„lean manufacturing along the supply chain – efficient...
TRANSCRIPT
„Lean Manufacturing along the Supply Chain – efficient implementation at a global operating
automotive supplier “
Klaus Günther, Senior Manager Group Logistics
GRAMMER‘s success started more than 100 years before when Willibald
Grammer founded a saddlery in Amberg. Since then GRAMMER developed itself
from a local manufacturer of seat cushions to a global automotive supplier for the
car and commercial vehicle industry.
GRAMMER – Milestones
1880 Willibald Grammer establishes a saddlery
1954 Georg Grammer produces seat cushions for tractors
1970 Serial production of suspended seats
1982 Production of seats for trucks and busses
1985 Division automotive interior
1990 Production of passenger seats for trains (ICE)
1996 IPO of GRAMMER AG
2004 Development and production of center consoles
2005 Opening of two new production sites in China
2008 Entering the Russian truck market
2011 Takeover of EiA Electronics N.V., Belgium
2012 Joint Venture for truck seats with Yuhua in China
2013 Takeover of Nectec s.r.o., Czech Republic
As a global player in the passenger car and commercial vehicle industry we are
located on four continents with 26 companies and more than 30 production and
sales/distribution facilities focused on highest quality.
GRAMMER – Globally next door to the customer
GRAMMER – products and markets
Driver seats for tractors, construction vehicles, forklifts and municipal vehicles
GRAMMER – products and markets
Driver seats for trucks and buses; seating systems for passenger seats
GRAMMER – products and markets
Headrests, armrests and center Consoles for passenger cars
Motivation and initial situation
Supply chain with lean principle
Process and application overview
Functional details
Lean-capable supply network
2
1
3
4
5
Motivation and initial situation
Supply chain with lean principle
Process and application overview
Functional details
Lean-capable supply network
2
1
3
4
5
Without levelling in production each single demand variation has
a direct impact on the production and supply network
Assembly line
JIS plant
OEM Production plant
Components 1
Components 2
Low-Runner
IC plant IC plant
Supplier A Supplier B Supplier A
Challenges today
Disturbances initiate a shock
wave in planning
Event-driven plan: distur-
bance, planning, disturbance
Continuous replannig leads to
instable production program
Changing sequences disable
optimisation
Missing transparency
Ongoing coordination of
involved persons is required
A stable planning and according processes are a prerequisite for levelling in production,
replenishment and procurement processes
LEAN Production and SAP – a contradiction?
LEAN and SAP???
* Every Part Every Interval
Interface to SAP ERP?
IT application support vs. IT-free processes (Kanban, Heijunka)
If supported by IT: standard solution/software or individual development?
Central data access: transparency vs. local and IT-free processes?
General question before the LEAN implementation
Quick response on demand variations / faster reaction on market development
Complexity of processes is reduced
Processes are standardised
Increase of quality in operations and logistics
Stock level reduction
Manufacturing processes are decoupled from exceptional events
Number of utilised resources is optimised
Motivation of employees is increased / absence times are reduced
Benefits of Lean Manufacturing in the supply chain
Motivation and initial situation
Supply chain with lean principle
Process and application overview
Functional details
Lean-capable supply network
2
1
3
4
5
Supply Chain with lean principles
super-
market
OEM
OEM
Components 1
IC plant External
supplier
pull
Goods receipt
Production plant
Components 2
Low –Runner
Demand-
driven
IC plant
push
Assembly line 2
Assembly line 1
JIS plant
JIS plant
JIS
JIS
push
push
Supplier park
Define /
simulate
schedule
Pull
Calculation of
safety stock
KANBAN
calculation Alignment Heijunka
Motivation and initial situation
Supply chain with lean principle
Process and application overview
Functional details
Lean-capable supply network
2
1
3
4
5
Segmentation:
Identification of material groups with
individual planning processes and
requirements (e.g. differentiation of high
runners and low runners)
EPEI calculation:
Determination of the minimal lot size
Define schedule:
Specification of time intervals for the pre-
definition of the production sequence
Simulate schedule:
Align schedule and actual production plan
Calculate safety stock:
Definition of the safety stock levels
based on number of Kanban boxes
Alignment:
constant production quantities within
planning interval as result of MRP
Levelling:
Creation of the production sequence
according to defined schedule
Pull:
Replenishment of components
according to the real consumption
Process steps of the „Heijunka levelled Kanban system“
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Supported by SAP Enhancement Packages
Enhancement Package 6 is available
The functionality “Enhanced Lean
Manufacturing” in EhP5 replaces SAP LPO
SAP extended the lean manufacturing
capabilities of SAP ERP (EhP2, EhP4,
EhP5, EhP6) continuously
Supported by Consulting Solution
Available since Q3/2011 as consulting
solution “Lean Manufacturing Planning &
Control (Heijunka)” by SAP Consulting
Process steps and elements of the
„Heijunka levelled Kanban system“
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Lean & SAP – two different worlds?
