Lean Supply Chain Management Essentials: A Framework for Materials Managers, 1st Edition (Paperback) book cover

Lean Supply Chain Management Essentials

A Framework for Materials Managers, 1st Edition

By Bill Kerber, Brian J. Dreckshage

CRC Press

274 pages | 118 B/W Illus.

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Description

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.

Table of Contents

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

Jidoka

Goals

Improvement and Respect

Lean: Additional Considerations

A Toyota Leader’s View of the Toyota Production System

Technical

Management

Philosophy/Basic Thinking

Planning and Control Hierarchy

Lean Planning and Control Chart

Leveling Production

Pull Systems

Flow

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

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

Chase

Hybrid

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

Packaging

Product Availability and Its Effect on Logistics

Collaboration

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

Purchasing

Developing a Systems Perspective for Purchasing

Traditional Purchasing

Lean Purchasing

Keiretsu

Lean Partnership

Quality

Supplier Quality Audits

Cost

Lean Purchasing and the China Price

Delivery

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

Appendices:

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

Index

About the Authors

Bill Kerber is a principal of High Mix Lean, a Lean Transformation consulting firm in Medford, New Jersey.

Brian J. Dreckshage is a Supply Chain Management Consultant currently working in Ballwin, Missouri.

Subject Categories

BISAC Subject Codes/Headings:
BUS053000
BUSINESS & ECONOMICS / Quality Control
BUS076000
BUSINESS & ECONOMICS / Purchasing & Buying
BUS087000
BUSINESS & ECONOMICS / Production & Operations Management