bma business, management and administration · 2014-06-28 · porsche consulting 26...
TRANSCRIPT
Business, Management and Administration
Academic Sponsors: Porsche Consulting
Collège des Ingénieurs
Manufacturing
Business Management and Administration
B AM
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt1
Agenda
June 20th, 2014
14:00 Introduction to Manufacturing
Agenda:
Lecturer:
14:15 Strategic Decisions
16:00 Achieving Operational Excellence
Dennis Knoll Project Manager, Porsche Consulting
17:00 Questions & Answers
15:00 Operational Management
17:15 End
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt2
The Porsche is composed of four different model lines
* All model lines excluding spare parts ** Until facelift
Source: Automobilproduktion
Porsche’s business system
650 suppliers22,000 active
part numbers> 80% of value
added
Supplier base*
850 dealers104 markets
~ 10,000 parts400 - 40,000 units
per year per model~ 100.000
vehicles per year107 variants
(all profitable)Ramp-up in
3 months3 year lifecycle**
The product
Cayenne
Boxster/Cayman
911
Panamera
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt3
A network of sites provides flexibility
Source: Porsche AG, Porsche Consulting
Stuttgart Leipzig
Hannover
Bratislava
Body
Body
Engines
15 - 20%
10 - 15%
Porsche value creation
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt4
Today the Porsche range comprises 4 lines with 28 models and derivates
Source: Porsche AG
911 911 Carrera 911 Carrera S 911 Carrera Cabriolet 911 Carrera S Cabriolet 911 Carrera 4 911 Carrera 4S 911 Carrera 4 Cabriolet 911 Carrera 4S Cabriolet
Boxster/ Cayman
Boxster Boxster S Boxster Spyder
Cayenne Cayenne Cayenne Diesel Cayenne S
Panamera Panamera Panamera S Panamera Turbo
Common parts
Common processes
Common suppliers
911 Targa 4 911 Targa 4S 911 Turbo 911 Turbo S 911 Turbo Cabriolet 911 GT2 911 GT3 911 GT3 RS 911 Sport Classic
Cayman Cayman S
Cayenne GTS Cayenne Turbo Cayenne Turbo S
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt5
Porsche AG in Zuffenhausen
Plant Stuttgart-Zuffenhausen
Source: Porsche AG
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt6
Vehicle assembly at Porsche in Zuffenhausen is performed on three floors
Vehicle assembly at Porsche AG, Zuffenhausen
Overview Assembly on three floors
Source: Porsche AG
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt7
Agenda
June 20th, 2014
14:00 Introduction to Manufacturing
Agenda:
Lecturer:
Strategic Decisions
Achieving Operational Excellence
Dennis Knoll Project Manager, Porsche Consulting
Questions & Answers
Operational Management
17:15 End
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt8
Strategicparameter
“production”
When?
Who?
Where?
How?
What?
In order to establish a strategy different parameter have to be considered
Production strategy
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt9
The answer to the question “How do we produce?” is a core element concerning the definition of the production strategyStrategic parameter “How”
Source: Porsche Consulting
Technology
Which technology should be applied ?Experience curve modelLife cycle concept (S-curve model)
Organization
How to organize production ? Structural organization Process organization
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt10
“
Pacesetter for technology
Key technology Basistechnology
Dry machining during metal cutting
Technology performance
Laser beam welding Casting techniques
cumulated R&D Expense
Whether to choose a technology or not strongly depends on its current life cycle phase “How”-Technology – Technology´s life cycle concept (S-curve)
Source: Porsche Consulting
© A
IRB
US
S.A
.S. A
ll rig
hts
rese
rved
. Con
fiden
tial a
nd p
ropr
ieta
ry d
ocum
ent.
May 2009 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt 12
Al/Al-Li
19%
Titanium14%
Steel6%
Misc.
8%A350-900 Material Breakdown (%)Including Landing Gear
Composite53%
Intelligent Airframe
CFRPWingsCentre wing box and keel beamTail cone (Section 19)Skin panelsFrames, stringers and doublersDoors (Passenger & Cargo)
No corrosion & fatigue tasks
CFRPWingsCentre wing box and keel beamTail cone (Section 19)Skin panelsFrames, stringers and doublersDoors (Passenger & Cargo)
No corrosion & fatigue tasks
TitaniumHigh load framesDoor surroundingsLanding gearPylons
No corrosion tasks
TitaniumHigh load framesDoor surroundingsLanding gearPylons
No corrosion tasks
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt13
S-curves illustrate the relation between required technology investment and its predicted performance “How”-Technology – S-curve-concept (substitution potential concept)
Source: Porsche Consulting
Core statement
The “substitution potential concept” evaluates when a shift in technology is economically viable.
