lean manufacturing toyota indonesia 2011_2

Jakarta, November 3rd, 2011

J.F. Ferry Yanto

LEAN SUPPLY CHAIN MANAGEMENT

[Toyota Indonesia Case]

Sharing on 6th Indonesia Supply Chain and Logistics Conference and Expo 2011 (ISCL) “New Era of Indonesia

Supply Chain and Logistics : Center of South East Asia

Safety awareness : I will not use hand phone during drive the car

THE CHALLENGE IN IMPLEMENTING LEAN MANAGEMENT IN INDONESIA

OUTLINE

OVERVIEW [Lean in Toyota]◙

LEAN MANAGEMENT STRATEGY <simple Concept>◙

Sample of LEAN IMPLEMENTATION◙

SUMMARY◙

CHALLENGE LEAN MANAGEMENT IMPLEMENTATION◙

Items to be Considered for Lean Management Implementation◙

1/17


OVERVIEW

GOAL of LEAN ACTIVITY COST REDUCTIONPROFIT INCREASE◙

In TOYOTA CASE ,

No Cost Reduction , No Profit IncreaseNo Cost Reduction , No Profit Increase

as Basic Philosophy

(1) SALES PRICE = COST + PROFIT

(2) PROFIT = SALES PRICE - COST

Sales Price Determined by CUSTOMERS

PROFIT ( ) = SALES PRICE ( = ) – COST ( )

◙

2/17


OVERVIEW

TO REDUCE COST ELIMINATE WASTE ( MUDA )[ Reduce Non Added Value Work ]

MUDA OVER PRODUCTIONWAS THE WORST !

MUDA OVER PRODUCTIONWAS THE WORST !

(1) OVER PRODUCTION HIDE PROBLEMS and MAKE IT IMPOSSIBLE TO BE SOLVED

(-) Excess Man Power or machine capacity ?

COST DEPENDENT ON PRODUCTION METHODE

COST BREAKDOWN ANALYSIS

[ 7 TYPE OF MUDA]

◙

◙

Traditional Production

Operator B

Operator A

Finished Products

Operator C

Material

3/17

IMPACT TO COST INCREASE


Continuous Flow Production

Material

Operator A Operator B Operator C

Finished

Products

Comparison as the traditional way production & continuous flow production:- √ Eliminate MUDA stock- √ Eliminate MUDA move- √ Save more space

OVERVIEW

In TOYOTA PRODUCTION SYSTEM : Always “CUSTOMER FIRST” Attitude

( Produce Good Products with Low Cost in a Timely Manner )

4/17


LEAN MANAGEMENT STRATEGY < SIMPLE CONCEPT >

Lead Time

TOTAL LEAD TIMETOTAL LEAD TIME

(1) SHORTENING LEAD TIME

(2) REDUCE INVENTORY LEVEL

● Simplifying the Process

● Continuous Flow ( One Piece Flow Process )

Lead Time

Lead Time

Lead Time

Lead Time

Lead Time

Lead Time

Lead Time

5/17


SAMPLE of LEAN IMPLEMENTATION

VENDOR MANUFACTURING DEALER CUSTOMER

Dealer PC store ProductionReceivingDock

Local Parts

Import Parts Customer

SUPPLY CHAIN IN MANUFACTURING

6/17




Local Parts



7/17


Domestics Logistics / Conveyance

SINGLE DELIVERY

(A)

(B)

(C)

4x / day

8x / day

1x / day

4 Hour

2 Hour

16 Hour

Stock

(A)

(B)

(C)

12x / day

1Hour

Stock

1Hour

1Hour

MILK RUN

Running StockVariety

2 ~ 16 Hour1 HourStock Reduction


8/17


Domestics Logistics / Conveyance

(D)

(E)

(F)

Plant 1

Plant 2

(D)

(E)

(F)

Plant 1

Plant 2

(D)

(E)

(F)

Plant 1

Plant 2

X-Dock

SINGLE DELIVERY

MILK RUN X-DOCK andINTERPLANT

MILK RUN , INTERPLANT


9/17




Local Parts



10/17


Internal LogisticsSimplify Process Re-arrangement of Process


11/17


Linked between internal and vendor&

STOCK REDUCTION USING KANBAN ( Kanban Cyclic )

SEQUENTIAL PARTS DELIVERY

etc.


