Introduction to Lean Manufacturing
Enhancements Part 1: SAP as a Lean Manufacturing EnablerPart 2: Lean Manufacturing Enhancements
Part 1: SAP as Lean Manufacturing Enabler
Key Drivers and Business StrategiesHow does SAP Enable Lean?
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Manufacturing Key Drivers and Pain Points
Long manufacturing lead times
Difficulty in achieving on-time delivery targets
Low inventory turns (unnecessary high inventory level)
High demand for storage space at a production line
Less labor productivity because of non-value-added activities
Limited flexibility to adapt to unplanned events
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Customer Business Strategies
Production to customer demand or based upon consumption
Shifting to single-piece-flow approach
Poka yoke (mistake-proofing)
Visual management
Kanban
Event and exception based processes
Jidoka: operators empowered to stop line if there is an issue
Kaizen: continuous improvement
Organizational Strategies
Manufacturing Strategies
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Top 10 Business Initiatives Influencing IT Investments
“AMR Research recently surveyed over 500 IT and business executives in 7 manufacturing vertical industries to determine the key business initiatives driving ITspending in 2005.
In all industries, Lean manufacturing was identified as the first or second most important initiative.”
Source: AMR Research: East Meets West – Lean Manufacturing and ERP Are a Better Fit Than You Think, October 2005
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
SAP as Enabler for Lean Manufacturing
“ Recent evidence [...] uncovered that automotive manufacturers that are backingtheir Lean efforts with an SAP platform are not only outperforming automotivecompanies that have chosen Oracle, they are even better equipped to beat thebest, with automotive SAP customers outranking even the Best in Class formanufacturing cycle time.
Maura Buxton, Aberdeen Group, Automotive Industry Leads the Lean Supply Chain Charge with SAP Solutions, August 2006
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Lean Customers: Automotive
China MotorCorporation
GRUPO ANTOLIN-IRAUSA, S.A.
PT ASTRA
SIEMENSVDO
SOFEDIT
South Africa
TVS MOTOR COMPANYIndia
Part1: SAP as Lean Manufacturing Enabler
Key Drivers and Business StrategiesHow does SAP Enable Lean?
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
How is Lean Manufacturing Enabled by SAP?
Supply Chain ManagementCustomer & Supplier Collaboration
Mixed-Mode Manufacturing:
- Make-to-Order Manufacturing
- Repetitive ManufacturingOrder-less production
- Flow Manufacturing TechniquesLine DesignSequence of eventsOperational method sheetsCapacity line balancingTakt calculationsDetailed planning and sequencingBackflush
KanbanIn-house movement, stock transfers, and external procurementEvent-driven or one-time KanbanKanban replenishment with or without MRPInternet-based electronic Kanban for external procurement
Preventive/Predictive Maintenance
Quality ManagementStatistical Process Control
Business Intelligence & IntegrationxMIIKPIs, Analytics, AlertsRole-based configurable portals
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Lean Manufacturing: Transactions in SAP ERP
Here you see standard transaction codes in SAP ERP associated with
functionality.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Sequence of Events: Tasks
Detailed tasks are listed with respective time for setup, labor,
machine, or move
Indicate if each task is Non-Value-Added (NVA)
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Sequence of Events: Materials
Indicate component quantity used for each
task
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Sequence of Events: Production Resources and Tools
May assign tools, equipment, and drawings to each task
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Graphical Display of Line
Graphical display of line can show main path and all feeder paths
Critical path is designated by red highlighting
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Operational Method Sheet
Material and Tasks are displayed for each workstation
Drawings or graphical representations are displayed
for each workstation
Tools and equipment may be listed for each workstation
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Line Balancing: Volume Design and Takt
Total volume of units (products) planned to run on line is 150. Total time
available is 600 minutes. Therefore, Takt is 600/150 or 4 minutes.
Volume of each product to be produced on the line
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Line Balancing: Total Product Cycle Time
For each product, you can see total execution time or Total Product Cycle Time (TPc/t) and the amount of time that is non-
value-added (NVA). NVA is muda, or waste, and may be targeted for elimination to
reduce cycle time.
Note: Takt violation for this product at this operation – 4.1 is greater than 4
minute takt or available time
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Graphical Line Balancing: Takt Violation
In a graphical display of each product by workstation, you can
see the Takt violation for a product highlighted in red
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Graphical Line Balancing
When task 70 is selected, you can see that it is system test and .90 minutes are
required at the workstation. If operators are cross-trained at each workstation, this
is a candidate for work to be moved to better balance the line.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Graphical Line Balancing: Drag & Drop Operation
Task 70 can be dragged and dropped to a different workstation. This is a simulation until saved – once saved, it will update Sequence of
Events (SOE) and may be pulled into the Operational Method Sheet.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning Board - Level Loading for Production
Pool of orders that need to be scheduled and sequenced on the line.
