Business Process Improvement Exam #2

Typical Boss type of Problem

"We have six distribution points (warehouse/DC) and need to ship things to 20 customers. I don't think we are doing this well. How can we improve our bottom line (cost) and can we increase on-time performance (customer service) as well.

Affinity Diagrams - Next Step

- After completing the diagram: Ensure you have clear, named major groupings Assign personnel to communicate this to others in your organization Thank everyone and release the group (in real world, not here in class) - What else happens: Feedback from others sometimes improves the diagram The groups often get used in cause-and-effect diagrams in a later step in the Continuous Improvement process TTU SCM Students get the opportunity to excel at this process!!!

What is Cause-Effect Diagram?

- An analysis tool that provides a systematic way of looking at effects and their respective causes - Developed by Dr. Kaoru Ishikawaof Japan in 1943 and is sometimes referred to as an Ishikawa Diagram or a Fishbone Diagram because of its shape

Five Steps of Implementing Lean in Warehouses

1. Identify what the customer expects and what value you add. 2. Identify every step through the distribution process. Use Value Stream 3. Allow for a free flow of goods through the process. Eliminate any blocks that do not add value. 4. Bring materials and goods into the distribution network based off of what customers want. Do not blindly forecast what consumers want. 5. Remove any excess waste until there is none left.

4pl and 3pl

4pl is a logistics provider but it goes much further than 3pls operations by adding resources, technologies, and infrastructure management as well as other services. 3pl is also a logistics provider but it does distribution, warehousing, and fulfillment services.

S&OP Process

A demand planning cross function meeting - Review forecasts with a team of operations, sales, marketing, and finance. A supply planning cross-functional meeting - Previously agreed upon forecasts have been "netted" against current on-hand inventory levels while keeping relevant factors in mind.(safety, stock targets, lot sizes, capacity constraints etc.) A pre- S&OP meeting - The data from the first demand and supply meetings are reviewed by department heads to ensure that a consensus is reached. Executive Meeting - Review and recommendations, resolve remaining issues.

Attributes of Success

A recent study by APQC found that companies that were most successful in benchmarking provided higher level management engagement and had solid financial focus

S&OP Process and Lean

A robust S&OP process acts as both a planning and a control method at an executive- management level from a lean perspective. - This is because various metrics (waste level, inventory returns, forecast accuracy, etc.) are benchmarked externally to set objectives. There are four key performance criteria that distinguish best-in-class in terms of S&OP: - Forecast accuracy - Perfect orders delivered complete and on time - Cash-to-cash cycle - Gross profit margin These are measurements of how lean a company is.

Supplier Portals and Advance Ship Notice Capabilities

ASN and supplier portals help give early notifications - Give incoming distribution center advance notice - Help plan inventory better (reduce waste) Many process, language, and relationship barriers exist when creating integrate offshore suppliers Global logistic leaders reduce time and cost of inbound processing by letting suppliers to produce ASNs and properly label the goods.

Total Delivered Cost Management

Ability to analyze and predict the total supply chain costs from the source of supply to final point of distribution Include domestic and international transportation and distribution costs by product and route Need to include: Duties, tariffs, and other consumer costs Automated systems to track and measure performance helps

Continuous Improvement

Benchmarking is more easily driven in an environment that has a tradition of continuous improvement (Benchmarking Enablers)

Supply and Demand Options

Chase strategy (demand follows where the production goes): - Adjust labor and production rates to ensure production meets demand - Used in the service industry Level Strategy (a steady rate of output): - Inventory is used to absorb fluctuations in demand - Downsides: - - Sometimes creates too much inventory - - Inventory is produced early - - Can produce more wrong items

Financial Supply Chain Management

Critical on the global logistics Important to have: - Internal and personnel skills - Partners and software vendors - International transportation planning and execution Supply chain leaders will consider tax implications in the design and execution of their global supply chain strategies Global logistics leaders will closely link the movement of cash and excellence in the Financial Supply Chain to expand trading partner relationships, maximize profitability, and ensure the flow of goods is not disrupted

