maximizing the value of oracle transformation using ... · pdf filemaximizing the value of...
TRANSCRIPT
Maximizing the Value of Oracle Transformation Using Enterprise Lean / Six Sigma (ELSS)
Rajesh Bhageria Matt LouisDeloitte Consulting Deloitte Consulting
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Profile and Relevant Experience
�Certified Enterprise Lean Six Sigma Black Belt with 15+ years of industry and consulting experience at Global Clients in Diversified Manufacturing, Aerospace & Defense, Consumer Product, Life Sciences and Construction segments.
�Certified by APICS in Production & Inventory Management (CPIM) and Supply Chain (CSCP)
� Primary area of emphasis is synchronizing Supply Chain and integrating distributed business models using technology as an enabler
�Oracle implementation experience with Fortune 500 companies in Asia, Europe and USA in areas of Lean Manufacturing (Flow), Operations Management, Sales & Operations Planning and Supply Chain Management
�Authored and presented at various Oracle events:
�Extending the Lean Enterprise
�Demand Driven Supply Chain
�“Realizing Value Quickly - Supply Chain Implementation Best Practices
Key Clients/Employers Served
Rajesh Bhageria
Senior Manager, Enterprise Applications (Supply Chain Transformation)
Diebold
Butler Mfg
Handleman
Michelin
Ingersoll Rand
Tecumseh
Smith Medical
GE Aircraft Engines
Introductions
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Profile and Relevant Experience
�Certified Enterprise Lean Six Sigma Master Black Belt with 13 years of industry and consulting experience at Global Clients in Telecommunications, Automotive, Aerospace & Defense, Consumer Product Manufacturing, Life Sciences, and Federal Government segments.
� Functional experience in Merger and Integration Management, Materials Management, Lean Manufacturing, Six Sigma, Operations, Supply Chain, Distribution, and Purchasing.
� Led the creation of Process Excellence organization of a large telecommunications company.
� Led prime work stream of project to understand, control, and prevent sources of margin erosion in distribution channels of a medical device manufacturer using Enterprise Lean and Six Sigma methodologies. Realized $8 million in annual margin erosion savings.
� Led the creation of Deloitte’s quality approach to the Provider segment of Life Sciences.
�Authored and presented “Enterprise Lean Six Sigma in White Collar Environments” to Firm-wide audience.
� Frequently invited to speak at industry events on lean six sigma.
Key Clients/Employers Served
Matt Louis
Manager, Strategy and Operations, Lean Operations
• Johnson & Johnson
• GE
• Procter & Gamble
• Textron
• Sprint Nextel
• US Air Force
Introductions
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Who is Deloitte?
• Deloitte is the world’s largest privately held professional services firm
– Nearly 130,000 employees world-wide providing Audit, Tax, Consulting, and Financial Advisory services
– Over 37,000 Consulting professionals globally
– Serving the major manufacturing segments including Automotive,
A&D, Diversified, High-tech, Medical Devices, Process
– Providing a full range of business consulting services in:
• Strategy and operations
(includes supply chain strategy, procurement, sourcing, and lean six sigma)
• Systems integration
(Winner of Oracle Titan award – 2006)
• Human capital,
• M&A
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Lean and Six Sigma can be powerful business improvement methods
•Tools to reduce process variation
•Highly analytical and data-driven
•Defined Methodology (DMAIC, DMADV)
•Focused on eliminating waste
•Provides tools and concepts for improving work
•Grounded in principles of value, flow, and pull
Six SigmaLean
“The relentless effort to systematically
reduce waste while improving the flow
of value to the customer”
“The relentless effort to systematically
reduce variation”
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Consequences of Tactical Lean
� Fails to provide an architecture that allows tactical improvements toadd up to strategic benefits
�Backsliding to non-Lean, legacy processes often occur since Lean initiatives lack structural support from the enterprise as a whole
�Tendency to address symptoms, not root causes, of waste
However, lean six sigma efforts have traditionally been applied in a tactical manner focused on individual sites or functions
Even multi-plant lean efforts tend to treat each facility as an independententity. As a result, the full potential of Lean often goes unrealized
Typical Application of Lean
Business Enterprise
Plant
Plant
PlantSuppliers CustomersPlant
Tactical Lean Focus
Copyright © 2005 Deloitte Development LLC. All rights reserved.
• Deloitte’s employs a transformation approach called Enterprise Lean Six Sigma (ELSS)
LEAN(Simplicity)
SIX SIGMA(Reliability)
ENTERPRISE LEAN SIX SIGMA
Improvement Architecture
Sales &
Marketing
Product
InnovationManufacturing Distribution
Service &
Support
The application of lean across the enterprise allows tactical improvements to “add up” to strategic change
•Provides an improvement “architecture”
•Connects strategy with improvement actions
•Employs powerful lean six sigma tools and techniques
•Applicable to all business processes
•Allows lean principles to extend across the supply chain
•Incorporates information flow and technology
Supply ChainLean
+
Copyright © 2005 Deloitte Development LLC. All rights reserved.
ELSS further expands the lean six sigma focus to the entire value chain
The ELSS strategic vision is to generate greater and more sustainable benefits by not sub-optimizing the overall process
Enterprise - Level Focus
Typical Perspective
Value Chain Perspective
Cross-Enterprise Focus
Typical Lean improvement efforts focus on making
local improvements
Enterprise lean attacks waste throughout the entire global value chain
“Local”
“Global”
Sales &
Marketing
Product
InnovationProduction Distribution
Service &
Support
Copyright © 2005 Deloitte Development LLC. All rights reserved.
IT
LEAN / Six Sigma
LEAN / Six Sigma
IT
Paths to Frustration
Businesses have traditionally placed lean, six sigma and IT transformation initiatives in tension with each other
Failure to recognize the synergies between these initiatives often leads to suboptimal resource allocation
Which comes first? Impacts
• Misalignment of business strategy
• Dilution of business improvement resources
• Sub-optimal IT and lean solutions
• Unrealized value and synergy
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Enterprise
IT
Solutions
An enterprise perspective on lean naturally aligns with enterprise information solutions
• Reduced Complexity
• Optimal Solutions
• Process-IT Alignment
• Greater Value
Enterprise Lean
Six Sigma
•Reduce overproduction (waste) of information
•Focus on critical operations and information
•Simplify processes, configurations, and transactions
•Define lean practices to be codified in an IT solution
•Enable lean to extend beyond the “four walls” to the enterprise
•Provide visibility and synchronization of info across demand-driven supply chains
•Capture and deliver critical operational performance information
•Codify lean business rules and policies in business systems
Integrated Lean-IT Solutions
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Traditional,
Fragmented
Value
Stream
Second Tier Supplier Major Subcontractor
Typical Limited Domain of Supply Chain Improvement Projects
Company Boundaries
Second Tier Supplier Major Subcontractor
Company Boundaries Domain of ELSS
Multiple Operations within OEM
Multiple Operations within OEM
Supply Chain Example
For example, enterprise lean with IT allows supply chain optimization to extend across boundaries and borders
IT Infrastructure
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Many companies now recognize the value of deploying lean, six sigma and technology in an integrated manner
• Rigorous process improvement through lean and six sigma can dramatically reduce the complexity of IT solutions
• Concurrent consideration of enterprise information requirements helps minimize “local” lean or six sigma initiatives and elevates the discussion to value chain optimization
• Lean thinking can have a significant positive impact on system implementations by adjusting application configurations to reflect and reinforce lean operating behaviors
• Companies that pursue integrated deployments realize greater operational improvements, reduced implementation costs, and more sustainable performance gains
• In short, it provides a better value proposition…faster, with more benefits, and at lower cost
Copyright © 2005 Deloitte Development LLC. All rights reserved.
IT serves as a primary enabler for lean enterprise transformation - the systematic deployment of lean methods across the business
• IT complements lean / six sigma by:
– Facilitating a transition from ‘lean manufacturing’ to ‘lean enterprise’by extending lean beyond the “four walls”
– Providing consistent, timely, and accurate information across the enterprise
– Creating visibility, collaboration, and synchronization across demand-driven supply chains
• Lean complements IT by:
– Reducing the overproduction (waste) of information
– Creating focus on critical operational information
– Simplifying application configurations by removing complexity
– Increasing the alignment of IT solutions with actual operating behaviors
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Physical
Arrangement
Organizational
Arrangements
Operating
Policies
Information
Infrastructure
Lean
Configuration
of WorkTactical
Implementations
Structural
Elements
Top
Level
Architecture
Information Infrastructure
• Requires work to be viewed from multiple perspectives
• IT solutions must be designed in the context of the lean work configuration
• Information flow is an integral part of a lean configuration of work
• Designs are based on a “lean enterprise” architecture
• Allows tactical actions to “add up” to strategic change
• IT forms the enabling “backbone” for the lean enterprise
Integration of lean, six sigma, and IT requires a new perspective
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Lean related activities occurs in multiple phases of the deployment
FastTrackTM for Oracle
Lean Activities
Plan andAnalyze
Design Build Deliver Operate
Project Management
Value
Strategy and Operations
Information Technology
Security and Controls
People
Project Management
Value
Strategy and Operations
Information Technology
Security and Controls
People
PH
ASES
TH
READ
S
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Additional design rigor is applied to the most critical processes
In-Scope
Processes
Subprocess
Activity
Level Best Practice
Process Modeling
And Design
Mapped Directly to Oracle
O
Perform Order Management
O-020
Capture Orders
O-030
Process Orders
O-040Calculate Order
Price and Maintain
Customer/Order
Data
O-050
Manage Customer
Credit Exposure
O-060
Manage and
Track Orders
O-070
Manage
Backorders
O-090
Pick Orders
O-100
Pack Orders
O-110
Plan/Manage
Shipping/Delivery
O-120
Ship/Deliver
Orders
O-130
Bill Revenue
O-140
Process Receipts
O-150
Manage
Collections
O-160
Manage Rebates
O-170
Manage
Chargebacks
O-190
Manage Returns
and Exchanges
O-020Capture Orders
Receive Customer
Planning and/or
Shipping Schedule
Determine/Confirm
Customer Order
Requirements
Determine Order Type
Create Standard Order
Create Service
Contract Order
Create Customer
Contract Order
Check/Create
Schedule Line
Agreement
Create Tooling/Support Equipment
Order
Create Prototype
Order
Create No-charge
Order
Create Subsequent
Delivery Free of
Charge (FOC) Order
Create Swap or
Exchange Order
Create Literature
Order
Create Sample Order
Create Stock Transfer
Order
Create Inter-company
Order
Create Cash Sale
Order
Create Third-party
Order
Create Credit/Debit
Memo Request
Process Consignment
Pick-up
Process Consignment
Fill-up
Process Consignment
Issue
S-130
Initiate, Manage
and Close Direct
Sale
S-180
Provide Sales
Support
Receive Customer
Planning and/or
Shipping Schedule
Determine/Confirm
Customer Order
Requirements
Determine Order TypeIs a Third-party
Order?
