Measuring Modeling and Managing Supply Chain Capacity
Transcript of Measuring Modeling and Managing Supply Chain Capacity
Measuring Modeling and Managing Supply Chain Capacity
Approach for understanding and Managing Capacity
Plan Do Check Act
• Plan– Establish operating plan
– Assess current capacity
– Define demand
– Identify sufficiency plan to close gap
• Do– Implement actions
• Check– Measure performance
• Trend, Pareto
• Act– Use 8 D to resolve problems
Capacity Planning
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Value Stream Perspective
• Holistic view of
– Capacity and capability
– Internal and external
• Current State and Future State
– Plan, Do, Check and Act
• Identify constraint(s)
• What can you Influence or Control
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Understand the 5 Ms and Effect on Capacity
• Measurement (OEE and OAE)
• Machinery (Capability…Gross, Eng., Actual)
• Methods (Lean Tools…SMED, TPM)
• Manpower (Standard work and Training)
• Material (Right…Place, Time, Amount)
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Customer
• Demand based on contracted agreement
• Operating plan… – APW/LCR 5 Days
– MPW/MCR 6 days
• Shutdown losses for extended holidays.
• Forever requirement
Supplier
• Demand based on market forecasts
• Operating plan… – 6 to 7 days per week
• Shutdown losses limited
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APW=Average Production Week LCR=Lean Capacity Rate
MPW=Maximum Production Week MCR=Maximum Production Rate
Perspective Customer versus Supplier
Measuring Capacity
Align Measures
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PROBLEM DEFINITION TIME PERIOD DATA TYPE ANALYSIS & REPORTING FOCUS
1 EXECUTIVE
Management or
Business Process /
Systems
Year / Month Aggregate $Financial Data Driven Reports /
Directional AnalysisPolicy
2 DIRECTORProduct / Workshop
FunctionMonth / Weekly
Product Line / Asset Allocation
($ / %)
Trend Charts (Material, Resources,
Timing)
Business Processes /
Interdisciplinary Systems
3 MANAGER Process / Work centers Weekly / DailyProcess / Material Allocation
($ / %)
Pareto / Trend Charts (Material Flow
/ Quality)
Workshop Resource
Capability / Capacity /
Flexibility
4 SUPERVISOR Group Workflow Daily / HourlyMaterial / Quality Statistics &
Analysis
Work and Material Flow Charts /
Waste Elimination (Kaizen)Standardize Work
5 OPERATOR Individual Workflow HourlyMaterial / Quality Attributes (5S -
G0/NO GO)Status to Target (RYG) Quality
MANAGEMENT
OPERATIONS PERFORMANCE METRICS
Capacity and Time
• Gross
– 24 hours day x 7 days week
– Cycle time has significant impact on gross pieces
• Operating Plan
– Gross minus time not scheduled
• Run Time
– Operating minus planned downtime
• Availability %=
– (Run time – documented lost time) /Run time
• Efficiency %– Ideal cycle time/(Available time/Total pieces)
• First Time Yield %– Good pieces/Total pieces
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Measurement
• Overall Equipment Effectiveness (OEE)– Availability x Efficiency x First Time Yield
– Measure of Production Team
• Overall Asset Effectiveness (OAE)– ((Op Plan– Planned DT)/Op Plan)) x OEE
– Measure of Operations Team
• Total Equipment Performance (TEP)– ((Gross Hrs.- Not Scheduled)/Gross Hrs)). x OAE x OEE
– Measure of Executive Team performance
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• Visual management of the constraint
• Variance to plan WHY? Why?
Measure to Plan
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• Trend, Pareto, and Sufficiency Plan
Measurement Goal, Actual and Plan
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Modeling Capacity
Strengths
• Simple to use/understand– Production processes
– Static data
• Internal processes
• Based on data from actual production runs– PPAP 300 piece
– Run at Rate
• Identifies constraints
• Mandated by OEMs
Weaknesses
• Minimizes effect of non value added processes– Buffers, Material movement
• Data isn’t dynamic– Time between failures
– Time to Repair
• Focused on individual process not the production system.
• Focus on up level BOM
• Not good at what if?
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Capacity Analysis Workbooks
Strengths
• Plans internal and external processes.
• Considers Machinery, Manpower, Methods, Material
• Demonstrates capacity versus demand overtime
• Analysis of BOM
• Identifies constraints
Weaknesses
• Uses static data sets– Cumbersome to maintain
• Analysis of planned to actual generally performed through spread sheets.
• Reliant on accurate production reporting
MRP System
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Strengths
• Identifies throughput improvement opportunities
• Provides a visual for understanding product and information flow
• Working document
• Captures process data
• Future State Maps
Weaknesses
• Static Data
• Manual process requires team involvement to be effective
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Value Stream Mapping
Strengths
• Considers the interrelationship of all processes.
• Includes machinery, methods, material, manpower.
• Considers variation
• Evaluates capacity overtime
• Validates Production System
Weaknesses
• Must have software license
• People must be trained in usage
• Models are unique to flow
Production Simulation
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Manage Capacity
• Identify product families
• Value Stream Map product families
• Collect process flow and information flow data
• Use value stream and associated data to develop simulation of the process flow
• Validate capacity plan with simulation model
• Use Kaizen to improve constraint throughput
– Question all reasons for losses
• Why?
• Can the lost event time and /or frequency be reduced
• Update VSM and simulation
Capacity Management
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Deploy Theory of Constraints
• Only by increasing flow through the constraint can overall throughput be increased.
• Assuming that demand has been defined the steps are:
– Identify the system's constraint(s)
– Decide how to exploit the system's constraint(s) (how to get the most out of the constraint)
– Subordinate everything else to the above decision (align the whole system or organization to support the decision made above)
– Elevate the system's constraint(s) (make other major changes needed to increase the constraint's capacity)
– Warning! If in the previous steps a constraint has been broken, go back to step 1, but do not allow inertia to cause a system's constraint
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Summary
• Define Product Family Value Steam
• Understand 5 Ms of the Production System
• Assure demand is accurate
• Collect and Analyze operational data
• Base capacity on historical performance
• Deploy Theory of Constraints
• Validate improvements with appropriate models
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