End-To-End Visibility

Critical to minimizing waste in your supply chain Useful for: - Tracking - Spotting and reacting efficiently to exceptions Timeliness and accuracy are extremely important Monitoring incoming data for potential quality issues - "Syntax" errors or missing information

Network Design

Dealing with a network analysis can be an expensive and difficult task, but with the development of improved, lower cost technology (a software), the cost of the analysis will drop dramatically and will be completed in a shorter amount of time. Software examples: - IBM's ILOG - Axxom's ORion-PI - Oracle's Strategic Network Optimization: - MicroAnalytics Opti-Site

Change Management

Efforts can be tremendously improved with an effective change management plan (Benchmarking Enablers)

Quantitative Benchmarking

Example WERC 2006 Quantitative Benchmarking Study

Integration of Resources

Firm must evolve to institute lean with JIT Must create an external expansion of JIT ideas into supply chain 4 Stages of JIT Include: Stage 1: Firm internally focused and functions are managed separately Creates a focused silo effect that is reactive and short-term goal orientated Stage 2: Integrated efforts and resources among internal functions Stage 3: Links suppliers/customers with the firm's processes Stage 4: Broaden supply chain influence beyond immediate/first-tier suppliers There are many conflicting objectives among participants in a supply chain with much uncertainty - Information gets distorted as it moves upstream and downstream the supply chain. - Manufacturers ship large, infrequent shipments while retailers want smaller, more frequent shipments. Lean supply chain relationships develop when suppliers and consumers: - Remove waste and reduce cost. - Improve quality and customer service. JIT purchasing includes delivering: - Smaller, but right quantities. - At the right time and location. Firms create and nurture lean supply chain with key customers with mutual dependency and benefits.

Crystal Clear Communication

Flowcharts are recognized as one of the most important ways to effectively communicate ideas among people who may differ in knowledge, education, and position

Visibility(seeing is Believing)

Helps supply chain members to see and manage the flow of products, services, and information in real time from customer to supplier. Allows supply chain managers to see the flow of orders and materials so that they can better manage capacity and resources. Example: Gary Carleton's outlook on visibility. Good visibility results in good reliability of a supply chain.

Reliability

If you are too price oriented, you may not get the best reliability or visibility (ex. Getting the cheapest transportation). Supply chain members need a reliable way to track shipments, products, etc. especially with high customer demands. Reliability can come from using good integrated systems or software.

Cross Docking

In Cross docking products from a supplier or manufacturing plant are distributed directly to a customer or retail chain with marginal to no handling or storage time. A logistics activity that attempts to reduce costs and total lead time and tries to better synchronize with actual demand. Advantages of Cross Docking: - Minimization of warehousing and economies of scale in outbound flows. - Minimizes the costly inventory function of a distribution center while still maintaining value-added functions of consolidation and shipping. - Inbound flows are directly transferred to outbound flows with little warehousing. Shipments typically spend less than a day in the distribution center, with as little time as an hour. Can enable JIT supply chain strategy in an extreme way: - Breaks down receiving items on loading dock and immediately matches them to outgoing shipments as opposed to stocking items in warehouse location and returning to pick them up for orders later. - Essentially eliminates/minimizes the inventory holding of warehouse while still allowing it to serve as consolidation and shipping site.

Lean Structure

It is a good idea to designate someone as Lean champion in order to help accomplish continuous improvement. - This person should be dedicated, change-agent. - The Lean champion should create a kaizen agenda and communicate it throughout the organization. The more structure there is, the better chance of success with your Lean goals. - Kaizen means continuous but incremental improvements

Kanban (means Card, signal or authorization)

Kanban is a key from going from a push to a pull environment. Have lots of applications in Supply Chain. A way to control the flow of materials and other resources by linking functions with visual controls. Kanban can be used to re-stock supplies and materials. Japanese manufacturing system in which the supply of components is regulated through the use of an instruction card sent along a production line.

