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Topic 1.3 “pull”and “push“ manufacturing techniques (ILO4)

Revisiting: Lean, Agile manufacturing, JIT

(feature in this lecture note: book reading enclosed in quote “…”)

Learning Outcome: ILO2, ILO4 of Module Descriptor Intended Module Learning Outcomes On completion of this module the student should be able to: 1. Examine and show an understanding of supply chain management, enterprise integration and logistics management. 2. Identify the system requirements of improving a traditional supply chain with Lean and Collaboration concepts. 3. Recognise the wider implications of SCM on society, the environment, and globalisation. 4. Demonstrate techniques to enable the effective control of a supply chain.

Reading: Bowersox et al., 2007. Supply Chain Logistics Management, McGraw Hill, Ch. 4, pp.93-96. Grant D.B. et al. 2006. Fundamentals of Logistics Management, European Edition, pp.408-9. Coyle J.J. et al (2003) not Langley et al., 2003. The Management of Business Logistics, A Supply Chain

Perspective, pp. 247, 256. National Research Council (2000). Surviving Supply Chain Integration, Strategies for Small Manufacturers,

pp.86-87. Taylor and Brunt, 2001. Manufacturing Operations and Supply Chain Mangement: The Lean Approach,

pp38-42,61-66. See also Lecture 2_Supplementary Notes (on concept of “Value Chain”

TUTORIAL CONSTRUCT THE RECOMMENDATION FOR CASE STUDY (B) Rapid Reform will fuel rise of China’s airports Hong Kong urged to drop regulatory barriers---CASE

STUDY (B)…Lockheed Martin won a competitive contract for part of the US Department of Defense initiative to improve logistics support to forces around the world. (part 3--recommendation)

Review on key logistics activities: ---Key Logistics Activities include: Customer services, demand forecasting, inventory management, logistics communications, materials handling, order processing, packaging, parts and service support, plant and warehouse site selection, procurement, reverse logistics, traffic and transportation, warehousing and storage, etc. How does it relate to the “Value Chain” concept? See Lecture 2 Supplement on “Value Chain” concept primary activity and support activity How does it relate to JIT management? manufacturing operation

Topics: 1.3.1 Lean supply chain basics 1.3.2. JIT Approach 1.3.2.1 Lean Enterprise Case Study DELL Example 1.3.2.2 (b) Kanban and JIT 2 Bin system 1.3.3 Lean Manufacturing in Aerospace and Lean Academy Initiative 1.3.4 Quick Response System and Collaborating Firms 1.3.5 The value chain Human Resources support activity – An example in TNT Express Worldwide (HK) Ltd. (Career Times 22 January 2010) Video: Rolls Royce Lean Manufacturing, DELL Lean Manufacturing, Toyota Lean Manufacturing

1.3.1 Lean supply chain basics

Lean (Agile) and JIT (Just in time) manufacturing

Lean manufacturing, also known as the flexible mass production, has a theme of

efficiency based on optimizing flow; such as Just-in-time (JIT) or "flow", and "autonomation"

(also get reference on concept of agile – quick response system)

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Coyle et al pp.22-23 Traditional supply chain 1970-1980: vendormanufacturingwholesalerretailercustomer

PULL concept

- Coyle p.22 “an important characteristic of effective inventory management is to attempt to

pull it through the supply chain in response to demand instead of pushing out inventory in

advance of demand (disadvantage: inflated inventory level, obsolete inventory, lower

inventory turnover) Lean implementation focused on getting the right things to the right place at the right time in the right quantity to achieve perfect work flow

- A number of companies has been successful in implementing the PULL system (see the DELL example in Section 1.3.2.1 (order entry)

Value Chain concept

- If production flows perfectly through the PULL system then there is no inventory; if customer

valued features are the only ones produced, then product design is simplified and effort is only

expended on features the customer values. (The value of the product exceed the total cost of

producing the product!)

Bowersox, p.37, The work of logistics revisited: ”In the context of supply chain management, logistics exists to move and position inventory to achieve” - desired time, place, and possession benefits at the lowest total production cost.