Is a Consignment
Order?
Credit/Debit
Memo Request?
Create Third-party
Order
Is Consignment
Fill-up
Requested?
Is Consignment
Pick-up
Requested?
Create Credit/Debit
Memo Request
Is Notification of
Issue to End-
customer?
Process Consignment
Fill-up
Process Consignment
Pick-up
Process Consignment
Issue
O-090
Pick Orders
O-030
Process Orders
O-130
Bill Revenue
Yes
No
Yes
No
Yes
No
Yes
No
Yes
No
Yes
Cont'd.
No
~80-90% of
Processes
~10-20% of
Processes
Rigorous value
stream designs
focused on
“critical”
processes
Lean/Six Sigma
Business
Practices / Design
Considerations
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Our value stream analysis methods are designed to reveal work complexity and root causes to performance problems
Typical improvement ranges for EL/SS
in a manufacturing environment
Typical improvement ranges for EL/SS
in a white collar environmentCADS
CODS
CODS
CODSCVS
PADR
CODSCADS
CADS
PADRCADS
PADR
TSOMACPAC
CODSCODSCODS
CODS
CADS
CADS
CADS
TSO
Thermo-King
Part: SL200 Blower Housing Control Box assembly (TCI 30: 0705R38197)
Weekl y requi rement: 35 approxHandoff from… Handoff to…
Step Descriptions Node Location Effort (min) Span Time Node Location Comments
1 Weekly runs list received by vendor liaison Production Control Galway, 1 5 Tues. PM Vendor Liaison Galway, 1 Fab Products vendor liaison
(Brendon O'Shaughnessy) receives runs list f rom Kevin G ill on a Fri. for
the next week (Wed. to Tues.)
2 Vendo r Liaison reviews weekly planner and prov ides net
schedule requirements to Fab Products
Vendor Liaison Galway, 1 10 Fab Products Fab
Products, 1
Brendon O. physically count s all A
items produced by Fab Products and
nets inventory items against weekly requirements. This inf ormation is
communicated to Fab Products via
the phone. Fab Products will build to
the schedule. TCI units a re built on evenings.
3 Vendo r Liaison checks daily quan tity available for pa in t
to determine call-o ff for units to Fab Products
Vendor Liaison Galway, 1 5 Paint Queue Galway, 1 Brendon O. does a daily netting of
requirements t o determine the call-off
amount fo r control boxes to Fab Products. Problems could arise if TK
is working a weekend or overtime w/o
notifying the Vendor Liaison
4 Vendo r Liaison makes an EDI call-off to Fab Products Vendor Liaison Galway, 1 5 Fab Products Fab Products, 1
EDI transmissions are done daily at noon. This transmission effects
current day deliver fo r A class items
includ ing TCI box es. Follow-up may
be requ ired via the phone if the EDI
doesn't come through or if the re are specif ic problems at Fab Product s.
Normally two-three days o f TCI
inventory is held at Fab Products
(e.g ., Wed. pm product is delivered to TK on Fr iday pm)
5 Fab Products receives call-of f for TCI boxes and ships
the units to TK via truck
Fab Product s Fab
Products, 1
NC NC Galway Drop Queue Galway, 1 Units shipped to Galway will be
pulled out of stock as discussed
above
6 Fab Products faxes a copy of the shipping document to Galway Stores
Fab Product s Fab Products, 1
NC NC Stores Galway, 1 Galway stores receives fax from Fab Products
7 St ores personnel receives shipping document and
verif ies receipt of mat erial at drop queue
Stores Galway, 1 5 Galway Drop Queue Galway, 1 St ores checks the delivery quantity.
Af ter verifying the correct delivery
amount, the EDI order is processed
as a receipt8 Pa int area charge hand (day shift) goes to outside drop
area to bring in TCI boxes for painting
Paint Booth Galway, 1 5 Galway Drop Queue Galway, 1
9 TCI boxes moved from queue to paint booth queue Galway Drop Q ueue Galway, 1 5 Paint Booth Queue Galway, 1 Charge hand brings cart in with TCI
units deliv ered on previous day. This is normally done prior to second shif t
since black painting is done on
second sh if t
10 Progress Chaser goes to the head of the control box
subassembly line and makes determination of number of units to move from paint to head of subassembly line
Control Box
Subassembly
Galway, 1 5 Paint Booth Galway, 1 Progress chaser makes the rounds of
several locations in the f actory t o determine ma ter ial needs. He then
communicates to the supplying areas
what the build requirements. TCI box
requirements a re communica ted to
the Paint Booth
11 Pa int area charge-hand (n ight shift ) performs a physical validation of box requirements by going to the head of
the subassembly a rea
Paint Booth Galway, 1 5 Control Box Sub-Assembly Queue
Galway, 1 This process invo lv es checking & rechecking rqts. Normally the paint
area likes to keep +10 items more
than are needed in the pipeline
12 Pa int booth charge hand loads TCI boxes ont o pa int f ixtures
Paint Booth Queue Galway, 1 10 Paint Booth Galway, 1 Pa int f ixtu res dictat e what is pain ted
13 Box runs through pre-t reatment, paint, and dry Paint Booth Galway, 1 120 Post Paint Queue Galway, 1 Boxes are queued at the end of the
paint booth
T herm o -K in g
Pa rt: SL 2 00 Blow er Hou sing C ont ro l Box as sembly (TC I 30: 07 05 R381 97)
Weekl y requ i rement: 35 a pp roxHa ndoff from… Hando ff to…
Ste p Des criptions Node Loca tion E ffor t (m in) S pan Time Node Location Comments
1 W ee kly ru ns l ist rece iv ed by v end or l iaison Produ ction Co ntrol Galway, 1 5 T ues. PM V end or Lia is on Galw ay, 1 F ab Prod ucts vendor l iaison
(Brend on O'S haughnessy) rece ives runs list f rom Kev in G i ll on a F r i. f o r
the n ext week (W ed. to T ues .)
2 Ve ndo r L iaison review s we ekly p lanner and prov ides net
sche dule requiremen ts to Fab Produc ts
Ven dor L ia ison Galway, 1 10 Fa b Produc ts Fab
Produc ts , 1
Bren don O. phys ica lly co unt s al l A
i te ms pro duce d by F ab Produ cts and
ne ts inv ent ory i tem s ag ainst weekly requ i re ments . Th is inf ormation is
commun ica ted to Fab Produc ts via
the p hon e. F ab Produ cts wi ll bui ld t o
the s che dule . TC I un its are bu i lt on ev en in gs.
3 Ve ndo r L iaison che cks da ily quanti ty a vai lab le f or pa in t
to determ ine ca ll -o ff fo r un its t o F a b Prod ucts
Ven dor L ia ison Galway, 1 5 P aint Queue Galw ay, 1 Bren don O. doe s a d ai ly nettin g o f
requ i re ments t o d ete rm ine the cal l -of f
am ount fo r co ntro l boxes to Fa b Prod ucts. Problems co uld ar is e if TK
is wo rk in g a week end o r overtim e w/o
no tifying the V endor Liaison
4 Ve ndo r L iaison makes a n E DI cal l -off to Fab Produc ts Ven dor L ia ison Galway, 1 5 Fa b Produc ts Fab Produc ts , 1
ED I tra nsm iss ion s are done da i ly at no on. Th is t ransm iss ion ef fect s
cur rent day deliv er fo r A c las s items
includ ing TCI box es. Fo l low-up m ay
be requ ired v ia th e p hon e i f the ED I
do es n't come th ro ugh or i f the re are speci f ic prob lem s at Fa b P ro duct s.
N orma lly tw o- three days o f TC I
inv ent ory is held at Fab Produc ts
(e.g ., W e d. pm product is del ivere d to TK on F r iday pm )
5 Fab Prod ucts rece iv es cal l -o f f f or TC I b oxes a nd sh ips
th e uni ts to T K v ia t ruck
F ab Pro duc t s Fab
Produc ts , 1
NC NC G alwa y D rop Queue Galw ay, 1 U ni ts s hipped to Galw ay w i ll be
pu l led o ut of stock as disc ussed
ab ov e
6 Fab Prod ucts f axe s a cop y o f the s hip ping document to Ga lway Store s
F ab Pro duc t s Fab Produc ts , 1
NC NC S tores Galw ay, 1 Ga lway st ores receive s fa x f ro m Fab Prod ucts
7 St ores perso nne l re ce ive s sh ippin g doc umen t an d
v eri f ies rec eip t o f m at er ia l at drop queue
Sto res Galway, 1 5 G alwa y D rop Queue Galw ay, 1 St ores check s the del iv ery qua ntit y .