Key Lean Success Factors

Lean Training Management Support Lean Structure

Lean Warehouse Examples:

Menlo Logistics: - Lean Pilot Site in Michigan - 20 Minute Segments - Weekly Performance Meetings Ryder Logistics: - Workplace Organization - Visual Management - Work Cells - Standardize Work - Lean Academy - Track Key Performance Indicators

Warehouse Layout

Placing items that are used more frequently near the loading zones will allow for a reduction in excess motion and reduce cycle times. Use visual systems to allow workers to identify items and locations easier throughout the warehouse. - Aisle-Section-Height-Bay (Means worker can see the aisle and the bay at height level) - Use a combination of letters and number to help identify these locations. Designate locations and systems for tools and equipment to prevent any misplacement and allowance for availability. Ask workers to return items to their designated places.

Lean Tools in the Warehouse

Problem solving Root cause analysis, fishbone, etc. Error proofing with standardized work (Poka Yoke) E.g. Visual instructions on how to use a strapping machine Line balancing a tool that can be used not only in staffing but also to ensure proper flow in the work cell Total Productive Maintenance (TPM) Equipment-related waste and equipment upkeep

Why Benchmark?

Profit -- That's Why

Quick Changeover

Quick Changeover is the amount of time taken to change a piece of equipment from producing the last good piece of a production lot to the first good piece of the next production lot The goal of Quick Changeover is to minimize changeover time and cost, so that smaller batches are run more frequently, resulting in better flow Essentially the same as "Single Minute Exchange of Dies" or (SMED) Changeover tasks involve preparation and adjustments, removing and mounting, measurements, settings and calibration, and trial runs and adjustments

Dynamic Routing

Shippers look for different combinations of carriers, routes, and freight forwarders Big Driver = Potential increase in supply chain agility Dynamic routing capabilities for global movement will be increasingly common attribute of supply chain leaders

Examples of parties involved in global logistics

Shipping Ports Trucking Labor Software to keep track of where merchandise is going and its final destination Railroad

Total Product Identification and Regulatory Compliance

Supply chain security concerns are increasing Global logistics leaders embrace a mindset that recognizes security and regulatory trends Real and potential problems: - Fines or other penalties for a failure to comply - Delays in movement of goods inbound and outbound - Risk to the company's brands should any problem with supply chain security emerge Technology can assist in this area: RFID technology

Decision Symbol

The __________ is a junction where a decision must be made. A single entry may have any number of alternative solutions, but only one can be chosen.

Document Symbol

The __________ is used to represent any type of hard copy input or output (i.e. reports)

Process Symbol

The __________ represents any process, function, or action and is the most frequently used symbol in flowcharting

Input/Output Symbol

The __________ represents data that are available for input or resulting from processing (i.e. customer database records)

Connector Symbol

The __________ represents the exit to, or entry from, another part of the same flow chart. It is usually used to break a flow line that will be continued elsewhere.

Benchmarking

The study of a competitor's product or business practices in order to improve the performance of one's own company. Do you have to limit benchmarking to Competitors? NO! Benchmarking involves: - Knowing your own performance & circumstances - Knowing where you want your performance to be - An identified "exemplar" of that future performance - An understanding of the gap between "now" and "future" - A clear plan to close the gap with measurable improvements

SCM Model in Excel

The trick is to take the network diagram with costs and demand and replicate it into a working model in Excel. It isn't hard, but the first time can be tricky. We will switch to Excel to demonstrate.

Lean Training

To begin with, it is crucial to properly train the entire organization on Lean to ensure cohesiveness. Often times, it makes more sense to bring in an outside trainer to help facilitate early on in the process. In this way, it makes it easier to have a more seamless transition into Lean.

Lean Analytical Tools

Tools for gathering information such as check sheets, scatter diagrams, cause and affect and fishbone diagrams. These are also quality tools. Tools for organizing information such as Pareto Charts - show a few items that typically generate the largest amount of sales for a company. (Can apply to problem solving as well.) Tools focusing on problem solving. The tools include five whys, histograms, and Statistical Process Control (SPC) Process is also called project monitoring or project tracking

When to use brainstorming?

When a broad range of options is desired. When creative, original ideas are desired. When participation of the entire group is desired.

