Lean Supply Chain Action Learning Program September 2007

1. Lean Supply Chain Action Learning ProgramSeptember 2007

2. Objectives of the Proposed Program • Enable participating companies to learn with and from each other by tackling real projects of vital importance to the companies • Demonstrate the effective application of lean principles in warehousing, transport, procurement and distribution • Disseminate the learnings to promote the application of lean supply chain principles by local companies • Promote South Australia as a world class centre for supply chain excellence

3. Lean Supply Chain • Focuses on the Value Stream • Encompasses warehousing, distribution, transport and procurement • Removes waste, mistakes, inflexibility • Involves developing a “lean mindset”

4. May involve… • Eliminating, combining, rearranging, simplifying stages • Removing commercial obstacles • Promoting free flow of information • Improved logistics methods and systems • Strategic positioning of inventory • Involving supply chain partners in the change process

5. Action Learning • A process in which a group of people come together regularly to help each other learn from their experience. • Participants typically come from different situations where they are involved in different activities and face individual problems. • The intention is to introduce some change, and use the intended change as a vehicle for learning through reflection.

6. The Lean Supply Chain Action Learning Program • Each project is undertaken by a team of three to five; one or two from the company and the remainder from other companies • The team works intensively together, one day per week over five weeks, learning and applying lean principles to the problem • Outcomes and recommendations are presented to the host company senior management • Key elements of the process are videotaped as a case study to promulgate via DVD to South Australian companies and via the Web to the World.

7. Project Selection Criteria • Addresses an issue of high priority to the company • Likely to benefit from “fresh eyes” • Potential to demonstrate best practice/lean principles • Likely to achieve a tangible outcome in the time available • Company willing for outcomes to be used in the public domain as a case study

8. Typical Projects • Examining the overall supply chain to determine strategies to improve customer service, reduce or eliminate inventory, reduce lead time and non-value adding activity • Apply Lean Principles to warehouse processes and work flow to reduce double handling and improve customer service etc • Develop a new warehouse layout to reduce distance traveled, increase storage density • Examine the existing warehouse organisation structure, job roles and skills and devise a development program to build involvement, teamwork and effectiveness of the people • Etc

9. Process Improvement Methodologies • Lean Principles and Value Stream Mapping • Cycle Time Reduction and Flow Process Charting • Business Process Re-engineering

10. Stages in Value Stream Mapping • Start with the Customer and work back • Become familiar with the present process • Observe and measure the present process • Create a Value Stream Map of present process • Identify non-value adding and waste • Develop an improved process to reduce overall lead time • Create a Value Stream Map of the new process • Plan the implementation and win buy-in

11. Project Steps • Preparation • Project • Day 1 • Day 2 • Day 3 • Day 4 • Day 5 • Dissemination

12. Preparation • Companies are canvassed for potential projects • Facilitator meets with each company to: • Set the Minimum Critical Specification for the project • Establish any constraints • Identify resources to be provided by the company

13. Preparation (continued) • Team is selected • Facilitator identifies relevant learning resources eg readings and case studies relevant to the project, to be used to prepare the team • Team is briefed at an initial meeting at the host company.

14. Day 1 - Plan the Project • Become familiar with the current situation • Clarify the objectives of the project • Identify the skills and capabilities within the group • Share learnings from pre-reading and from experience to identify possible approaches and tools to be used • Agree on the overall approach and the roles of each team member • Develop a project plan • Reflect on the effectiveness of the team and the process

15. Day 2 Record and Examine • Identify, gather and assemble relevant data and information • Consult with stakeholders • Document the current situation using the appropriate tools eg Value Stream Mapping, Activity Sampling, Flow Charting, Storyboarding etc • Analyse the current situation to identify opportunities for improvement eg elimination of non-value adding activity, cycle time reduction etc • Initial brainstorming of ideas and options • Pose questions to be researched and answered before Day 3 • Reflect on the effectiveness of the team and the process

16. Day 3 Develop • Review outcomes of research between sessions • Intensively brainstorm options and short list eg story boarding, mind mapping etc • Test short listed options with the key stakeholders in the company • Synthesize the proposal • Identify further information or data to be collected to validate the proposal • Assign responsibilities for next session • Reflect on the effectiveness of the team and the process

17. Day 4 Refine and Justify • Refine the proposal based on the research between sessions • Document the proposal eg Value Stream Map, Layout Diagram, Flow Chart etc • Prepare a cost benefit analysis of the proposal • Develop an implementation plan • Plan tasks and assign responsibilities for next session • Reflect on the effectiveness of the team and the process

18. Day 5 Present Outcomes • Prepare a report with recommendations and justifications • Prepare a presentation for the host company’s senior management • Present to Senior Management and obtain their feedback • Reflect on the effectiveness of the team and the process and document the learnings

19. Dissemination • Presentations by project team at seminars and site visits • Video case study of the project, for inclusion with other case studies on a DVD for distribution to SA companies • Web site explaining and promoting the program with downloadable case studies and streaming video or slide presentations to illustrate, accessible around the world as a showcase for South Australian supply chain excellence

20. Into the future • Recruit more companies into the program locally and interstate. • Encourage overseas companies to follow the example, and to contribute their case studies to the data base • Provide a platform for benchmarking, locally and internationally

21. Funding • The initial projects under Lean Supply Chain Action Learning Program have been funded by the SA Department of Trade and Economic Development (DTED)