Lean Six Sigma in the Logistics Service Industry - … · Lean Six Sigma in the Logistics Service...
33
Lean Six Sigma in the Logistics Service Industry CILT Supply Chain Network. London 14 th June 2010
Transcript of Lean Six Sigma in the Logistics Service Industry - … · Lean Six Sigma in the Logistics Service...
Lean Six Sigma in the
Logistics Service Industry
CILT Supply Chain Network.
London 14th June 2010
Page 2
syncreon
Scale
● FY 2009 combined revenue of $650m● 9,000+ direct employees world-wide● Global footprint with coverage across 5 continents
syncreon differentiates through:
● Performance, Quality and Responsiveness
● Business Process Improvement / Engineering, IT and Operational Performance
● Customization of best in class solutions
● “Agility” and speed to support customers with major/critical challenges
Specifically focused industry expertise delivering tailored, integrated
solutions to global technology and automotive markets
Rapid Organic Growth from $35m to $220m by 2006
1999Acquisitions of Logit & TDS Logistics
2007Acquisition of NAL Worldwide.
2009
Provides greater footprint and
technical resource in NA
Minority equity participation by GenNx360 to fund M&A and
assist in growth
syncreon – The Evolution
Page 3
Walsh Western formed from a
carve-out of „old‟ Walsh Western which was sold to Exel Logistics
provided a global platform.
provided deeper penetration in high tech in Germany.
● Re-branded as s y n c r e o n
Innovators in Supply Chain Solutions
Page 4
● Global company with customer base including Fortune 500 companies
● Providing highly customized end-to-end logistics and supply chain operating solutions critical to our
customer‟s success
● Our solutions are designed to achieve maximum flexibility and agility to meet changing requirements
into today‟s markets
● syncreon works with customers to design and implement highly integrated and customized solutions,
a key differentiator
● We deliver cost savings and a strong competitive advantage to customers looking to outsource the
management of their supply chains
Delivering tailored, integrated solutions
Page 5
Scale
● FY 2008 revenue of $650m
● $35+ billion of product managed annually
● 8,000 direct employees world-wide
● Global footprint across 5 continents
syncreon differentiates through:
● Customization of best in class solutions to customer fit and requirements
● Flexibility, agility and speed to support customers
with major challenges and changing supply chain
requirements
● Performance, Six Sigma Quality and Responsiveness
Some of our key customers
Page 6
Germany
Dusseldorf
Neuss
Emden
Frankfurt
Hamburg
Hannover
Ingolstadt (2)
Niederaula
Potsdam
Regensburg
Saarlouis
Stuttgart
Leipzig
Global locations
USA
Auburn Hills, MI.
Belvidere, IL
Dayton, OH
Dundee, MI
Detroit, MI
Kansas City, MO
Hebron, KY
Memphis, TN
St. Louis, MO
Riverview, MI
Senatobia, MS
Sterling Heights, MI
Warren, MI
Canada
Markham
Mississauga
Laval
Oshawa (2)
Windsor (2)
China
Shanghai
Shenyang
Poland
Lodz
Brazil
Santo Andre
Betim
Curitiba
San Bernardo
Barueri
São Carlos
Itatiaia
Resende
Page 7
Additional delivery capability via outsourced 4PL network in France, Spain, Portugal, Italy, Czech Republic, Slovakia,
Scandinavia, Switzerland, Hungary, Turkey, Greece, Romania
UK
Ellesmere Pt.
Goodwood
Hinckley
Ireland
Dublin
Cork
Limerick
Belgium
Brussels
Genk
Netherlands
Waalwijk
UAE
Dubia
Hungary
Gyor
Customized solutions
Page 8
● Configure-to-orderFinal CTO, sub-assembly, software upload, test, product personalization and final configuration
● FulfillmentVMI, postponement, customization, re-pack, labeling
● E-Fulfillment .com order processing
● Inbound LogisticsSequencing, lot material, kitting, metering,container management, MRO management (non-production material)
●4PL Freight ManagementDelivery via outsourced 3PL, order status visibility, shipment confirmation, specializeddelivery
● Reverse LogisticsReturns management, swap,refurbishment/repair/disposal services
● Export/OutboundCKD, SKD, consolidation, deconsolidation,packing, export, customs & duty management
● Service/Aftermarket PartsWarehousing, repacking, parts orderfulfillment & distribution
So what is Six Sigma?
A definition of very high level quality
as seen from the customer
A methodology to solve problems and improve existing processes & products
(DMAIC) Define-Measure-Analyse-Improve-Control
A methodology to design new products or processes
(DFSS) Design for Six Sigma
A way of “making change happen”
Six Sigma - Foundations
Focused on the customer and their prioritised requirements
These are usually referred to as the CTQs, the critical to quality customer requirements
In manufacturing these typically relate to SLA‟s, specification tolerances, delivery dates, “out of box” compliance
In non-manufacturing including Logistics and Supply Chain these typically will be based around speed, accuracy, and completeness
Getting these things right is critical to the customers experience of your organisation
So, Where Does “Lean” Come From?