Work Cells

Work Cells relocate people and equipment that are located in different departments into groups so they can focus on making one product. Work Cells are typically in a horseshoe shape, this allows for an efficient workspace Require less workers and are able to produce the product just as fast Workers in a Work Cell typically have higher morale and better energy. A Work Cell is an arrangement of resources in a manufacturing environment to improve the quality, speed and cost of the process.

Off-page Connector Symbols

are used to indicate the flow chart continues on another page. Often the page number is placed in the shape for easy reference

Global logistics as a whole

• Global logistics is essentially getting products from their producers to the consumers around the world. • This is a complex process with many different people/departments involved. • It is estimated that the global volume of merchandise trade was 16 trillion.

Defining Flow Chart Symbols

- There are no "one" definition for flowcharting symbols - There are some guidelines for commonly used symbols - Just be sure that when using these symbols you are consistent with their meaning

Overall Equipment Effectiveness (OEE)

(Availability) X (Performance Efficiency) X (Rate of Quality)

What is Benchmarking?

- "The process of improving performance by continuously identifying, understanding, and adapting outstanding practices and processes found inside and outside the organization. - Benchmarking (seeks) to improve any given business process by exploiting "best practices" rather than merely measuring the best performance. Best practices are the cause of best performance. Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financial advantage." - Benchmarking is not simply copying another successful process exactly. - Benchmarking is understanding the conditions that allow for success of the process and attempting to replicate the success within existing conditions. - The use of benchmarking, in a conscientious effort at change, is a major requirement for the Malcolm Baldridge National Quality Award.

7 Steps of Benchmarking

- A process of measurement-comparison-action whose objective is improvement of firm performance; (Plan) Step 1: Set Benchmarking Priorities Step 2: Identify the Key Processes (Measure) Step 3: Collect Data - Operational and Managerial (Compare) Step 4: Identify the Exemplar- Research and compare best in class performance Step 5: Identify Gaps - Define reasons for low performance Step 6: Identify Roadmap - Develop an improvement road map and set priorities (Act) Step 7: Close Gaps and Improve/Refine Processes - This process cycles with the company's annual planning cycle.

Benchmarking Challenges

- A recent study by Penn State found several key challenges among companies trying to benchmark - Accurate/comparable data is the biggest barrier Implementing results Comparable processes Available resources Standard definitions Clear Goals for benchmarking Willingness to share Finding the right partner Senior management support

What is a Flowchart used for ?

- Building a step-by-step picture of the process for analysis, discussion, or communication purposes - Defining, standardizing, or finding areas for improvement in a process

Bavarian Motor Co. Example

- Currently, and 200 cars are available at the port in Newark 3OO are available at the port in Jacksonville. The numbers of cars needed by the distributors in Boston Columbus, Atlanta, Richmond, and Mobile are 100, 60, 170, 80 and 70 = 480 , respectively. BMC would like lo determine the least costly way of transporting cars from the ports in Newark and Jacksonville to the cities when, they are, need. - The Bavarian Motor Company (BMC/Not BMW) manufactures expensive luxury cars in Hamburg, Germany, and exports cars to sell in the United State. The export cars are shipped from Hamburg to ports in Newark, New Jersey, and Jacksonville, Florida. From these ports, the cars ore transported by rail or truck to distributors located in Boston, Massachusetts: Columbus. Ohio, Atlanta, Georgia, Richmond, Virginia and Mobile, Alabama. - Supply/Demand/Costs for BWC

Qualitative Benchmarking

- It isn't enough to know how high the competition vaults. - The athlete must know how the competition achieves those heights. What are the tools What is the technique Who is the coach What is the nutritional regiment

Ground Rules of Brainstorming

- Don't edit what is said and remember not to criticize ideas! - Go for quantity of ideas at this point; narrow down the list later - Encourage wild or exaggerated ideas (creativity is the key) - Build on the ideas of others (e.g., one member might something that "sparks" another member's idea)

The Spine

- Draw a horizontal arrow pointing to the right. This is the spine. - To the right of the arrow, write a brief description of the effect or outcome which results from the process. - Draw a box around the description of the effect. (head of the fish)

Who Should You Benchmark Against?

