1st Edition

Lean Supply Chain Management Essentials A Framework for Materials Managers

By Bill Kerber, Brian J. Dreckshage Copyright 2011
    280 Pages 118 B/W Illustrations
    by CRC Press

    276 Pages
    by CRC Press

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    Presenting an alternate approach to supply chain management, Lean Supply Chain Management Essentials: A Framework for Materials Managers explains why the traditional materials planning environment, typically embodied by an Enterprise Resource Planning (ERP) system, is an ineffective support system for a company that wants to adopt Lean practices. It begins by defining supply chain management basics, including roles, objectives, and responsibilities from a traditional framework. Next, it describes Lean basics and explores the conflicts between Lean and the traditional framework.

    The book focuses on the materials management aspects of Lean, such as leveling work into the value stream, heijunka scheduling, standard work, and the concept of intervals, including Every Part Every Interval (EPEI). By combining traditional materials management tools, such as Sales and Operations Planning (S&OP), with Lean manufacturing approaches and applying them to different manufacturing environments, the authors clarify the logic behind why you are doing what you’re doing with Lean components and how they fit together as a system. Specifically, they explain how to:

    • Determine which leveling strategy to use to smooth production
    • Calculate interval to determine lot sizes in various production environments
    • Apply Lean to purchasing, warehouse, and logistics areas
    • Use your value stream map for green initiatives and risk management
    • Replace capacity planning and shop floor control with visual factory, operator balance charts, EPEI, and plan for every part

    Illustrating why balancing demand and capacity is better than trying to balance supply and demand, the book includes a definitive chart that matches Lean tools to the planning and control charts that have served as the model for ERP systems. It integrates the principles learned from Toyota’s fifty-plus-year journey with Lean principles to provide the up-to-date understanding required to approach the application of Lean to your supply chain with a methodology that allows for experimentation, learning, and continuous improvement.

    Lean Basics
    Materials Management
         Traditional Planning and Control Framework
    Enterprise Resource Planning (ERP)
          Problems with ERP in Make-to-Order Environments
    Five Lean Principles 
         Specify What Creates Value from the Customer’s Perspective
         Identify All Steps across the Whole Value Stream
         Make Those Actions That Create Value Flow
         Only Make What Is Pulled by the Customer Just inTime
         Strive for Perfection by Continually Removing Successive Layers of Waste
    Lean Focuses on Three Major Areas of Waste
    House of Toyota Framework
         Operational Stability 
         Just in Time 
         Improvement and Respect
    Lean: Additional Considerations
    A Toyota Leader’s View of the Toyota Production System 
         Philosophy/Basic Thinking
    Planning and Control Hierarchy
    Lean Planning and Control Chart
         Leveling Production
         Pull Systems
         Interval as Lot Size

    Executive S&OP, Forecasting, and Customer Relationships
    Executive Sales and Operations Planning
    Role of Executive S&OP in Lean
         Lean Manufacturing
         Executive S&OP
    What Is Executive S&OP?
    Executive S&OP Focus
    Executive S&OP Process 
         Product Families
         Aligning Families and Resources
    Takt Time and Executive S&OP
    Forecasting Perspective
    Forecasting Basics
    Demand Patterns
    General Methods of Forecasting
    Forecasting as a Process
    An Alternative to Forecasting: Supplier Partnerships

    Leveling and Heijunka
    Leveling Value Streams
    Mix and Volume Variability Definitions
    Buffer with Finished Goods Inventory (a la TPS): Make to Stock
    Bill of Materials Shape Helps Dictate Strategy
    How Lean Fits In: Make to Stock
    Leveling Production Mix vs. Sales Mix: Heijunka Scheduling
    Buffer Demand Variability with Lead Time (Backlog): Make to Order
    Managing Backlog
    How Lean Fits In: Postponement
    MPS and Heijunka
    Master Production Schedule
    Concluding Observations

    Dependent Demand Materials
    Benefits of Creating Flow
    Batch Manufacturing
    Lean Process Flow
    Operator Balance Chart
    Batch Flow
    One-Piece Flow
    First-In-First-Out Flow
         Typical FIFO Lane Rules
    Material Planning
         Material Planning Horizons
    Mix Issues

    Capacity Management and Shop Floor Control
    Issues with Traditional Capacity Planning
    Capacity Planning in Lean
    Value Stream Loops
    Capacity and Pull
    Standardized Work in Process
    Shop Floor Control
         Heijunka, Flow, and Visual Control as Shop Floor Control
         Staffing and Takt Time
         Operator Balance Chart

    Inventory Management
    Traditional Inventory Management
         The Importance of Inventory Management: Customer Satisfaction and Company Financials 
         Concepts of Traditional Inventory Management 
         Order Quantity 
         When to Order
    Lean Inventory Management
         Inventory as Waste 
         Inventory Management in Lean 
         Visual Control 
         Approaches to Reducing Inventories 
         Supermarket Sizing as a Way to Reduce Inventory 
         Kanban Sizing
         WIP Inventory: FIFO Management 
         Reducing Pipeline Inventory: Kanban—Visual Card 
         Inventory Reduction through Reducing Lot Sizes 
         Point of Sale Data

    Lot Sizing
    Lot Sizing in Lean
    One Piece
    Every Part Every Interval (EPEI)
    Why Should We Strive for Smaller Intervals?
    So How Do We Determine the Interval?
    An Example: Murphy’s Toys Trim Data
    Interval and Capacity
         Balancing Work (Operator Balance Charts)
         Lot Sizing as Part of Scheduling
    Applying the EPEI to Traditional Planning Systems: The Period Order Quantity
    Mix Issues
    Volume Variability
    Mix Variability
    Making Sense of High-Mix Value Streams
    What Do We Gain by Increasing the Interval?
    Interval as Goal Setting
         High-Mix Interval
    Determining the Interval
    Interval in Value Stream Loops

    Warehousing and Logistics
    Traditional Physical Control of Inventories
    Traditional Relationships
         Packaging—Readying an Item for Shipment
         Overall Warehouse Setup and Item Locations
    Traditional Logistics
         Logistics Skill
         Freight Cost
    Distribution Requirements Planning
    Lean Warehousing
    Controlling Space
    Controlling Labor
    Lean Logistics
    Inbound Logistics
    Outbound Logistics
         Zone Skipping
    Product Availability and Its Effect on Logistics
    Visibility and Reliability

    Quality Control
    Lean Quality
    Lean and Total Quality Management—Visual Control
    Poka-Yoke Methods and Examples
    Lean and Quality Control—Jidoka/Autonomation
    Lean and Total Quality Control Management—Companywide
    TS 16949
    Seven Lean Quality Tools

    Developing a Systems Perspective for Purchasing
    Traditional Purchasing
    Lean Purchasing
    Lean Partnership
         Supplier Quality Audits
         Lean Purchasing and the China Price
    Improving Delivery and Flexibility by Reducing Lead Times and Lot Sizes
         Reducing Supplier Base
         Keeping Critical Items Internal
         Measuring Delivery Performance
    Technological Capabilities
         Design and Development

    Lean System
    Summary and Conclusions

    The Myth of the Bell -Shaped Curve: Inventory Level and Customer Service
    The Bullwhip Effect
    Lean Implementation Methodology
    Using your Value Stream Map for Green Initiatives and Risk Management



    Bill Kerber, Brian J. Dreckshage