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1
Professor Peter Hines, 2005
Researching,
Researching, applying,
applying,
&
& communicating
communicating
lean
lean thinking
thinking
2
Professor Peter Hines, 2005
Overview
3
Professor Peter Hines, 2005
4
Professor Peter Hines, 2005
1997
1997
1999
2000
2002
5
Professor Peter Hines, 2005
6
Professor Peter Hines, 2005
Cost-Value
Equilibrium
2
1
x
Creating
CreatingLean
LeanSolutions:
Solutions:
1.
1.Reduce
ReduceInternal
InternalWaste
Waste
2.
2.Develop
DevelopCustomer
CustomerValue
Value
Waste/Cost
7
Professor Peter Hines, 2005
SUPPLY
CHAIN
RESPONSE
MATRIX
Over
Production
Waiting
Transportation
Inappropriate
Processing
Unnecessary
Inventory
Unnecessary
Motion
Defects
BIG
PICTURE
MAPPING
FOUR
FIELDS
MAPPING
DEMAND
AMPLIFICATION
MAPPING
DECISION
POINT
ANALYSIS
H
M
PHYSICAL
STRUCTURE
VOLUME
VALUE
L
L
H
M
H
8
Professor Peter Hines, 2005
Focus
Business Process
Industry Sector
Automotive Assembly
Gaps
9
Professor Peter Hines, 2005
Focus
Business Process
Industry Sector
Gaps
Human Element
Supply Chain
Systems Perspective
Value Stream Mapping
10
Professor Peter Hines, 2005
Lean Enterprise
Focus
Business Process
Industry Sector
(Repetitive) Manufacture
Gaps
11
Professor Peter Hines, 2005
System Capability
Focus
Business Process
Integrated Processes
Industry Sector
All Manufacturing/Service
Gaps
12
Professor Peter Hines, 2005
Volume
Max
80
Average
70
Min
Vehicle
Manufacturers
Outbound
Logistics
Distribution
& Retail
60
50
40
30
20
10
Customer
Marketplace
Outbound
Transit
Loading &
Despatch
Vehicle
Production WIP
On-site Part
(VM)
Inbound Transit
Finished
Components
Assembly WIP
Pre-Assembly
WIP
In-house built
Parts
Bought-out Parts
0
Raw Material
Days of Inventory
Inbound
Logistics
First Tier
Suppliers
100
14
Professor Peter Hines, 2005
15
Professor Peter Hines, 2005
Spaghetti Diagram
Customer Car Park
Valeting Area
Customer
Delivering
Car
Parts
Store
Service Workshop
Technician
& Valeter
Activity
Service Desks
Coffee
Area
Customer
Collecting
Car
30 round
Forecast
Planning
Operator
Random
Supply
Lean Ltd.
30 pieces
per 7.5 min
1 every 15 sec
15s Order
Numerous Variety
Batches
Operation 1
I
Red
Blocks
510 sec
Variety = 3
1 piece per time
Managers Schedule
Operation 2
I
C/T = 5 sec 5 blocks
Uptime =
100%
450 sec av
Batch = 10
Variety = 3
510 sec
7 sec
Operation 4
I
C/T = 7 sec 4 blocks
Uptime =
100%
450 sec av
Batch = 9
Variety = 3
60 sec
75 sec
5 sec
Operation 3
I
C/T = 5 sec
Uptime =
100%
450 sec av
Batch = 1
Variety = 3
30 sec
60 sec
7 sec
2 blocks
5 sec
Planning
Forecast
Blocks R Us
Lean Ltd.