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt14
Source: BCG Perspectives
An important tool concerning the technology choice is experience curve model
“How”-Technology – Experience curve model
Source: Porsche Consulting
Core statement
Cost of value added decline approximately 20 to 30 percent in real term each time accumulated experience is doubled
(Bruce Henderson)
Causes of cost degression Processes and production techniques are
designed more efficientlyQualification of employees Use of Economies of Scale (e.g., discount bulk)
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt15
Ex-post-analysis corroborates the results of the experience curves
“How”-Technology – Experience curve model
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt16
The Structural organization can be categorized according to different basic forms
“How”-structural organization – Basic forms
Source: Porsche Consulting
Function-oriented organization Center organization
Matrix organization
Corporate Governance
Prod
uct A
Prod
uct B
Production Procurement
Prod
uct A
Prod
uct B
Marketing
Prod
uct A
Prod
uct B
Distribution
Prod
uct A
Prod
uct B
Corporate Governance
Center B Center CCenter A
Product A
Product B
Corporate Governance
Production Procurement
Marketing Distribution
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt17
Corporate Governance
Prod
uct A
Prod
uct B
Production Procurement
Prod
uct A
Prod
uct B
Marketing
Prod
uct A
Prod
uct B
Distribution
Prod
uct A
Prod
uct B
The function orientation is the classical organizational form
“How”- structural organization - Function-oriented organization
Source: Porsche Consulting
Advantages Disadvantages
Partly untransparent organizationCoordination deficits between the functional
divisionsDanger of suboptimal states in the
departments/functional divisions
Opportunity to specialize in the functional divisions
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt18
The matrix organization goes beyond the classical functional focus on business processes“How”-structural organization – Matrix organization
Source: Porsche Consulting
Advantages Disadvantages
Competence problems concerning overlapping operational Longer lasting decision-making processDanger of not achieving an optimal choice due
to compromises within the team High communication effort
Enhancement of group work Improved problem solving as employees from
different departments start to collaborateLess work on the management level
Product A
Product B
Corporate Governance
Production Procurement Marketing Distribution
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt19
When using the center-concept object-oriented business areas will be determined
“How”-structural organization – Center organization
Source: Porsche Consulting
Advantages Disadvantages
Less control through the management level Danger of coordination problems between the
business units Higher personnel cost for managers Striving for company success within the business
units may not be long-lasting
Quick and flexible decisions in independent units Shorter communication channels Less work on the management level Improved motivation through employee
empowering
Corporate Governance
Center B Center CCenter A
Variants:
Profit-Center: A pre-defined profit has to be achieved within a certain period
Cost-Center: A pre-defined sales volume cannot exceed a certain level of costs
Service-Center: Customer Care; the consumer determines the amount of goods and services; provision of service and goods will be settled internally
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt20
A key element concerning the definition of the production strategy is the choice of the process structure“How”-structural organization – Basic principles of the Process organization (I)
Source: Porsche Consulting
Stationary production
Characteristics Applied for products that are difficult to move;
product does not leave its positionApplied for small scale production
Workshop production
Characteristics Applied for small and medium size series with high
numbers of variants or individualized features Centralized production processes Strategy of utilization of capacity possible
Schematic
Assembly site
VM VM
VM
milling drilling
turning
sanding
assembly
Schema
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt21
Important basic forms of flow production (schematic)
straight flow
U-formserpentine
For the series and mass production the concept of flow production is applied
“How”- structural organization - Basic principles of the process organization (II)
Source: Porsche Consulting
Flow production
Characteristics Machines and plants are arranged according to the
assembly sequenceApplication of series and mass production Implementation of a minimal through-put time
strategy
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt22
Optimal processes enable the production of 70 vessels per year
“How”-structural organization – Example Hyundai Heavy Industries
Source: Porsche Consulting
Flow production
Series production of basic modules in mobileproduction halls (automated welding)Customer-oriented module configurations Process of the modules to varnish Supply of the modules at the dry-docks
Composition of the modules (Incl. bow, stern, and cabin module) in the dry-dock
