Introduction to
Lean Manufacturing
Enhancements
Part 1: SAP as a Lean Manufacturing Enabler
Part 2: Lean Manufacturing Enhancements
Part 1:
SAP as Lean
Manufacturing Enabler
Key Drivers and Business Strategies
How does SAP Enable Lean?
Manufacturing Key Drivers and Pain Points
Long manufacturing lead times
Difficulty in achieving on-time delivery targets
Low inventory turns (unnecessary high inventory level)
High demand for storage space at a production line
Less labor productivity because of non-value-added activities
Limited flexibility to adapt to unplanned events
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Customer Business Strategies
Manufacturing Strategies
¾ Production to customer demand or based upon consumption
¾ Shifting to single-piece-flow approach
¾ Poka yoke (mistake-proofing)
¾ Visual management
¾ Kanban
¾ Event and exception based processes
Organizational Strategies
¾ Jidoka: operators empowered to stop line if there is an issue
¾ Kaizen: continuous improvement
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Top 10 Business Initiatives Influencing IT Investments
“AMR Research recently surveyed
over 500 IT and business
executives in 7 manufacturing
vertical industries to determine the
key business initiatives driving IT
spending in 2005.
In all industries, Lean
manufacturing was identified as
the first or second most
important initiative.”
Source:
AMR Research: East Meets West – Lean
Manufacturing and ERP Are a Better Fit Than
You Think, October 2005
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
SAP as Enabler for Lean Manufacturing
“
Recent evidence [...] uncovered that automotive manufacturers that are backing
their Lean efforts with an SAP platform are not only outperforming automotive
companies that have chosen Oracle, they are even better equipped to beat the
best, with automotive SAP customers outranking even the Best in Class for
manufacturing cycle time.
Maura Buxton, Aberdeen Group,
Automotive Industry Leads the Lean Supply Chain Charge with SAP Solutions, August 2006
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Lean Customers: Automotive
South Africa
PT ASTRA
SIEMENSVDO
GRUPO ANTOLIN-IRAUSA, S.A.
TVS MOTOR COMPANY
India
China Motor
Corporation
SOFEDIT
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Part1:
SAP as Lean
Manufacturing Enabler
Key Drivers and Business Strategies
How does SAP Enable Lean?
How is Lean Manufacturing Enabled by SAP?
Supply Chain Management
„ Customer & Supplier Collaboration
Kanban
„ In-house movement, stock
transfers, and external procurement
Mixed-Mode Manufacturing:
„ Event-driven or one-time Kanban
- Make-to-Order Manufacturing
„ Kanban replenishment with or
without MRP
- Repetitive Manufacturing
„ Internet-based electronic Kanban
for external procurement
„ Order-less production
- Flow Manufacturing Techniques
Preventive/Predictive Maintenance
„ Line Design
„ Sequence of events
„ Operational method sheets
„ Capacity line balancing
Quality Management
„ Statistical Process Control
Business Intelligence & Integration
„ Takt calculations
„ xMII
„ Detailed planning and sequencing
„ KPIs, Analytics, Alerts
„ Backflush
„ Role-based configurable portals
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Lean Manufacturing: Transactions in SAP ERP
Here you see standard transaction
codes in SAP ERP associated with
functionality.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Sequence of Events: Tasks
Detailed tasks are listed with
respective time for setup, labor,
machine, or move
Indicate if each task is Non-ValueAdded (NVA)
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Sequence of Events: Materials
Indicate component
quantity used for each
task
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Sequence of Events: Production Resources and Tools
May assign tools, equipment,
and drawings to each task
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Graphical Display of Line
Graphical display of line can show
main path and all feeder paths
Critical path is designated by
red highlighting
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Operational Method Sheet
Material and Tasks are
displayed for each workstation
Drawings or graphical
representations are displayed
for each workstation
Tools and equipment may be listed for
each workstation
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Line Balancing: Volume Design and Takt
Total volume of units (products)
planned to run on line is 150. Total time
available is 600 minutes. Therefore,
Takt is 600/150 or 4 minutes.
Volume of each product to be produced
on the line
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Line Balancing: Total Product Cycle Time
For each product, you can see total
execution time or Total Product Cycle Time
(TPc/t) and the amount of time that is nonvalue-added (NVA). NVA is muda, or waste,
and may be targeted for elimination to
reduce cycle time.
Note: Takt violation for this product at
this operation – 4.1 is greater than 4
minute takt or available time
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Graphical Line Balancing: Takt Violation
In a graphical display of each
product by workstation, you can
see the Takt violation for a
product highlighted in red
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Graphical Line Balancing
When task 70 is selected, you can see that
it is system test and .90 minutes are
required at the workstation. If operators
are cross-trained at each workstation, this
is a candidate for work to be moved to
better balance the line.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Graphical Line Balancing: Drag & Drop Operation
Task 70 can be dragged and dropped to a
different workstation. This is a simulation until
saved – once saved, it will update Sequence of
Events (SOE) and may be pulled into the
Operational Method Sheet.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning Board - Level Loading for Production
This section shows Primary and Alternate
Lines or work centers where orders may
be scheduled and sequenced.