SAP’s understanding of Heijunka and an adequate IT-solution:
system integrated leveling keeps demand fluctuations from shop floor to enable a more
efficient production process
there are high- and low runners, and production needs to be mixed
different kinds of leveling have to be supported: Push, Push-Pull and Pull-Leveling
Heijunka needs a good visualization
SAP and Lean is not a contradiction, it’s the combination of the benefits of PUSH & PULL:
SAP covers both approaches, PUSH and PULL
PUSH is the classic planning approach, which is performed mainly by MRP
PULL means consumption based replenishment of goods, and is covered by ERP
processes like JIT, JIS and Kanban
Both approaches can be combined in SAP, so that the long-term planning view can be
improved by short-term consumption information
SAP’s consulting solution “Lean Manufacturing – Planning & Control” supports a fully
integrated, IT supported Heijunka process.
System-based leveling with SAP LMPC
Initial Situation:
…material‘s
requirements
fluctuate over
time…
… but efficient
manufacturing
needs steady
quantities
Solution: demand fluctuations are covered by a buffer; buffer size is calculated according to fluctuations’ size
and service level required
goods are produced in leveled, steady quantities, filling the buffer
all calculations are performed by the system; manual interaction needed only in case of exceptions
many other leveling variants possible (e.g. Pull / Push-Pull), depending on requirements
Heijunka-Board – the electronic way:
graphical planning table with SAP LMPC add-on
Capacity
view
flexible &
adjustable
menus and
buttons
Alle relevant data
available (> 900
columns in ALV-
Grid)
Alerts, e.g. for
buffer level,
constraints not met,
etc.
Visualization
of order
sequence
Sequencing
according to
different
criteria (e.g.
setup matrix)
Stock level
view
production orders with e.g. leveled quantities can be displayed, sequenced etc.
rhythm wheel / production schedule functionality can be used
mixed sequence of high / low runners
direct access to relevant data
conflicts (e.g. missing components, tools, etc.) can be visualized
solution combines the features of a Heijunka-board, combined with the comfort of a planning cockpit
Motivation and initial situation
Supply chain with lean principle
Process and application overview
Functional details
Lean-capable supply network
2
1
3
4
5
Segmentation
Product related analysis
Variation of overall demand
Average volume
Product min/max demand
Value/benefit contribution
Analysis of available capacity
Asset utilisation
Disturbances
Cycle time
Operating times
Maintenance
Support during determination of
EPEI
Safety stock
Stock to cover increasing
demand
With consideration of
OEE-Influence, pre-setup
Reserve capacities
Setup changes
Stock areas, box sizes and
box availabilities
Operating times
EPEI classes
Functional system support –
segmentation is a prerequisite for optimised Heijunka planning
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Master data maintenance alignment/levelling:
Principe of the EPEI calculation
EPEI calculation
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Production duration Stop time Shift decoupling Setup time
Determination of EPEI, lot size and target stock levels
Based on demand
forecast and output
rate for the whole
product portfolio per
shift (incl. Scrap)
Based on statistical
reports of shift
protocols (average
values)
Establishing of a
shift decoupling
covering 80% of
occurred stop times
Usage of the
residual available
time per shift for
setup
Overall shift duration
EPEI calculation
EPEI is the shortest time
interval, where each product is
produced at least once
EPEI is the operational smallest
lot size – in contradiction to the
economic lot size
Target is the standardised
process for the determination of
the moving stock
Master data maintenance for alignment/levelling
EPEI calculation
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Calculate safety stock
SAP enhancement package 5:
Improved support to calculate
safety stock
SAP ERP proposes the number
of Kanban boxes
Periodic process to update the
parameter settings
Customer demand or a specific
forecast can be used for
calculation
Less gap of material with
reduced stock level
Master data maintenance for alignment/levelling
Calculate safety stock