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt23
Location factors determine the choice of the production location
Strategic parameter “Where”
Source: Porsche Consulting
Economic-demographic conditions
Tax, customs duties, state subsidy, currency risksTraining structure Labor supply (qualification, amount)Balanced age structure
Political-legal conditions
Political stability Investment protection Labor-law standard situation/trade unions Environmental standards (sewage, exhaust gases)
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt24
Location factors determine the choice of the production location
Strategic parameter “Where”
Source: Porsche Consulting
Infrastructure conditions
Capacity of transport routes Energy supply (negative example: Silicon Valley)Connection to suppliers and customers Schools, hospitals, supply facilities Communication facilities
Geographical conditions
Security from natural disaster (earthquake, flood, storms, etc.)Opportunity to expand the production location Attractiveness of the location for employees
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt25
Mercedes-Benz U.S. International, Inc. Porsche Leipzig GmbH
Product: Mercedes-Benz M-Class (SUV)
Capacity: 80.000 units/year
Main supplier in the vicinity of the plant
over 50% of the M-Class productionfor the US market
Product: Porsche Cayenne (SUV)
Capacity: 23.000 units/year
Cooperation partner in the vicinity of200 km
Approx. 50% of total sales in the USContradiction ?
Leipzig, Deutschland vs. Tuscaloosa, USA –Who has the right location strategy for the production of a SUV?“Where” – plant planning of Porsche and DaimlerChrysler
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt26
Processing of raw materials
Pre-commissioning
Part manufacturing
Componentmounting
Final assembly
Value chain
Part manufacturing
Componentmounting
Final assembly
Value chain
Final assembly
Value chain
Value creation in the enterprise
Value creation in the enterprise
Value creation in the enterprise
Strategy for vertical range of manufacture
Strategic parameter “Who”
Source: Porsche Consulting
Massive vertical Integration (Purchase of a sawmill, rubber tree plantation)
Vertical range of manufacture approx. of 20% (Industry average at OEMs approx. of 30 - 40%)
System integrator
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt27
The strategy of the vertical range of manufacture provides decisions for “Make-or-Buy” and the way of supplier cooperation“Who” – Outsourcing and forms of cooperation
Source: Porsche Consulting
Make or Buy – Advantages and disadvantages of outsourcing
Decrease of capital commitment Optimization of the cost structure Increase of flexibilityFocus on core business Reduction of entrepreneurial risk
- Risk of employment - Risk of Investment Dependence on suppliers (Contract design)Loss of scope of decision/alternatives/
competence Dependence on technologyLoss of know-howProblems of coordination -> logistics
Forms of cooperation concerning outsourcing
Sole contractual relationsComplete integration System partnershipHybrid solutions (e.g., industry parks)
Cho
ice
“out
sour
cing
”
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt28
3rd tier Supplier
2nd tier Supplier
1st tier Supplier
OEM OEM
Component and part supplier
System specialist,assemblies suppliers
Module developer System integrator
The supplier pyramid is subject to a continuous change
“Who” – Supplier structure traditional vs. current
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt29
The term 0,5-tier Supplier has evolved to characterize the system supplier
“Who” – Scope of competence of the supplier
Source: Magna Steyr
Tech
nolo
gica
l int
egra
tion
com
pete
nce
Production-related integration competence
Additional requirements
Component and part supplier
System specialist Module supplier
Systemintegrator
Material and process specific innovation
Specializedsystem development
across OEM standards
Responsible for life cycle
Assembly andJIT-supply
System integrators of the automotive industry
Supplier management System integration Quality managementWarranty Complexity management
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt30
With the ramp-up of the Panamera, the production depth of the Leipzig plant rises from 6% to 15% – the logistics scope increases considerably
* CO estimate; no official figures provided** Source: Porsche Leipzig GmbH
Installed scopes (Extract)
Involved production sites
Panamera
Cayenne VW Bratislava VW Bratislava Porsche Leipzig Approx. 6%*
Production stages
Body shell Painted components
Disks Exhaust Cockpit Lights
Power trainWheels Interior (remaining
scope)
Stage 1 (Body shop/Paint
shop)
Stage 2(Assembly)
Stage 3(Finish)
Production depth at Leipzig plant
VW Hannover Porsche Leipzig Porsche Leipzig Approx. 15%**
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt31
Specialized in
small series and niche product
highly customized products
Enables the implementation of brand strategies (niche cars) at low investment costs and risks
High flexibility concerning number the of units for OEMs
System integrators enable the implementation of a brand strategy
“Who” – Example System integrator Valmet Automotive
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt32
