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PROCESS MANAGEMENT: LEAN PRODUCTION & SCM

Outline
Lean & Supply Chain Mgmt. The Elements of Lean production TQM & Supply Chain Mgmt. The Elements of TQM Flow Diagrams Check Sheets Pareto Charts Cause-&-Effect Diagrams Statistical Process Control

Introduction
In 1990s, supply chain management combined: Quick response (QR)- speed & flexibility Efficient Consumer Response (ECR)- speed & flexibility grocery stores JIT /Lean production Continuous reduction of waste Keiretsu Relationships- Including suppliers Lean production Quality is a necessary element and outcome of Lean manufacturing to achieve low cost, high quality, & reduced lead times.

Lean Manufacturing& TQM are required throughout the supply chain!!!


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Lean manufacturing
Waste Reduction Waste encompasses wait times, inventories, material & people movement, processing steps, variability, any other non-valueadding activity. Partnerships Suppliers & customers work together Mutual dependency & benefits occur among JIT partnerships. Reduced number of suppliers

Lean Manufacturing
Layouts Move people & materials when & where needed, ASAP. Group technology (work cells)process similar parts or components saving duplication of equipment & labor Work cells are often U-shaped to facilitate easier operator & material movements. very visual (lines of visibility are unobstructed) with operators at one processing center able to monitor work at another.

Lean Manufacturing
Inventories Reduction of inventory levels causes problems to surface in the organization. Once problems are detected, they can be solved. The end result is a smoother running organization with less inventory investment.

Lean manufacturing & Supply Chain Management- Cont.


-Scheduling
Small batch scheduling drives down costs by: Reducing purchased, WIP, & finished goods inventories Makes the firm more flexible to meet customer demand. - zero deviation from schedules

Lean Manufacturing & Supply Chain Management- Cont.


Continuous Improvement (Kaizen) Continuous approach to reduce process, delivery, & quality problems, such as machine breakdown problems, setup problems, & internal quality problems. Workforce Commitment Managers must support JIT by providing subordinates with the skill, tools, time, & other necessary resources to identify problems & implement solutions. Empowered and cross-trained employees to ensure flexibility

Mission of lean manufacturing


Elimination of inventory Elimination of unnecessary activity suppliers are preapproved vendors whose quality is certified Elimination of redundant suppliers

Principles of Supply Chain Management: A Balanced Approach by Wisner, Leong, and Tan. 2005 Thomson Business and Professional Publishing

TQM & Supply Chain Management


TQM is an enterprise-wide philosophy, encompassing suppliers & customers. The Elements of Total Quality Management
Focus on the Customer Meeting customer expectations applies to external as well as to internal suppliers & customers. Workforce Involvement Top management commitment. New role as facilitator. Employee Empowerment- Think out of the box. Teamwork is the quality circle concept

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The Tools of TQM


Flow Diagrams- Annotated boxes representing process to show the flow of products or customers. Check Sheets- to determine frequencies for specific problems. Pareto Charts- for presenting data in an organized fashion, indicating process problems from most to least severe.

Cause-and-Effect Diagrams (Fishbone or Ishikawa diagrams) used to aid in brainstorming and isolating the causes of a problem.
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Flow diagram

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Check sheet

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Pareto charts

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Fishbone diagram

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Obstacles to Implementing TQM


Lack of:
Company-wide definition of quality not coordinated, different issues, different measures Strategic plan for change Customer focus Real employee empowerment Strong motivation Time to devote to quality initiatives Leadership Poor inter-organizational communication View of quality as a quick fix Emphasis on short-term financial results