TAKT =
15 sec
10s Order
Supply to
Pull
Order
Daily Order
Standard Number
Changeover
Milk
Round
1
Operation 1
Red Batch
Blocks
White
Blocks
20 sec
Variety = 3
1 piece per time
Operation 2
Operation 3
Operation 4
Waste
Elimination
C/T = 5 sec
Uptime =
100%
300 sec av
Batch = 1
Variety = 1
5 sec
20 sec
C/T = 5 sec
Uptime =
100%
300 sec av
Batch = 1
Variety = 1
C/T = 5 sec
Uptime =
100%
300 sec av
Batch = 1
Variety = 3
5 sec
5 sec
5 sec
R
Y
G
60 sec
19
Professor Peter Hines, 2005
Flow VA % Area Dist Time People C/T Up/T Avail. T Batch Var
20
Professor Peter Hines, 2005
21
Professor Peter Hines, 2005
700000
600000
Product Defects
500000
Service Defects
Scrap
400000
300000
200000
100000
0
Blanking
Pressing
Assembly
Paint
Despatch
22
Professor Peter Hines, 2005
KNIT
SIZE
COLOUR
PIECE
PARTS
GREY
FABRIC
YARN
KNIT
DYE
PACK
CUT
SEW
PRODUCT
PACKED
PRODUCT
(FGS)
COLOURED
FABRIC
VARIANT
FLEXIBILITY
LEAD TIME
(TUBE)
PACK
SIZE
COLOUR
GAUGE
23
Professor Peter Hines, 2005
cost
r e d u c t io n
o p p o r t u n it y
2.0
1.5
H o r iz o n ta l p la te a u s h o w
o p p o r tu n itie s fo r
P o s t- A s s e m b ly
d e c a n tin g , in s p e c tin g
e tc
W IP s to r e
le a d - tim e r e d u c tio n
1.0
A s s e m b ly
o p e r a tio n s
0.5
re c e iv e
g o o d s in
s to r e g o o d s in
P r e s s o p e r a tio n s
0.0
100
50
200
150
300
250
350
Time (hours)
RS Components Course
Professor Peter Hines, 2005
2.0
2 .2 9 T o ta l
2 .0 1 V A
3 3 7 h rs
1.5
*
*
1.0
*
*
0.5
100
50
200
150
300
250
350
Time (hours)
RS Components Course
Professor Peter Hines, 2005
2.0
2 .0 3 T o ta l
1 .9 6 V A
2 2 5 h rs
1.5
1.0
100
50
200
150
300
250
350
Time (hours)
RS Components Course
Professor Peter Hines, 2005
Customer
Service Team
Finance
Filing
Reception
Senior
Time
Finance C/W
2 - 7.5 2 hrs
hrs
Monicas
Table
Finance
No
Charge
Legal/Means
Phase 2
Yes
Finance Phase 2A
Resource
No
Yes
Charge
Non
Charge
2 hrs
1 wk 34 wks 1 hr
Tag
1 hr
Pull
0.25 hr
Need Yes
File
39
hrs
Get File
No
Skills
No
Yes
Skills
No
0.1 2
hrs
4 Senior
Case Work
Yes
Process
Post
Process
Post
Post
Bucket
Post
Bucket
1 wk
0.5 hr
Post
Bucket
13 to
248
days
3:20 to
5:15
hrs
Total
27
Finance Phase 2A
Charge
Non Charge
Charge
with files
Non Charge
With files
Read
Letter
Read
Letter
Skills
Yes
No
Skills
Filing
Senior
Case Worker
Time
Resource
Referral
Yes
Need No
File
Need
File
Yes
No
mins
mins
Yes
Get File
Get File
Pull File
Process
Process
Process
Post
Bucket
Post
Bucket
Post
Bucket
2 hrs
2 hrs
5 mins 5 mins
Calculated per piece of post
Post split into 1st, 2nd, Dx
30 mins 30 mins
to 4 hrs to 2 hrs
25 mins 30 mins
Total
28
29
Professor Peter Hines, 2005
Operational Level
Customer
Understanding
Process Activity
Understanding
Process Costing
Understanding
Value Stream Mapping
30
Professor Peter Hines, 2005
31
Professor Peter Hines, 2005
Vision
Year 3 Year 4 Year 5
2.9%
3.2%
3.5%
8.8%
9.4%
10.0%
23.0% 23.0%
23.0%
21.4% 23.2%
25.0%
1.0%
0.9%
0.9%
7.5/7.5 7.8/7.8
8.0/8.0
80%
80%
80%
48%
54%
60%
28%
29%
30%
3.0%
3.5%
4.0%
640
670
700
348
374
400
84%
92%
100%
8
8
8
8
8
8
44.0% 45.5%
47.0%
60.0% 67.2%
74.5%
63.4% 67.4%
71.5%32
85%
95%
100%
Professor Peter Hines, 2005
Importance
2.50
Satisfaction
2.00
1.50
1.00
0.50
Te
O
rm
rd
er
s
/D
el
iv
er
y
Ti
m
D
e
ea
le
rR
ep
ut
at
io
St
n
af
fa
tt
he
D
ea
le
r
D
ea
le
rF
ac
Af
ilit
ie
te
s
rS
al
es
Se
rv
ic
e
ic
e
Pr
Pa
ym
en
t
Pr
od
uc
tC
Br
an
d
ha
ra
ct
er
is
tic
s
0.00
33
Professor Peter Hines, 2005
ACTIVITY
AREA
DIST MTS
TIME MIN
PEOPLE
(FVA/VA/SA
/W)
SA
W'
SA
W
SA
SA
SA
SA
W
W'
.
.
W
SA
Showroom
Showroom
Showroom
Showroom
Showroom
Showroom
Showroom
Showroom
Showroom
Showroom
20
0
0
0
0
0
0
0
3
0
0.25
2
0.5
2
0.1
0.1
1
0.25
0.5
120
1
1
2
2
2
2
2
1
1
0
T
D
I
I
O
O
I
O
D
D
.