A f ter v er i fying the c or rect del ivery
am ount, the E DI order is proce sse d
as a receip t8 Pa in t area c harge han d (day s hift ) goe s to o uts ide drop
area to br ing in TC I b oxe s for p aintin g
Pain t Bo oth Galway, 1 5 G alwa y D rop Queue Galw ay, 1
9 TC I b oxes m oved from q ueu e t o pa int boo th que ue Galw ay D ro p Q ueu e Galway, 1 5 P aint Boo th Queue Galw ay, 1 C harge ha nd br ings c art in w ith TC I
un i ts de liv ered on previous day . T h is is no rmally done pr ior to s econ d sh if t
sinc e black p ain t ing is done on
secon d sh if t
1 0 Prog re ss Chaser goes to the head of the c ontrol box
sub assembly line an d mak es det ermin ation of number o f uni ts to m ove from pa int to hea d o f subassembly l ine
Control Box
Sub assembly
Galway, 1 5 P aint Boo th Galw ay, 1 Prog re ss chaser m ake s the ro un ds of
sev era l loca tions in the f ac tory t o de term ine ma ter ial n eed s. H e the n
commun ica tes t o the supplying area s
w hat the bu i ld requ i re ments. TCI box
requ i re ments a re communicated to
the P aint Booth
1 1 Pa in t area c harge-ha nd (n ight shi ft ) per fo rm s a phys ica l v al idat io n o f box re qui remen ts by going to the head of
th e sub assembly area
Pain t Bo oth Galway, 1 5 Con trol Bo x Su b-A ssemb ly Queue
Galw ay, 1 T his proc ess invo lv es checking & rec hec kin g rqt s. N ormal ly th e paint
area likes to k eep + 10 i tem s more
than are need ed in th e p ip el ine
1 2 Pa in t booth charge hand loads TC I b oxe s ont o pa in t fixtures
Pain t Bo oth Queue Galway, 1 10 P aint Boo th Galw ay, 1 Paint f ixture s dic tat e w hat is pa in ted
1 3 Bo x runs throu gh pre -t reatment, paint , a nd dry Pain t Bo oth Galway, 1 12 0 P ost P a int Que ue Galw ay, 1 Box es are queue d at th e end o f the
pa int b oo th
Develop Program
Schedule
(Program Office)
B
Develop Aircraft
Schedule
Define Cost
Accounts
Obtain
Contract
(Contracts)
Develop
Engineering
(Engineering)
Generate
Planning
(Planning)
Develop BOM
(Planning)
Load/Hang
Demand in
SAP
(Program Office)
(Program Office)
(Planning)
Develop Program
Schedule
(Program Office)
B
Develop Aircraft
Schedule
Define Cost
Accounts
Obtain
Contract
(Contracts)
Develop
Engineering
(Engineering)
Generate
Planning
(Planning)
Develop BOM
(Planning)
Load/Hang
Demand in
SAP
(Program Office)
(Program Office)
(Planning)
Target value streams / processes selected
.
4
EPDMEPDM
EPDM
EPDMPro E
Pro
Interlink
EPDM
EPDM
EPDM
EPDM
EPDMEPDM
EPDM
EPDM
MAC
PAC
MAC
PACOrganizational In
formational
Physical
Policy
Convert Plan Order t o
Prod. Orde r
(Production Coo rdinato r)
Track
Fabrication
Run MRP
(IT System )
Convert Plan
Orders t o
Purchase Req.
(MRP Controller )
Convert to
Purchase
Order
(Purchasing)
Track
Purchase
Order
(Purchasing)
Receive
Material
Stock Material
(180 & 209 )Issue
(MRP Controller )
Purchase
Convert PlanOrder f or B
Product Kit
Issue to KitGoods
Receipt
DD 250
Kits GFE
Fabricate
D
Put in Work
(Production Coo rdinato r H/D/L)
DR ApprovalCycle
Hangar, Dock & Line
Hang
Demand
C
C
Assess NavyAvailability
(ACC Coordinator )
Cut DummyPO
Conduct
Make/Buy
Yes - "Q"#
No - "CAP"O&A
Track G FE(CAMS List) A
Hang
DemandBuyB
Aircraft
A
Hot DR
?
Put in Work
(Material
Coordinator )
(MRP Controller ) (MRP Controller ) (Receiving)
AVO Supply
Chain
Fit
Check
(Receiving) YES (Warehousing )
(MRP Controller )Procuremen t
(MRP Controller )
AVO
(MRP Controller )
Convert Plan
Order t o
Prod. Orde r
Comp lete
Work
DR
CORE
(ACC Coordinator ) (ACC Coordinator )
(ACC Coordinator ) (ACC Coordinator )
Kit 1 5
9
7
8
10
Actual work configuration is illustrated via work visualization tools
Work configuration data captured in structured worksheet format
Redesigned work configuration documented in worksheet and used to generate benefit estimates
Reconfiguration in multiple dimensions using lean and Six Sigma techniques
New work configuration is modeled and expressed as new process
Copyright © 2005 Deloitte Development LLC. All rights reserved.
� Current bid policy / process
requires a substantial
number of manual
information exchanges
� Physical separation of
engineering functions
creates a significant amount
of manual, paper-based
communication during
design and planning
� Perceived difficulty of
extracting information from
existing ERP system results
in planning activities being
performed in stand-alone
applications
Transactional Statistics
Findings
Cycle Time
Effort Time
6 5 4 3 2 1 Months
Denotes site change
Physical flow
Information flow
Denotes building changeDesignAssembly
Quality
Control
Receiving
Material
PlanningWIP
Mechanic
1
Mechanic
2
Mechanic
3
Mechanic
4
Mechanic
5
Mechanic
6
Mechanic
7
Mechanic
8
Supplier
1
Mechanic
9
Warehouse
Supplier
2
Supplier
3
Supplier
4
Supplier
5
Suppliers
Total Nodes Involved 19
Total Hand-offs 39
Manufacturer
Unique value stream modeling tools provide insight into workflow, organizational hand-offs, and policy impacts
Copyright © 2005 Deloitte Development LLC. All rights reserved.
� Current bid policy / process
requires a substantial
number of manual
information exchanges
� Physical separation of
engineering functions
creates a significant amount
of manual, paper-based
communication during
design and planning
� Perceived difficulty of
extracting information from
existing ERP system results
in planning activities being
performed in stand-alone
applications
Transactional Statistics
Findings
Cycle Time
Effort Time
6 5 4 3 2 1 Months
DesignAssembly
Manufacturer
Customer
SalesMechanical
EGR
Electrical
EGR
Service
Quality
Control
EGR Admin
Purchasing
Production
Planning
Shelf
Supervisor
Receiving
Material
Planning
WIP
Mechanic
1
Factory
Mgr
Mechanic
2
Mechanic
3
Mechanic
4
Mechanic
5
Mechanic
6
Mechanic
7
Mechanic
8
Supplier
1
Mechanic
9
Warehouse
Supplier
2
Supplier
3
Supplier
4
Supplier
5
5010
10
Infor
InforExcel
Access
OutlookInfor
Infor Excel
50
Infor
Auto
Mgr
Auto
CAD
Infor
Infor
Infor
Suppliers
Total Nodes Involved 29
Total Hand-offs 224Denotes site change
Physical flow
Information flow
Denotes building change
Incorporation of information flows and “sources” provides the complete view of value stream complexity required for redesign
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Slide 1Confidential and Proprietary. Copyright © 2003 STERIS Corporation
and Deloitte Consulting (US) LLC All Rights ReservedGMP2
Cycle Time
Effort Time
6 5 4 3 2 1 Weeks
� Current engineering
activities are heavily paper
driven and contain a
substantial number of
manual information
exchanges
� The use of multiple,
disparate information
sources and planning
systems increases both
hand-offs and the risk for
error in the process
� Inadequate process gates
result in out of sync
requirements definition,
engineering, and
manufacturing activities
Transactional Statistics
Preliminary Findings
Total Nodes Involved 23
Total Hand-offs 375
10 9 8 716 15 14 13 12 1120 19 18 17
Contracts
Project MgrSalesRep
CSR
POP
Coordinator
Lead Engineer
Electrical
Engineer
Production Planning
MechanicalEngineer
Programmer
Purchasing
Draftsperson
Engineering
Manager
EGR Planning
Internal
CSR
EGR CSR
Mechanical Designer
Electrical Designer
Secretary
Order
Coordinator
Centocor
HartSmart
Out
look
Out
look
Excel
Oracle
Out
look
Out
look
Excel
Out
look
AdobeSymix
Excel WordAutoCAD
Outlook
Out
lookAutoCAD
Out
look
Out
look
Outlook
SymixWord
ExcelWordAuto
CAD
Out
look
ExcelWordAuto
CAD
Out
look
Symix
Out
look
Oracle
Excel
Out
look
Oracle
Excel
Symix Outlook
Excel
Symix
Project
Out
look
Excel
Out
look
Excel
AutoCAD
Symix
Out
look
Outlook
Excel
Excel
Word
Auto
CAD
Outlook
Out
lookSymix
SuppliersCustomer
Mentor
Erie
Quebec
The baseline process shows a complex activity map with
multiple hand offs, multiple functions, and disparate systems
resulting in long lead time
Information Flow
Denotes site change
A more complete understanding of work configuration allows integrated lean-IT designs to be developed
Reconfiguration Impacts:
• Organizational hand-offs reduced by 51%
from 375 to 134
• Reduced number of organizations involved
in order capture process by 22%
• Information sources reduced by 50%
• Effort time reduction of approximately 40%
As-Is Order Capture Process
To-Be Order Capture Process
Reconfigured Design Involved:
• Technology changes
• Policy changes
• Workflow changes
• Organizational alignment
Slide 1Confidential and Proprietary. Copyright © 2003 STERIS Corporation
and Deloitte Consulting (US) LLC All Rights ReservedGMP2
� The configuration process will
improve order definition ,
accuracy, and completeness
resulting in a reduction in
engineering involvement
� The implementation of
Siebel/Oracle will streamline the
order entry process removing the
manual interfaces between the
Order Entry Worksheet, Oracle
and Symix
� Dedicated technical support in the
sales cycle and the deployment of
the SSQ web site plus direct entry
of SSO orders into Siebel by the
Project Manger will result in clean
orders requiring less engineering
rework through in the engineering
design phase
Reconfiguration Themes
Suppliers
Customer
Mentor
The future order capture process dramatically increases order
quality while reducing overall effort and cycle time
Contracts
ProjectManager
Sales
POPCoordinator
Electrical
Engineer
MechanicalDesigner
Programmer
Purchasing
LeadEngineer
EngineeringPlanning
BOMCoordinator
Draftsperson
ElectricalDesigner
Secretary
Hart
Smart
CENTOCOR
Out
look
Out
look
Outlook
SSQ
Web
SSQ
Web
SSQ
Web
SSQ
Web
SSQ
Web
Siebel
Oracle
Project
Oracle
AutoCAD
Auto
CAD
Auto
CAD
Auto
CAD
Oracle
Adobe
Word
Out
look
SSQ
Web
Transactional Statistics
Total Nodes Involved
Total Hand-offs
Reduction in Nodes
Reduction in Handoffs
Cycle Time Reduction
18
134
22%
64%
40%
Cycle Time
Effort Time
6 5 4 3 2 1 Weeks10 9 8 716 15 14 13 12 1120 19 18 17
Information Flow
Denotes site change
SSQ
Web
Copyright © 2005 Deloitte Development LLC. All rights reserved.