Bowersox, p.36 COST MINIMIZATION (Total costing theory and practice) “Focus of lean logistics follows recent development of total costing theory and practice

1.3.2. JIT Approach Coyle et al p.246 the JIT approach

-designed to manage lead times and to eliminate waste (e.g. DELL lean manufacturing

approach)

Grant, p.176

“If a JIT delivery system is utilized, need for inbound warehousing is grated minimized or

eliminated; if JIT system not in use then warehouses needed for inbound material; result

higher inventory cost (inventory cost a higher percentage of the product value”.

Two examples of Lean Manufacturing and PULL system

Why do some companies such as ROLLS-ROYCE Toyota succeed at lean, while other companies

struggle? What do companies with the best outcomes do differently than their less successful peers?

1.3.2.1 Lean Enterprise Case Study DELL Example

Bowersox, p.33 Industry Insight 2-1 DELL GOES TO THE EXTREME DELL manufacturing strategy: Build every order to order -DELL requires suppliers to respond with order fulfillment within two hours. Think differently, DELL direct model lowest total cost -Michael DELL (refer: BTO – given in Topic 1.2)

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Order PULL (order entry system), sequenced into production schedule every two hours.

Factory Installation, Scan service tag – based on customer requirement Scan part tag drag quality accountability throughout the supply chain Serial number tracked throughout the machine Ensures consistently high quality product Build and test scan service tag, put into box deliver exactly what the customer expect through integrated manufacturing workflow Order released to merge centre – combine system unit with monitors through robot Customer get what they ordered when they needed 1.3.2.2 (a) Lean Manufacturing Example Toyota Plant Kentucky 04:25 - 1 年前

http://www.youtube.com/watch?v=U0_ktNqbQyU (4.25 minutes) 150 football field Steel, Plastics 600 ROBOTS 2 million square feet Assembly line 500,000 vehicles annually 1.3.2.2 (b) Kanban and JIT 2 Bin system Grant, p.185 Kanban/Just-in-time System “Kanban also known as Toyota production system TPS, developed by Toyota Motor Company during 1950-60; objective is that parts and materials should be supplied at the moment they are needed in the factory production process” How? See example HURST GREEN PLASTICS, Fast Mangement KANBAN system save time, money and effort 2-bin (chamber) – lower in use stock, upper reserve stock (sliding floor) Access stock using lower chamber for use in short floor Pulling of slider = re-order stock Product used in First In, First Out Twin Bin System Caster, Mobile Technology Visual assessment of stock level, more effective supply chain Coyle et al, The Management of Business Logistics, A Supply Chain Perspective:

- JIT inventory system: Inventory control system to reduce inventory levels by coordinating demand and supply in the point where desired items arrives just in time for use.

"Lean" is more than simply a set of improvement tools

The 3rd Generation Forget everything you think you know about lean manufacturing. Just-

in-time production, kanban cards, 5S, set-up reductions and

standardized work -- those are all just tools.

Refer: The Lean Enterprise Video in Topic 1.2

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“The biggest mistake made by companies considering the use of lean manufacturing is to jump

into the water without a strategically focused plan.” 2007. (see Section 1.3.5)

The “lean” model is used to deliver operational improvements in a range of industries. But

there are several ways to implement lean tools and techniques, each with its own benefits and

drawbacks

Successful use of lean method

Large enterprise companies like Toyota, Dell Computer have achieved dramatic reductions in

delivery time and lowered inventory levels, while increasing responsiveness to customer

demand and improving cash flow.

The typical approaches used by most companies today do not provide an optimal return on

investment to companies. The “missing link” between Lean goals and successful projects that

produce the intended result is a strategy for Lean.