Pool of orders that need to be scheduled and
sequenced on the line.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning Strategy
Scheduling Stategy Profile
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning Board
Work is sequenced according to strategy profile.
Here, setup times are not optimized.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning Strategy – Optimize setups
Designate to optimize based upon setup time.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning and Sequencing – Setup Optimization
Work is now scheduled in a different order to
minimize setup times. Some of the setups are
now shorter. Throughput time is shorter.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Board: Demand Source View
Kanbans may be selected and click on “To
Empty” or “To Full” to change status and
respective transactions occur automatically.
The boxes above represent Kanban
containers which are color-coded to
indicate status.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Control Cycle
Control cycle details such as supplying
area and plant.
View the number of kanbans and kanban
quantity as well as designating maximum
amount of empty containers that may
generate an alert to take action.
The vendor and agreement designated will
be used to automatically generate releases
to the supplier.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Part 2:
Lean Manufacturing
Enhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)
Production Leveling based on Heijunka Processes
Kanban Analytics
Kanban Board – Automatic Refresh
Benefits:
• Kanban Boards can be used for monitoring the shop floor with user
interaction only for exceptions
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Board – Tabular view
Benefits:
„ Provides the same information as the graphical board in a tabular display
„ Easy to configure, easy to use
„ Extensible to display additional system and customer-specific fields
„ Sophisticated print function
„ Can be displayed in web-based user interfaces (Portal)
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban – New Business Application Interfaces
New BAPIs for Kanban Data and Control Cycles:
• BAPI_KANBANCC_EXISTCHECK
• BAPI_KANBANCC_GETLIST_ALL
• BAPI_KANBAN_GETLIST_ALL
• BAPI_KANBANCC_CREATE
• BAPI_KANBANCC_CHANGE
• BAPI_KANBANCC_DELETE
• BAPI_KANBAN_CHANGE
Benefits: Supports customer-specific process control and development
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Part 2:
Lean Manufacturing
Enhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)
Production Leveling based on Heijunka Processes
Kanban Analytics
Kanban Alerting
New alerts supported in the Kanban process:
1.
Alert when errors occur while changing Kanban status
2.
Alert when replenishments are deleted
3.
Alert when maximum limit of EMPTY Kanbans is exceeded
4.
Alert when deliveries are delayed
Benefits:
-
Manage by exception – if there is no alert/message, no action is
required
-
Ease of exception handling
-
Can configure alerts so only appropriate parties are alerted with
their preferred communication method
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Part 2:
Lean Manufacturing
Enhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)
Production Leveling based on Heijunka Processes
Kanban Analytics
Kanban – Process with RFID
Automatic Kanban status change,
goods receipt posting and
creation of the material document
Source
Material
l
Ful
Full
l
Ful
RF Gate
Empty
Automatic Kanban status change and
creation of a replenishment element,
e.g. a PO
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban
(with RFID Tag)
RFID in Kanban – Business Benefits
„ Cost Reduction:
‹ Time
‹ No
savings through automatic status change
interaction with screens for end users
‹ Reduced
labor costs
‹ Reduced
cost of incorrect data
„ Better Process stability
‹ Less
dependence on worker, thus less human error
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Part 2:
Lean Manufacturing
Enhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)
Production Leveling based on Heijunka Processes
Kanban Analytics
In-house Production in Repetitive Manufacturing
In-house Production
with Kanban (current):
mat
mat
mat
Operation 1
Operation 2
Operation 3
Supply Area
mat1
Storage
Location
0001
Storage
Location
0002
Storage
Location
0003
Component
mat1
Routing
Operation 1
Operation 2
RP 1
mat1
mat1
Operation 3
RP2
RP3
Final backflush
Control cycle mat1
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
In-house Production with Reporting Point Kanban (new)
In-house Production
with Reporting Point
Kanban (new):
mat
mat
mat
Operation 1
Operation 2
Operation 3
Storage
Location
0002
Storage
Location
0001
Storage
Location
0003
Component
mat1
Routing
Operation 1
CC 1
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
mat1
mat1
Operation 2
Operation 3
RP 1
RP2
RP3
SA 1
SA 2
SA 3
CC 2
CC 3 Final backflush
In-house Production with Reporting Point Kanban (new)
Background:
„ Kanbans are more effectively used for the shop-floor control
„ Pull principle in shop-floor control (work load for each operation/reporting point
is represented by an empty kanban); operation n controls the previous operation
n-1 (not vice-versa)
„ The allocation of material to the work center is assigned dynamically -- due to the
stock level, capacity, etc.