ELSS can have a direct impact on the design, setup, and configuration of Oracle solutions
• Workflows
– Example: Order capture workflow configuration
• BOM structure
– Example: De-layering of bill to reduce transactions and mirror material flow
• Assembly, feeder line, and cell definition
– Example: Synchronization points
• Business rules / policies
– Example: Transition of material replenishment via MRP to demand driven methods such as kanban
• Organizational roles / role definition
– Example: Roles definition for system tasks
Copyright © 2005 Deloitte Development LLC. All rights reserved.
• The project was conducted as part of a business transformation initiative for a global Fortune 1000 company using lean operating principles and Oracle technology
• Project focused on the lean reconfiguration of two European production operations and the supporting technology infrastructure
• The primary objectives of this project included the following:
– Reconfigure production, engineering, and supplier interfaces to drive cost and performance improvements
– Facilitate consolidation of production operations into a single plant
– Develop a “lean” operating configuration for the Oracle Flow Module
• A comprehensive production system design was prepared and a major component of the new, lean design was successfully implemented
Lean / Flow Transformation Case Study
Copyright © 2005 Deloitte Development LLC. All rights reserved.
• Effort (productive) time ranged between 2% and 18% of cycle time (total elapsed time)
• Up to 75% of effort time comprised of non-value added activities
• Average lead time for products from feeder lines is 5 days for products requiring only 5 hours of touch labor
• Over 900 hand-offs / transactions to build a frame
• Part routings were highly variable across multiple stations
• Batch sizes of 200 units (5 days supply)
• Imbalance of “skin”products throughout system
Work Configuration Examples
25
Value stream analysis indicates reality…unnecessary production complexity and multiple impediments to flow
Intra-site Physical Flow
Informa tion Flow
Inter-site Physical Flow
240 220 200 180 160 140 120 100 80 60 40 20
Cycle T ime
Effort Time
Hours
• Large imbalanced WIP i nventory level s required to sustain current pr oduction configuration
• Parts travel a total of 4.6 miles within the plant be fore frame is delivered to final assembly
• Value-added effort time is 15% of total cycle time
Cycle Time: 197 hrs*
Effort Time: 86 hrs*
Handoffs: 650*
Distance
Intra-site: 7353 m*
Value Stream Analysis
SHEET STORAGE
FRAME
ROBOTIC
WELDING
WELDING
TEST
ASSEMBLY 1EVAC.
LEAK
TEST
PRETEST
DIP PAINTDIP
TANKS
SUB
ASS’Y
CD ASSEMBLY
MPE
CONTROL BOX
SOLDERINGSKINNING
TLE ASS’Y
POWDER PAINT
SPRAY TUNNEL
MAINTENANCE
STORES
FORM
SPOT WELD
LINER
SUB-
ASS’Y
ASSEMBLY 2MINI MARKET
PUNCH
11
8
7
STOPA
Tool Die
U
80
100
T 260N
55 Ton
STOPA
Tool Die
U
80
100
T 260N
55 Ton
11
8
7
STOPA
Tool Die
U
80
100
T 260N
55 Ton
STOPA
Tool Die
U
80
100
T 260N
55 Ton
* Does Not Inc lude F inal Assembly
Level 1 Physical Space Map (As-Is): Frame
Dub lin
Gal way
Dub lin
Gal way
26
Complex routings increase WIP, material handling, and cycle time
* Does Not Inc lude F inal Assembly
Value Stream Analysis
Intra-s ite Phys ical Flow
Informa tion Flow
Inter-s ite Phys ical Flow
240 220 200 180 160 140 120 100 80 60 40 20
Cycle T ime
Effort Time
Hours
• Each frame consists of 81 parts tha t must be planned, pr oduced, and managed
• Complex producti on system requires “informal” pr oduction control
• Process inv olves nearly 650 tra nsacti ons (information and physical )
Cycle Time: 197 hrs*
Effort Time: 86 hrs*
Handoffs: 650*
Distance
Intra-site: 7353 m*
Level 2 Physical Space Map (As-Is): Frame
Fork lift
W eld ing
Queue 1
W eld ing
Robot 2
W eld ing
Robot 2
Spot
Weld
100 Ton 150 TonLVD2
STO PA
ROLLER CONV EYOR
Tool Die
50 Ton
Supervis or
U
80
100
160
T P
RE
SS
GUILLOTINE
250 Ton Press
CNC T 260T 260
N
55 TonSmal l EPLVD1 P /B
P /B
Fork lift
W eld ing
Queue 1
W eld ing
Robot 2
W eld ing
Robot 2
Spot
Weld
100 Ton 150 TonLVD2
STO PA
ROLLER CONV EYOR
Tool Die
50 Ton
Supervis or
U
80
100
160
T P
RE
SS
GUILLOTINE
250 Ton Press
CNC T 260T 260
N
55 TonSmal l EPLVD1 P /B
P /B100 Ton 150 Ton
LVD2
STO PA
ROLLER CONV EYOR
Tool Die
50 Ton
Supervis or
U
80
100
160
T P
RE
SS
GUILLOTINE
250 Ton Press
CNC T 260T 260
N
55 TonSmal l EPLVD1 P /B
P /B LVD2
STO PA
ROLLER CONV EYOR
Tool Die
50 Ton
Supervis orSupervis or
U
80
100
160
T P
RE
SS
GUILLOTINE
250 Ton Press
CNC T 260T 260
N
55 TonSmal l EPLVD1 P /B
P /B
Value stream analysis of sample parts highlighted complex factory work configurations that drive cost and inhibit flow
Sample Physical Map
Copyright © 2005 Deloitte Development LLC. All rights reserved.
• Final assembly stations
balanced to optimize
operator utilization
versus flow of units
Selected Findings
Additional analyses were conducted on production operations to reveal root causes of cost and performance issues
34
A capacity analysis revealed the possibility of reducing the number of machine resources required to deliver skin parts by standardizing routings
� A total of five sheet metal forming machines, down from nine, will be required in the
final to-be state
� To further increase flexibility, improve response time and decrease batch size, work
will be sequenced to minimize setup times and maximize the use of parallel work
Machine Setup
Hits/
Bends
Per Part
(min)
Setup
(min)
Pcs/
Sheet
Time/
Sheet
Demand
Size
Parts/
Uni t
Total
Run
100T P/B S1 10 2.5 20 N/A N/A 50 2 250
100T P/B S1 2 0.5 20 N/A N/A 50 1 25
100T P/B S2 1 0.25 20 N/A N/A 50 2 25
100T P/B S2 1 0.25 20 N/A N/A 50 1 12.5
100T P/B S2 1 0.25 20 N/A N/A 50 1 12.5
100T P/B Total 100 325
160T PP S1 1 0.55 15 N/A N/A 50 2 54.5
160T PP S2 1 0.5 15 N/A N/A 50 2 50.0
160T PP S3 1 0.55 15 N/A N/A 50 1 27.3
160T PP S4 1 0.55 15 N/A N/A 50 1 27.3
160T PP S3 1 0.55 15 N/A N/A 50 1 27.3
160T PP S3 1 0.55 15 N/A N/A 50 1 27.3
160T PP S3 1 0.55 15 N/A N/A 50 1 27.3
160T PP Total 105 240.9
50T P/B S1 5 1.25 25 N/A N/A 50 1 62.5
50T P/B S1 6 1.5 25 N/A N/A 50 1 75
50T P/B S1 7 1.75 25 N/A N/A 50 1 87.5
50T P/B S1 5 1.25 25 N/A N/A 50 1 62.5
50T P/B Total 100 287.5
LVD2 S1 12 3 20 N/A N/A 50 1 150.0
LVD2 S2 4 1 20 N/A N/A 50 1 50.0
LVD2 S3 2 0.5 20 N/A N/A 50 1 25.0
LVD2 S4 4 1 20 N/A N/A 50 1 50.0
80 275.0
At 346 minutes (241
run time + 105 setup time) and with the most
setup requirements the
160T Press will have to be closely monitored
when maki ng any improvements i n the
100T Press
With a total of 425 minutes (325 run time
+ 100 setup time) the 100T Press is the
machine capacity
constraint within the cell
Reconfiguration and Implementation
38
Final assembly balance (paint to skinning)
0
5
10
15
20
25
30
35
Stations
Tim
e
Despite having balanced labor per station, the workflow for units is erratic, giving rise to bottlenecks and hindering true flow
Note: This is only the time spent working on the unit. T he time for s tation 9- 32 was divided by two, evacuation’s time as well as
testing time was divided by 3 (number of stations ac tive at the time of observation)
The analysis indicates that the average work content (unit assembly) is only 8-10 minutes
per station
Final Assembly Flow Assessment
Re-work at the blower housing
caused this peak
The soldering stati ons are in line with each
other & perform the
same work, one unit has to wait for another
Electric pre-
testing
Trend line of time spent on a unit by stati on
Rework
Final
testing
Evacuation
Takt time
� Machine capacity analysis revealed
opportunity to reduce equipment
by 20% simply by standardizing
product routings
28
32
SHEE T STO RAGE
FRAME
ROB OTIC
WEL DING
WEL DING
TEST
ASSEMBLY 1E VAC.
