Prepared by Julian Kalac, P.

Eng
Lean Six Sigma Master Black Belt
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 99%
Customer Quality
Ship order
CUSTOMER
Material Production

Shipped on time and customer happy

We Made $$$$
No Wasted Time
•

• No Wasted Money

• No Wasted Resources ? ?
• No Wasted Material

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 The truth Hidden Factory
Ship order CUSTOMER
Material Production

$50000-material $350,000 transportation costs

scrap costs

The Hidden Factory

Wrong order shipped
Lost order

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Hidden Factory

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Hidden Factory

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Hidden Factory

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INSANITY --“Doing the
same thing over and
over again and expecting
different results”
Albert Einstein

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 Identification and systemic elimination of non-
value add costs and re-alignment of resources
to deliver value to the customer faster, better, &
more consistently
 Lean in Manufacturing:
Eliminate Leading to Reduced Leading to Increased
Waste Cycle Times Capacity

◦ Focus: Eliminate waste, non-value add steps,

process constraints and bottle necks that cause
problems in work throughput
◦ Approach: Intuitive and broad - “inch-deep, mile
wide”

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 Non-Value Added
Value Added
1.
5%
Overproduction
2. Waiting
3. Transportation
4. Non-Value Added Processing
5. Excess Inventory/Material
6. Defects
7. Excess Motion
8. Underutilized People

Typically 95% of all lead time is non-value added

Lack of cross-functional training

Over relying on a select few while others

are Inadequately trained

 Operators are unable to rotate and help

each other out to balance the work-
load

High overtime, increased pressure stress

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 Process
Non-Value Added Business-Value Added Value Added

Does not add Does not add value Adds value to

value to the to output, customer the output and
output, and will not pay for, but customer is
customer isn’t is necessary. willing to pay
willing to pay (Legal, Safety, Etc.) for.
for.

Eliminate Minimize Optimize

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Pull Systems
Production scheduling method used to link downstream
activities to upstream activities

Work begins based upon a demand signal (kanban) from

a downstream customer, either internal or external

Avoids overproduction, work backlog, and disconnects

within a process

Nothing is produced until the downstream customer

signals a need
 KANBAN
◦ A signal to produce
◦ Signal can be an empty square, bin, shelf, cart, or
kanban card
◦ Kanban qty is safety stock used while new order is
delivered
◦ Kanban qty is calculated based on usage, lead time,
delivery time
◦ Can be setup manually or automated
◦ Can extend through electronic notification to
suppliers using automatic messaging and triggers
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 Cycle Time is dictated by the slowest (bottleneck)
operation in the cell.

•What operation controls the cycle?

•How can you relieve the bottleneck?

25
20
min
min
4 5
15
min
3

2 1

30 40
min min
 •Maintain buffer in front of bottleneck
– (never starve the bottleneck !)
•Improve bottleneck operation
•Cross train on bottleneck

– Creates a visual work place

– Continuous Improvement
– Cell Support
– Balance activities / operations

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2
 SCOR (Supply Chain Operations Reference)
Model:
Structured around Five CORE Process Types

SCOR Model

Plan Plan Plan

Deliver Source Make Deliver Source Make / Deliver Source Make Deliver Source
Repair
Return Return Return Return Return
Return Return Return

Supplier Customer Customer’s

Supplier’s Your Company
Internal or Internal or Customer
Supplier
External External

Provides Framework for your Transformation / Improvement Projects.

• Defining the boundaries / scope of the supply chain .
• Evaluate the supply chain’s strengths and weaknesses.
• Industry benchmarks, standardized terms, metrics,
Enables a total enterprise view of a supply chain

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 Plan SCOR Supply Chain Model
Transactional Process Steps

Deliver Source Make Deliver Source Make/Repai Deliver Source Make Deliver Source

Return Return Return

r Return
Return Return Return Return
Product/Service Value Stream

Processes Process Process Processes Processes

Processes Process Process
Start Finish
Steps Steps

Sub- Organization Customers End-use

Suppliers
Suppliers Customers

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Do we see the flow (or lack of flow )
 Supply Chain
Logistics Management