This section shows Primary and Alternate Lines or work centers where orders may
be scheduled and sequenced.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning Strategy
Scheduling Stategy Profile
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning Board
Work is sequenced according to strategy profile. Here, setup times are not optimized.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning Strategy – Optimize setups
Designate to optimize based upon setup time.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Planning and Sequencing – Setup Optimization
Work is now scheduled in a different order to minimize setup times. Some of the setups are
now shorter. Throughput time is shorter.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Board: Demand Source View
Kanbans may be selected and click on “To Empty” or “To Full” to change status and
respective transactions occur automatically.
The boxes above represent Kanban containers which are color-coded to
indicate status.
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Control Cycle
View the number of kanbans and kanban quantity as well as designating maximum
amount of empty containers that may generate an alert to take action.
Control cycle details such as supplying area and plant.
The vendor and agreement designated will be used to automatically generate releases
to the supplier.
Part 2: Lean ManufacturingEnhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)Production Leveling based on Heijunka Processes
Kanban Analytics
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Board – Automatic Refresh
Benefits:• Kanban Boards can be used for monitoring the shop floor with user
interaction only for exceptions
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Board – Tabular view
Benefits:Provides the same information as the graphical board in a tabular displayEasy to configure, easy to useExtensible to display additional system and customer-specific fields Sophisticated print function Can be displayed in web-based user interfaces (Portal)
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban – New Business Application Interfaces
New BAPIs for Kanban Data and Control Cycles:
• BAPI_KANBANCC_EXISTCHECK• BAPI_KANBANCC_GETLIST_ALL• BAPI_KANBAN_GETLIST_ALL• BAPI_KANBANCC_CREATE• BAPI_KANBANCC_CHANGE• BAPI_KANBANCC_DELETE• BAPI_KANBAN_CHANGE
Benefits: Supports customer-specific process control and development
Part 2: Lean ManufacturingEnhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)Production Leveling based on Heijunka Processes
Kanban Analytics
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Alerting
New alerts supported in the Kanban process:1. Alert when errors occur while changing Kanban status2. Alert when replenishments are deleted3. Alert when maximum limit of EMPTY Kanbans is exceeded4. Alert when deliveries are delayed
Benefits:- Manage by exception – if there is no alert/message, no action is
required- Ease of exception handling- Can configure alerts so only appropriate parties are alerted with
their preferred communication method
Part 2: Lean ManufacturingEnhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)Production Leveling based on Heijunka Processes
Kanban Analytics
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban – Process with RFID
Kanban (with RFID Tag)
Source
MaterialFullFull
FullFull
Empty
RF Gate
Automatic Kanban status change, goods receipt posting and
creation of the material document
Automatic Kanban status change and creation of a replenishment element,
e.g. a PO
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
RFID in Kanban – Business Benefits
Cost Reduction:Time savings through automatic status changeNo interaction with screens for end usersReduced labor costsReduced cost of incorrect data
Better Process stabilityLess dependence on worker, thus less human error
Part 2: Lean ManufacturingEnhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)Production Leveling based on Heijunka Processes
Kanban Analytics
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
In-house Production in Repetitive Manufacturing
In-house Production with Kanban (current): Operation 1 Operation 2 Operation 3
mat mat mat
RP 1 RP2 RP3Routing Operation 1 Operation 2 Operation 3
mat1
StorageLocation0002
StorageLocation0003
mat1 mat1
Final backflush
Supply Areamat1
StorageLocation0001
Component
Control cycle mat1
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
In-house Production with Reporting Point Kanban (new)
In-house Production with Reporting Point Kanban (new):
Operation 1 Operation 2 Operation 3mat mat mat
RP 1 RP2 RP3Routing Operation 1 Operation 2 Operation 3
mat1Component
StorageLocation0001
StorageLocation0002
StorageLocation0003
mat1 mat1
Final backflush
SA 1 SA 2 SA 3CC 1 CC 2 CC 3
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
In-house Production with Reporting Point Kanban (new)
Background:Kanbans are more effectively used for the shop-floor controlPull principle in shop-floor control (work load for each operation/reporting point is represented by an empty kanban); operation n controls the previous operation n-1 (not vice-versa)The allocation of material to the work center is assigned dynamically -- due to the stock level, capacity, etc.Reporting Points monitor the production progress between operationsManufactured parts at each reporting point are backflushed to the reporting point
