Lean Six SigmaATL011706

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Information about Lean Six SigmaATL011706

Published on June 19, 2007

Author: Alien

Source: authorstream.com

“Lean Six Sigma: Will it Work with ERP?:  'Lean Six Sigma: Will it Work with ERP? By G. L. (Jerry) Kilty, CFPIM, CIRM qmsJerry@ij.net 727 725-7674 Agenda:  Agenda Overview of Lean Manufacturing andamp; Six Sigma Strategies for MTS/MTO ERP: Planning andamp; Scheduling Impact Paperwork Impact Backflushing Conclusions Overview Lean & Six Sigma:  Overview Lean andamp; Six Sigma Lean Manufacturing:  Value Value Stream Flow Pull Perfection Lean Manufacturing Process Management:  Process Management Customer Product/ Services Function A Function B Function C Process 1 Process 2 Process 3 Objectives Measures Lean Means Speed:  Lean Means Speed The Lean Metric: Cycle Efficiency Value Stream Map to Find the 20% Waste The Major Lean Improvement Tools Pull Systems Setup Reduction Total Productive Maintenance Cycle Efficiency:  Cycle Efficiency Process Cycle Efficiency = Value Added Time / Total Lead Time Cycle Efficiency:  Cycle Efficiency Typical Fabrication 10% Assembly 15% Continuous Mfg. 30% World Class 25% 35% 80% Six Sigma: The Power of Culture:  Six Sigma: The Power of Culture Engagement of CEO andamp; PL Managers 1% of workforce receive 4 Weeks Training (Black Belt) Black Belts are Expected to Contribute $250,000 to $1,000,000 Increased Operating Profit per Year Level of Investment to Profit Return “Belts”:  'Belts' Master Black Belt Black Belt Green Belts White Belts Sigma Levels:  Sigma Levels Level 6 5 4 3 2 1 Defects per Million 3.4 233 6,210 66,807 308,537 690,000 Sigma Levels:  Sigma Levels Level 6 5 4 3 2 1 Yield 99.9997% 99.977% 99.379% 93.32% 69.2% 31% Six Sigma CSF’s:  Six Sigma CSF’s Customer Centricity Financial Results Management Engagement Resource Commitment Execution Infrastructure Culture Change The Principle of Lean Six Sigma:  The Principle of Lean Six Sigma ' The activities that cause the customer’s critical-to-quality issues and creates the longest time delays in any process offer the greatest opportunity for improvement in cost, quality, capital, and lead time.' The Lean Six Sigma Secret:  The Lean Six Sigma Secret Identify the 'Hidden Factory Costs' Non Value-Added Costs Any Process Six Sigma Quality Focus Rapid Improvement Requires Both, Lean andamp; Six Sigma Strategies for MTS/MTO:  Strategies for MTS/MTO Slide17:  Volume Variety 1 2 3 4 Job Shop Batch MTS Repetitive Flow MTO Lean Strategies MTS:  Lean Strategies MTS MTS Environments are Best Suited For Lean Strategies Constant Repeatable Demand High Volume of Standard Products Replenishment Systems can be Planned in Advanced and Synchronized Lean Strategies MTO:  Lean Strategies MTO Not the Best Suited for Lean Aim towards Configuration Design Changes Planning BOM Mass Customization Value Added Analysis Set-Up Reduction Slide20:  Volume Variety 1 2 3 4 Job Shop Batch MTS Repetitive Flow MTO ERP: Planning & Scheduling Impact:  ERP: Planning andamp; Scheduling Impact Supply Chain Stages :  Supply Chain Stages Multiple Dysfunction Semi-Functional Enterprise Integrated Enterprise Extended Enterprise Multiple Dysfunction:  Multiple Dysfunction Supplier Supplier Purchasing Sales/Mktg Prod Cntrl Logistics Distribution Customer Customer Semi-Functional Enterprise:  Semi-Functional Enterprise Supplier Customer Customer Supplier Purch. Log. Sales/Mktg Prod. Cntrl. Dist. Integrated Enterprise:  Integrated Enterprise Supplier Customer