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Average demand Replenishment, consumption
Stock variation
Disturbances, buffer Operating time
Alignment
Alignment for each
production line after
MRP run for high
runner
Production capacity is
adapted to alignment
Customer specific
implementation is
possible
Daily production
quantities basis for
sequencing
Planning of low
runners by date
Requirements planning:
Alignment
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Production and replenishment control:
Pull
Pull
Manufacturing:
Release 2 of the consulting solution
supports the Heijunka aligned Kanban
system with shop stock
Replenishment:
MRP generates the demand forecast
Kanban-/JIT-calls support pull-based
replenishment from production,
storage and the supplier
Kanban board with automatic update
Batch building box
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Consumption plant
Production and replenishment control: Pull
Supplier – KANBAN: control cycle calculation
SAP Enhancement Package 5:
Graphical display of demand
and the calculated stock level in
the supermarket
Calculation of the number of
Kanban boxes within the control
cycle
Master data maintenance for alignment/levelling Material require-
ments planning
Short-term
planning
Production and re-
plenishment control
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Production and replenishment control: Pull
Supplier KANBAN board: consumer view
Features:
Empty KANBANs already
assigned to the supplying plant
are marked in red
Full KANBANs in the
supermarket of the consuming
plant are marked in green
KANBANs in transit with delive-
ry note are marked in yellow
JIT call via SAP standard
Display:
Schedule line ID (customer)
Box number of customer
Processing status in supplying
plant
Planned delivery time
Consumer
Source
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
Levelled production and material flow
Peaks on capacity requirements on people and machines are reduced
Bullwhip effect especially to intercompany suppliers is reduced
Continuous customer delivery is improved
Stable consumption of supplier parts (internally/externally) is ensured
Less impact of variances in sales quantities and disturbances to the production plan
Lead time and stock level are reduced
Integration of shop floor and SAP supported material requirements planning and procurement
processes
Simplification of the planning process with reduced planning effort
Transports and their capacity is easier to plan
Stock level planning is optimised: buffer stock is reduced Stock areas get smaller costs
of stock keeping are reduced
Benefits through a lean oriented supply chain…
Operational lean processes supported by SAP ERP
Lean processes
In SAP ERP
Super-
market
OEM
OEM
Production 1
IC plant External
supplier
pull
Goods receipt Production plant
Production 2
Low -Runner
IC plant
push
Assembly line 2
Assembly line 1
JIS plant
JIS plant
JIS
JIS
push
push
Supplier park
Segmen-
tation
EPEI
calculation
Define/simulate
schedule Levelling
Alignment Calculate
safety stock
Calculate
safety stock
Pull
Pull
Segmen-
tation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock Alignment Levelling Pull
The transfer of the processes to SAP ERP avoids
disruptions and increases the positive effect of levelling
in production with impact on the whole supply chain
Lean: Processes and IT are aligned to an efficient flow
Motivation and initial situation
Supply chain with lean principle
Process and application overview
Functional details
Lean-capable supply network
2
1
3
4
5
Process oriented
Demand is in principle continuously, a preview is available
Stable processes and a stable bottleneck (maybe challenges during ramp-up/phase-out)
Straight oriented material flow
Partners and involved departments are able to adapt to levelled requirements and delivery
Short term additional demands can – even though – be covered
Combined planning of high runners with levelling and low runners by requirement date
Relatively short setup times
IT oriented
SAP SCM is too complex (heuristic with characteristic based or model mix planning)
Standard capacity levelling in SAP ERP (graphical planning table) has gap of transparency
Infinite planning is „too less“ ( finite planning with Heijunka board is required)
Lean & Levelling, but when?