Benefits:Visibility and reduction of WIPAssemblies are only produced when needed and in the quantity neededAvoiding reworkElimination of waste Simplified and flexible production process
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
In-house Production with Reporting Point Kanban
Part 2: Lean ManufacturingEnhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)Production Leveling based on Heijunka Processes
Kanban Analytics
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka – Definition & Business Benefits
Heijunka: Toyota Production System (TPS) term
“The distribution of production volume and mix evenly over time”
Business Benefits:Convert uneven customer pulls into an even and predictable manufacturing scheduleStabilize the material and value flow Decrease production lead times and inventoriesIncreases production flexibility and delivery reliability
Mission: Produce every product, every day, several times
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka – Process Requirements
Load Leveling Volume and Mix
Material A
Material B
Material C
M T W T F
Uneven production volume and product mix
Material A
Material B
Material C
M T W T F
Leveling production volume
Material A
Material B
Material C
M T W T F
Leveling product mix
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka – Process Requirements
Load Leveling Volume and Mix
Material A 30 PC Requirement situationof a shift or day20 PCMaterial B
Material C 60 PC
Material A 10 PC Lot calculation by MRP or Kanban controlcycles
Material B 5 PCMaterial C 20 PC
Material AMaterial BMaterial C
Heijunka: Sequencing/Leveling of finishedgoods
Heijunka: Sequencing/Leveling of semi-finished goods
Material DMaterial EMaterial F
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka – Leveling/Sequencing
Several tools and functions already in the SAP portfolio to support Leveling/Sequencing:
Tools and functions for demand leveling: SOP (mySAP ERP)Demand Management (mySAP ERP, mySAP SCM)Model Mix Planning (mySAP SCM)
Tools and functions for production leveling: SOP (mySAP ERP)Demand Management (mySAP ERP, mySAP SCM)MRP (mySAP ERP, mySAP SCM)Tabular Planning Board (mySAP ERP, mySAP SCM)Capacity Planning (mySAP ERP, mySAP SCM)Sequence Planning (mySAP ERP, mySAP SCM)
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka – Leveling/Sequencing
Enhancements leverage key features and functions of mySAP ERP to support Lean Manufacturing processes:
Pull principle for the control of in-house production, external procurement and transport processes using KanbansOrder-less or order-independent production planning and control using Repetitive ManufacturingTakt-based planning and scheduling in the Sequence planning
Newly designed process uses the following application areas of mySAP ERP:
Material Requirements Planning (MRP)Repetitive Manufacturing (REM) KanbanSequence Planning
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Enhanced Heijunka Process:
1) MRP calculates requirements Lot size calculation within the leveling/sequencing horizon uses fixed lots representing the relevant Kanban quantities Fixed lots in short time horizon, daily or weekly lots in long time horizon
2) MRP creates planned orders and projects capacity requirementsCapacity leveling and sequencing is possible based on MRP planned orders
3) Kanban process control production based on actual demand (internal or external)
Extension of the current process: The Kanban module (change status to EMPTY) does not create a new planned order which replaces existing MRP planned ordersInstead the system searches for a suitable scheduled MRP planned order and links it to the KanbanThis enables keeping the scheduling/sequencing situation stable within the planning horizon Additional scheduling/sequencing algorithms
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka Board - Execution
1. Sequence planning board – supporting sub-day time segments
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Heijunka Board - Execution
2. Kanban board (graphical or tabular format)
Part 2: Lean ManufacturingEnhancements
Enhancements to existing Kanban Processes
Alert-based Kanban Process Monitoring
RFID-enabled Kanban
Reporting Point Kanban (Kanban for WIP Material)Production Leveling based on Heijunka Processes
Kanban Analytics
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Kanban Analytics: KPIs available in BI content 7.1.2
Actual replenishment lead time / replenishment lead time from control cycle Actual quantity delivered / call-off quantity from control cycle Wait time (time span between status empty and full), other interoperation times like empty-transit, transit-full, etc. Number of defects per time unitCorrection of defects per time unit (time span from defect status to productive status) Stock in production supply area (number of full boxes)Actual empty boxes / maximum of empty boxes from control cycle
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Summary - Key Takeaways
- Lean is a top priority in today’s manufacturing environment
- SAP enables Lean Manufacturing processes through current functionality such as Kanban
- SAP will continue to provide value to our Manufacturing customers by enhancing our solutions to more effectively support Lean
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
Your Turn!
Jutta Wesemann-RuzickaSolution Manager
Q&A
© SAP AG 2006, Lean Manufacturing Developments ERP 2005, Jutta Wesemann-Ruzicka
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