Value Stream Management to enhance competitiveness in supply chain networks

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1 Value Stream Management to enhance competitiveness in supply chain networks Value Stream Management supports to achieve corporate targets Discover waste in your operation The method VSM Enhance value creation process by using VSM Outlook: VSM in cross-company Supply Chain Networks

2 Value Stream Management as corporate team effort Impact of employees to value creation process Customer orientation Focus of all activities on customer requirements Support by leadership required Responsibility for continuous improvement of the operation Lead by example Apply Operational Excellence People involvement Benefit from multi-annual experience of employees, share best practices, un-used potentials Corporate suggestion plan Suggestions for process improvement V A L U E Source: li.hamburg, blog.modalyst

3 Waste is everywhere Waiting Inefficient Processes Over-processing Product quality exceeds the specification Overproduction Too high output production on stock Rework Products not meet the quality specification 7 types of waste Transport long conveyance Both internal and external Inventory Stock of semi finished products Movement of worker source: manufactus 7 Arten der Verschwendung

4 Waste is everywhere Waste in process Over-processing scrap, rework Waste in process flow Waiting time, double handling, storage, overproduction Waste in organization High level of inventory, thinking Department silos, idle resources Waste in the corporate network Long distances between sites, limited transparency, loss of information in communication Waste in Supply chain network Interfaces, limited transparency, high security buffers, Issues in coordination of production schedule, quality feedback, and capacity Source:rk-rose-krieger, organizzazioneaziendale

5 Throughput time Value Stream Management Flowing process Create Value to a flowing resource Flowing resource: Passenger, product, car, Total lead time = Nbr. of units in process * Takt Bottleneck limits flow Throughput is restricted by process with longest Takt Variations - Machine breakdowns, inefficiencies of process,... - External influences, late arrival, seasonal fluctuations Relation of variation, resource efficiency and throughput time The closer you operate to 100% resource utilization, the more lead time increases Process variation increases total lead time long Source: This is Lean. N. Modig & P. Ahlstrom fast 0% Utilization 100%

6 Suppliers Body DR=99% Q=99% daily 1 days Confirmation Aufträge PPC Rotarex FIFO Max pcs day CT=120s CT=15s < 0,1 days CT=7,2s 0,6 days PT=120s PT=15s PT=7,2s ST=180min ST=0s ST=0s OEE=90% OEE=90% OEE=90% RR=0% RR=0% RR=1% AT=7,5h á AT=7,5h á AT=7,5h á 3 shifts 3 shifts 3 shifts 120 sec. Orders Machining Deburring Orders Suppiers Small parts DR=99% Q=99% 80 daily Washing 0 15 sec. 7,2 sec. Confirmation OXOX 0Assembly 1 3 CT=80s PT=226s ST=0s OEE=90% RR=1% AT=7,5h á 2 shifts < 0,1 days < 0,1 days 0,6 days < 0,1 days sec. Orders Delivery Information FIFO Max. 80 pcs. Customer DR=99% Q=99% daily Shipping 1 1 WT=1,9 days PT=368,2 seconds 1 x per month How to increase value creation in any operation? Application of Value Stream Management (VSM) Value Stream Analysis Select product Map current status Identify potential KAIZEN KAIZEN KAIZEN Value Stream Design Envision desired status Plan implementation Date 12. December 2014 Signatures Plant Manager Mr. X Plant Manager Council Technology Maintanance Value Stream Man. Mr. Y No. Loop Actions Objectives (S.M.A.R.T.-Method) App. Responsible Involved department Status 1 Interface Increase shipping frequency Daily deliveries to customers Jan 15 Employee K Customer care, Logistics 2 customer Shipping of partial shipments No stock of finished goods Jan 15 Employee K Customer care, Logistics Production control by "pitch" of 2 Planning, Assembly, 3 Reduction of cycle time by 80% Dec 14 Employee P hours with Kanban system Logistics Setting up a supermarket pull system Only 0.6 days defined stock in Assembly, Production, 4 Dec 14 Employee M between assembly and washing the supermarket Logistics Pacemaker Using three Employeen in the Reduction of the cycle time of Employee P, Training, Planning, 5 Dec 14 Loop assembly, tasks allocation the assembly to 80 seconds Employee Q Production Consumption-Based Delivery of small Reduction in the stock of small Employee K, 6 Dec 14 Customer care, Logistics items inside the Assembly parts in the Assembly by 90% Employee P Improved production planning through Increasing machine availability of Planning, Production, 7 Feb 15 Employee I the merger of PPC systems 80 to 90%. Logistics Production control by "pitch" of 2 Planning, Production, 8 Reduction of cycle time by 80% Apr 15 Employee P hours with Kanban system Logistics Setting up a supermarket pull system 0.1 days defined stock in the Assembly, Production, 9 Production Mrz 15 Employee M Loop between washing and machining supermarket Logistics Qualifications of the employee for the 10 No waste (0%) in machining Apr 15 Employee Q Training, Production equipping of the processing station Setting up a supermarket pull system 1 day only defined stock of 11 Interface Feb 15 Employee K Customer care, Logistics for body bodies in the supermarket supplier 12 Introduction of daily delivery Reducing the wait time by 90% Feb 15 Employee K Customer care, Logistics Product family: B0480 Value Stream Planning Workshop on VSP Implementation

7 Value Stream Management (VSM) Company Supplier Production- Planning and Control Customer Customer x times ea. week x times ea. week Process 1 I Inventory Process 2 I Process 3 I Process 4 I Inventory Inventory Inventory Process 5 I Parameter 1 Parameter 1 Parameter 1 Parameter 1 Parameter 1 I Inventory Parameter 2 Parameter 2 Parameter 2 Parameter 2 Parameter 2 Inventory other parameters other parameters other parameters other parameters other parameters Buffer Buffer Buffer Buffer Buffer Process time Process time Process time Process time Process time Buffer = Throughput lead time Flow of information Flow of material

