Lean Supply Chain Management Essentials: A Framework for Materials Managers

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 Author :
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.