Innovative Supply Chain and Manufacturing Production Systems

Click here to load reader

download Innovative Supply Chain and Manufacturing Production Systems

of 32

  • date post

  • Category


  • view

  • download


Embed Size (px)


Innovative Supply Chain and Manufacturing Production Systems. For Presentation to the Annual Meeting of the Institute of Industrial Engineering Montreal , Canada June 1 , 2014 Martin M. Stein, D.Sc. 617-755-1960. - PowerPoint PPT Presentation

Transcript of Innovative Supply Chain and Manufacturing Production Systems

Example: TRACC provides the platform for sustainable performance improvement for a balanced set of metrics

Innovative Supply Chain and Manufacturing Production SystemsFor Presentation to the Annual Meeting of the Institute of Industrial EngineeringMontreal, CanadaJune 1, 2014

Martin M. Stein, D.Sc. 617-755-1960

Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.netThe Toyota Production System and Proctor and Gambles, IWSThe Toyota Production System created a new form of management where culture change and climate in the organization were fundamental elements of production process controlProctor and Gambles, Integrated Work System, is a major advance over TPM, with linkages to the supply chain. Plants are now able to produce product in response to inventory shortages.Competitive advantage will require the expansion of internal capabilities and the rapid transfer new programs globally including for use by potential acquisitions and new plants. Internal Capability will permit the use of internal resources that implement best practices on a step by step basis. The availability of a road map for implementation will provide an efficient and effective process for guiding companies toward excellence in supply chain and manufacturing.

2 Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.netCreating Leadership Opportunities for Culture ChangeThe TRACC System provides new opportunities for leaders to harness the organizations energy for culture change.Cross-functional teams become engaged in problem solving at all levels. Situational problems are solved by teams of front-line workers supported by technical staff members. Systemic problems are supported by supervisors, managers and technical staff who are dealing with recurring issues so they are not repetitive. Strategic challenges are surfaced by the mid level teams who identify barriers to strategic implementation.The TRACC System contains several modules that drive culture change and organizational development. The Leading and Managing Change module is designed to create a holistic overview of the organization and is extremely important for companies with silo organization structures. Enablers also are included in the Human Capital Module where human resources, competency testing and professional development implementation actions required by culture change are provided.The End to End, Demand Driven Organization Model (Stage 4 and 5) requires integration of business planning and the creation of a Center of Excellence that also facilitate culture change.3 Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.netBenefits of Integrating Manufacturing and Supply ChainCoordination of supply and demand is a critical element in the design of an end to end, demand driven value network.The most advanced companies such as Procter & Gamble have recognized that there are significant potential benefits form integrating supply and demand planning.The savings potential from manufacturing at P & G was $ 1B but when the supply chain opportunities were incorporated, savings potential tripled to $ 3B!The logical structuring and systematic approach for continuous improvement that is required for a manufacturing process can be extended to include and integrate the supply chain components such as logistics, customer service and warehousing.The latest version of the TRACC system has been expanded to include 11 additional modules for Supply Chain components. The combination of these to the 11 components for manufacturing, now create a comprehensive set of 22 that include over 1300 best practice staged and structured implementation actions.4 Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.netTRACC provides the platform for sustainable performance improvement for a balanced set of metrics5

Practice MaturityPerformanceCLASSWORLD68%77%24%3.01.63 years90%23%Perfect OrderSC Cost as % of Revenue68%90%26%21%Deliver 20% More Perfect Ordershold a thirdless inventory72 Days 54 Days have lower SC costsequal to 5% of revenueLeaders and Laggards85%21%72655458Days of InventoryExample adapted from AMR research and CCI results26% Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.net5The TRACC offering is functionally initiated and ensures integration and alignments to Strategic and Operational EnablersReturnSourceDeliverStrategySTRATEGIC ENABLERSOPERATIONAL ENABLERSORGANISATIONAL ENABLERSAlign Transform PlanMakeOperational EnablerOrganisational EnablerSUPPLIERCUSTOMERSupply Chain Strategy WorkshopsSupply Chain Alignment

