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First steps for improving the performance of companies using Lean Six Sigma methodology, starting with manufacturing and supply chain departments (partial presentation).
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Improving the organization's performance by using Lean Six
Sigma methodology
Rodica Ghinea
July 2013
when talking about Performance = evaluating the financial performance
July 2013
Performance = a comprehensive approach including both financial and non-financial aspects
In the late 1950’s
currentlycurrently
LEANLean Manufacturing =
Sistemul de Productie Toyota (TPS)
improving the processes by eliminating waste
Six SigmaSix Sigma- Motorola
set of tools and strategies for improving the quality
LEAN- Six Sigma a combination of the two methodologies for improving the
performance of a process / company through systematic application of tools, strategies and politics for continuous improvement
+
+
July 2013
To build a company's Development Plan
started with the company processes
To determine the structure of the
business (product distribution)
July 2013
In order
For that:
Know the business
July 2013
Analyze current processes in Supply Chain
Analyze current processes in manufacturing
Build the actual VSM
Build the future VSM
Improve services
And that means:I. Build VSM
II. Establish the activities that bring add value
Kanb
an
build
ing
map
v
alue
Rem
ove
was
te
III. Through the stock management
Use
wor
k st
anda
rd
Supp
ly C
hain
July 2013
Made an analysis of business structure
A = high runner = 73 products bring 80 % turnover
B = repeater = 130 products bring 19% of turnover
C= stranger = 66 products bring 2 % of turnover
Tool used: Paretto Diagram
July 2013
A B C0
20
40
60
80
100
120
140
73
130
66
number products
1761066 RON
7511953 RON
76581 RON
Which helped to make the decisions:
July 2013
Automatizations
Lean Cells
Customizedproduc
ts
For A products (high runners)
For B products (repeaters)
For C products( strangers)
I. Build VSM
July 2013
Performance before implementation:
7 activities; OFR = 90%; MTPT = 140 days; OEE = 65% LT = 25 daysEfficiency = 65% Tact time = 5.7 sec
Based on data collected has been built the future status for VSM
July 2013
FUTURE STATUS
After implementation of the new VSM expect to:
July 2013
reduce the number of the activities to 4;
with an OFR = 95%; and rotate the material stock at each 100 days (MTPT = 100 days); with a rate of using the equipments of 85 % ( OEE)
and delivering the A products in 5 days (LT = 5 days)
To obtain this performance needs to implement the VSM- action plan
July 2013
Action Product type responsible data
Implement the cells layout B HS mar.13 Kanban implementation inter-
operational A, B VA dec.13 Implementation Kanban finish
product A, B DC ian.14
Implementation Kanban-secondary operations
A, B SN sep.13
Implement work standard for each product family
A, B BB nov.13
Design and implement Kanban for primary parts
A, B CB mar.14
Standardise the box for parts A, B GH aug.13
Implement a conveyor between packaging and verification B GI may.14
“U” CELL
July 2013
price
New layout 300 euro/pcs
II. Status of waste (MUDA)
July 2013
Work time: 8 h
Production time : 2.75 h
Defects or purchasing activities : 4.25 h
manufacturing
defects
purchasing
waste distribution (hour)
waste
waste
adding value
2,75
1,25
3
About 70% of work time is lost.
To increase the value added need to be implemented the
following activities:
July 2013
Activity Price Responsible statusDesign and implement a new assemble table
600 eur BU Manager Implement standard work
0 Engineer
Kanban implementation
0 Engineer
July 2013
75
150
131
Productivity after implementation
manufacturing through Kanban implementa-tionthrough work standard
After implementation the productivy will increase as:
July 2013
1. Increase productivity
2. OFR = 92%
3. OEE = 85%
4. Decrease stock by 20%
5. Increase workplace ergonomics
6. Released a surface of 300 square meters
before implemen-tation work stan-
dard
after 1 month after 6 monts0
50
100
150
200
250
300
350
152
240
300
Evolution productivity
Series1Linear (Series1)
After implementation :
Red- crises situation- not enough time to bring in time !
Yellow - warning signal- a good moment for ordering
Green – enough parts for production
Code of colour:
July 2013
Kanban: Card that contains all identifiers landmark for an article/ sub-assembly / finished product, such as: code, quantity, position, destination provider.
III. Kanban
delay in deliveries
Model: Design Kanban
July 2013
III. Kanban
monthly
consumption min max box type A box type B box type C
anti-drill plate 13206 4052 10129 10
2.5" SH cap 3VL 1935 484 1209 2
2.5" SH cap5VL 7163 1791 4477 4
2.5" SH cap 5BA 659 165 412 1
2.5" SH cap 5E 863 216 539 1
2.5" SH cap 5OV 3046 762 1904 4
3" SH cap 3VL 1935 484 1209 2
3" SH cap 5VL 3112 778 1945 4
3" SH cap 5BA 659 165 412 1
3" SH cap 5E 863 216 539 1
3" SH cap 5OV 762 762 1904 4 4
III. Supply Chain To understand the situation, it has used another tool- the Ishikawa Diagram:
Iulie 2013
July 2013
III. Supply Chain
hours %0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
22.7 55.3
17.3 44.7
Supply Chain structure
MUDAvalue added
The activities developed into the Supply Chain Department have been analysed. Around 44.7% of weekly work time it is lost.
July 2013
III. Supply Chain To improve the performance of department has been established an action plan to improve purchasing services
ActionA P
C D
A P
C D
A P
C D
A P
C D
A P
C D
A P
C D
A P
C D
A P
C D
implemen tthe matrix communication with clients and / or suppliers
establish responsible for purchasing on group materials
make decision buy/not buy in max 48 h
build a new and simplified map of processes for supply chain
Status
group documents by category
standard implementation for organizing shelves
processing orders based on FIFO principle
implementing standardized document for purchasing indirect materials and for services
July 2013
< 3 months (3:6]months (6:12]months (12:24]months > 24 months0
5000
10000
15000
20000
31141118
31351113 998
12117
2118
5086
1126
88
4543
1737
3024
308
635
985
00
Stock Distribution
merch.
selling
raw mat.
indirect ma-terials
components
packaging
(*10
00) R
ON
Has developed an analysis to understand the distribution of stock:
July 2013
1. Implement an working standard for procurement process
2. Introduce the order into the ERP operating system-max 48h
3. appointment responsible for articles category purchasing
4. Construction ERP interface easily accessible without risk
Strategic actions:
1. Reduce the variant of type packaging
2. Implementing Kanban to the supplier for components and raw materials
3. identifying new suppliers in Romania / Europe
Based on the analysis has been established the action plan
Results after implementation
July 2013
< 3 m
onths
(3:6]months
(6:12]months
(12:24]months
> 24 m
onths0.0
2500.0
5000.0
7500.0
5048.8
882.62119.2
0.0 0.0
1892.8
723.8
1260.0
0.0 3.3
stock trend after implementation
merch.sellingraw mat.indirect materialscomponentspackaging
(x10
00)
RON
packag
ing
componen
ts
indirect
materia
ls
raw m
at.
merch.
0
5000
10000
15000
20000
25000
Stock trend after implementation
beforeafter
Conclusions
July 2013
KPI before trend after
OFR (%) 90 95
MTPT (days)
140 100
OEE (%) 65 95
Stoc (%) 45 15
LT (days) 25 5
Performance
Company
For:- questions- helping to save your company- helping to develop your company/department- guidance for developing performance project
write to me on : [email protected]
July 2013
Some slides were removed from the initial presentation.
Thank You!
July 2013