.
I
O
Showroom
Showroom
0
0
0.5
0.1
1
2
Showroom
0.1
SA
Showroom/Workshop
20
TOTALS
43
129.4
20
34
Professor Peter Hines, 2005
Check parts
& Pre -picking
3,5 min
Hot orders
PC Replenish
System
Work
division
cur
rier
Continue
scheduling
during day
Parts
storage
Mechanical
Work
5 operators
Prepare
Service Job
Cards
5 min - the day
before service
30%
24h - Local
storage center
48h -From other
dealer
Found more
repairs
Call customer
Final Road
Test
1/1,5 hours
70%
2 days
later
Understanding
Requirements
& Booking
90% phone call
10%personal visit
5 min
Large Repair
Small Repair
Done immediatly
Routine
Regular service
75% Service at
Dealer
25%
Concerns :break
5% down , warranty
Investigation &
Paperwork
95%
Lead
LeadTime
Time
3,6
3,6 days
days
Automatic
replenishment
Custom .collectio
n & Payment
Valeting
50% customers
Service
come back later
3
95% 22 min
25% waits at dealer
cars
5% 1,5 h
15% pick up from
= 1 hValue2 Stream
valeters Mapping
city centre
10% courtesy car
inv
oic
e
Accountant
(invoice
registr .)
the day after
Quality
Feed -back
Ring 3-5
days later 35
VA
??
Source car
Car arrival, Delivery arrang. & Service Booking
Invoice&AFRL
PDI - Mechanical Work&Road Testing
Valeting
Customer Collection
Totals
FVA
0.0%
??
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
-
SA
0.0%
??
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
-
W
0.0%
??
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
-
Activity cost %
0.0%
??
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
-
36
Professor Peter Hines, 2005
The Process
Costing Perspective
ASC Area
Storage Centre
Source
New Car
Finalise Deal
& Take Order
Sales DP - 3
10,081.24
Dealer Visit
& Test Drive
Sales DP - 2
19%
4,750.40
Decision
to Purchase
Sales DP - 1
9%
6,577.48
13%
Other Dealer
Stock
Own Stock
Think &/or
Visit Other Dealer
Factory Order
Invoice Emission
& AFRL - Trigger
VW Payment
Stock
Mantaining
71,486.00
Administration DP - 1
5%
2,840.40
Car Arrival
& Delivery Check
Delivery
Arrangement
Sales DP - 5
Sales DP - 6
7,125.60
13%
2,740.61
PDI
5,899.91
15%
Mech.Service DP - 1
2,859.94
58,746.75
26,632.86
Customer
Collection
Valeting
Mech.Service DP - 6
5%
General
5%
Sales DP - 4
8,404.55 16%
37
Professor Peter Hines, 2005
Value Creation
Annualised Hours
Measurement Scheme
Skills/Competency Scheme
External
Waste Reduction
38
Professor Peter Hines, 2005
49.6K
62.5K
43.2K
155.3K
Equivalent to a 105%
increase in profitability
Value Stream Mapping
39
Professor Peter Hines, 2005
40
Professor Peter Hines, 2005
Steel Service
Centres
Automobile
OEMs
Tallent Engineering
LDV
Corus
GKN Sankey
British Steel
Distribution
Krupp Camford
Wagon Group
40%
Metal
Processing
Customers
40%
2. Time to Market
Reduction
30%
30%
30%
30%
3. Stock Reduction
10%
20%
20%
15%
4. Quality Improvement
50%
20%
50%
45%
5. Productivity
Improvement
5% per annum
5% per annum
5% per annum
15% over 3
years
6. Increased Mutual
Business
30%
30%
30%
30%
Improvement Area
British Steel
Strip Products
Steel Service
Centres
42
Professor Peter Hines, 2005
Demand Amplification
35000
Blanking plan
Blanking Actual
Pressing Plan
30000
Quantity
25000
20000
15000
10000
5000
0
35
36
37
38
39
40
41
42
43
44
45
46
47
48
Week number
RS Components Course
Professor Peter Hines, 2005
Demand Amplification
Tonnes
200
150
Enduser Demand
Wide coil orders
100
BSSP Deliveries
50
RS Components Course
Professor Peter Hines, 2005
Check vs
Sales Plan
Order (3
months in
advance)
COMMERCIAL
STEEL MILL
SCHEDULING
Steel
Service
Centre
Promise
(Negotiation)
Call off weekly
or by day
Revisions to
Missed
Deliveries
Pickle
Hot roll
2 Days
Coils
Daily
Order
With
Time
slots
Fax
Revision
2 shifts
5 Month
Forecast
Vehicle
Assembler
12,000 pcs/mo
Tray = 14 off
2 shifts
Shipping
Schedule
Weekly
Schedule
by Day
1x
hours
Coils
3
Days
Pack
I
Dispatch
I
C/T = 15 min
C/O = 10 min
2 Days
PRODN.
