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5. „Leveling” of customer needs at medium and long term
Understand the PC&L function 5 main PC&L principles
5
Leveling of Production
Leveling of Supplies
Control the Lead-Time
The Leveling
Objective: Constant level of production, and NOT constant level of stocks!
Sto
ck
RM
& B
OP
Filte
r:
FG
sh
op
-sto
ck +
po
ol-
sto
ck
Our plant
Supplier Customer
Leveled production
Leveled orders High demand variability
6
Major components of Lead Time that generate stocks:
1. Overproduction
2. Lack of flexibility
3. Lack of reliability
4. Poor organization of the Production and the PC&L
5. Quality Problems
6. Irregular Withdrawals and Deliveries
Exceptional risks
Which ones?
Understand PC&L function
Reduction of the Lead Time
7
Reduction of the Lead Time (1) Overproduction
1 – Production over needed demand
Gap between production and customer needs
Unstable production rhythm
= NO respecting the rules of
TAKT-TIME
Pull System + Production Leveling
Material Flow Management & Organization / Production Planning Strategy (PC&L)
Module. 04
9
Simulation game
The Batch Size / Withdrawal Frequency Stage 1. • You produce three products: yellow triangles, green circles and blue squares • Production batch size for the first stage is 4 • You have three options for delivery / withdrawals frequency:
• 1 / day • 2 / day • 4 / day
Task: • Calculate the maximum stock before loading any truck (how many pieces in
total). • Fill in just the grey fields only. Note: • Truck load reflects customer order and must be respected. • Trucks come to pick up parts in due times (at 9.00, 12.00, 15.00 and 18.00) • Depending on batch size and withdrawal frequency, you may need to have some
stock available before production begins (safety stock)
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Simulation – S1 The batch size / Withdrawal frequency
Max stock before loading
Stock needed at the
beginning of the day
Stock before
loading
4 deliveries / day
Stock before
loading
2 deliveries / day
1 delivery / day
Stock before
loading
Batch size : 4
11
Production Control & Logistic (PC&L) Customer Relationship & Production Leveling
GROSSDOCK
Customer Relationship &
Production Leveling
12
Production leveling
The principles to stabilize the Production (1)
Sequencer
A
stabile TT
TT
Customer
TPA
Constraints! Variability departure time due to potential issues related to: - Customer - Forwarder
6h 8h 10h 12h 14h
C1 C2 C3
Truck Schedule
13
Production leveling The principles to stabilize the Production (2)
A Customer
We need a
stabile Takt-
Time
Sequencer
The demand mix and
quantities fluctuate!
Constraints!
To absorb
Variations of
Qties/ref Pool stock
TPA
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Shares the workload over the day / shift
Generates frequent withdrawal from Shop-stock & brings the customer demand information to the production lines (Takt Time transmission)
•Operations plan •Load balance between sites •Inventories plan •Resources plan •Action plans
To Finance •Revenue plan •Budget (once a year)
STANDARD S&OP PROCESS • current month S&OP • compared to prior S&OP • compared to budget • goal : 95% for each section, every month • one set of figures
„input”
„output”
19
To anticipate & to adapt: medium term vision & plant steering Vision of volumes over 6 months (or longer) by product family
To define the level of production (by family) Customers Consumption (volumes, start-up & end of production) Capacity Equipment
To define the plant’s organization at medium term Define the working calendar according to customer calendar ( working days in a
month) Plans for repairing, renovation and necessary technical downtime - maintenance
(TPM) Identify the necessary human resources (number of operators + staff (indirect)) The supply of critical resources (raw materials and materials, but also the demand
on the media) and to take into account the constraints and their Lead-Time
Sales & Operations Plan: SOP
Objectives
20
Production Control & Logistic (PC&L) Material Flow Organization
CROSS-DOCK
Internal Flow
Management
21
Agenda:
Internal Flows: General Organization of the Layout
Reception Area
Flat Storages & Overflow Stock Management