- For either type of benchmarking, there are various considerations, e.g. intra-industry vs. inter-industry. - Inter-industry - compare with companies in your industry - Intra-industry - compare with companies in other industries - "If a team is going to benchmark, it should benchmark from the best in the world, not the best in its industry. If a team's company is in the consumer packaged goods business, the question is not 'who is the best product developer in packaged goods, but who is the best product developer, period'." - Benchmarking pioneer, Xerox, studied L.L. Bean's order management process. For either quantitative or qualitative benchmarking, there are various considerations. Internal & external benchmarking are not mutually exclusive. - Internal Internally comparing BU, divisions, locations or employees Benefits: ease of access to information, shorter time required, spurs culture of continuous improvement Drawbacks: does not represent absolute best practice standard - External Comparing to other companies or industries Benefits: offers a clear standard Drawbacks: temptation to 'copy exact' rather than translating underlying circumstance of success 'Pool' benchmark study Compare to one or more other companies Compare to customer expectations

The Effect!

- Identify and clearly define the outcome or EFFECT or the goal to be analyzed - Decide on the effect to be examined. - An effect may be positive (an objective) or negative (a problem), depending upon the issue that is being discussed. POSITIVE: pride and ownership over productive areas upbeat atmosphere that encourages the participation of the group NEGATIVE: justifying why the problem occurred and placing blame easier for a team to focus on what causes a problem than what causes an excellent outcome concentrate on things that can go wrong may foster a more relaxed atmosphere which sometimes enhances group participation

Brainstorming Process

- Leader Plan for about 30 minutes Bring needed equipment (post its, paper, butcher board, etc.) Appoint recorder Review Ground Rules Choose type of Brainstorming Oversee process Close session Set Follow On Plan!

Lean Warehousing Examples in Menlo Logistics

- Mapping material flows - Keeping drivers and tractors moving - Using milk runs (reduce transportation costs and build consistency) - Electronic data interchange--EDI ( eliminates errors that are caused by manual data entry) - Warehouse efficiency - Optimize transportation routes - Packaging optimization A milk run came to describe the distribution of milk bottles by the milkman. On his daily route, the milkman simultaneously distributed the full bottles and collected the empty bottles from a previous delivery and would then return with the empty bottles back to the starting point. A Milk Run is a delivery method used to transport mixed loads from various suppliers to one customer. Instead of each supplier sending a truck every week to meet the needs of one customer, one truck (or vehicle) visits the suppliers to pick up the loads for that customer.

Motion and the Process Cycle

- Orders tend to pile up and spend most of their cycle time at rest in idle.56% of the time they are in idle, 38% they are being worked on, and 6% is spent fixing problems in the cycle. - Pickers should be assigned to zones rather than entire orders to eliminate unnecessary movement.This facilitates packers and loaders to always be working rather than waiting.

Types of Benchmarking

- Quantitative benchmarking demonstrates best RESULTS - Qualitative benchmarking demonstrates best PRACTICE PRACTICE generates results. Improve practices to obtain best results.

SCM Model - Outcomes

- Recognize how to model SCM First in paper format Then use analysis tools - Model the SC in Excel to represent various problems Manufacturing Transportation Inventory Locations - Determine "Shortest Path" or Lowest Cost - Examine "What if" analysis

Affinity Diagrams - Step 4&5

- Step 4: Arrange Plan for 15 minutes, but will vary based on the complexity of the problem Do not "Force" any single idea into an existing group Normally, no conversation among group members is better in this step There is no "Best" way here, I usually recommend round-robin placement Plan to have some sort of "tie breaker" in case of differences It is ok to leave some ideas not in groups (i.e., misc. group of three or four unrelated ideas) - Step 5: Titles/Heading for the Groups Most of the groups will have relatively obvious names (don't freak out and wordsmith over minor differences) Ensure your meaning is clear with your naming (clear unambiguous titles) Review to see if any ideas are better suited to another group after the naming

Batch Size Reduction

- The benefits of batch size reduction includes a lot of things such as: Reduced lead times, lower inventory levels, more flexibility to meet fluctuating demand, better quality with reduced scrap and rework, less floor space used in production and storage, and thus lower overall cost making batch size reduction a great thing to utilize Office spaces generally tend to be batched together as well for each activity such as order processing, where files, forms, faxes, and reference materials are gathered before going to a specific computer screen One way to reduce WIP and improve flow is to decrease the batch sizes of the work such as designs, codes, and test, items that move through the system. Smaller batches will go through the system faster and with less variability fostering faster learning.

