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Transcript of 1 Lean Supply Strategies: Applying 5S Tools to Supply Chain Management Kimball Bullington, Ph.D....
1
Lean Supply Strategies: Applying 5S Tools to Supply Chain Management
Kimball Bullington, Ph.D.Professor of Supply Chain
ManagementMiddle Tennessee State University
Presentation Expectations
• Not a lean operations sales pitch
• 5S is necessary, but not sufficient
• Supply strategies should be consistent with operations strategy – this may not be for you
Outline
• What is 5S?
• What is a Supply Strategy?
• What is Lean Supply?
• Developing a Supply Strategy Using 5S
Five S
• An organizational method for lean operations
• A pillar of the visual workplace
• A system for workplace housekeeping
Why Use 5S as a Model?
• It is a simple model and easy to understand and communicate.
• It uses a familiar vocabulary in a lean system.
• It helps to communicate the reasons for SCM activities such as consolidation and segmentation to those outside of supply management.
Five S
• Sort (seiri)
• Set in Order (seiton)
• Shine or purity (seiso)
• Standardize (seiketsu)
• Sustain (shitsuke)
5S
Five S
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
REDTAG
If it doesn’t belong, If it isn’t being used,If it is in the way – get rid of it.
Set in Order
• A place for everything and everything in its place.
• Tool cutouts
• Taped outline on floor or bench
• Color coding
Five S
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
Input
Output Tape enforces “Set in Order”
Shine
• Keep everything clean and swept
• System maintenance and inspection
• Problems are more easily spotted when the workplace is in order
• It promotes discipline
Standardize
• Standardize ensures that your progress in 3S implementation is not wasted.
• Procedures, schedules, practices
Sustain
• Deming’s point number 1: Constancy of purpose
• Golden Broom Award
Outline
• What is 5S?
• What is a Supply Strategy?
• What is Lean Supply?
• Developing a Supply Strategy Using 5S
What is a Supply Strategy?
• Strategy – A plan for achieving
organizational goals.
• The Supply Strategy should support the Corporate Strategy.
• The Supply Strategy should support the Operations Strategy.
• The Supply Strategy should give our customers confidence in the quality, reliability, and safety of our products.
Supply Strategy Constraints
Outline
• What is 5S?
• What is a Supply Strategy?
• What is Lean Supply?
• Developing a Supply Strategy Using 5S
Lean Supply
• Supply in a Lean Operations environment
• Supply that supports Lean Operations
• Supply with little waste
• Supply consistent with lean principles
Lean Operations
• The latest incarnation of JIT
• Based on Toyota Production System.
• Waste elimination
• Widely used in automotive mfg & repetitive mfg.
• Gaining popularity in all mfg. as well as services
Outline
• What is 5S?
• What is a Supply Strategy?
• What is Lean Supply?
• Developing a Supply Strategy Using 5S
Why Use 5S as a Model for Supply Strategy?
• It is a simple model and easy to understand and communicate.
• It uses a common language in a lean system.
• It communicates the reason for consolidating and segmenting to those outside of supply management.
Five S Supply Strategy
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
Five S Supply Strategy
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
REDTAG
If they don’t belong, If they aren’t being used,If they are in the way – get rid of them.
Five S Supply Strategy
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
RedConsolidat
eTagIf they don’t belong,
If they aren’t being used,If they are in the way – get rid of them.
How do we make improvement when the restraining forces offset the driving forces?
Consolidation
Restraining Forces Driving Forces
Progress
Forces Driving Consolidation
• Reduces waste of working with wrong suppliers
• Focuses efforts of selection, evaluation, and improvement on a few suppliers
• Reduces transaction waste
• Increases opportunity for partnering and leverage
• Is consistent with lean production!
Forces Opposing Consolidation
• Fear of loss of competition• Doubtful savings• Lack of understanding of motivation• Lack of commitment to the selection process• Pets
Improvement by Reducing Restraining Forces
Consolidation
Progress
Five S Supply Strategy
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
Set in Order
• Segmentation– Risk value– Spend value– Design value– Time value– Location value
How Can I Be Successful? Evaluation of Current Supply Base
• Number of Suppliers• Breakdown by Commodity• Skills / Process Evaluation• Performance Evaluation
Critical 2: Special Situations
Critical 1:Long-term Relationship
Non-Critical 1:Contractual
High
Low High
Ris
k
Annual Spend
Supplier Segmentation Matrix
Non-Critical 2:Transactional
Consolidate
ConsolidateRisk reduce &Consolidate
0123456789
10
0 1 2 3 4 5 6 7 8 9 10
Need / Opportunity for Lean
Ne
ed
fo
r E
ng
ine
eri
ng
In
vo
lve
me
nt
Pipe
Boards
Service
Machine
Housing
Weld
Fitting
Design
Lean
Design & Lean
Supply Base Segmentation
Five S Supply Strategy
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
Shine
• Keeping machines clean helps us to spot problems
• Keeping our supply base “clean” (i.e., orderly, measured) helps us to spot problems or opportunities
• Working with suppliers on ongoing development opportunities
Shine
• Inspection of suppliers implies surveys or audits– Site surveys– Supplier self-assessment– Remote surveys– 3rd party certification surveys– 3rd party quality awards
SWOT AnalysesCommon Themes
• Strengths – Current supplier provides product for process mkt.
• Weaknesses – We are a small customer with little leverage– Lack of management depth for small suppliers
• Opportunities – Setup reduction– Cost reduction
• Threats – Loss of technology leadership
Shine – Reduce Entropy
Entropy – a measure of the degree of disorder in a system: entropy always increases in a closed system.
Disorder – more suppliers, unknown number of suppliers, late deliveries, lost discounts, poor quality, suppliers treated inappropriately, etc.
Five S Supply Strategy
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
Standardize
• Include in personal plans
• Make the status visible (e.g., # of suppliers)
• Assign audit responsibilities
• Ticklers
Standardize: Problems Avoided
• Growth of supplier base• Size of supplier base unknown• Segmentation deteriorates • Suppliers not visited regularly• Surveys conducted informally or with renegade
processes• Development efforts delayed / neglected
Five S Supply Strategy
• Sort
• Set in Order
• Shine
• Standardize
• Sustain
Sustain
• Deming’s point number 1: Constancy of purpose• The leadership of supply is responsible for
sustaining the process.• Supplier day – annual reviews• Ongoing strategy implementation monitoring,
review, and revision• Supplier database
Five S Supply Strategy
• Sort – supplier consolidate
• Set in Order - segment
• Shine – survey, SWOT, & development
• Standardize – 3S scheduled
• Sustain – sustaining leadership
Five S is the foundation of lean operations and it can be the foundation of lean supply.
Five S References
1. James P. Womack and Daniel T. Jones, Lean Thinking , 1996.)
2. Hiroyuki Hirano, 5S for Operators: 5 Pillars of the Visual Workplace (Productivity Press, 1996.)
3. Hiroyuki Hirano, 5 Pillars of the Visual Workplace (Productivity Press, 1990.)
4. Kimball Bullington, 5S Supply Base Maintenance, Quality Progress, Jan., 2003
5. Hau Lee, The Triple-A Supply Chain, Harvard Business Review, October, 2004.
45
Lean Supply Strategies: Applying 5S Tools to Supply Chain Management
Kimball Bullington, Ph.D.
Professor - MTSU