Leading and Managing Change

Demand Planning

Sales & OperationsPlanning

Supply Planning

Integrated Business Planning


Health and Safety




Visual Management


Autonomous Maintenance

Asset Care

Set-up TimeReduction


Warehouse Management


Administrative Excellence


Human Capital

InnovateProduct LifecycleManagement

Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.net67TRACC stages: The maturity growth is defined over 5 stages and the implementation sequence ensures sound foundationsDisconnectedBasics establishedMisalignedIgnorantFragmentedControllingCrises ManagementFire fightingUnclear strategyUnclear goalsUndefinedSilo approachesAd hocCompetentIdentifySelective adoptionRecognition of waste / valueRisk awarenessValue articulatedPrioritisationStabilisationClearly definedInitial awarenessUnderstanding of root causesStandardisedIntegratedDeployedKnowledge ExpertConsistentCompetentClear / focusedAvailableBusiness process drivenAddressing Root causes

AlignedExcellenceSimplicitySharing CollaborationVisibilityExternal / InternalCulture of learningImprovementBest in the classwithin industryEliminating root causes of problems

Culture of teachingInternational benchmarkingResilientVirilityDynamicPredictiveOrchestratingShapingConfidence & TrustAdvanced detection

Stage 1Stage 2Stage 3Stage 4Stage 5DisconnectedBasics establishedCompetentAlignedDDVNStage 5Stage 1Stage 2Stage 3Stage 4 Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.netPlanning TRACCs: The Maturity Pathway8ShapingNo InsightFunctional ForecastsConsensus ForecastsDEMAND PLANNINGStage 1Stage 2Stage 3Stage 4Stage 5DisconnectedBasics establishedCompetentAlignedDDVNStage 5Stage 1Stage 2Stage 3Stage 4SUPPLY CHAINDisarrayBasic PlansReliable PlansSUPPLYPLANNINGFragmented and ReactiveRudimentary IntegrationAligned and FocusedSALES & OPSPLANNINGSensingINTEGRATED BUSINESS PLANNING Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.net89Decision-making in Planning TRACCs9DPIBPSPS&OPSCA

S&OPDP SPSupply Chain AlignmentDetermine customer segmentation and differentiated internal supply chainsNetwork configuration decisions with regard to manufacturing facilities, sourcing locations, distribution centres and routesCollaboration decisions with regard to 2nd and 3rd tier customer and suppliersHigh capital investment decisionsHigh importance and high complexityLong term 3 to 5 yearsBroad impact on entire internal and external supply chain and organisationIntegrated Business PlanningSet direction and priorities for businessDecisions aimed at closing gap between supply chain plans and financial objectivesDecisions on new products, new markets and new improvement projectsRisk and opportunity basedHigh importance and high complexityHigh investment decisionsMedium to long term 18 to 24 monthsSales and Operation PlanningBalancing demand and supplyControlling inventoryProduct portfolio managementHigh-level capacity constraint decisionsDecision on reaching consensus on demand and supply plansMedium term 6 to18 monthsExecution of strategySupply PlanningConstrained supply plansFinite capacity plansDaily, weekly, monthlyRough-cut plans 18 to 24 month horizonDemand planning Consensus demand plan18 to 24 month horizon Competitive Capabilities InternationalIntegrative Improvement Systemwww.etracc.netinfo@ccint.net9Planning TRACCs: Integration drives consolidation of Information and timingCustomersSupplierStrategic PlanningSupply Chain Alignment TRACCCollaborationCollaborationMarketing and Sales planningDemand Planning and CommunicationMATERIALS PLANNINGMaterial Planning (MRP)

Material ReleasingCAPACITY PLANNINGResource Planning (RP)

Rough Cut CapacityPlanning (RCCP)

Capacity RequirementsPlanning (CRP)

Finite LoadingPRODUCTION PLANNINGProduction Planning (MPP)

ProductionScheduling (MPS)

FiniteScheduling (FPS)DEPLOYMENT PLANNINGInventory Planning (IP)

Distribution DeploymentPlan (DRP)

Medium Term(weeks or months)MaterialPlansShort Term(days or weeks)Vendor SchedulesMedium Term(weeks or months)Resource AvailabilityShort Term(days or weeks)RCCP Plans orInfoShort Term(weeks or months)Requirements Capacity PlansMedium Term(weeks or months)ProductionPlansShort Term(days or weeks)Production SchedulesShort Term(hours or days)FiniteSchedulesMedium Term(weeks or months)Inventory TargetsShort Term(days or weeks)Deployment RequirementsMake (Convert)SupplyDemandCustomer-driven Supply Chain (i.e. pull based)Purchase ordersSales and OperationsPlanning TRACCShipment HistoryBusiness u