Low stocks of materials through Just-in-Sequence and
Just-in-Time delivery
Reduced goods receiving andstorage area
Reduced transport and packaging costsLow production costs
Source: Ford-Werke AG
Industry parks are established to reduce complexity and through-put-time
“Who” – Example Industry park Ford Saarlouis
Source: Porsche Consulting
Reduction of complexity in the logistics Short communication channels
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt33
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt34
System partner Smartville
Industry parks enable an optimal integration of cooperating partners
“Who” – Example Industry park SMART Hambach
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt35
A company´s performance on the market consists of products, services or a combination of both Strategic parameter “What”
Source: Porsche Consulting
Product
Different possibilities of positioning as an product provider Mass vs. niche provider Standard vs. exclusiveLarge differences even among mass providers
Toyota Yaris
150.000 vehicles per year 3 engine variant 448 different configurations
VW Lupo
120.000 vehicles per year 18 engine variant176.576 different configurations
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt36
Services are characterized by the simultaneous creation and consumption
“What” – Services
Source: Porsche Consulting
Services
Four characteristic features Immateriality (e.g., consulting services)Simultaneous creation and consumption (e.g., hair cut)Restricted storage capacity (e.g., seats in an aircraft)High complexity (e.g., financial products)
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt37
Product/service
A combination of products and services offer a higher customer benefit
“What” – Product/Services
Source: Porsche Consulting
Product/Services
Combination of products and servicesManufacturing company (e.g., Engineering industry)Product-related Services (e.g., Service Hotline, etc.)
Case study: KümaMachine-tool factory (Production of multi-spindle heads)Approx. 80 employees
FrüherMachine-tool factory
HeuteMachine-tool factoryProduct-related ServicesService HotlineVirtual spare part storageTeleservice-user
(Error causes can be determined out of a distance )
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt38
vs.
An increase of the number of variants and a concurrent delivery time reduction is only possible through a reduction of the through-put-timeStrategic parameter “When”
Source: Porsche Consulting
Customers, who decide to buy a brand-name product, demand following two things:Highest degree of customization Quickest possible delivery
A conflict of interest emerges for the producer how he can response to that demand:
Problem: Customer requestSolution: Production of variants and stock building
Problem: Despite a full stock the product demanded by the costumer may not be availableSolution: The product variant demanded by the customer will only be produced after the incoming order
has been received Problem: Delivery time Solution: Minimization of through-put-time through production process optimization
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt39
AssemblyBody/paint
98%Stability of sequence
within productionFixed sequence
of vehiclesVehicleorders
> 3 h
Manufacturing process
Finishedvehicles
Lead-time for supply in planned sequence
Lead-time for supply in actual sequence
Lead-time for mono-material supply
Modul parts
Single parts
> 6 days
> 6 days
The Build - to - Order production system of Porsche based on the pearl - chain principle
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt40
Agenda
June 20th, 2014
14:00 Introduction to Manufacturing
Agenda:
Lecturer:
Strategic Decisions
Achieving Operational Excellence
Dennis Knoll Project Manager, Porsche Consulting
Questions & Answers
Operational Management
17:15 End
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt41
Strategic production planning
Def. production program
Def. rough resource requirements
How can the planning be implemented in a resource-saving way operational product management
Inputs Outputs
MaterialsLaborEnergyCapital
Information System
Products
Services
Transformation
Object of the operational production management is the optimal definition of the transformation process “production”
Source: Porsche Consulting
Production planning
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt42
High delivery readiness and adherence to delivery dates
High capacityutilization Short through-put-time
Low inventory
Source: Porsche Consulting
Production requirements can be illustrated by a “Polylemma” when quality is predefined Production requirements
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt43
Source: Porsche Consulting
The production planning is conducted from general to detailed
Three levels of production planning and control
Aggregate sales and production planning
Customer order
Master Production Schedule
Materials Requirements
Planning
Rules for batch size and capacity planning
Raw material request Detailed production plan
Production control
Plan
ninn
g ho
rizo
nt
Level 1
Level 2
Level 3
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt44
Planning level temporal spatial factual
Business planning Year/quarter Entire corporation Monetary