In 1987, John Krafcik, a young researcher working at MIT on the “International Motor Vehicle Program” coined the phase to describe the Toyota Production System (TPS)
He suggested the TPS should be named for what the system does, so the performance attributes of the Toyota system when compared with traditional mass production were written onto a white board …
What‟s on the White Board?
This showed it:
Needed less human effort to design products and services
Required less investment for a given amount of production capacity
Created products with fewer delivered defects
Utilised fewer suppliers
Went from concept to launch, order to delivery and problem to repair in less time with less human effort
Needed less inventory at every process step
Caused fewer employee injuries, etc.
Krafcik said, “it needs less of everything to create a given amount of value, so let‟s call it lean”
Traditionally, the Five Key Principles of Lean Thinking are:
Understand the customer and their perception of value
Identify and understand the value stream for each process and the waste within it
Enable the value to flow
Let the customer pull the value through the processes, according to their needs
Continuously pursue perfection (continuous improvement)
The Key Principles Of Six Sigma
Understand the critical to quality requirements (CTQs) of our customers and stakeholders
Understand our processes ensuring they reflect these CTQs
Manage by fact:
Measurement and management by fact enables more effective decision making
By understanding variation we‟ll also know when to take action and when not to
Involve and equip the people in the process
Undertake improvement activity in a systematic way
Our approach is to merge these with the key principles of Lean Thinking to produce an enhanced set …
The Magnificent Seven …Lean Six Sigma
Focus on the customer
Identify and understand how the work gets done – the value stream
Manage, improve, and smooth the process flow
Remove Non-Value-Add steps and waste
Manage by fact and reduce variation
Involve and equip the people in the process
Undertake improvement activity in a systematic way
Lean Six Sigma The best of Lean & Six Sigma
Lean Process Thinking
Six Sigma Defect Reduction
Lean Six Sigma Improvement
Focus on customer value, Waste elimination, speed, Flow
Focus on customer value, defect reduction, variability, and rigorous
project driven problem solving
Business Improvement methodology with lean & data analysis tools built in
Page 17
DMAIC Improve
existing processes,
services, and
facilities to 6 Sigma
quality
Leverage and sustain the gains achieved by
improvement and creation
NPI (DFSS) New
processes, services,
business and facilities to
6 Sigma quality
Business Process Improvement / Six Sigma @ syncreon
BPI program initiated as a strategic company-wide program
Integration of Six Sigma & Lean form the basis of the syncreon BPI
Key objectives of BPI program:
increase operational efficiencies & eliminate waste
meet competitive cost challenges and create customer value
invest in the development of our people
Page 18
What is BPI / Six Sigma?
Six Sigma is a customer focused, results oriented, data driven approach to business improvement
Making & Creating reliable processes / products
Focus on processes, minimizing the variation and eliminating defects
increase operational efficiencies & eliminate waste
meet competitive cost challenges and create customer value
invest in the development of our people
The Return is:
The cost & effort of defects – detecting them / checking them
Reworking them
Customer complaints
Process Interruption
Are removed
Page 19
BPI / Six Sigma Parameters
Process Yield DPMO COPQ Sigma
99.9997% 3.4 <10% 6 World Class Benchmark
99.976% 23 10 – 15% 5 10% Gap
99.4% 6,21 15 – 20% 4 Industry
93% 6,680 20 – 30% 3 10% Gap
65% 30,853 30% 2 Non Competitive
50% 50,000 > 40% 1
COPQ = cost of poor quality: % of overall cost. DPMO = Defects per million opportunities. Sigma = sigma level of the organisation
2003
2009
Page 20
BPI in syncreon
Six Sigma commenced as Business Process Improvement methodology in syncreon in April 2003
Champion Training for executives
Top level presentation to HQ and all facilities on Six Sigma
Customised Yellow Belt Training designed
Roll Out Started!
Page 21
BPI in syncreon
Green Belt and Black Belt Training identified
People sent on GB training, BB training followed
External Black Belts recruited in parallel
Started Steering Committees
BPI Projects kicked off !
Page 22
Management System
Methodology
Metric
Management System
Lean Six Sigma drives strategy execution
Leadership sponsorship and review
Metrics driven governance process
Engagement across the organisation
Methodology
Consistent use of DMAIC Model
Team based problem solving
Measurement-based process
analysis, improvement, and
control.
