apics conexus luncheon presentation
DESCRIPTION
PowerPoint presentation for December 08,2010 Conexus/Bingham McHale Manufacturing Connections LuncheonTRANSCRIPT
Advancing Productivity, Innovation, and Competitive Success
Hot Trends to Fire Up Your Production and Inventory
Management
Jim MalonePresident
APICS-CINDCentral Indiana Chapter
www.apics.org
Advancing Productivity, Innovation, and Competitive Success
Since 1957, individuals and companies have relied on APICS for its superior training, internationally recognized certifications,
comprehensive resources, and worldwide network of accomplished industry professionals.
The global leader and premier source of the body of knowledge in operations management, including
production, inventory, supply chain, materials management, purchasing, and logistics.
Advancing Productivity, Innovation, and Competitive Success
APICS-CINDCentral Indiana Chapter
Chapter Background
Advancing Productivity, Innovation, and Competitive Success
Central Indiana
•CIND geography covers much of Central Indiana.
•Viewed as One of the Top Chapters in North America
• A Platinum Award Winning Chapter (consistent performance)
• ~ 450 Professional Members Regular Chapter Meetings
• Monthly Dinner Meetings
•Plant Tours
•Seminars
•A Strong Instructor Base
APICS: Central Indiana Chapter
Advancing Productivity, Innovation, and Competitive Success
APICS Chapters in Indiana
• 4 Chapters serve Indiana– Michiana– Fort Wayne– Central
Indiana– Ohio Valley
Michiana
Fort Wayne
Central Indiana
Ohio Valley
Advancing Productivity, Innovation, and Competitive Success
APICS Districts
APICS' more than 250 local chapters are divided into 9 geographic districts that span North America.
Advancing Productivity, Innovation, and Competitive Success
Outside North America, APICS is represented by two types of organizations:
International Associates (IA): International Associates are non-profit membership organizations, who provide APICS certification exams and related products, and membership services such as local meetings, networking opportunities, and conferences in every region of the globe.
Authorized Education Providers (AEP): Authorized Educational Providers teach APICS courses and provide consulting based on the APICS body of knowledge in every region of the world.
Currently there are over 90 APICS International Associates
Advancing Productivity, Innovation, and Competitive Success
Membership in APICS-CIND
The real value in APICS-CIND membership is the fact that you are “connected” to a community of . . .
. . .nearly 40,000
professionals
worldwide….
Advancing Productivity, Innovation, and Competitive Success
Setting the record straight: Manufacturing & Logistics Report Card
Conexus of Indiana Report• Conexus releases an annual
Manufacturing & Logistics Report Card, assessing our strengths and weaknesses
• The 2009 Report Card shows solid performance –
– Manufacturing and logistics are major components of Indiana’s economy
– Our global position is strong – foreign investment & exports
– Pro-growth business climate
Human capital is our biggest barrier to success
Advancing Productivity, Innovation, and Competitive Success
• APICS –CIND was founded in the 1960’s– and is committed to the development of Indiana’s workforce by helping
build the knowledge and skills in operations management, including production, inventory, supply chain, materials management, purchasing, and logistics.
• APICS-CIND offers localized services including:
– Professional Development Meetings– Educational programs – Certification review courses – Career placement opportunities – Plant Tours & Seminars
• APICS –CIND supports 4 College Student Chapters
Advancing Productivity, Innovation, and Competitive Success
The Indiana Alliance of Professional Societies, IAPS, is an alliance of local Indiana Chapters of national organizations recognized for being the authorities in their respective fields and providers of Professional Bodies of Knowledge. These professional organizations share a core foundation and vision in building knowledge and skills, advancing learning and knowledge exchange opportunities, to improve business and help their members and organizations successfully compete and build a stronger local and global economy.
As a member of the Indiana Alliance of Professional Societies, (IAPS), participating professional associations recognize the advantages of co-venturing with complimentary professional associations with the purpose of sharing resources and ideas in order to broaden their scopes within operations, logistics, and supply chain management.
APICS-CIND A Founding Member of the I.A.P.S.
Advancing Productivity, Innovation, and Competitive Success
INVENTORY AND PRODUCTION MANAGEMENT
SUPPLY CHAIN 101
Advancing Productivity, Innovation, and Competitive Success
The Supply Chain can and will destroy your Career and maybe
your Company
SUPPLY CHAIN STORIES
Advancing Productivity, Innovation, and Competitive Success
Supply Chain Story
In the mid-1990s, the Swedish car manufacturer Volvo found itself with excessive stocks of green cars. To move them along, the sales and marketing departments began offering attractive special deals, so green cars started to sell. But nobody had told the manufacturing department about the promotions. It noted the increase in sales, read it as a sign that consumers had started to like green, and ramped up production.
Source: Chain reaction, The Economist, Jan 31, 2002
On Internal communication and collaboration
Advancing Productivity, Innovation, and Competitive Success
Supply Chain Story
US auto man.Supplie
rs
Suppliers
Toyota“Toyota helped us dramatically improve our production system. We started by making one component, and as we improved, [Toyota] rewarded us with orders for more components. Toyota is our best customer.”