JIT Goals

- The new JIT goals help to make sure that an entire network is being designed to support strategies. - Using the JIT goals on an annual basis will allow networks to improve on service levels and have cost reductions.

Walmart and Dell (Examples of JIT in the Supply Chain)

- Walmart uses more of its own vehicles, a retail link system, cross docking, radio frequency identification to accomplish a lean supply chain. - Dell utilizes mass customization, warehouses and inventory of their products in close proximity to their plants, and freight forwarders to assist with shipments so that they can achieve a JIT supply chain.

Step #1 - simplify

- What are you really trying to solve - low cost, shortest distance, etc.? - Then DRAW out the network on a piece of paper I suggest a map background Helps to visualize the problem Eliminates stupid decisions sometimes by clarifying

Affinity Diagram

- business tool used to organize ideas and data. - a tool that gathers large amounts of language data (ideas, opinions, issues) and organizes them into groupings based on their natural relationships. - The Affinity process is often used to group ideas generated by Brainstorming. - Obstacles from achieving Continuous Improvement

Flow Chart

- ➢An organized combination of shapes, lines, and text that graphically illustrates a process or structure - ➢A pictorial representation showing all the steps of a process

A Framework for Benchmarking

1. Set Priorities 2. Determine Critical Processes 3. Collect Your Data 4. Research Best Practice Processes 5. I.D. Gaps -Reasons for low performance 6. I.D. Roadmap 7. Identify Action Initiatives

Five Key Steps in the Affinity Process:

1. State the problem or issue that will be worked upon 2. Generate Ideas for the Issue in Question 3. Collect the Ideas (cards/sticky notes) 4. Arrange the Ideas into Related Groups 5. Create a Title or Heading for Each Group Note: Steps 1-3 are basically the same as the brainstorming process

JIT Areas of Focus

A need to efficiently manage inventory in the supply chain. Companies spend plenty of money due to excess safety stock, because of the carrying cost that is in excess of 20% or 30% of the cost of inventory. JIT - focuses on a lower total cost, the lowest cost per-pound and unit raw material cost. Other aspects to consider- transportation, handling, and storage costs, etc. JIT based operations need to focus on cost and reliability; other dimensions consist of flexibility and agility to meet customer shorter-term demand. Developing a partnership with the suppliers to give the company more than just the lowest price and best quality (helps with downstream "pull" requirements, check image on the next slide) When focusing on a lower total cost, it may offset the higher transportation and handling costs of smaller loads. This allows benefits of lower storage and overall carrying costs. The lesson learned: JIT makes sense and will work effectively when it is applied strategically.

Sales and Operations Planning (S&OP) Defined

A way for business to ensure that supply can match demand and can be a great tool to make the connection between the kaizen event goals and corporate goals - Also called Aggregate Planning - Increases teamwork between between departments by aligning operational and strategic plans. - Organizes people, capacity, materials, and time at the least possible cost, while providing exceptional customer service Executive level management regularly meets to review projects for supply and demand and their financial impact - Make sure that the plans in each area match with the company's plan.

Affinity Diagrams - Purpose

Add structure to a large or complicated problem Includes brainstorming Adds categorization to simplify the ideas into groups Helps to organize problems into areas (useful for other tools) Can increase participant support by gaining agreement

An Answer

Can be done in an abbreviated map But represents all the combinations or routes, the supply, demand and costs This helps to ensure you go from the "word problem" to a working model in Excel

Benchmarking got its start in 1979 with Xerox.