LEAK
TEST
PRETEST
DIP PAINTDIP
TANKS
SUB
ASS’Y
CD ASSEMBLY
MPE
CONTROL BOX
SOLDE RINGSKINNI NG
TLE ASS’Y
POW DER PAINT
SPRA Y TUN NEL
MAINT-
EN ANCE
STORES
FORM
SPOT W ELD
L INER
SUB-
ASS’Y
ASSEMBLY 2MI NI MA RKET
PUNCH
In tra -si te Phy si c al Flo w
Info rma ti o n Flo w
In te r -si te Phy si c al Flo w
Cyc le Time
Effo rt Time
Hour s
Level 1 Physical Space Map (As-Is): Roadside Panel
• Redu ndan t co mmunica tio n of pro duc tio n pri orities bet ween ma nagers a nd o pera tors
• Ma chine oper ator s depe nde nt on mate rial handlers to mov e pa rts b etween pr ocesses
• F our of se ven of t he ski n parts go t hr oug h the same po wer press ope ra tio n (sa me setup) but
a re pu nche d in s epar ate nest s
Cycle Time: 147. 5 hr s
E ffor t Time: 2. 6 hrs
Hand offs: 28
Dista nce
Intra-site: 900 m
M grs. Office
SPOT
W ELD
G alwayG alway
Material Handling
Mgr’sOffice
Valu e Stre am Anal ysi s
2 40 2 20 2 00 1 80 1 60 1 40 1 20 1 00 80 60 40 20
Physical mapping of a roadside panel illustrated significant reconfiguration opportunities for the skin product value stream
� Effort time was less than 2% of cycle time
� In-factory response time of 10 working
days to deliver a product that requires less
than 5 hours of work
� Significant imbalance in skin products
throughout the production system
� The number of skin components in WIP
equated to 256 ship sets or 5.4 day s of
supply
� Howev er, the actual mix of components
y ielded only 85 complete ship sets – 67% of
the parts were not matched to end-item
demand
� Part routings were highly complex and
variable across 9 machines
� Batch sizes of 200 units were being run
through the sheet metal area
As-Is Conditions:
0
50
100
150
200
250
300
350
400
450
500
Bellyband
Bonne
t
Curbside D
oor
C urbsid
e Pan
el
Grills (
sets)
Roadsid
e Doo
r
Roadsid
e Pane
l
Skin Component WIP Profile
Reconfiguration and Implementation
� Analysis of skin product
WIP highlighted a
complete imbalance of
product flow to support
final assembly…increasing
WIP by 60%
Copyright © 2005 Deloitte Development LLC. All rights reserved.
� Production control requires multiple people, processes, and systems
� Push-oriented operating model
� Complex material flows and routings
� Disparate information systems
� Operating metrics not aligned with lean / flow mfg.
� Functionally oriented plant layout and organization
� Cumbersome engineering change management process
� Sub-optimized make / buy decision-making
� Multiple interplant and supplier dependencies
� Fragmented supplier management activities
40
Organizatio nal Space Map (As-Is) - Order Reple nishm ent Process
In tr a-si te Physic al Fl owI nfo rm ati on Flow
In ter -si te Physic al Fl ow
S i te Ma rker
Bu ildi ng Ma rker
� C ompl exi ty in the pro ce ss dr ive n
b y m ultip le I nf o rmat ion S yst em s
tha t req ui re h um an co nn ec tivity
� Org ani zat ion struc tu re dri ve s th e
ma nag em ent and lo gisti cs o f o rd er replen ishment proc es s ra th er tha n
ef fi cienc y and c ust omer ne ed s.
� For pa rt # 3D95 795 G0 7 t he tim e
fro m rep lenishmen t n eed b eing
determi ned un t il that sp eci fic part
gets a ssemb led o n a un it is ov er 1 4 wee ks
* Analysi s d oes n ot i ncl ude detail ed process in Mi nneapo lis
Han d-o ff Sta ti sti cs
In ter -S ite 5
Inside Dub l in 5
I nsi de Ga lway 22
Ins ide Minn eapo l is 3*
T otal Han do ffs 35
Total No des / Org s 2 0
CMS ( IS)
Mate ri al Co ord inat or D ubl in
Kan ban L oc D ubl in
Shi ppi ng & R ecei ving
D ubl in
Mater i al Coo rdi nat or G alw ay
Pi ckli st ( IS)
Mater ia l Runner Queue
(Ga lwa y)
Mat er ia l Runner Galw ay
St ockr oom Galway
Shi ppi ng & R ecei ving
Qu eue G alw ayShi ppi ng & Recei ving
Galw ay
T IME Syste m ( IS)
Purchasi ng G alway
Lega cy
S ystem
S ales &
Market ing
Pla nning
G alw ay
Pla nning
M inne apol is
Manufa cturing M inne apol is
Shi ppi ng & R ecei ving
M inne apol is
MAS A, M inne apol is
Val ue Stream Map pi ng
24
Weld
ing
Warehou se
Dubli n Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
O ff i ces
Fi nal Ass embl y
Sub Ass embl y
Press Brake
S olde ri ng
S kinni ng
Of fi ce Of fi ce
Dubl in
G alway
L evel 1 Phy si cal Space M ap (As-I s) : Accu mul ator Tan k
Weld ing
S mal l Pa rts
St orage
Deg
Cut
Pu
Mult i
Ben
Sm s tMSLg sto
HS
In tr a -si te Ph ys ic al F low
I nf orma tio n F low
In ter -si te Ph ys ic al F low
1 20 1 10 1 00 90 80 70 60 50 40 30 20 10
Cyc le T ime
Eff o rt Ti me
Hours
• In f orma tio n abo ut pro du ction an d ma ter ia l req ui reme nts no t fo rmally co mmu nicated
• Re dundant i nf orma tio n about f inal ass embly s equ en ce track ed by sep arat e pro ce sse s
• Ou tsi de pro ce ssing th e f orming o f t he water cap in Ga lway expa nd s th e cyc l e ti me b y
a t leas t one wee k
C yc le Ti me: 117 h rs
Ef fo rt Time: 1 2 h rs
H ando ff s: 89
Di st ance
T ra veled: 11 63km
Value S tream Map ping
18
In tr a -s i te Phy s ic al Flow
I nf o rma tion Flow
In ter -s i te Phy s ic al Flow
240 220 200 180 160 140 120 100 80 60 40 20
Cy cle T ime
Eff ort T i me
Ho urs
Wel d
Warehou se
Du blin Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
Weld ing & Sandi ng
O ff i ces
Sub Ass embl y
Pr ess Br ake
S olde ri ng
S kinni ng
Of fi ce Of fi ce
Dubl in
G alway
Level 1 Phy si cal Space Map (As-Is): F rame
Fro m
G alw ay
• Mult i ple pro ductio n c ont ro l syst ems in use wi th di f fer en t priori ties c oor dinated by sp ecia lis ts & l ine f eeders
• Ef for t t ime is 16% o f Cycl e ti me
• F ina l Asse mb ly uses contr ol b ox a va ilabi li ty t o determi ne frame line on seque nce
Cy cle Ti me: 191 hr
Ef for t Ti me : 31 hr
Han doffs: 5 63
Distance
I ntra-s ite: 395 2 m
V al ue Stream Map pi ng
47
Organiza tional Space Map (As-Is) - Order Replenishment Process
In tra-sit e Physic al Fl owIn formati on Flow
In ter -sit e Physic al Fl ow
S i te Ma rker
Bui ldi ng Ma rker
� Co mpl exi ty in t he pro ces s dri ve n
by mu ltipl e Info rmat ion System s
t hat requ i re h um an co nn ec ti vi ty
� Orga ni zat ion st ructu re drive s th e
manageme nt and lo gisti cs o f o rder re plenis hmen t p roc es s rather t ha n
effic ien cy a nd c ust omer ne ed s.
