PART A
LEAN
7typesofwaste:
Overproductionrefertoproducingmorethanrequired,resultinginw
asteproducts&labor.
Excesstransportationtransportationthatcoststhecustomermoneybutdo
esn’taddanyvaluetoendproduct.
Excessinventorymoreinventorythanisrequiredtocompleteproject.
Excessprocessingreferstousingmoreofthelaborforcethannecessary
Waitingidletime,eitherviamachinesorlaborers.
Correctionswastedtimefixingaproblembecauseitwasn’tdone
correctlyforthefirsttime.
Motion-wastingtimetorunlikepickupparts.
The Principles of Lean Thinking
1.Specify what creates value from the
customers perspective
2.Identify the entire value stream for each
service, product or product family and
eliminate waste
3.Make those processes flow
4.Make only what is pulled by the customer
5.Strive for perfection by continually removing
wastes
VALUE STREAM MAPPING
4STEPS TO DEVELOP VSM
1.Define and pick product/ product family
2. Create “Current State” Visual Stream
Mapping (CSVSM)
3. Create “Future State” Visual Stream
Mapping (FSVSM)
4.Develop plan to make CSVSM and FSVSM
Advantages
chains, distribution channels and information
flows.
used in analyzing value
flows in manufacturing system.
elimination of waste.
door
for
further
improvement
efforts.(continuous improvement)
analysis.
techniques/methods.
specific moment.
situation.
production flow BUT it does not provide the
required resolution for detailed problem
solving.
new systems
organization.
or
layouts
is
applied
ERP
systems are evolving as umbrella systems that
tie together a variety of specialized systems
Important
i.Improvements in integration and flexibility
ii.Extensions to e-business applications
iii.Abroader reach to new users
iv.The adoption of internet technologies
Advantages
•BusinessIntegration
Uses a single data base and a common software
infrastructure to provide a broader scope and
up-to date information, enabling management
to make better decisions that an benefit the
entire supply chain.
•Flexibility
Different languages, currencies, accounting
standards and soon can be covered in one
system, and functions that comprehensively
manage multiple location of a company can be
a packaged and implemented automatically.
•Standardize manufacturing processes
Since it having information in one software
system rather than scattered among many
different system that cannot communicate with
one another, companies can keep track of
materials, order, and financial status effectively
and coordinate manufacturing, inventory ,and
shipping among many locations and business
units at the same time.
•Betteranalysisandplanningcapabilities
Since it becomes possible to carry out
flexibility and inrealtime, the filling and
analysis of data from avariety of dimensions,
one is able to give the decisions makers the
information they want, thus enabling them to
make better and informed decisions.
Disadvantages
production processes.
in
Disadvantages
•Expenses and need time in implementation
–Getting the full benefit sofERP takes time and
money.
–Large firms typically need three to five years
and spend tens of million of dollars to
implement a successful ERP system.
•Difficult implementing change
–In some cases, acompanyhas to radically
change how itoperates to conform to theERP’s
work processes as its best practices.
–Sometimes, the best practices simply are not
appropriate for the firm and cause great work
disruptions.
•Difficulty integrating with other systems
-Most companies have other systems that must
be integrated with the ERPsystems, such as
financial analysis programs,
–Because of the difficulty of these other system
operate with ERP system, they needed an
additional software to create these link.
•Risks in using one vendor
-After accompany has adopted an ERP system,
the vendor has less incentive to listen and
respond to customer concerns.
Supply chain
Elements
1.Plan - Have a plan for managing all the
resources that go toward meeting customer
demand for products or services.
Source - Choose reliable suppliers- deliver
goods and services required for making
products.
Make - Companies manufacture their products
or services includes scheduling the activities
necessary for product testing, packaging, and
preparing for delivery.
Deliver - The set of processes that plans for
and controls the efficient and effective
transportation and storage or supplies from
suppliers to customers.
Return - Companies must create a network for
receiving defective and excess products and
support customers who have problems with
delivered products.
MRP
Strategies
A system that controls inventory levels, plans
production, helps supply management with
important information, and helps with the
manufacturing control system with respect to
the production of assembled parts.
STRATEGY
WHEN TO
CHOOSE
BENEFITS
Make
Stock
to
standardized
products,
relatively
predictable
demand
Low
manufacturing
costs;
meet
customer
demands
quickly
Make
Order
to
customized
products,
many
variations
Customization;
reduced
inventory;
improved
service levels
Configure to
Order
many
variations on
finished
product;
infrequent
demand
Low inventory
levels;
wide
range
of
product
offerings;
simplified
planning
Engineer to
Order
complex
products,
unique
customer
specifications
Enables
response
to
specific
customer
requirements
BOM:A listing of all of the raw materials,
parts, subassemblies, and assemblies needed to
produce ONEunit of a product.
•Gross Requirements: needed during each
period.
•Scheduled Receipts: Existing orders that
arrive at beginning of period.
•On-hand or available balance:
•(depending on software convention, could be
at the beginning of each period or end):
•Book: Inventory balance at end of each period.
•Net requirements: What is need to meet
requirements and safety stock.
•Planned order receipt: arrives at beginning
of period.
•Planned order release: Addresses lead time.
Benefit of MRP
•Low levels of in-process inventories
•Ability to track material requirements
•Ability to evaluate capacity requirements
•Means of allocating production time
•Ability to easily determine inventory usage by
backflushing
Benefits






Lower inventories
Higher productivity
Greater agility
Shorter lead times
Higher profits
Greater customer loyalty
Preliminary steps in SCM
Step 1 – Energize the Organization
Step 2 – Enterprise Vision
Step 3 – Supply Chain Value Assessment
Step 4 – Opportunity identification
Step 5 – Strategy Decision
Distribution
 Often called logistics.
 Movement of materials, services,
cash, and information in a supply
chain.
 Two types of logistics:
 Forward  Raw materials, parts
and finished goods flowing from
suppliers to producers, distributors
and, finally, to consumers.
 Reverse  Wastes, packages, and
defective/obsolete products are
"climbing back" the supply chain.
 Goal: Recapture/create value in
returned goods/to properly dispose
of goods that cannot be sold.
Warehouse Management
 Warehouse:
Commercial
building for storage of goods.
 Warehouse
management
to
optimize:

Inventory

Labor

Physical Space

Time

Costs
To control the movement and storage of
materials within an operation and process the
associated transactions.
Utilize technology (Barcode scanner, mobile
computer,
Radio-frequency identification
(RFID)