Early Inter-industry benchmarking at Xerox. - Objective: Analyze competitive unit production costs in manufacturing - Action: Compare Fuji-Xerox machine capabilities and features, tear down components for study. - Result: US manufacturing costs were much higher. Xerox disposed of traditional budget processes and adopted Japanese cost targets. Positive result led to benchmarking in all of Xerox. Evolution to Intra-industry benchmarking at Xerox. - Objective: Improve picking productivity with process improvements by studying exemplar picking activity at LL Bean. - Action: Study LL Bean warehouse operations, visit LL Bean, compare both processes. - Result: Incorporated many of LL Bean practices to modernize Xerox warehouse activities.

A Brainstorming practice

Form groups: Choose a leader. That person will lead the brainstorming session for each group. Remember to follow the basic guidelines given previously. Problem/Opportunity: How do we improve the Texas Tech Red Raiders Football!?!

Types of brainstorming

Freewheeling - Share ideas all at once - List all ideas as they are "shouted out" Round robin - Everyone takes a turn offering an idea - Continue until there are no more ideas - Anyone can pass on any turn - All ideas are listed as they are offered Leader - Recorder - Group Members

Five Reasons Why Global Logistics is Important

Global logistics is a crucial part of Supply Chain because it connects products from their beginning point to their final destination. Without it the worldwide flow of goods would be interrupted. 1. Managing rising logistics costs 2. To support Lean Manufacturing on a global scale 3. Be able to operate as an on-demand business (MTO) 4. Cross-functional sourcing decisions 5. To aid supply chain management on a global scale

STEP 3: Causes

Identify the main CAUSES contributing to the effect being studied Establish main causes, or categories, under which other possible causes will be listed. 3Ms and P Methods, Materials, Machinery, and People 4Ps Policies, Procedures, People, and Plant Environment PEEP (People, Equipment, Environment, Procedure) Write the main categories your team has selected to the left of the effect box. Draw some above and below the spine. Draw a box around each category label and use a diagonal line to form a branch from the box to the spine.

Value Stream Mapping (VSM)

Implementing a VSM allows for employees to understand the flow of activities and see where improvements can be made. Allowing for lower level employees to make decisions and suggestions can improve efficiency as they feel they are included in decisions made by supervisors. This is done through "quality circles." Identify lean improvements and observing every activity as you go. Implement lean improvements using VSM plans, then restart the cycle to continuously improve and eliminate waste.

Balancing a Work Cell

Important to calculate the takt time for the product or service family in order to balance the activities in the work cell so that materials or information can flow properly. Takt Time = total work time available/units required This can be used to identify bottlenecks in the system A time observation form is a useful tool when looking to staff and balance any multiple-step process

Integrated International and Domestic Workflow

Improvement in this area will allow for more centralized international logistics "Logistics leaders are deploying technology that enable them to have a single 'work space' that contains both functionality and data across the full international spectrum.

Why implement Cause-Effect Diagram?

It helps determine the root causes of a problem using a structured approach. It encourages group participation and utilizes group knowledge of the process. It uses an orderly, easy-to-read format to diagram cause-and-effect relationships It indicates possible causes of variations in a process. It increases knowledge of the process by helping everyone to learn more about the factors at work and how they relate. It identifies areas where data should be collected for further study.

Global Logistics Process Automation

More Information = The Better Decisions Few companies have well automated global logistics processes "Ocean Booking" Problem: Laborious process of identifying and transacting international moves Many ERP and logistics systems do not support global logistics

Quality of the source

Quality of the source focuses on the customer, making sure you deliver your products to the customer ensuring quality and trust. Poka Yoke, is a Japanese word for mistake-proofing A Poka Yoke is a way or tool that makes it is virtually impossible to pass on a defective part or piece of information from one process to another Quality at the source usually goes with Total Quality Management (TQM). Focuses on product design TQM is a team-based program spanning from the supplier to the customer, and requires a commitment by management to have a long-term, companywide initiative toward quality in all aspects of products and services as defined by the customer The 7 tools of TQM include: continuous improvement, six stigma, employee empowerment, benchmarking, Just-in-Time (JIT), Taguchi concepts, and knowledge of TQM tools (Pareto charts or fish-bone diagrams.