CONTROL
Weekly
Order
Weekly
Schedule
& Revisions
Individual
Schedules
3 Month
Forecast
Slit
I
C/T =
4min/coil
C/O = 45 min
Uptime = 55%
2 shifts
27,000 secav
Dispatch
Blanking
I
C/T = 1 sec
C/O = 20 min
Uptime = 70%
27,000 secav
EPE 10 Days
10 Days
3 Days
to 32 Days
240 Sec.
Pressing
I
C/T = 1 sec
C/O = 30 min
Uptime = 70%
27,000 secav
EPE 10 Days
2 Days
1 Sec.
Assembly
I
C/T = 13 min
C/O = 0 min
Uptime = 85%
2 shifts
27,000 secav
6 Days
1 Sec.
Paint
Dispatch
C/T = 1 hour
C/O =
Uptime = 65%
2 shifts
27,000 secav
C/T = 9 min
C/O = 0 min
Uptime = 85%
2 Shifts
27,000 secav
0.6 Days
780 Sec.
Assembly
Lead Time
3600 Sec.
540 Sec.
days
VA Time =
7262 sec
(121 min)
Steel
Service
Centre
Orders
STEEL MILL
SCHEDULING
Daily
Order
Coils
PRODN.
CONTROL
Daily
Order
With
Time
slots
2 shifts
Coil
600
600 600
Pickle
Hot roll
Pack
Dispatch
Slit
Dispatch
Batch
tote
12,000 pcs/mo
Tray = 14 off
2 shifts
OXOX
14
14
14
coil
600
600
600
coil
Coil
600
Vehicle
Assembler
5 Month
Forecast
Batch
tote
14
Blanking
Pressing
Assembly
& Paint
C/T = 1 sec
C/O = 5 min
Uptime = 85%
27,000 secav
EPE Day
C/T = 1 sec
C/O = 5 min
Uptime = 85%
27,000 secav
EPE Day
C/T = 60 min
C/O = 0 min
Uptime = 65%
2 Shifts
27,000 secav
1x
hours
14
Dispatch
FIFO
C/T = 120 hrs
(includes
cooling)
RFT = 85%
1 Day
C/T = 15 min
C/O = 10 min
1 Day
C/T =
4min/coil
C/O = 5 min
Uptime = 85%
2 shifts
27,000 secav
7 Days
1 Day
1200 Sec.
1 Day
1 Day
1 Sec.
1 Sec.
4 Hours
3600 Sec.
Lead Time
= 11.5
days
VA Time =
6902 sec
Target
40% u
15% u
50% t
15% t
30% t
30% u
Results
20-90% u
20-75% u
50 ppm
8-33% t
40-50% t
30%
u
47
Professor Peter Hines, 2005
48
Professor Peter Hines, 2005
Planning
Pre-audit
Initial visit
Billing
Cert. production
Tech. Cert. review
Outsourcing
Cert. completion
Visit cycle
Billing Amf
Visit 1
Strategic review
S A Partners, 1993-2005
49
S A Partners, 1993-2005
50
S A Partners, 1993-2005
51
S A Partners, 1993-2005
52
Current State
Phases
Hours
Maximum
Days
Hours
Resource
Minimum
Hours
Maximum
Mins
Hours
1
Mins
1. Planning process
10
25
2. Pre-audit
30
20
40
3. Initial audit
30
20
40
4. Billing
10
30
10
32
40
17.5
47.5
7. Outsourcing
14
14
8. Cert. completion
2.5
21
26
9. Visit cycle
0.5
27
55
12
12
11. Visit 1
31
15
15
26
50
10
50
42.5
201.5
49
24
57
Total of process
S A Partners, 1993-2005
53
Process
Culture
Opportunities
Process
Comfort factor
Read electronically
Validation of data
Lack of trust
Planning to fail
Obtain alternative
contacts from client
(education of client re:
status of registration)
Current systems do
not allow for
monitoring as per s/s
Comfort/lack of trust
Investigate system
capability
Readiness of client
Culture
[1]
S A Partners 2004
S A Partners, 1993-2005
54
Future State
Time Line (calendar days)
Phases
Minimum
Days
Hour
s
Maximum
Days
Hour
s
Resource
Minimum
Hour
s
Min
Hour
s
Min
35
Planning
35
10
15
Total
32
Maximum
15
10
13
30
55
18
26
S A Partners, 1993-2005
55
56
Professor Peter Hines, 2005