„ Reporting Points monitor the production progress between operations
„ Manufactured parts at each reporting point are backflushed to the reporting point
Benefits:
„ Visibility and reduction of WIP
„ Assemblies are only produced when needed and in the quantity needed
„ Avoiding rework
„ Elimination of waste
„ Simplified and flexible production process
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
In-house Production with Reporting Point Kanban
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Part 2:
Lean Manufacturing
Enhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)
Production Leveling based on Heijunka Processes
Kanban Analytics
Heijunka – Definition & Business Benefits
Heijunka: Toyota Production System (TPS) term
“The distribution of production volume and mix evenly over time”
Business Benefits:
„ Convert uneven customer pulls into an even and predictable
manufacturing schedule
„ Stabilize the material and value flow
„ Decrease production lead times and inventories
„ Increases production flexibility and delivery reliability
Mission: Produce every product, every day, several times
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka – Process Requirements
Load Leveling Volume and Mix
Material A
Uneven production volume
and product mix
Material B
Material C
M
T
W
T
F
M
T
W
T
F
M
T
W
T
F
Material A
Leveling production volume
Material B
Material C
Material A
Leveling product mix
Material B
Material C
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka – Process Requirements
Load Leveling Volume and Mix
Material A
Material B
30 PC
20 PC
Material C
60 PC
Material A
10 PC
Material B
5 PC
Material C
20 PC
Material A
Material B
Material C
Material D
Material E
Material F
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Requirement situation
of a shift or day
Lot calculation by MRP
or Kanban control
cycles
Heijunka: Sequencing
/Leveling of finished
goods
Heijunka: Sequencing
/Leveling of semifinished goods
Heijunka – Leveling/Sequencing
Several tools and functions already in the SAP portfolio to support
Leveling/Sequencing:
Tools and functions for demand leveling:
‹ SOP
(mySAP ERP)
‹ Demand
‹ Model
Management (mySAP ERP, mySAP SCM)
Mix Planning (mySAP SCM)
Tools and functions for production leveling:
‹ SOP
(mySAP ERP)
‹ Demand
‹ MRP
Management (mySAP ERP, mySAP SCM)
(mySAP ERP, mySAP SCM)
‹ Tabular
Planning Board (mySAP ERP, mySAP SCM)
‹ Capacity
Planning (mySAP ERP, mySAP SCM)
‹ Sequence
Planning (mySAP ERP, mySAP SCM)
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka – Leveling/Sequencing
Enhancements leverage key features and functions of mySAP ERP
to support Lean Manufacturing processes:
‹ Pull
principle for the control of in-house production, external procurement and
transport processes using Kanbans
‹ Order-less
or order-independent production planning and control using
Repetitive Manufacturing
‹ Takt-based
planning and scheduling in the Sequence planning
Newly designed process uses the following application areas of
mySAP ERP:
‹ Material
Requirements Planning (MRP)
‹ Repetitive
Manufacturing (REM)
‹ Kanban
‹ Sequence
Planning
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Enhanced Heijunka Process:
1) MRP calculates requirements
„ Lot size calculation within the leveling/sequencing horizon uses fixed lots
representing the relevant Kanban quantities
„ Fixed lots in short time horizon, daily or weekly lots in long time horizon
2) MRP creates planned orders and projects capacity requirements
„ Capacity leveling and sequencing is possible based on MRP planned orders
3) Kanban process control production based on actual demand (internal or
external)
Extension of the current process:
„ The Kanban module (change status to EMPTY) does not create a new planned
order which replaces existing MRP planned orders
„ Instead the system searches for a suitable scheduled MRP planned order and
links it to the Kanban
„ This enables keeping the scheduling/sequencing situation stable within the
planning horizon
„ Additional scheduling/sequencing algorithms
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka Board - Execution
1. Sequence planning board – supporting sub-day time segments
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka Board - Execution
2.
Kanban board (graphical or tabular format)
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Part 2:
Lean Manufacturing
Enhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)
Production Leveling based on Heijunka Processes
Kanban Analytics
Kanban Analytics: KPIs available in BI content 7.1.2
„ Actual replenishment lead time / replenishment lead time from control
cycle
„ Actual quantity delivered / call-off quantity from control cycle
„ Wait time (time span between status empty and full), other
interoperation times like empty-transit, transit-full, etc.
„ Number of defects per time unit
„ Correction of defects per time unit (time span from defect status to
productive status)
„ Stock in production supply area (number of full boxes)
„ Actual empty boxes / maximum of empty boxes from control cycle
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Summary - Key Takeaways
- Lean is a top priority in today’s manufacturing
environment
- SAP enables Lean Manufacturing processes
through current functionality such as Kanban
- SAP will continue to provide value to our
Manufacturing customers by enhancing our
solutions to more effectively support Lean
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Your Turn!
Q&A
Jutta Wesemann-Ruzicka
Solution Manager
Jutta.Wesemann-Ruzicka@sap.com
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
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