� F or part # 3D95 795 G0 7 the t im e
from rep le nish men t n eed being d etermi ne d un til that sp eci f ic part
get s as semb led o n a un it is ov er 1 4 wee ks
*An al ys is does no t in clu de d eta il ed process in Mi nneapo li s
Han d-o ff Sta tistics
In t er-Si te 5
Inside Dub l in 5
I nsi de Ga lway 22
I ns ide M inn eapo l is 3*
T otal Hando f fs 35
To tal N o des / Org s 2 0
CMS ( IS)
Mater i al Co ord inat or D ubl in
Kanb an L oc D ubl in
Shi ppi ng & R ecei ving
D ubl in
Ma ter ia l Coor di nat or
G alw ay
Pi ckli st ( IS)
Ma teria l R unner Queue
( Ga lwa y)
Mat er ia l R unner Galw ay
St ockr oom Galw ay
Shi ppi ng & Recei ving
Que ue G alw ayShi ppi ng & R ecei ving
G alw ay
T IM E S yste m ( IS)
P urchasi ng G alw ay
Lega cy
S ystem
S ales &
Market ing
Pla nning
G alw ay
Pla nning
Minne apol is
Ma nufact ur ing M inne apol is
Shi ppi ng & R ecei ving
M inne apol is
MASA , Minne apol is
Value S tream Map ping
29
Intr a -s i te Phys ic al Flow
I nf o rma tion Flow
Inter -s i te Phys ic al Flow
Dubl in
G alway
Level 1 Phy si cal Space Map (As-Is): Tube
Weld
ing
Outsid
e Stor
age
Du blin Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
Weld ing & Sandi ng
O ff i ces
Fi nal Ass em bl y
Sub Ass embl y
Pr ess Br ake
S olde ri ng
S kinni ng
Of fi ce Of fi ce
Outs ide V endo rs
C yc le Time: 108 h rs*
Tou ch Time: 3 h rs*
H ando ffs: 25*
Dis tan ce
I ntra-s it e: 290 m*
* Doe s Not I nc lude Fi n al A ssem bly
• Mu lti ple production sy st ems at pl ay , compl e te ly d ef ea tin g any kan b an
production co nt ro l in iti ative s
• Ef fort ti me i s l es s than 3% of cyc le time*
• Pa rt go es th rou gh 9 q ueues f rom t ime rece ived thro ug h FA St ati on 11 queue
120 110 100 90 80 70 60 50 40 30 20 10 Ho urs
Cy cle T ime
Eff ort T i me
Val ue S tream Map pi ng
38
Cycle Time
E ffort Time
Weld
ing
Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
Weld ing & Sandi ng
O ff i ces
Fi nal Ass em bl y
Sub Ass embl y
Pr ess Br ake
S olde ri ng
S kinni ng
Of fi ce Of fi ce
Dubl in
Galway
Level 1 Physi cal Space Map (As-is) –Suppor t Brack et
Cycl e Time:
E f for t Ti me
Han dof fs:
71 .5 ho urs*
3 .8 ho urs*
34
D is tan ce
In tra-sit e: 582 m
• P ull sig nal is defeated by batchi ng and queu ing of parts. Th is par t icu lar part wa s “at t he top of th e h eap”
• E ffort t ime is 5% of cyc le ti me
• U nne cessary hand li ng s tep s e. g. s ub-assembly for a 45 sec ond s tep , movement o f cut p anels outside
In tr a -s i te Phy s ic al Flow
I nf o rma tion Flow
In ter -s i te Phy s ic al Flow
Y ard
*N eed fo r p art was id enti fied fiv e d ay s prio r to th is ; doe s no t i nc lu de f in al as s emb ly
120 110 100 90 80 70 60 50 40 30 20 10 Ho urs
Outs ide V endo rs
V al ue Stream Map pi ng
35
Weldi
ng
War ehou se
Du bli n Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
Weld ing & Sandi ng
Off i ces
Fi nal Ass embl y
Sub Ass embl y
Press Br ake
S olde ri ng
S kinni ng
S ub-
Ass’ yOf fi ce
Level 1 Physical Space Ma p (As-Is): Back Idler Pu lley
I ri sh Express CargoFOMP
( It al ian Su pp li er)
In tr a-s it e Phy sic a l Flo w
In f orma tion Flow
Inte r -s it e Phy sic a l Flo w
12 0 11 0 10 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0
Cycle T ime
Eff ort Ti me
Ho ur s
• Sequ ent i a l pro ces ses a re no t al i gn ed to support fl ow b etwee n pro ce sse s
• L on g setu p t im es ( 75 min vs . 5 min V A) in flu enc e 2- 3 week prod uc tio n run s
• Lo ng s uppl ie r l ead t ime s (8 week s) c reat e l arg e in vent ory req ui remen t s
C yc le Ti me: 57 h rs
Ef fort Ti me: 5 h rs
Hando ff s: 25
Di stance
I ntr a-s it e: 46 69 m
Dubl in
G alway
Value S tream Mapping
40
Organizational Space Map (As-Is) - Order Reple nishm ent Process
In tr a-si te Physic al Fl owI nfo rm ati on Flow
In ter -si te Physic al Fl ow
S i te Ma rker
Bu ildi ng Ma rker
� C ompl exi ty in the pro ce ss dr ive n
b y m ultip le I nf o rmat ion S yst em s tha t req ui re h um an co nn ec tivity
� Org ani zat ion struc tu re dri ve s th e
ma nag em ent and lo gisti cs o f o rd er replen ishment proc es s ra th er tha n
ef fi cienc y and c ust omer ne ed s.
� For pa rt # 3D95 795 G0 7 t he tim e
fro m rep lenishmen t n eed b eing determi ned un t il that sp eci fic part
gets a ssemb led o n a un it is ov er 1 4 wee ks
* Analysi s d oes n ot i ncl ude detail ed process in Mi nneapo lis
Han d-o ff Sta ti sti cs
In ter-S ite 5
Inside Dub l in 5
I nsi de Ga lway 22
Ins ide Minn eapo l is 3*
T otal Han do ffs 35
Total No des / Org s 2 0
CMS ( IS)
Mate ri al Co ord inat or D ubl in
Kan ban L oc D ubl in
Shi ppi ng & R ecei ving
D ubl in
Mater i al Coo rdi nat or G alw ay
Pi ckli st ( IS)
Mater ia l Runner Queue
(Ga lwa y)
Mat er ia l Runner Galw ay
St ockr oom Galway
Shi ppi ng & R ecei ving
Qu eue G alw ayShi ppi ng & Recei ving
Galw ay
T IME Syste m ( IS)
Purchasi ng G alway
Lega cy
S ystem
S ales &
Market ing
Pla nning
G alw ay
Pla nning
M inne apol is
Manufa cturing M inne apol is
Shi ppi ng & R ecei ving
M inne apol is
MAS A, M inne apol is
Val ue Stream Map pi ng
24
Weld
ing
Warehou se
Dubli n Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
O ff i ces
Fi nal Ass embl y
Sub Ass embl y
Press Brake
S olde ri ng
S kinni ng
Of fi ce Of fi ce
Dubl in
G alway
Level 1 Physi cal Space M ap (As-I s) : Accumul ator Tank
Weld ing
S mal l Pa rts
St orage
Deg
Cut
Pu
Mult i
Ben
Sm s tMSLg sto
HS
In tr a-si te Ph ys ic al F low
I nf orma tio n F low
In ter -si te Ph ys ic al F low
1 20 1 10 1 00 90 80 70 60 50 40 30 20 10
Cyc le T ime
Eff o rt Ti me
Hours
• In f orma tio n abo ut pro du ction an d ma ter ia l req ui reme nts no t fo rmally co mmu nicated
• Re dundant i nf orma tio n about f inal ass embly s equ en ce track ed by sep arat e pro ce sse s
• Ou tsi de pro ce ssing th e f orming o f t he water cap in Ga lway expa nd s th e cyc l e ti me b y
a t leas t one wee k
C yc le Ti me: 117 h rs
Ef fo rt Time: 1 2 h rs
H ando ff s: 89
Di st ance
T ra veled: 11 63km
Value S tream Map ping
18
In tr a -s i te Phy s ic al Flow
I nf o rma tion Flow
Inter -s i te Phy s ic al Flow
240 220 200 180 160 140 120 100 80 60 40 20
Cy cle T ime
Eff ort T i me
Ho urs
Wel d
Warehou se
Du blin Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
Weld ing & Sandi ng
O ff i ces
Sub Ass embl y
Pr ess Br ake
S olde ri ng
S kinni ng
Of fi ce Of fi ce
Dubl in
G alway
Level 1 Physi cal Space Map (As-Is): F rame
Fro m
G alw ay
• Mult i ple pro ductio n c ont ro l systems in use wi th di f fer en t priori ties c oor dinated by sp ecia lis ts & l ine f eeders
• Ef for t t ime is 16% o f Cycl e ti me
• F ina l Asse mb ly uses contr ol b ox a va ilabi li ty t o determi ne frame line on seque nce
Cy cle Ti me: 191 hr
Ef for t Ti me : 31 hr
Han doffs: 5 63
Distance
I ntra-s ite: 395 2 m
V al ue Stream Map pi ng
47
Organiza tional Space Map (As-Is) - Order Replenishment Process
In tra-sit e Physic al Fl owIn formati on Flow
In ter -sit e Physic al Fl ow
S i te Ma rker
Bui ldi ng Ma rker
� Co mpl exi ty in t he pro ces s dri ve n
by mu ltipl e Info rmat ion System s
t hat requ i re h um an co nn ec ti vi ty
� Orga ni zat ion st ructu re drive s th e
manageme nt and lo gisti cs o f o rder re plenis hmen t p roc es s rather t ha n
effic ien cy a nd c ust omer ne ed s.