12/17




Local Parts



13/17


Process PRODUCTIVITY UP with elimination MUDA

► Others Example how to proceed ?Reduce MP with same output

MP Output

: 10λ: 200 Unit

: 9λ: 200 Unit

Yamazumi Chart MP Process Line #1

Unbalance Loading MP in Process Line #1

Problem :

Highest CT

Target Reduce

Process Analysis

Improvement / Kaizen

Achieve Target


14/17


SUMMARY

TOYOTA Indonesia utilize Toyota Production System as the base of manufacturing process, and Lean was blend inside of TPS as the focus point in TPS Basic Philosophy : Cost Awareness with Customer First and Quality as priority.

Currently, Continuous Improvement/Kaizen is implemented with PDCA cycle .

15/17


CHALLENGE LEAN MANAGEMENT IMPLEMENTATION

2nd TIER and 1st TIER are NOT CENTRALIZED

Base on Demography or Mapping Area

Ideal Condition : All in 1 Area

Good Infrastructure

MUTUAL UNDERSTANDING in BUSINESS (LEAN)

Gap of Knowledge

Development and Growth Together

COMMITMENT MANAGEMENT

Inconsistency Condition

Be a Coy Culture & Reflected in People Development

OTHERS

Government Regulation / Policy in IndustrialHow to link with Lean Concept

NEW CHALLENGE … … Flexible Market Demand

SAME DIRECTION / VISION ( Mutual Understanding )

Need Support From Government

WEAK In INDUSTRIAL RELATIONSHIP ( Coy VS Union )

1.

2.

3.5

.

4.

16/17

Optimizing Current

●

●

►

IT / SYSTEM Development Readiness Company Adopt ?

►

Less Localization ? Enhance Localization►


Items to be Considered for Lean Management Implementation

Skillful RESOURCES is the key point

Supply Chain Management is one complete cycle and have synergy with one another

Strong COMMITMENT Management

• Knowledge and break through idea/creative idea

• Top Management concern and monitoring required

Business Relations [company with vendor]• Mutual understanding Spirit of Efficient Process

• Good relationship between company and employee (union)

Infrastructure [road condition, others facility etc]

• Good TEAM WORK

Force LOCALIZATION , as a big opportunity for reducing Lead time CR

17/17


POOR METHODE of CONVEYANCE and LOGISTICS

◙ Poor method results in stagnation

■ Basically : Conveyance is NON ADDED VALUE operations

Eliminating conveyance is the best way

■ If Conveyance is Needed,

Best possible way is to make JIT material flow

When it is needed

Only what is needed

In the amount needed


SUPPLY CHAIN

1. Grasp Current Situation Accurately ( Time and Volume Stagnation included )

2. Procure Parts from Supplier close by

(1) SUPPLY CHAIN MANAGEMENT BECOMING MORE IMPORTANT

(2) SIMPLIFY THE FLOWa) Macroscopic Flow

a) Microscopic Flow ( Demerits of Complicated Flow )


Kanban Pulling System

SUPPLY CHAIN

REDUCE LOT SIZE

REDUCE LOT SIZE

1 Pieces Production No Stagnation Guarantee

Quality

Goal

Production Lead Time

= Processing Time + Lot Size

1 Hour 10 Lot = 10 days

1 Lot = 1 hours

Productivity Up

( Improve Chance )


production line

　　 Logistics Kaizen　　　　　　　　　　　　物流改善

　　 (2) Reduction of Production Lead Time

Lead Time

(1)

Ｃｕｓｔｏｍｅｒ

• Leveled frequent supply 平準化した多回納入

Ｓ h ｉｐｐｉｎｇＣｕｓｔｏｍｅｒ

What is Needed to Reduce Inventory

23

INVENTORY

　　 (3) Increase reliability of Production Line

　　 (4) Reduce and Limit variety

　　 (1) Logistic Kaizen

Leveled Frequent Delivery

Leveled Frequent Pick Up





Local Parts



Long lead time conveyance/Logistics [Import parts]√Lot Based

AA AA-2

AA-1

10 Part No.a

bc

de

f

gh

ij

15 Part No. a

bc

de

f

gh

ij

k

lm

no

Order 1 lot = 10 Unit

√X-Dock

√PxP Based

abc

de

f

gh

ij

Part No. Order Box

1020

56

Minimum = 5 ~ 10 % reduction

1 box : 10 pcs

1 box : 12 pcs

LEAN MANAGEMENT STRATEGY


Delivery ~ Customers

Reduction the Stock with giving Flexibility for absorbing miss forecast

→ Monthly Firm to Monthly Firm with Weekly Order Change

LEAN MANAGEMENT STRATEGY





Local Parts


lean manufacturing toyota indonesia 2011_2

Business

implementing

supply chain

mutual understanding

cost reduction

profit increase

lean

muda

challenge