliberate
withdrawal of
buffer inventories
/ workers
(G)
Smoother
output rates
(B)
Scrap/quality
control
(I)
Less indirect cost for:
interest on idle inventory,
space and equipment to
handle inventory, inventory
accounting, physical
inventory control
(C)
Fewer rework
labor hours
(D)
Less material
waste
Less material, labor, and indirect inputs for the same of higher output = higher productivity
Less inventory in the system = faster market response, better forecasting, and less administration.
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How to accomplish JIT production
7) Improve Product Design
-Standard product configuration
-Standardize and reduce
number of parts
-Process design with
product design
-Quality expectations
6) Reduce Inventory More
-Look for other areas
-Stores
-Transit
-Carousels
-Conveyors
5) Work with Vendors
-Reduce lead times
-Frequent deliveries
-Project usage
requirements
-Quality expectations
© 2004 Superfactory™. All Rights Reserved.
1) Design Flow Process
-Link operations
-Balance workstation
capacities
-Re-layout for flow
-Emphasize preventive
maintenance
-Reduce lot size
-Reduce setup/changeover time
Concurrently
Solve Problems
-Root Cause
-Solve permanently
-Team approach
-Line and specialist
responsibiity
-Continual education
Measure Performance
-Emphasize
improvement
-Track trends
2) Total Quality Control
-Worker responsibility
-Measure: SQC
-Enforce compliance
-Fail-safe methods
-Automatic inspection
3) Stabilize Schedule
-Level schedule
-Underutilize capacity
-Establish freeze
windows
4) Kanban Pull
-Demand pull
-Backflush
-Reduce lot sizes
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Limitations of JIT
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Preconditions to JIT
• trust must be present
• labor/management
• suppliers/consumers
•
•
•
•
recognition of processes
familiarity with problem solving
quality at the source
agreement over value and waste
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Limitations of JIT
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Right Settings
• applicable in growth to maturity phases of
Product Life Cycle
• standard product
• Steinway and JIT
• standard/fixed pay-rate
• problems with piece-rate scheme
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Universal agreement that change needed
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Theoretical Benefits of JIT
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Unpleasant surprises
eliminated
Less computerization
• visual control
Improved quality
WIP reduced
Better communications
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Less pressure on receiving docks and
incoming inspection areas
Lower costs
Change in attitude
• Defects are treasures
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Dealing with Variance
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Four major stances:
• Buffer against it
• Ignore it
• Manage it
• Eliminate it
All forms of variance create cost
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JIT & Variance
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Variance a fact of life
Comes from many sources
• internal
scheduling changes, scheduling practices,
manufacturing planning & control systems,
absenteeism, process variability
• external
changes in forecasts, actual demand, customer
requested changes, government, competition, vendors
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Kanban
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Japanese word for card
Authorizes production from downstream operations based
on physical consumption
May be a card, flag, verbal signal etc.
Used often with fixed-size containers
Kanban quantities are a function of lead-time and
consumption rate of the item being replenished (min
qty=(demand during lead-time + safety stock)/ container
quantity)
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Kanban Production Control Systems
Production
Kanban
Withdrawal
Kanban
A
Machine Center
Assembly Line
B
Storage
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....
Kanban Squares
X
X
X
X
X
X
Flow of work
Flow of information
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Kanban Card
Unique Part #
46-281247p1
27” Al Rim
Qty
23
Where to find
part when bin
is empty
Stock Loc: Line Loc:
RIP 1
Asm. 1
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Description
Kanban Qty
Where to return
filled Kanban
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Quality at the Source
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For JIT & Kanban to work, quality must be high
 There can be no extra inventory to buffer against
the production or use of defective units
Producing poor-quality items, and reworking or rejecting
them is wasteful
The workers must be responsible for inspection &
production quality
The philosophy is, “NEVER pass along defective item”
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One Piece Flow
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A philosophy that rejects batch, lot or mass processing as
wasteful
States that product should move (flow) from operation to
operation, only when it is needed, in the smallest increment
One piece is the ultimate (one-piece-flow)
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Continuous Flow
• Line up all of the steps that truly create value so they occur
in a rapid sequence
• Require that every step in the process be:
• Capable – right every time (6 Sigma)
• Available – always able to run (TPM)
• Adequate – with capacity to avoid bottlenecks
(right-sized tools)
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Continuous Flow
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Linking manual and machine operations into the most
efficient combinations to maximize value-added content
while minimizing waste
Elimination of work stagnation in and between processes
Ideal creation of one piece flow: making one part and
moving one part (in contrast to batch and queue material
handling)
In order to really get and hold the benefits of flow
production the organization must transition from a
functional structure to a product-focused, cross-functional
structure
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Pull Production
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Actual customer demand drives the manufacturing process
It creates a system of cascading production and delivery
instructions from downstream demand to upstream production in
which nothing is produced by the upstream supplier until the
downstream customer signals a need
The rate of production for each product is equal to the rate of
customer consumption
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Pull Production
• Through lead time compression & correct value
specification, let customers get exactly what’s wanted
exactly when it’s wanted:
• For the short term: Smooth pull loops to reduce
inventory
• For the near term: Make-to-order with rapid response
time
• For the long term: Diagnostics and prognostics in a
stable relationship to take out the surprises for
consumers and producers
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Pull System
Leveled assembly
instructions
A
Production
Schedule
C
Fab
Vendor
Fab
Vendor
Fab
Vendor
Fab
Vendor
A
B
A
Customers
Sub
Final Assy
Sub
Vendor
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....