Tools and Techniques

Control

Workflow

Robot

System Requirements

Computerized information system (Bar code reading, database connection)

1.3.3 Lean Manufacturing in Aerospace and Lean Academy Initiative

Lean Manufacturing in Aerospace (Rolls-Royces) 07:47 - 1 年前

Chief Operating Offcer, Rolls-Royce Corporation

What’s covered in the Video: Power and Technology; Excellent performance in price and quality Aerospace industry; Core is education, LAI (in collaboration with Purdue, MIT) academic focus organization Primary engineering school – graduate input to aerospace Principle of LEAN (not found their way into undergraduate curriculum LEAN vocabulary and principle Students ordered parts, Teamwork, communication, teamwork (make 8 aircraft in the exercise) Think at the enterprise level Lean factory improvement Fundamentals of integrated product team Organizational view – how lean activities fit within the organizational structure 1st step in the Six Sigma Process; Adding product through the supply chain ; Improvement

1.3.4 Quick Response System and Collaborating Firms National Research Council, p. 86 “Agility, flexibility and responsiveness more important in rapid changing customer taste and supplier needs” “Flow manufacturing is a new approach that offers improved speed, order fulfillment process. Basic idea of flow manufacturing is the pull of materials through production and the supply chain based on customer demand (see DELL’s order entry and lean manufacturing)” Why? An example: Quick Response: quickly shaping retail business – Collaboration between Firms QuickResponse is rapidly changing from a technology-driven system of automatic replenishment to a

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merchandising concept which requires a change in the way retailers and manufacturers conduct business. http://findarticles.com/p/articles/mi_m3092/is_n8_v30/ai_10658047/

"QuickResponse changes the way retailers do business," said Dave Carlson, senior vice president of

corporate information systems, Kmart, at last month's QuickResponse '91 conference here. "Retailers

need to send suppliers detailed sales history. Sharing your sales data may contradict your instincts, but

suppliers need that information if we are to achieve the goal of QuickResponse."

QuickResponse strategies – Example company: TARGET Target began working on QuickResponse about three years ago, but no real progress occurred until the fall of 1989 when the upscale discounter created a special QuickResponse team. Twelve pilot vendors were selected to explore how they could work together as partners instead of adversaries. Pilot vendors included 3M, Bassett Walker, Commercial, Hanes, JIK, Kleinert's, Lee, Mirro, Playtex Apparel, Procter & Gamble, Sun Weave Linens, and Wrangler. How? Quick Response System - Data Base Management System (Topic 4)

1.3.5 The value chain Human Resources support activity – An example in TNT Express Worldwide (HK) Ltd. (Career Times 22 January 2010)

Value Chain diagram: Michael Porter, 1980. And 5 FORCES model, 1985

Porter (1980). Competitive Strategy: Techniques for Analyzing Industries and Competitors Porter (1985). Competitive Advantage: Creating and Sustaining Superior Performance

Staff training program - Reference: Human Resources Manager, 5 years in the job -How they recruit and develop their dedicated team (Gillian Pang, director, human resources)

1.Training program (the MT programme*)

2. Role rotation 3. Breakfast meeting with management personnel

Why? For competitive capability in serving the client – TNT competing with other global supply chain

operators ref: Michael Porter’s 5 FORCES model (Tutorial 2_Solution_Points)

Mr Derek Chui, joined the MT programme in 2003 after a degree in shipping technology and management from the HK Polytechnic University

o Works in 3 main function over the two-year period

o Consolidating industry know-how

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After MT programme, started working on small and medium sized business accounts in

2003

Later promoted to business development manager, taking care of a number of major clients

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Question: Is TNT a 3PL? Lesson Learnt: TNT competitive as a world-wide Express (Logistics) company

Summary

JIT technology includes tools (robot) and workflow (integrated manufacturing process for example from steel sheet metal to welding to body shop to plastic e.g. plumber to electronic

components. JIT, Lean manufacturing, Flow manufacturing, are ways to decrease inventory

cost while maintaining best customer service from ordering to order delivery. Quick response system consist of collaborating firms to provide customer service for example vendors

connected online to super-retail market store.

HR function (like TNT) help in strengthening the business competitiveness of global logistics company – business development manager helps in serving major clients.

Company collaboration like clothing company linking with super retail store (12 pilot vendors working as collaborating partners).

Summary for Topic 1.1 – 1.3 (Lecture 1-3): Logistics, Logistics (Supply Chain) Management, Value Chain and Competitive Advantage, manufacturing technology (JIT), workflow,

collaboration by firms (vendors, retailers), 3PL (express delivery).