� F or part # 3D95 795 G0 7 the t im e
from rep le nish men t n eed being d etermi ne d un til that sp eci f ic part
get s as semb led o n a un it is ov er 1 4 wee ks
*An al ys is does no t in clu de d eta il ed process in Mi nneapo li s
Han d-o ff Sta tistics
In t er-Si te 5
Inside Dub l in 5
I nsi de Ga lway 22
I ns ide M inn eapo l is 3*
T otal Hando f fs 35
To tal N o des / Org s 2 0
CMS ( IS)
Mater i al Co ord inat or D ubl in
Kanb an L oc D ubl in
Shi ppi ng & R ecei ving
D ubl in
Ma ter ia l Coor di nat or
G alw ay
Pi ckli st ( IS)
Ma teria l R unner Queue
( Ga lwa y)
Mat er ia l R unner Galw ay
St ockr oom Galw ay
Shi ppi ng & Recei ving
Que ue G alw ayShi ppi ng & R ecei ving
G alw ay
T IM E S yste m ( IS)
P urchasi ng G alw ay
Lega cy
S ystem
S ales &
Market ing
Pla nning
G alw ay
Pla nning
Minne apol is
Ma nufact ur ing M inne apol is
Shi ppi ng & R ecei ving
M inne apol is
MASA , Minne apol is
Value S tream Map ping
29
Intr a -s i te Phys ic al Flow
I nf o rma tion Flow
Inter -s i te Phys ic al Flow
Dubl in
G alway
Level 1 Phy si cal Space Map (As-Is): Tube
Weld
ing
Outsid
e Stor
age
Du blin Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
Weld ing & Sandi ng
O ff i ces
Fi nal Ass em bl y
Sub Ass embl y
Pr ess Br ake
S olde ri ng
S kinni ng
Of fi ce Of fi ce
Outs ide V endo rs
C yc le Time: 108 h rs*
Tou ch Time: 3 h rs*
H ando ffs: 25*
Dis tan ce
Intra-s it e: 290 m*
* Doe s Not I nc lude Fi n al A ssem bly
• Mu lti ple production sy st ems at pl ay , compl e te ly d ef ea tin g any kan b an
production co nt ro l in iti ative s
• Ef fort ti me i s l es s than 3% of cyc le time*
• Pa rt go es th rou gh 9 q ueues f rom t ime rece ived thro ug h FA St ati on 11 queue
120 110 100 90 80 70 60 50 40 30 20 10 Ho urs
Cy cle T ime
Eff ort T i me
Val ue S tream Map pi ng
38
Cycle Time
E ffort Time
Weld
ing
Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
Weld ing & Sandi ng
O ff i ces
Fi nal Ass em bl y
Sub Ass embl y
Pr ess Br ake
S olde ri ng
S kinni ng
Of fi ce Of fi ce
Dubl in
Galway
Level 1 Physi cal Space Map (As-is) –Suppor t Brack et
Cycl e Time:
E f for t Ti me
Han dof fs:
71 .5 ho urs*
3 .8 ho urs*
34
D is tan ce
In tra-sit e: 582 m
• P ull sig nal is defeated by batchi ng and queu ing of parts. Th is par t icu lar part wa s “at t he top of th e h eap”
• E ffort t ime is 5% of cyc le ti me
• U nne cessary hand li ng s tep s e. g. s ub-assembly for a 45 sec ond s tep , movement o f cut p anels outside
In tr a -s i te Phy s ic al Flow
I nf o rma tion Flow
In ter -s i te Phy s ic al Flow
Y ard
*N eed fo r p art was id enti fied fiv e d ay s prio r to th is ; doe s no t i nc lu de f in al as s emb ly
120 110 100 90 80 70 60 50 40 30 20 10 Ho urs
Outs ide V endo rs
V al ue Stream Map pi ng
35
Weldi
ng
War ehou se
Du bli n Pl ant
P unchi ng
Machin e S hop
Shi ppin g & Re ceivi ngC ra ti ng
Test
Tubi ng
P aint S hop
Weld ing & Sandi ng
Off i ces
Fi nal Ass embl y
Sub Ass embl y
Press Br ake
S olde ri ng
S kinni ng
S ub-
Ass’ yOf fi ce
Level 1 Physical Space Ma p (As-Is): Back Idler Pu lley
I ri sh Express CargoFOMP
( It al ian Su pp li er)
In tr a-s it e Phy sic a l Flo w
In f orma tion Flow
Inte r -s it e Phy sic a l Flo w
12 0 11 0 10 0 9 0 8 0 7 0 6 0 5 0 4 0 3 0 2 0 1 0
Cycle T ime
Eff ort Ti me
Ho ur s
• Sequ ent i a l pro ces ses a re no t al i gn ed to support fl ow b etwee n pro ce sse s
• L on g setu p t im es ( 75 min vs . 5 min V A) in flu enc e 2- 3 week prod uc tio n run s
• Lo ng s uppl ie r l ead t ime s (8 week s) c reat e l arg e in vent ory req ui remen t s
C yc le Ti me: 57 h rs
Ef fort Ti me: 5 h rs
Hando ff s: 25
Di stance
I ntr a-s it e: 46 69 m
Dubl in
G alway
Value S tream Mapping
Collectively, the as-is analysis identified root cause production system characteristics that impeded the adoption of lean / flow operating techniques
Copyright © 2005 Deloitte Development LLC. All rights reserved.
A lean production system was designed using the EOE top-down reconfiguration approach while optimizing work and information flow
Tactical Implementations
Structural
Elements
Top
Level
Architecture
EOE Lean Reconfiguration
10
Final Assembly
Heat E
xchanger &
Tubing A
ssemblies
Skins
Cont rol Box
Accumulator Tank
Frame
Mixed Model Final Assembly
Blower Housing
The product family analysis revealed that six feeder value streams should be incorporated in the To-Be architecture to support the single SL assembly line
Assembly Value Stream
� Single SL model assembly line
Feeder Value Streams*
� Frame Value Stream
� Skins Value Stream
� Blower Housing Value Stream
� Control Box Value Stream
� Accumulator Tank Value Stream
� Heat Exchanger and Tubing
Assembly Value Stream
Value streams include all the work activities and materials/components preceding the delivery of completed products to final assembly or the customer
* Product famil y anal ysis provided in the Appendi x
To-Be Plant Architecture and Reconfiguration Princip les
79
SHEET STORAGE
FRAME
ROBOTIC
WELDING
WELDING
TEST
ASSEMBLY 1EVAC.
LEAK
TEST
PRETEST
DIP PAINTDIP
TANKS
SUB
ASS’Y
CD ASSEMBLY
MPE
CONTROL BOX
SOLDERINGSKINNING
TLE ASS’Y
POWDER PAINT
SPRAY TUNNEL
MAINTENANCE
STORES
FORM
SPOT WELD
LINER
SUB-
ASS’Y
ASSEMBLY 2MINI MARKET
PUNCH
Intra-site Physical Flow
Informa tion Flow
Inter-site Physical Flow
Cycle T ime
Effort Time
Hours
Level 1 Physical Space Map (To-Be): Control Box
• WIP in the s ystem reduced from 5 days to 3 days supply• Overall cycle time re duce d 43%
• Effor t time reduced by 14%
• 56% reduction in hand-offs by eliminating part tracking & chasing
Cycle Time: 16 hrs
Effort Time: 4.75 hrs
Handoffs: 19
Distance
Intra-site: 503m
Fabricated Products
Galway
Limerick
Galway
60 55 50 45 40 35 30 25 20 15 10 5
Material Handling
Appendix
27
Grills
Bonnets, Back Panels
Doors and Panels
Dip
Tanks
Paint
Line
Maintenance
The final physical location of the skin cell will take advantage of synergies with the paint area
To-Be Value Stream Reconfiguration – Feeder Value Streams
Product Value Streams Defined
Value Stream Material and Info Flows
Detailed Cell and Station Layouts
Copyright © 2005 Deloitte Development LLC. All rights reserved.
The lean plant architecture consisted of a mixed model assembly line and six product value streams linked by a demand-pull system
• Mix model end unit demand
• Product/part rate of use at final assembly
• Point of use
• Replenishment cycle time
• Synchronization points
• Floor space requirements and availability
Information required to make the
linkage between feeder and
final assembly value streams includes:
Initial implementation efforts focused on the “skins”product value stream
10
Assembly Value Stream
� Mixed-model assembly line
Feeder Value Streams (Cells)*
� Frame
� Skins
� Blower Housing
� Control Box
� Accumulator Tank
� Heat Exchanger and Tubing
Assembly
Final AssemblyMixed Model F inal Assembly
A product family analysis revealed that six “feeder” value streams should be incorporated in the To-Be architecture to support a mixed-model assembly line
EOE Cas e S tudy
Fram
es
Heat E
xchanger an
d
Tubing Assem
blies
Accumulator Tank
Blower Housing
Control Box
Value streams (Cells) include all the work activities from raw material to delivery of completed products to final assembly or the customer
Skins
Copyright © 2005 Deloitte Development LLC. All rights reserved.
141
2
111
0
987
5
Mini
Market
Step
Mini-Market 13
3
4
6
LdB
cart
1
2
Panels Bonnets Grills Doors
Pads
Color Skins
Pads Kits
Belly
band
K
i
t
s
P
a
d
s
SB
Skins
ST 14 Door
Subassembly
Reconfigured a remote
sub-assembly station to
an in-line, position –
enabling single piece
flow
Kanban Carts
Created specific
‘homes’ for
kanban carts and
positioned them in
close proximity to
their respective
stations
ST 8 and 9 Grills
Stations rotated to
eliminate safety
concerns stemming
from the operators
proximity to aisle
and forklifts
ST 5 Panels
Repositioned
bench to
decrease
operator walking
and permit ‘flow’
ST 13 Kits
Organized area by
creating specific
locations for material
bins and ordering them
according to their ‘order
of appearance’
Color Skins
Infrequently used
color skins are
separated from
black and white
Lean principles were applied to enhance the flow of skin parts to the assembly line, improve material management, and reduce operator movement
Copyright © 2005 Deloitte Development LLC. All rights reserved.
� Line balancing / sequencing
� Feeder line modeling
� Bottleneck identification
� Kanban planning / execution
� Resource calculation
� Production execution
� Flow scheduling
� Repository of sequence of event
data
� Presentment of operation method
sheets
Sample Oracle Flow Capabilities:
Stand-Alone FlowThe business transformation effort involved the deployment of the Oracle Flow Module to support the lean production architecture
Consequently, Oracle Flow requirements, functionality, and configuration were integral components of the lean redesign effort
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Reconfigured Skin Assembly LineFinal
Assembly
S050 – Unit
CleanS056 – Grill
Subassy
S058 – Door
Subassy
Spot, TIG, Sand
Flow Line
Skin Cell “Feeder” line
Kanban
Item
Producing
Line
Sizing
Calculation
Replenish
Lead Time
Oracle Flow was used during the design process to model the lean production system including the final assembly line, feeder lines, and kanban linkages
Kanban Planning
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Install Front &
Back Panel
Install Bonnet
& Mesh
Day shift
demand
Currently the
two stations
are staffed with
4 operatorsLabor
needed to
meet TAKT
Evening
shift
demand
Labor needed
to meet TAKT
Grill
Subassembly
Grill Fit
Both stations
can be staffed
by one operator
on evening shift
The mixed model mapping functionality helped optimize the flow of the skin assembly line
Copyright © 2005 Deloitte Development LLC. All rights reserved.
• Operators using the ‘Flow Workstation’ can view centralized OMS information from the shop floor
• Common work practices supports flexibility in choosing manufacturing locations for products
Assembly
sequence step
Process specific instructions
and quality information
displayed to operator
Operation Method Sheet (OMS) capabilities were employed to enhance work standardization and quality
Copyright © 2005 Deloitte Development LLC. All rights reserved.
