Post on 06-Dec-2014
description
Mart Leepin 3092991
Chain strategy for earthmovers
Overview
Company background Scenario and actions undertaken Assessment of the planning processes Questions
HFP - Background
HFP – Heavy Fabricated Products
Manufacture earthmovers in Melbourne.T/O of $20mil AUD annually.Employ 300 people.Are part of a larger leading American heavy fabrication company.
Mart Leepin 3092991
HFP - Background
HFP supply chain
Suppliers HFP Dealers Customers
HFP - Background
Conservative management style identified
Slow reaction from the dominant parent. Outdated Info systems used.
HFP - Background
Fabrication Example - Inside the JCB factory UK
Scenario
Assembly improvement required
Slow movement of parts between production areas.
Four month lead time for some parts.
Products made to customer specification.
Human precision is required for provision – specialized metal working activities.
Actions Undertaken
External party engaged to lead planning
Two representatives from Victoria University were invited by the MD to lead the development of plans across the whole supply chain.Victoria University representatives acted as facilitators for the SOLP process undertaken.
Actions Undertaken – SOLP
SOLP - Strategic Operations Logistics Planning Process
A method used to improve a business channel situation by carrying out planning with supply chain partners.
Mart Leepin 3092991
1/ Determine SC objective
3/ Determine competitive
criteria
2/ Determine product groups
4/ Audit SC
5/ Assess current strategy
6/ Formulate required strategy
7/ Determine action plan
Business objective
Product range
Examine SC
Current policy status
Customer needs Order winning
criteria
Actions Undertaken – SOLP Overview
Suitable strategies
Chosen strategies
and actions
Actions Undertaken – SOLP
HFP SOLP sessions - Outline Session 1 Session 2
Participants
1 Dealer;2 Suppliers;9 HFP Managers.
1 Customer (Conference call);9 HFP Managers.
Product Earth movers Truck Bodies
Time frame
7 workshops;2 hrs long;6 months.
7 workshops;2 hrs long;6 weeks.
Actions Undertaken – SOLP
Overview of SOLP stages
1/ Set supply chain objectives
Decide business objectives.What Products? Which Market?
Actions Undertaken – SOLP
2/ Arrange products into groups
Groups are determined by market segment or particular resources used in production.
Product Group 1 - EarthmoverWheel loader earthmover Hex earthmover
Product Group 2 – Truck bodyStandard Truck body Custom Truck body
Actions Undertaken – SOLP
3/ Decide competitive criteria
Determine what will win a customer order?Price, quality, delivery speed, flexibility, range, support.
Actions Undertaken – SOLPOrder winning criteria – Truck bodies
Competitive factors Standard body Custom
Reliability of delivery 35 35
Features
Quality 10 25
Flexibility of Design
Response to variation in volume 10
Price 15 25
Delivery lead time 30 20
Total 100 100
Actions Undertaken – SOLP
4/ Audit supply chain
Review and measure capabilities of operations, info. systems, and logistics.Inventory, Inbound logistics,Provision,Distribution,Management of SC,Financial Control of SC.
Mart Leepin 3092991
Actions Undertaken – SOLP
4/ Audit supply chain: Provision – Areas of focus: Receipt of materials from suppliers, availability of people & machinery, Q & A, Information flows.
Possible performance measures considered:Capacity - i.e. - quantity of bodies / earthmovers per week,Product defect rate,Accommodation for customer specification,Response to demand.
Mart Leepin 3092991
Actions Undertaken – SOLP
4/ Audit supply chain: Inbound logistics - Areas of focus:Evaluation of suppliers, JIT, transport of material to production areas.
Possible performance measures considered:Timely, accurate receipt of quality materials,Flexibility of suppliers.
Mart Leepin 3092991
Actions Undertaken – SOLP
4/ Audit supply chain: Outbound logistics -Areas of focus:
Effective transport from manufacturer to DC.
Possible performance measures considered: Timely and accurate delivery of orders.
Actions Undertaken – SOLP
5/ Assess current strategy
Introduce policy areas, identify current practices, processes and resources. Capacity, human resources, quality, facilities.
Assess whether order winning criteria is being met.