8 Discover opportunities to increase productivity Kaizen change to better Enhance customer orientation Focus on customer Takt Eliminate waste Reduce excess use of resources Discover non utilized potentials Optimizing of internal processes Synchronize processes Efficient linkage of value creation processes and control processes Transparency through enhanced communication and collaboration Comprehension of complete value stream Focus on value creating processes

9 World Class Implement efficiency opportunities Continuous improvement Datum Exemplarischer Maßnahmenplan Unterschriften Verschwendungs AG Werksleiter Betriebsrat Technik Wartung Nr. Verbesserungspotenzial Maßnahme / Ziel (SMART) Termin Verantwortlich Prozess/Abteilung Status 1 2 PPC's Einführung eines zentralen Planungssystems Mitarbeiter Pl Planung 2 Kurze Planungsintervalle Verlängerung der Planungshorizonte auf bis zu 10 Wochen, Änderungswünsche spätestens 4 Wochen vor Liefertermin Mitarbeiter V/Pl Vertrieb, Planung 3 Geringe Lieferfrequenz Verkürzung der Lieferzyklen bis hin zu wöchentlicher Lieferung bei gleichzeitiger Reduktion der Sicherheitsbestände um 50 % Mitarbeiter EK Einkauf 4 Doppelte Lagerung Eliminierung von doppelten Lagerstufen durch Einrichten von Supermarkt- Pull-Systemen Mitarbeiter P/L Produktion, Logistik 5 Interne Verpackung Wirtschaftlich- technische Überprüfung der internen Verpackung und ggfs Mitarbeiter P/K Produktion, Eliminierung bzw. Anpassung Konfektionierung 6 Hohe Ausschussrate Reduktion der Ausschussrate des Verseilprozesses um 10% sowie der Aderisolierung um 15% anhand von Qualitäts- bzw. Fehleranalysen Mitarbeiter P/Q Produktion, Qualität 7 Lange Rüstzeit Voraussetzungen für schnelles Rüsten schaffen, Reduktion der Rüstzeit des Flechtprozesses um 50% Mitarbeiter P/W Produktion, Wartung 8 5S Klare Arbeitsanweisung und Sicherstellung der Sauberkeit, Ordnung und Vollständigkeit der Werkzeuge innerhalb der Abteilung Qualitätsköntrolle Mitarbeiter P/Q Produktion, Qualität 9 Mitarbeiterschulung Reduktion der Ausschussrate um 5 % durch Steigerung des Qualitätsbewusstseins der Mitarbeiter in Schulungen Mitarbeiter M/Q Mantelung, Qualität 10 Einhaltung der Lieferfristen Erhöhung der Lieferfrequenz auf 4 bzw. 2 Wochen zur Einhaltung der kundenseitig geforderten Lieferfristen Mitarbeiter P/V Planung, Vertrieb SMART = Spezifisch, Messbar, Akzeptiert, Realistisch, Terminiert Problem erkannt Verantwortlichkeiten geklärt Maßnahme erstellt und geprüft Umsetzung der Maßnahme Maßnahme umgesetzt und geprüft

10 Extending Corporate VSM to comprehensive VSM across multiple companies Example of cross-company Value Stream Management information Tier 2 Tier 1 products information products OEM component module complete product Communication issues between departments, sites and companies Information distributed along different companies in supply chain network Limited transparency of SCN goals, corporate targets, team performance, e.g. lead time, contribution to cost, quality Unexpected changes / Short notice changes of orders i.e. quantity, design, => extra effort due to change of material, not-adjusted processes Sources: hualian, goodyear, carlook

11 From VSM of site to VSM of SCN Example of cross-company Value Stream Management

12 Comprehensive VSM-method StreaM Different perspectives of Value Stream Management Comprehensive Analysis and optimization of Value stream Detailing according to focus of VSM application Global view vs. detailed analysis of specific part of supply chain network Different criteria for analysis e.g. lead time, cost, energy, quality,

13 Application of cross-enterprise VSM in industry Optimization of complex process flows

14 Application of cross-enterprise VSM in industry Optimization of complex process flows

15 Summary Value Stream Management (VSM) to enhance competitiveness in supply chain networks Attain corporate targets with Value Stream Management Eliminate waste Increase value adding processes Outlook: Value stream Management in industrial Supply Chain Networks

16 VSM Related Literature and additional resources Oberhausen, Chr.; Plapper, P. A Standardized Value Steam Management Method for Supply Chain Networks In: proceedings of the International Conference on Competitive Manufacturing COMA 2016, January 2016, Stellenbosch, South Africa, pp ISBN Oberhausen, Chr.; Plapper, P. Value Stream Management in the "Lean Manufacturing Laboratory" in Procedia CIRP (2015, July), 32 Weber, D.; Oberhausen, Chr.; Plapper, P. Value Stream Management in high variability production systems SSRG International Journal of Industrial Engineering (2015), 2(1), 4 Plapper, P.; André, Chr. Wertstrommethode Value Stream Mapping In: Gläbe, R.; Thomann, H.J. (eds.): Qualitätsmanagement in Dienstleistungsunternehmen. vol. 34. Ed. Köln: TÜV Media, 2011 ISBN , pp Plapper, P. Erfolgreiches Lieferantenmanagement durch eindeutige Schnittstellendefinition In: Der Qualitätsmanagementberater, Prof. Hermann J. Thomann (Hrsg.) Prozessorientiertes Qualitätsmanagement in der betrieblichen Praxis 1. Akt. Lieferung, Mai 2009, TÜV Media, Köln, ISBN contact: peter.plapper@uni.lu