Customer Supplier Purch. Log. Sales/Mktg Prod. Cntrl. Dist. ERP Extended Enterprise:  Extended Enterprise Suppliers’ suppliers Supplier Customers Nucleus Firm. Customers’ customers Networked Information Flow Classic Benefits of ERP:  Classic Benefits of ERP Reduced Inventory (FG, WIP, RAW) Increased Productivity Reduced Cycle Times Increased Cash-to-Cash Cycle Time Increased Flow and Availability of Information Reduced Costs Slide28:  Planning Horizon PO WO Sandamp;OP Master Schedule MRP Slide29:  Planning Horizon Sandamp;OP Master Schedule MRP CHANGE When Changes Happen! Run Again Planning & Scheduling Changes:  Planning andamp; Scheduling Changes MRP from Order Point to Rate Based MRP -andgt; Planning Lean -andgt; Execution Slide31:  Final Assy. Schedule Final Assy. Inventory Stocking Point Operation KanBan Signal PULL Methodology Push and Pull Comparison:  Push and Pull Comparison Push Scheduling drives all work to be completed. Work center sends next work center an order when it is completed. It is assumed that the next work center will be ready. Pull Work center receives authorization to complete work from downstream users. Parts are not forwarded until they are requested. Pull System Characteristics:  Pull System Characteristics Universal Standardization Visibility Simplicity Standard Lot Sizes Discipline Versatility/Flexibility Flattening the Bill of Materials Objectives of a Pull System:  Objectives of a Pull System Synchronize Material Movement Limit Inventory in WIP Facilitate Process Improvements, and Further Reductions in Inventory Reduce Throughput Time Simplify or Eliminate Documentation Improve Quality Paperwork Impact:  Paperwork Impact Lean’s Impact on Paperwork:  Lean’s Impact on Paperwork By Shifting from a Transaction Base System to Four-Wall System (Backflushing), much of the W/C to W/C Paperwork can be Eliminated. Storeroom Issues are Eliminated Dock to Stock Programs Eliminate 'Incoming Inspection' Backflushing:  Backflushing SHOW OF HANDS:  SHOW OF HANDS Who is doing Backflushing? Backflushing:  Backflushing Four-Wall System Receipts are Recorded Goods are Delivered to Point-of-Use (Fit) They are NOT Subtracted from Inventory until They Leave in the Form of Finished Goods Slide40:  Backflushing Demo Demo BOM:  Final Product Part A Part B Demo BOM Before (Without Backflushing):  Receiving/Inspection/Stores WIP Issue 2 3 1 4 5 6 8 10 11 12 9 14 7 13 WIP Before (Without Backflushing) After (with Backflushing):  WIP After (with Backflushing) POU Receipt Scrap To FG Accurate BOM No Substitute Parts 'Short' Throughput Time Criteria for Backflushing:  Criteria for Backflushing Dock to Stock Quality Programs Short Throughput Time (Measured in Hours, not Weeks) 100% Accurate BOM No Part Substitutions Process Scrap Tickets Frequently (At least Daily) Conclusions:  Conclusions Conclusions:  Conclusions Lean Strategies Work Best in a High Volume, Low Variety Repetitive/Continuous Flow Business Environments. Batch Companies (Position 2) Have the Most Opportunities for Large Savings When Implementing Lean by Shifting from Batch to Continuous Flow Lean Strategies can be Employed in Any Type of Company Conclusions:  Conclusions When Implementing Lean, Change ERP to Rate Based Demand Change Long-Term Communications to Suppliers Lean Equals Pull System Backflushing is a Lean Technique that is Designed to Save Paperwork and Eliminate Transaction Steps The End:  The End Thank You! G. L. (Jerry) Kilty, CFPIM, CIRM qmsjerry@ij.net

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