Actions Undertaken – SOLP Assessment of operations strategy example – Truck bodies
Order Winners
Policy areaCurrent Practice
Reliabilityof delivery
Quality-Attain spec
Flexibilityof design Price
Deliverylead-time
Facilities 2 factories 1 1 0 -1 -2
Capacity
120 hours2 bodies per week -1 0 0 -1 -1
Vertigal Integration
Assemble in - house -1 -1 1 -1 -1
Process & Technology Fixtures -1 -1
-2 0 -2
HR's
Core team and contract 0 1 -1 -1 1
Actions Undertaken – SOLP Assessment of operations strategy example – Truck bodies
Policy areaCurrent Practice
ReliabilityQuality
- Flexibility
Price
Delivery
of delivery
Attain spec of design lead-time
QualitySelf -
inspection 0 2 0 1 0
Control Policies
BPICS
0 2 0 1 -1MRP II
ProcedureCo-
operation -2 1 -1 0 -1
DistributionTransport
Co 0 0 0 -2 0
New Product
Formal process
plan 0 2 0 1 -2
Actions Undertaken – SOLP
6/ Formulate required strategies
Identify areas for improvement.
Policy areaCurrent Practice
Reliability Quality- Flexibility
Price
Delivery
of delivery Attain spec of design lead-time
Process & Technology Fixtures -1 -1 -2 0 -2
Actions Undertaken – SOLP
6/ Formulate required strategies
Identify specific weaknesses. Lack of tooling and fixtures used to hold components.Identify corrective strengths.Consider the situation in reverse, - Reduce reliance on tooling.Identify solution.Install robotic welding.
Actions Undertaken – SOLP
7/ Create action plan
Use strategy to drive concrete, specific, timely actions.
Actions Undertaken – SOLP Action plan example for wheel loader bucket earthmover
Policy Area
Year 1 Q3 Year 1 Q4 Year 2 Q1/2 Year 1 Q 3/4
Facilities Review floor space
Layout design completed
Allocate extra space acquired
Cell layout completed for additional production
Capacity Examine feasibility of new press
Develop alternative suppliers
Order new equipment
Install new equipment
Process & tech
Review fixtures and robot welding
HR’s Hire weld engineer,Review recruitment & T/d of welders
Recruit work tools engineer
Complete training of new welders
Outcomes and Assessment
Positive response received from HFP Detailed action plans created for the next 1.5 - 2 years for
policy areas. Less detailed action plans created for supplier and dealer
policies and shorter term actions. Assessment of SOLP Process was undertaken via
observation and interviews undertaken. SOLP can assist a diverse team formulate strategic plans.
Mart Leepin 3092991
Outcomes and Assessment
PositivesStructured process.Assists stakeholders in gaining insight and understanding.
NegativesInput from a greater range of members may be difficult to arrange.A SOLP restricted to a focal co., can mean ‘not seeing wood for the trees’.
Mart Leepin 3092991
Questions 1/ What are the strong and weak points of the SOLP
process for strategic planning of a SC ?
Structured approach, democratic, potential for a range of valuable insights & inputs.
Potentially difficult to co-ordinate various participants and inputs.
2/ Should the SC strategy team include members from all partners in the chain?
Yes, ensures realistic order winning criteria, assists in improving relationships with customers and suppliers, leading to attainment of goals relating to Inbound logistics, Provision and Distribution.
Mart Leepin 3092991
Questions
3/ Why should HFP use the SOLP Process to form its future strategic actions in operations areas? How will actions be implemented?
Time already invested , familiarity by participants, (refer to strengths q 1). Approval will be required from the parent for actions that require expenditure.
Involve participants from the planning process & perhaps external change management.
Mart Leepin 3092991
Questions
4/ Is it sufficient to end external help when strategic action plans have been derived or is implementation assistance essential to put into practice the strategies derived?
Assistance may be required, especially if an organization has not undertaken a major change for some time.
Due to the characteristics of the parent, external assistance may provide a additional drive and perspective to meet objectives.
Mart Leepin 3092991
Reference
Sadler I. (2007) Logistics and Supply Chain Integration, Sage, London