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The frog!
Rebbit! Rebbit!
Uh oh!
10OoC
5OoC
OoC
Day 1 20 7 27 27
Day 2 20 7 27 27
Day 5 20 5 25 27
work centre
batches
action?
Competitive Time
Benefits (higher )
Reduce cost
Reduce direct material cost Improve production efficiency/effectiveness Increase the rate of adding value
3/3
Why no value being added: Waiting for completion of batches Waiting for physical / intellectual rework Waiting for management decision
1/4 - 2 - 20
For every quartering of total time, productivity doubles, costs reduce by 20%
3x2
Lean competitors enjoy x3 avg growth rate, x2 profit margin
How to go lean
Objective 1
Understand customers and what value they want Define the internal value stream Eliminate waste, make info & products flow, pulled by customer needs Extend the definition of value outside your company Continually aim for perfection
Method
Setting the direction, targets and checking results An internal framework for delivering value Appropriate method to make necessary change Externalise the value focus to the whole value stream Strive for perfection in the product and in all processes and systems
(several value streams exist in a value chain, e.g. key product line to key customer)
Capability / variance
Lower specification limit Upper specification limit Defects 1350 parts per million Defects 0.001 ppm
Nominal
3 6
Variation of output of a process can give rise to defects internally and/or passed onto customer Aim to reduce process variation to increase reliability of a process This is the foundations of Six Sigma methodology
Six Sigma
A complete methodology for improving the business or simply a process reliability concept? Key to Motorola, GE and other businesses at all levels
Executive vision Executive vision Assess & kickoff Assess & kickoff Deploy strategy Deploy strategy
oj Pr ti ec pl m em ta en n tio
Select champions Train and set up structure Map, id critical input/output variables Determine variance Design of experiments Use control charts
Lean Lean
Agile Agile
Agile Agile
Make/Engineer to order, High variety, Service culture Product Innovator? Customer intimate?
Complementary
Make to forecast
Material suppliers
Lean Lean
Upstream variation
Make to order
Agile Agile
Downstream variation
customer
Use of champion
Machine Running Time Actual production hours minus downtimes This is possible production if 100% performance
Availability
Net Operating Time Machine speed against theoretical speed This is the possible output if 100% quality
Performance
OEE
Useful Production Time Material in minus product out This is the real output
Quality
Performance G. Total dozens produced = 3869 dozen H. Balanced Speed (180 BPM=0.067) = 0.067 I. Performance (HxG / Ex100) = 85% Quality J. Rejects during operating time = 20 dozen K. Rate of quality products (G-J / Gx100) = 99% Overall Equipment Effectiveness OEE (F x I x K / 10000) = 52%
Customer Satisfaction Customer Satisfaction Profitability Profitability Greater Control Greater Control
Summary
Strategy that encompasses business [profit] objectives and customer order winning [and maintaining] criteria Achieve short-term, KPI-driven improvements consistent with strategy Plan and act for sustainable change
Result
Major quality improvements, 60% drop customer complaints Other significant financial benefits Short / long term EVA moved negative to neutral
Production processes focus Introducing OEE Focus on waste CI, include quick changeovers Ambitious, achievable targets Self-managed work teams
FILLING HALL
Phase 2 (underway)
TOPSTAR/DUBUITT
BOTTLING HALL
James Womack & Daniel Jones, Lean Thinking: Banish Waste and Create Wealth in your Corporation (Simon & Schuster, 1996) John Bicheno, The Lean Toolbox, 2nd edn (Picsie Books, 2000) http://www.picsie.co.uk/ (10?) Peter Hines & David Taylor, Going Lean: a guide to implementation (Lean Enterprise Research Centre, Cardiff Business School, 2000) Institute of Operations Management (IOM)
Papers and courses on Lean, Agile, etc, see iomnet.org.uk Seminars (e.g. Recently: Lean at Boots, 5S at Ratheon)
Pande, Neuman, Cavanagh, R.R. 2000 "The Six Sigma Way, McGraw-Hill ISBN 0-07-135806-4 (20)
For knowing about it without actually dealing with the detail
Breyfogle 1999 "Implementing Six Sigma - Smarter Solutions Using Statistical Methods" Wiley-Interscience ISBN 0-471-29659-7 (60)
Good for detail if you actually want to implement it
Agile
http://www.agility.co.uk/ or internet search for agile (care with agility!)
Rebbit!
DMEM