Pull - The Continuing Need!
Batch
Action B
tote
20
Action A
20
Customer
X0X0
SHIPPING
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Standardized Work
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Standardized work consists of three elements:
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Takt time
Matches the time to produce a part or finished product
with the rate of sales. It is the basis for determining
workforce size and work allocation
Standard in-process inventory
The minimum number of parts, including units in
machines, required to keep a cell or process moving
Standard work sequence
The order in which a worker performs tasks for various
processes
Once a standard work is set, performance is measured and
continuously improved
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Standardized Work
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Standardized work is the documentation and
application of the best practices of a manufacturing
process
It may include photographs and/or drawings
It ensures that production operations are performed
the same way each time
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It is developed with the process/production operators
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It is posted at each workstation
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Standardization/Simplification
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Eliminate inherent sources of variance
Eliminate opportunity for human discretion error
Examples
• Container sizes
• MacDonalds with interaction with customers
Consistent with Deming Wheel
• Standardize  expose problems  solve
problems  implement new methods
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Work Balancing / TAKT Time
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Work balancing maximizes operator efficiency by matching
work content to TAKT time
TAKT time is the rate at which customers require your
product
TAKT time is calculated as follows:
Available work time per day
Daily required customer demand in parts per day
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TAKT Time
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TAKT
• the beat
• (Net Available Operating Time) / Customer Requirements
• time periods must be consistent
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TAKT Time Example
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Net Available Operating Time
• Time per shift
480´ (minutes)
• Breaks (2 @ 10´) - 20´
• Clean-up
- 20’
• Lunch
- 30’
• NAOT/shift
410´
Customer Requirements
• Monthly
26,000 units/month
• No. Working Days
20 days/month
• CR/Day
1,300 units/day
TAKT Time
• 410’ x 60” x 3 shifts (73,800) divided by 1,300
• 57.769 seconds per part or 57"
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48
Production Smoothing / Leveling
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Averaging both the volume and the production sequence of
different model types on a mixed-model production line
 Example: Toyota Manufacturing
Toyota makes 3 car models - a convertible, hardtop, and an
SUV. Assume that customers are buying nine convertibles,
nine hardtops, and nine SUVs each day. What is the mostefficient way to make those cars?
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Production Smoothing / Leveling
One solution would be for Toyota to make all nine convertibles in
the morning, all nine hardtops in the afternoon, and all nine SUVs
in the evening. That would allow people to concentrate on one kind
of work at a time.
.
However, the people who make parts for the convertibles would be
busy in the morning, but they and their equipment would be idle in
the afternoon and evening. Similarly, the people and equipment
that make the parts for the hardtop and SUVs would be busy
sometimes and idle at other times.
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Production Smoothing / Leveling
In the staging lot, vehicles would pile up between the plant and the
dealers. Customers don't buy nine convertibles in the morning, nine
hardtops in the afternoon, and nine SUVs in the evening. They buy
different kinds of cars through the day and week.
Ideally, an automaker needs to make different types of vehicles at more
or less the same pace that customers buy them. Otherwise, they will
end up with a lot of extra inventory in the form of unsold cars.
Parts Factory
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Car Factory
Dealer
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Production Smoothing / Leveling
Toyota solved the problem by production leveling.
If customers are buying nine convertibles, nine hardtops, and nine
SUVs each day, Toyota assembles three of each in the morning,
three of each in the afternoon, and three of each in the evening. It
also distributes the production of convertibles, hard tops, and SUVs
as evenly as possible through each shift: convertible, hard top, SUV,
convertible, hard top, SUV, and so on.
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Production Smoothing / Leveling
Leveling production also helps to avoid the problem of excess
inventory of finished vehicles. The vehicle plants make the
different types of cars at about the same pace that customers buy
those cars. They can adjust the pace of production as buying
patterns change.
As the result, dealers only need to maintain a minimal inventory of
cars to show and sell.
Parts Factory
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Car Factory
Dealer
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Wrap-up - Pull Manufacturing
Lean manufacturing is really about minimizing the
need for overhead



which is about concentrating precisely on only what
is necessary
which is about linking interdependent supply
system decisions, and actions
which needs to be visual, responsive and simple to
manage
© 2004 Superfactory™. All Rights Reserved.
54