Metric
Measure / Monitor Key KPI’s & understand process variation
syncreon Lean Six Sigma Approach
Page 23
Lean Sigma Process Improvement Overview
Target non value add
Speeds the process
Reduces invested capital
Removes Buffers
Exposes capability issues
Customer focused
Fixes capability issues
Reduces process surprises
Improves process control
Lean Six Sigma
Both tool boxes are very complimentary
Page 24
Supplie
r
Cust
om
er
Lean Simple & Wing-to-Wing focus Breadth (understanding the whole)
Six Sigma Advanced tools & focused approach Depth (understanding the details)
Lean identifies problems in the flow, and can help to improve the capability (improve phase)
Lean/Six Sigma
X
Improving the capabilitywith Six Sigma can eliminate additional steps
Six Sigma/Lean
Lean and Six Sigma go strongly together
Lean - focus on improving the flow of value.Principle-based methodology to eliminate waste in the flow.
Six SigmaImproves capability of steps that do add value
Six Sigma - focus on improving capability.Rigor methodology and tools to solve problems in the flow.
LeanFocus on flow of value. Helps identify steps that don’t add value and provides tools to eliminate them
X
Two separate improvement initiatives that are very strong together.
Page 25
BPI Program Governance
BPI Steering Committee
BPI Regional Manager
Bi-monthly meetings
Weekly Reviews
Project Appraisals
Mid-term Reviews
Completion reviews
CEO, COO, CFO, CIO, EVP Quality & Engineering ,VP BPI
Project LeaderBPI EngineerOperational
Reps Finance Rep
IT Rep
BPI Team
Project LeaderBPI EngineerOperational
Reps Finance Rep
IT Rep
BPI Team
Project LeaderBPI EngineerOperational
Reps Finance Rep
IT Rep
BPI Team
Project LeaderBPI EngineerOperational
Reps Finance Rep
IT Rep
BPI Team
Page 26
Key Lean Sigma Roles within syncreon
Dedicated positions – part of BPI Group
Manage large business critical projects
Mentor Green Belts
Participate in training
Work with, mentor, and advise management improvement plans
Utilize 6 Lean Sigma tools and methods
Deliver $100,000 Savings
Senior Manager
Project identification
Project prioritization
Project selection
Project execution
Remove road blocks
All employees, down to supervisor level
Awareness training
Contributors to continuous improvement
Part-time team members as appropriate
Employees identified as having future
potential
All Senior Executive and Management
Teams
Work part-time on projects
Project Leaders
Integrate BPI Lean Sigma
methodology into daily work
Deliver $50,000 Savings
Project Sponsor Black Belts
Green Belts Yellow Belts
Training Cycle
Foundation Training and Product Training
Regulations, Systems Training, Best Practices
Blended Training, Quality Audits
Performance Support , Training Improvements
Key Processes, Pitfalls to Avoid
Exceptions
Changes in Process , Regulations
Process Innovations
Initial Training
Refresher Training
Ongoing Training Ongoing Knowledge Transfer
Page 28Page 28
Six Sigma, syncreon & Processes Types
• All businesses processes have Suppliers, Inputs, Process steps, Outputs, and process customers. Customers of a process can be internal as well as external to syncreon. This applies to both “core processes” as well as “enabling processes”
• As a result all processes are potentially subject to output variation. Process customers feel the impact of this variation.
• syncreon applies Six Sigma methodology to improve both core & enabling processes capabilities.
Common Core Processes
Market & Sell
Manufacture Product
Maintain Customers
Deliver Goods/Services
Common Enabling Processes
Hiring
IT
Training & Development
Administration
Page 29
Typical Level of Effort Over a Project Life Cycle
Define Project M A I C Integrate into Daily Work
Leve
l of E
ffort
Champion/Sponsor Project Lead and Team members Team members and Process Owner
Page 30Page 30
Improvements are continuously identified and implementedBPI
Theoretical = actual requirements = no re-engineering need
Best practices and Best in class performanceOperational
Shorter implementation lead time with Zero defectsImplementation
Robust allowing the customer to focus on core competenciesPlan
Innovative and creative ideas, positive impact on SP and customer own operations / Supply ChainRFQ Analysis
RFQ Analysis ImplementationPlan Operational BPI
BPI – New Business Approach
Engineering & IT organizations with a strong focus on customization to support the entire business cycle, starting prior to RFQ Analysis throughout the contract life
Page 31
Summary - Reasons for Lean Sigma Success
Strong Customer Focus
Senior management involvement (Top Down)
Rigorous, disciplined approach with a common language
Short duration projects (3-6 months)
Clearly defined measures of success (bottom line)
Promotes learning culture
Infrastructure for developing key people
Very adaptable, fits well with other programmes
Page 32Page 32
Customer Benefits
Improved balance sheet
Allows focus on core business
Managed complexity for customers
Cost effective way to manage their business
Enhanced Operational performance
Increased speed to market
Reduced logistics costs
Thank you for your interest
s y n c r e o n technologyRobert KearnsBusiness Development EMEA
Mobile +44 (0) 7823 530199Email [email protected]
