measuring modeling and managing supply chain capacity
Post on 03-Jul-2015
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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
2
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
3
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
5
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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