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Lean and the Strategic Plan. H. David Paris, C.P.M., CFPIM, CIRM V.P. Training Industrial Solutions, Inc. (ISI) R. Henry Migliore, Ph.D. Professor Emeritus /Northeastern State University President, Managing for Success. SUCCESSFUL IMPLEMENTATIONS.

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Lean and the strategic plan

Lean and the Strategic Plan

H. David Paris, C.P.M., CFPIM, CIRM

V.P. Training

Industrial Solutions, Inc. (ISI)

R. Henry Migliore, Ph.D.

Professor Emeritus /Northeastern State University

President, Managing for Success


Successful implementations
SUCCESSFUL IMPLEMENTATIONS

  • An enterprise must conduct change from the top

  • If strategic vision does not include the Lean philosophy, radical changes taking place will not follow the predetermined path of the enterprise

  • Most US companies fail to implement Lean because of wavering leadership

  • Use the strategic plan to drive successful implementation



Strategic planning for each function
STRATEGIC PLANNING FOR EACH FUNCTION

  • PURCHASING

  • MATERIALS

  • LOGISTICS

  • QUALITY

  • FINANCIAL

  • HUMAN RESOURCES

  • DESIGN ENGINEERING

  • MARKETING

  • SALES

  • SAFETY

  • MANUFACTURING


Purchasing
PURCHASING

  • Support production with the uninterrupted flow of material without excess inventory

  • Established through contracts with suppliers

  • Use MRP output for forecasting only

  • Track commodities our factory uses

  • Track commodities used by suppliers

  • Match purchased lot sizes with manufacturing lot sizes

  • A-B-C analysis for inventory turns


Materials
MATERIALS

  • Balance customer requirements and manufacturing capacity

  • Lean implementation of visual pull systems

  • Drive MPS and support the S&OP

  • Drive MRP output for forecasting capacity constraints

  • Control the shop floor through visual signals not through MRP

  • Produce to supermarkets


Logistics
LOGISTICS

  • Cease buying truckloads of one part number, and fill the same truck with a smaller quantity of several part numbers

  • Consolidate shipments

  • Imported product can be held in local warehouses at the supplier’s expense


Quality
QUALITY

  • Identify problems as they occur, not final inspection

  • Prevention activities include

    • 6 sigma problem solving

    • Run charts

    • CEDAC

  • Verify process control

    • Simple process capability (Cp)

    • Process capability to a central tendency (Cpk)

  • Functionality check

  • Continuous improvement


Financial
FINANCIAL

  • Cost accounting

    • Identify cost of each product

    • Maximize return on investment (ROI)

    • Maximize contribution

  • Fixed cost will remain the same

  • Improve the difference between revenue and variable cost to increase profit

  • Optimize the mix within constraints

    • Sales possibilities

    • Capacity constraints


Financial measures
FINANCIAL MEASURES

  • Optimize the mix through linear programming

    • % of optimum sales

  • % adherence to the production plan

  • Variable cost variation

  • Purchase price variation (PPV)


Human resources hr
HUMAN RESOURCES (HR)

  • Excellent hiring practices

    • Background checks

    • Literacy test

    • Minimum education

  • Training programs

    • Cross training

    • Job mapping

  • Continuous improvement program

    • Eliminate waste

    • Improve processes

    • Increase safety

    • Reward efforts


Design engineering
DESIGN ENGINEERING

  • All functions must be linked during the design stage to insure compatibility

    • More likely to meet target completion date

    • More likely to function properly

    • More likely to meet objectives

      • Size - Weight - Capabilities

  • Quality Functional Deployment (QFD)

  • Failure Mode Effect Analysis (FMEA)

  • Design For Manufacturability (DFM)

  • Design For Assembly (DFA)


Marketing and sales
MARKETING AND SALES

  • Marketing concentrates on

    • Long term planning

    • New product development

  • Sales

    • Leads the sales and operations process (S&OP)

      • Production plan by family

      • Monthly production for 12 to 18 months

    • Prepare all functions for fluctuations in demand

      • Promotions

      • New product growth

      • Competition


Safety
SAFETY

  • Comply with OSHA regulations

    • Training is a must

  • Post charts depicting

    • Attendance

    • Training

    • Accidents

    • Lost time accidents

  • Deploy safety to every level

    • Safety must be a part of every employee’s job


Manufacturing
MANUFACTURING

  • Radical changes outlined by value stream maps

  • Stop pushing large lots through production

  • Start pulling small lots (1-piece) through production

  • Relocate some equipment to support

    • Flow – Repetitive – Cellular Production


Manufacturing1
MANUFACTURING

  • If possible, always flow production

    • Balanced Operations – Close Layout – Mixed Models - POUS – Visual Management

    • Schedule the pacemaker process and flow to product completion

  • If not flow, then pull

    • Unbalanced operations

    • Distanced layout

    • Setup long

    • Uptime problems


Manufacturing2
MANUFACTURING

  • Environments for flow and pull systems

    • MTS

    • ATO

    • MTO

    • DTO


Mts pull with balanced flow

FIFO LANE

MTS: PULL WITH BALANCED FLOW

Information Flow

Customer

Raw

Matl

Fin.

Goods

Process

C

Process

A

Process

B

Supplier


Mts pull with imbalanced flow

MATERIAL FLOW

Kanban

Locations

MTS: PULL WITH IMBALANCED FLOW

Information Flow

Customer

Raw

Matl

Fin.

Goods

Process

C

Process

A

Process

B

Supplier


Ato pull with balanced flow

FIFO LANE

Kanban

Locations

ATO: PULL WITH BALANCED FLOW

Information Flow

Customer

Raw

Matl

Fin.

Goods

Process

A

Process

B

Process

C

Supplier


Ato pull with imbalanced flow

Parts Flow

Kanban

Locations

ATO: PULL WITH IMBALANCED FLOW

Information Flow

Raw

Matl

Fin.

Goods

Process

C

Process

A

Process

B

Customer

Supplier


Mto dto
MTO - DTO

Information Flow

Customer

Raw

Matl

Fin.

Goods

Process

C

Process

A

Process

B

Supplier

FIFO LANE


Conclusion
CONCLUSION

  • Implement Lean through the strategic plan

    • Management lead

    • All functions can work together

    • Better financial support

    • Common goals and objectives


H. David Paris, C.P.M., CFPIM, CIRM

[email protected]

R. Henry Migliore, Ph.D.

[email protected]

E10 Lean and the Strategic Plan

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