-Senior executive, supplier to Ford, GM, Chrysler, and Toyota, July 2001**
“The Big Three [US automakers] set annual cost-reduction targets [for the parts they purchase]. To realize those targets, they’ll do anything. [They’ve unleashed] a reign of terror, and it gets worse every year. You can’t trust anyone [in those companies]”
-Director, interior systems supplier to Ford, GM, and Chrysler, October 1999*
* And ** Source: Building Deep Supplier Relationships, HBR, December 2004
Arm’s Length
Partnership
Advancing Productivity, Innovation, and Competitive Success
Supply Chain Management at Work
• The Opportunity– $13.5 m in Inventory– 4 Inventory turns per
year– Stock Outs of FGI– Location Inventory
accuracy of 56%– Global Inventory
accuracy of 89%– $75 K in obsolete
inventory each year
• The Results– $6.18 m in Inventory– 7 Inventory turns per
year– 100 % Order fulfillment– Location Inventory
accuracy of 98.6%– Global Inventory
accuracy of 99.39%– $20 K in obsolete
inventory each year
Advancing Productivity, Innovation, and Competitive Success
Supply Chain Management at Work
• Inventory Accuracy
• Benchmarking Tach Time
• Establish Kanban for all inventory (min/max)
• 100% Shipping attainment
Advancing Productivity, Innovation, and Competitive Success
Evolution of Operations and Supply Chain Management
• Supply chain management– management of the flow of information, products, and services
across a network of customers, enterprises, and supply chain partners
Advancing Productivity, Innovation, and Competitive Success
Evolution of Operations and Supply Chain Management
Advancing Productivity, Innovation, and Competitive Success
Key Performance Indicators
• Metrics used to measure supply chain performance– Inventory turnover
– Total value (at cost) of inventory
– Days of supply
– Fill rate: fraction of orders filled by a distribution center within a specific time period
inventory of valueaggregate Average
sold goods ofCost turnsInventory
) item e(unit valu) itemfor inventory (averageinventory of valueaggregate Average ii
days) sold)/(365 goods of(Cost
inventory of valueaggregate Average supply of Days
Advancing Productivity, Innovation, and Competitive Success
Positioning the Supply Chain
• Cost
• Speed
• Quality
• Flexibility
Advancing Productivity, Innovation, and Competitive Success
Positioning the Supply Chain: Cost
• Waste elimination– relentlessly pursuing the
removal of all waste
• Examination of cost structure– looking at the entire cost
structure for reduction potential
• Lean production– providing low costs
through disciplined operations
Advancing Productivity, Innovation, and Competitive Success
Positioning the Supply Chain:Speed
• Fast moves, Fast adaptations, Fight linkages
• Internet– conditioned customers to expect
immediate responses
• Service organizations– always competed on speed
• Manufacturers– time-based competition: build-to-
order production and efficient supply chains
Advancing Productivity, Innovation, and Competitive Success
Positioning the Supply Chain : Quality
• Minimizing defect rates
• Conforming to design specifications
• Please the customer
• Six Sigma, ISO, TS, QMS
Advancing Productivity, Innovation, and Competitive Success
Positioning the Supply Chain:Flexibility
• Ability to adjust to changes in product mix, production volume, or design
• Disasters – Natural– Man Made
• Political/Labor Unrest
• Economic
Advancing Productivity, Innovation, and Competitive Success
TLS
LEAN
SIX SIGMA
THEORYOF
CONSTRAINTS
Advancing Productivity, Innovation, and Competitive Success
• Strategy– Provides direction for achieving a mission
• Five Steps for Strategy Formulation– Defining a primary task
• What is the Organization in the business of doing?• What is the Organization not in the business of doing
(Outsourcing)?– Assessing core competencies
• What does the Organization do better than anyone else?– Determining order winners and order qualifiers
• What qualifies an item to be considered for purchase?• What wins the order?
– Positioning the Organization• How will the firm compete?
– Deploying the strategy
Strategy and Operations Of the Supply Chain
Advancing Productivity, Innovation, and Competitive Success
Supply Chain Improvement Tools
Theory of Constraints is based on the premise that the rate of goal achievement is limited by at least one constraining process. Only by increasing flow through the constraint can overall throughput be increased. Assuming the goal of the organization has been articulated the steps are:
– Identify the constraint– Decide how to exploit the constraint– Subordinate all other processes to the above decision – Elevate the constraint – If, as a result of these steps, the constraint has moved, return to Step 1 and
repeat the process. Don't let inertia become the constraint.
The end goal for Supply Chains using this tool is to move from using a forecast model in determining inventory and manufacturing levels to a replenishment to consumption model
Advancing Productivity, Innovation, and Competitive Success
Supply Chain Improvement Tools
• Lean manufacturing or lean production, often simply, "Lean," is a production practice that considers the expenditure of resources for any goal other than the creation of value for the end customer to be wasteful and should be eliminated. Working from the perspective of the customer who consumes a product or service, "value" is defined as any action or process that a customer would be willing to pay for. There are 7 areas of waste:
– Transport (moving products that is not actually required to perform the processing) – Inventory (all components, work in process and finished product not being processed) – Motion (people or equipment moving or walking more than is required to perform the
processing) – Waiting (waiting for the next production step) – Overproduction (production ahead of demand) – Over Processing (resulting from poor tool or product design creating activity) – Defects
Advancing Productivity, Innovation, and Competitive Success
Supply Chain Improvement Tools
• Six Sigma seeks to improve the quality of process outputs by identifying and removing the causes of defects (errors) and minimizing variability in manufacturing and business processes. It uses a set of quality management methods, including statistical methods, and creates a special infrastructure of people within the organization ("Black Belts", "Green Belts", etc.) who are experts in these methods.
– Continuous efforts to achieve stable and predictable process results – Manufacturing and business processes have characteristics that can be measured,
analyzed, improved and controlled
– Achieving sustained quality improvement requires commitment from the entire
organization, particularly from top-level management – A clear focus on achieving measurable and quantifiable financial returns – An increased emphasis on strong and passionate management leadership – Special infrastructure of "Champions," "Master Black Belts," "Black Belts," "Green
Belts",
Advancing Productivity, Innovation, and Competitive Success
Thank You
APICS-CINDCentral Indiana Chapter
www.apics-cind.org