Line Supply with Small Train
Flow Racks
Withdrawals, Shipment Preparation & Pool Stock
Handling Operation Standardization
Production Control & Logistics
Internal Flow Management
22
Material Flow Organization
Lay-out & Flow
Emp
ty p
acka
gin
g
Sequencer
TPA
zo
nes
Sho
p-s
tock
N°1
N°2
N°3
Heavy equipment
truck 1
truck 2
truck …
queue
Lin
e A
Lin
e B
Lin
e C
Lin
e D
Frontal feeding by small train
Oft
en
an
d r
egu
lar
pic
kin
g
Incoming zone
Supermarket
Shop-stock
Shop-stock
Pool-stock
Fin
ish
go
od
s fl
ow
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Reception area Flow & lay-out of the Flat Storage / Supermarket
The withdrawal train takes the WK from the Sequencer to pick the containers out of the Shop Stock (Frequency to be decided on. In a Lean factory it takes between 15’ to 30’)
The forklift truck or small train brings the products into the TPA (Truck Preparation Area) or into the Pool Stock according to the WK. Decision is made by Logistics through placing the right WK in the Sequencer
Shop Stock Shop Stock Shop Stock
POOL STOCK
Sequencer
WK
WK WK
WK
TPA
31
„A full for an empty”
No empty runs
No handling inside the production lines
Leveling of workload
Standardization allows the optimization (organization = cost)
Handling operation standardization Principles
32
Training Modules of PC&L
GROSSDOCK
Supplies Leveling & Logistics Optimization
33
The Transport Scheme (TSc) defines:
The route (main route et sub route) followed by each carrier from Supplier to the factory
The assignment of the docks to the routs
The Transport Program (TP) defines: The delivery times The number of trucks The workload of the trucks drivers Firm 1 month, horizon 6 month
Supply Leveling Establish the Transport Scheme and the Transport Program
A B C
1-6-X Main route
The factory
34
Manifest (pick-up sheets, loading list):
It is the truck packing list expressed by part Number in packaging units (PU).
It is as well the document to check-up loading & shipment. It is used to keep tracks off any shortage.
It is expression of a firm order
It is the proof of loading
It is the transport documentation (Delivery Note)
It is reception document (physical or computerized)
The manifest allows to control the BOP physical flow
Stabilize the Suppliers Manifest
35
Check deliveries against manifest
Report shortage
Appraise suppliers MPM
Repot MPM towards Suppliers
Follow up action plan
Stabilize the Suppliers Deliveries Follow Up
36
Increase the deliveries frequency Current situation for RM & BOP transportation
The Factory
Customer
A
B
C
D
E
1-1-X
1-1-X
5-3-X
5-2-X
5-3-X
1-3-X
CURRENT SITUATION Separated Flows, few deliveries: loss of synergies and of savings
Suppliers
37
Project Management structure driven by PC&L with purchasing involvement
S&OP / MPS / SP / TP
Supply Leveling & Manifest Management
„E” (Ex-works)-group of incoterms transportation
Needs expressed in packaging units
12h access to supplier shipping area
Knowledge of the nationals laws
Increase the deliveries frequency Establishing a Milk Run: Requisite
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The aim is to supply the line work stations in small containers.
Purchasing negotiates, with support from the material planners, the transition to small containers.
Use reusable (returnable) containers.
HOWEVER, In some cases it is more reasonable to:
Repack. Only a small container may enter the supermarket.
Supply in disposable (one-time) containers. In this case, the supply to work stations without loss of time and waste removal must be guaranteed.
Use of small containers Principles
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Use of small containers (1) Recommendations
1. The box has at least one "standard" side measuring 200, 300 or 400mm (enable to standardize the width of supermarkets and flow racks)
2. The height and the other side (see 1st criteria) of the box, are designed to optimize the ratio "Number of Parts / Box Volume"
3. The surface of a standard pallet can be exactly filled with a set of boxes
4. One part number per box (left and right detached)
5. Full box weight does not exceed 12 kg (and meets Health & Safety criteria)
6. The box is stackable
7. The box is solid enough to do project life time rotations