Teamwork and Lean

Teamwork supports a process that defines and solves problems using Lean tools. To make this happen, it all again begins with top management to guide teamwork and collaboration among the organization. There must be a culture, and an identity of teamwork for it to really take shape.

Total Productive Maintenance

Total Productive Maintenance (TPM) focuses on equipment-related losses related to production equipment and machinery. Studies have shown that 70% of manufacturers operate under "breakdown maintenance" to maintain equipment costs Preventative maintenance is the maintenance performed on equipment to ensure it is working and reduce the likelihood of it failing. Predictive maintenance are tools used to check temperatures, vibrations, etc. to check to see if any corrective action is needed Adopting TPM can benefit your company by involving machine operators on routine checks, earlier detection of critical factors to maintaining equipment "uptime", and reducing capital expenditure through equipment refurbishment and capacity improvements

Keys to Global Logistics Excellence

Total delivered cost management Global logistics process automation End-to-end visibility Supplier portals and Advance Ship Notice (ASN) capabilities Total product identification and regulatory compliance Dynamic routing Variability management Integrated international and domestic workflow Integrated planning and execution flow Financial supply chain management

Areas of Potential Waste in the Global Supply Chain and Logistics Network

Transportation and inventory. Transportation and inventory costs are often dependent on volume. An extraordinary number of parties involved in global logistics process can cause waste. Supplier performance and supplier lead times. 25% of purchase orders are not being shipped as planned or are not delivered as planned. Outdated distribution networks. Over processing of goods Products not arriving on time or in the incorrect place

Integrated Planning and Execution Flow

Ultimate way to ensure global supply chain and logistics function is Lean Data becomes real-time for scheduling, in-transit visibility and performance measures of carriers Integrated workspace creates access to: - Carrier and cost information, such as rates, capacities, contract commitments, etc. - Movement schedules and shipment details - Related data, including costs, appointments, in-transit status available to all - Performance measures and reporting

Management Support

Ultimately, any type of change cannot succeed without top management constantly supporting and driving that change. Without the "in it for the long haul" mindset from management regarding the change, the results will only be temporary and ultimately fail. The organization needs to be flush in its dedication towards Lean.

Culture

Ultimately, culture will determine whether performance improvement is embraced (Benchmarking Enablers)

Addressing Waste in the Global Supply Chain

Use technology Design a process that is lean and includes all parties Collaborate across the SC. Link demand and demand planning with replenishment and buying Reduce number of suppliers and logistic service providers Focus on supplier performance; control the supply chain at the international source Understand transport differences and options Align financial supply chain with trade supply chain Use 4PL and 3PL

Draw you network now

Use the full page USA outline to draw a network for the BWC shipment problem. It should look similar to the "Network Example" from three slides back. Note: I will insert a full page outline for your help around here or at the end of the section.

What is Best in Class?

Usually classified as the top 20% of the reported performance in quantitative studies.

Variability Management

Variability is the Achilles Heel of long supply chains Use performance measurement and tools Example: root cause analysis - Attempt to minimize variability for more predictable global supply chain and logistic s performance - To better understand both the level of supply variability and the root causes of that flux Central to time compression, planning effectiveness, and risk reduction

Summary: Use Brainstorming When...

You want to determine possible causes and/or solutions to problems. Brainstorming helps our team generate a large quantity of ideas. Planning out the steps of a project (BPI project!) Although not the primary use of the tool, Brainstorming can be used to help identify the different steps in implementing a project. When deciding which problem (or improvement opportunity) to work on first. You can use Brainstorming in any situation where many ideas need to be generated in a relatively short period of time. You want to include all opinions. Nobody has a monopoly on wisdom. Round-robin Brainstorming helps to ensure equal participation in an idea-generating session.

Brainstorming

brain·storm - verb produce an idea or way of solving a problem by holding a spontaneous group discussion. "a brainstorming session" Teams often use Brainstorming as a consensus-building tool, and in situations where they need to generate a large number of ideas