Implementation of Lean and Agile Practices in SME’s

1. Implementation of Lean and Agile Practices in SME’s Hossam Ismail The Agility & Supply Chain Management Centre The Management School

2. Outline • Background to the Centre • Agility concept and implementation • How we work • Brief outline of case studies • Case study 1: Eleco • Case study 2: Richardson’s (Video) • Supply Chain Agility • Key Research Themes

3. Background The Agility & Supply Chain Management Centre was founded in 2000 It builds on the group’s expertise in agile and responsive manufacturing The centre also assists in the development of new products and marketing Reduce Operating Costs To assist SMEs in the region: • Awareness of agility & supply chain capabilities • Dissemination of best practice to SMEs • Assisting with the implementation of process improvement programmes • Assisting SMEs to achieve strategic growth in existing and new markets Increase Capacity Create New Markets

4. Funded Projects • Agile Supply Chains ( £711k NWDA/ERDF) 2011-13 • Resilient Multi-Plant Networks (€223k FP7) 2010-12 • 4 Live KTP projects (£500k TSB/Industry) 2010-13 • Innovation and Productivity Grand Challenge (£300k EPSRC) 2007-09 • Agile Enterprise Development Programme (£322k EU Obj1) 2005-07 • 17 Completed KTP’s (£2M TSB/Industry) 2002-10 • Merseyside Agile Manufacturing Initiative (£600k Obj1 EU) 2001-04 • Other Local Initiatives and Collaboration (£7k-£50k) 2004-11 • Ellesmere Port and Neston (Objective 2) Agile Manufacturing • Local Enterprise Growth Initiative (LEGI) Process Improvement • Northwest Food Alliance (Lean and waste reduction) • Northwest Aerospace Alliance (Supply Chain Modelling) • Maritime Sector (Container Port Modelling) • Virtual Engineering Centre (Daresbury) Supply Chain Integration

5. Objective 1 Project Outputs • ERDF Objective 1 Project 2002-2007 • Placement of over 10-15MSc students in companies per annum

6. The Agility Implementation Stages Reduce operating costs and improve efficiencies FOCUS Improve production capabilities Robust Responsive FOCUS Improve marketing and strategy capabilities Proactive Seek new opportunities for growth

7. Strategic View Of Agility Business Environment Turbulence Trends Assessment Strategic Options Leadership Assessment Capability Focus Tools Selection KPI Selection Develop Plan Implement Plan Evaluation

8. The Approach

9. Tipping Points and Sustainability 5 Tipping Points 4 RESOURCES & COMMITMENT 3 The Doing Dimension 1 2 Knowing – Doing Gap The Knowing Dimension ABSORPTIVE CAPACITY

10. Production Control ORDERS ORDERS ORDERS 49 -56 days AV. Crown Timber Redframe Customers out Timber Supplier. 550 - 600 trusses/wk Gang Nail Connector Plate Supplier DAILY PRIORITIES DAILY 1*2wks 1-2 * wkly SHIPPING SCHEDULE 2-3*wks Value Stream Mapping Raw Material Sawing R & B Sorting Shipping Press I 672 Pcs 2 2 2 3 1 16 (2') 1 35 units 250 20 (1.5' 2 Days 12 days C/T: 30 Mins Initial Setup 45 Mins C/T 25 Mins C/T: 0.5 Mins/Unit Setup: 0.5 Mins C/T: 3.5 Mins C/O - Total Cycle Time: 0.5 mins * Feature no * Quantity Uptime: 40% Uptime: 10% Uptime - 80% Uptime: 40% Scrap: 2% 27,600 Secs 27,600 Secs 27,600 Secs 27,600 Secs 20 units =114Mins 16 units =100Mins Setup: 0.5 mins o o (2 setups 90 & 45 ?) LT = 22015 MIns 120 Mins 245 Mins 50 Mins 1 Day 2 Days 12 Days VA =252.5 Mins 0.5 Mins / Unit 47.5 Mins 25 Mins 30 Mins 150 Mins for an order of 50 Truss 237.5 ( 6 1.5) Mins to press a batch Units of 5 trusses.( Sorted by feature) Case Study 1: ELECOTimber-Frame Design, engineer, manufacture & supply timber frame structures. • Agility Improvement Programme: • New Manufacturing Layout • SET-UP Time Reduction Workshop: SMED • Training and Mentoring Employees in • Stock Control • Line Balancing • Information Flow and Feedback • Management Visibility • Programme Results • Increase Monthly Turnover by £74K • Increase in Gross Profit by £185K • Increased Operating Profit by £120K • Jobs Safe Guarded 8 • New Jobs Created 3 • Our Concerns • High levels of transportation; internally & externally • Project Changeover/Setup Times taking 45min • Management of Information was poor • Management Visibility was also poor

11. Case Study 2: Richardsons Healthcare Knowledge Transfer Partnership • Manufacturer of Pressure Relief Mattresses for Operation Tables • Problems • Productivity is decreasing • Quality issues (rejects, rework) • Leadtime is increasing • Limited planning & control • Demand is increasing

12. Supply Chain Agility

13. Key Research Themes • Strategic Agility • Resilience through readiness • Improving Operational Agility • Agile Supply Chain Development • Future proofing supply chains • Improving the Knowledge Transfer Process • Improving sustainability & Assessing when a tipping point occurs • Configurable Simulation Models for Optimising Performance • Decision Support tools • Integrated Supply Chain Models • Logistics Models • Sectors: Maritime, Aerospace, Automotive

14. Thank you If you need more information about our work: THE AGILITY & SUPPLY CHAIN MANAGEMENT CENTRE Contact: Jenny Poolton (Marketing Manager) Email: jpoolton@liv.ac.uk Tel: 0151 795 3641 or 3642 www.agilitycentre.com The University of Liverpool Management School Room FE13, The Chatham Building, PO Box 147, Liverpool L69 7ZH