63
Level 1 Physical Space Map (To-Be): Frame
Intra-site Phys ical Flow
Informa tion Flow
Inter-site Phys ical Flow
Cycle Time: 48 hrs*
Effort Time: 65 hrs*
Handoffs: 375
Distance
Intra-site: m*
Value Stream Analysis
Dubl in
Galway
* Does Not Inc lude F inal Assembly
• Machine resources for the frame reduced from twenty to twelve• Cycle time reducti on of 75% to 80%
• Effor t time reduction of approximatel y 25%
• Work in pr ocess i nventory reduction of 6 5%
FRAME
TEST
ASSEMBLY 1EVAC.
LEAK
TEST
PRETEST
SUB
ASS’Y
CD ASSEMBLY
MPE
CONTROL BOX
SOLDERINGSKINNING
TLE ASS’Y
POWDER PAINT
SPRAY TUNNEL
STORES
LINER
SUB-
ASS’Y
ASSEMBLY 2
Wel di ng
Rob ot 1
Wel di ng
Rob ot 1
Wel di ng
Rob ot 2
Wel di ng
Rob ot 2
Fr ame Wel din g R obot
Top And Bot tom Member s
S ide M ember sSTO PA
T 26 0 S /AT 26 0 S /A
S ide M ember s
F eederTS 500 ( 22) F eederTS 500 ( 22)
Top & Base Member s
Jackshaf t,
C ente r Memb er & O the r Par t s
GU ILLO TI NEGU ILLO TI NE
Wel di ngWel di ng
250 To n P re ss250 To n P re ss
8 0 P8 0 P
15
0 T
on
P/B
15
0 T
on
P/B
S m all E P S m all E P
Secon d P hase
Frame Wel di ng
Secon d P hase
Frame Wel di ng
T 26 0
L arge E P (28) L arge E P (28)
LV
D1 P
/B
LV
D1 P
/B
55 P
/B
100 P 100 P
Queu e
Queu e
Queu
eQue
ue
Small Brackets and Components Cel l
Dunk
R inse
R inse
R inse
A cid
R inse
R inse
R inse
Zinc
R inse
Pass
IP K
IP K
Paint B oot h
MAINTENANCE
Cycle T ime
Effort Time
240 220 200 180 160 140 120 100 80 60 40 20 Hours
64
Level 2 Physical Space Map (To-Be): Frame – Sheet Metal & Welding
* Does Not Inc lude F inal Assembly
Value Stream To-Be Design
Intra-s ite Physical Flow
Informa tion Flow
Inter-s ite Physical Flow
240 220 200 180 160 140 120 100 80 60 40 20
Cycle T ime
Effort Time
Hours
Cycle Time: 48 hrs*
Effort Time: 65 hrs*
Handoffs: 375*
Distance
Intra-site: 3500 m*
Welding
Robot 1
Welding
Robot 2
Frame Welding Robot
Top And Bottom Members
Side MembersSTOPA
T 260 S/A
Side Members
FeederTS 500 (22)
Top & Base Members
Jackshaft,
Center Member & Other Parts
GUILLOTINE
Welding
250 Ton Press
80 P
150 T
on
P/B
Small EP
Second Phase
Frame Welding
T 260
Large EP (28)
LV
D1
P/B
55 P
/B
100 P
Queue
Queue
Queue
Queue
• Machine res ources for the frame reduced from twenty to twelve• Cycle time reducti on of 75% to 80%
• Effor t time reduction of approximatel y 25%
• Work in pr ocess inventory reducti on of 6 5%
25
Value stream analysis indicates reality…unnecessary production complexity and multiple impediments to flow
Intra-s ite Physical Flow
Informa tion Flow
Inter-s ite Physical Flow
240 220 200 180 160 140 120 100 80 60 40 20
Cycle T ime
Effort Time
Hours
• Large imbalanced WIP i nventory level s required to sus tain current pr oducti on configuration
• Parts travel a total of 4.6 miles within the plant be fore frame is delivered to final assembly
• Value-added effort time is 15% of total cycle time
Cycle Time: 197 hrs*
Effort Time: 86 hrs*
Handoffs: 650*
Distance
Intra-site: 7353 m*
Value Stream Analysis
SHEET STORAGE
FRAME
ROBOTIC
WELDING
WELDING
TEST
ASSEMBLY 1EVAC.
LEAK
TEST
PRETEST
DIP PAINTDIP
TANKS
SUB
ASS’Y
CD ASSEMBLY
MPE
CONTROL BOX
SOLDERINGSKINNING
TLE ASS’Y
POWDER PAINT
SPRAY TUNNEL
MAINTENANCE
STORES
FORM
SPOT WELD
LINER
SUB-
ASS’Y
ASSEMBLY 2MINI MARKET
PUNCH
11
8
7
STOPA
Tool Die
U
80
100
T 260N
55 Ton
STOPA
Tool Die
U
80
100
T 260N
55 Ton
11
8
7
STOPA
Tool Die
U
80
100
T 260N
55 Ton
STOPA
Tool Die
U
80
100
T 260N
55 Ton
* Does Not Inc lude F inal Assembly
Level 1 Physical Space Map (As-Is): Frame
Dub lin
Gal way
Dub lin
Gal way
26
Complex routings increase WIP, material handling, and cycle time
* Does Not Inc lude F inal Assembly
Value Stream Analysis
Intra-s ite Physical Flow
Informa tion Flow
Inter-s ite Physical Flow
240 220 200 180 160 140 120 100 80 60 40 20
Cycle T ime
Effort Time
Hours
• Each frame consists of 81 parts tha t must be planned, pr oduced, and managed
• Complex producti on system requires “informal” pr oducti on control
• Process involves nearly 650 transacti ons (informati on and physical )
Cycle Time: 197 hrs*
Effort Time: 86 hrs*
Handoffs: 650*
Distance
Intra-site: 7353 m*
Level 2 Physical Space Map (As-Is): Frame
Fork lift
W eld ing
Queue 1
W eld ing
Robot 2
Weld ing
Robot 2
Spot
Weld
100 Ton 150 TonLVD2
STO PA
ROLLER CONV EYOR
Tool Die
50 Ton
Supervis or
U
80
100
160 T P
RES
S
GUILLOTINE
250 Ton Press
CNC T 260T 260
N
55 TonSmall EPLVD1 P /B
P /B
Fork lift
W eld ing
Queue 1
W eld ing
Robot 2
Weld ing
Robot 2
Spot
Weld
100 Ton 150 TonLVD2
STO PA
ROLLER CONV EYOR
Tool Die
50 Ton
Supervis or
U
80
100
160 T P
RES
S
GUILLOTINE
250 Ton Press
CNC T 260T 260
N
55 TonSmall EPLVD1 P /B
P /B100 Ton 150 Ton
LVD2
STO PA
ROLLER CONV EYOR
Tool Die
50 Ton
Supervis or
U
80
100
160 T P
RES
S
GUILLOTINE
250 Ton Press
CNC T 260T 260
N
55 TonSmall EPLVD1 P /B
P /B LVD2
STO PA
ROLLER CONV EYOR
Tool Die
50 Ton
Supervis orSupervis or
U
80
100
160 T P
RES
S
GUILLOTINE
250 Ton Press
CNC T 260T 260
N
55 TonSmall EPLVD1 P /B
P /B
As-Is Frame To-Be Frame
Machines reduced
from 20 to 12
Effort time reduced by
25%Cycle time reduced by
75%
WIP inventory
reduced by 65%
Reconfigure
Simulation of the reconfigured product value streams highlighted significant performance improvement opportunities
Footprint
reduced 40%
Copyright © 2005 Deloitte Development LLC. All rights reserved.
• Lower product cost
• Reduced cycle times
• Reduced working capital
• Increased order delivery performance
• Improved quality
• Less space
• Greater flexibility
• Fewer transactions
In summary, EOE generated significant financial benefits by simultaneously configuring production operations and technology to support flow
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Summary Points
• This approach drives substantially more value through the Oracle transformation program
• The approach takes a systematic approach to improvement…focus your energy and resources on the most critical processes and activities
• Incorporation of lean and six sigma in the program supports corporate operational excellence goals and can provide a more strategic alignment between IT and the lean initiative
• A more operationally oriented design reduces risk and increases adoption
Copyright © 2005 Deloitte Development LLC. All rights reserved.
Contact
Rajesh Bhageria
513-253-5431
Matt Louis
513 314 9870
For Additional Information
Copyright © 2005 Deloitte Development LLC. All rights reserved.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. Deloitte Touche Tohmatsu is an organization of member firms around the world devoted to excellence in providing professional services and advice, focused on client service through a global strategy executed locally in nearly 150 countries. With access to the deep intellectual capital of 120,000 people worldwide, Deloitte delivers services in four professional areas – audit, tax, consulting and financial advisory services – and serves more than one-half of the world’s largest companies, as well as large national enterprises, public institutions, locally important clients, and successful, fast-growing global growth companies. Services are not provided by the Deloitte Touche Tohmatsu Verein, and, for regulatory and other reasons, certain member firms do not provide services in all four professional areas.
As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other’s acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names “Deloitte,” “Deloitte & Touche,” “Deloitte Touche Tohmatsu,” or other related names.
In the U.S., Deloitte & Touche USA LLP is the U.S. member firm of Deloitte Touche Tohmatsu and services are provided by the subsidiaries of Deloitte & Touche USA LLP (Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, Deloitte Tax LLP and their subsidiaries), and not by Deloitte & Touche USA LLP. The subsidiaries of the U.S. member firm are among the nation’s leading professional services firms, providing audit, tax, consulting and financial advisory services through nearly 30,000 people in more than 80 cities. Known as employers of choice for innovative human resources programs, they are dedicated to helping their clients and their people excel. For more information, please visit the U.S. member firm’s Web site at www.deloitte.com/us.