Aggregate sales and production planning
Month/week Plant/production segment
Production type, production group
Master-Production-Schedule
Week/day Production segment/machine groups
Products(Variants of products)
Material Requirement Planning
Week/day Machine groups/ machine
Assemblies, com-ponents, raw materials
Production control Day/hour Machine Operation/ process
Aggregation level of the planning information
* according to Heinrich 1989Source: Porsche Consulting
The aggregation level of the planning information continuously decreases with each planning levelAggregation level of production planning*
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt45
Procurement Performance of the suppliers Stock capacity
Production Current machine capacity Planning of future capacity Personnel capacity Employment level
Marketing/Distribution Customer requirements Competitive behavior Requirement forecast
Finance Cost data Financial situation of the company
Personnel Labor market situation Employee training
Development New products Construction change
Source: Porsche Consulting
The sales plan is the starting point of the operational production planning
Basis of the sales plan
Aggregate sales andproduction planning
Rough resource andpersonnel planning Program plan for product families
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt46
April May
1 2 3 4 5 6 7 8
Office chair 150 150
Kitchen chair 120 120
Desk chair 200 200 200 200
Program plan for chair family 550 790
Source: Porsche Consulting
The integration of the program planning on the product level reflects the net requirements of each unit per unit of timeProgram plan for product families – Example
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt47
April Mai
1 2 3 4 5 6 7 8
Forecast 30 30 30 30 35 35 35 35
Customer order 38 35 31 19 0 0 0 0
Gross requirement 38 35 31 30 35 35 35 35
Available inventory 17 132 101 71 36 1 116 81
Master Production Schedule 0 150 0 0 0 0 150 0
Gross requirement 38 35 31 30 35 35 35 35
Available inventory 17 0 0 0 0 0 0 0
Master Production Schedule 0 18 31 30 35 35 35 35
Calculation of the Master Production Schedule using a fixed batch size
Calculation of the Master Production Scheduleusing a variable batch size
Inventory end of March: 55 units
Source: Porsche Consulting
The Master Production Schedule (MPS) will be determined according to the sales planning or rather to customer ordersDerivative of the Master Production Schedule
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt48
Source: Porsche Consulting
The production planning is conducted from general to detailed
Three levels of production planning and control
Aggregate sales and production planning
Customer order
Master Production Schedule
Materials Requirements
Planning
Rules for batch size and capacity planning
Raw material request Detailed production plan
Production control
Plan
ninn
g ho
rizo
nt
Level 1
Level 2
Level 3
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt49
The batch size is a machine´s production volume between a changeover
As a part of the batch size planning the period-based net requirements are combined into production lots according to economical criteria
For all products that are produced on the same manufacturing facility it has to be determined in how many batches and with which size the total production output of a planning period has to be split up
Source: Porsche Consulting
The production lot depicts a quantitative defined production order
Definition
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt50
Fundamental resources for the production process of a company
Raw materials
Components
Components are products that have not reached the final state yet. They are a part of the total product of the production process. Components are partly labeled as assemblies, subassemblies, etc.
Work-in-Progress
Work-in-Progress describes material waiting for manufacturing within the value chain. It includes both components and raw material. Work-in-progress depicts a key performance indicator in order to measure the efficiency of the production control. Especially, the JIT production system strives for a minimal work-in-progress strategy.
Finished goods
Finished goods are final products in the production process
Source: Porsche Consulting
Inventories can be available along the value chain
Inventory types
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt51
Source: Porsche Consulting
The vision of zero inventory is corroborated by a lot of arguments
Motivation for stock-keeping
1. Economies of scale
2. Uncertainty- concerning demand - concerning through-put-time (e.g., process stability)- concerning procurement
3. Speculation- concerning highly volatile prices
4. Transport
5. Smoothing- e.g., minimal purchase quantity of the supplier
6. Logistics- e.g., bulk goods and cheap material
7. Cost of inventory management
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt52
80%
95%
100%
20% 50% 100%
A B C
Percentage of total part numbers
Perc
enta
ge o
f tot
al in
vent
ory
valu
e
Source: Porsche Consulting
For the reduction of inventory management cost only a small part of the inventory is closely monitored ABC-Analysis
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt53
6,910,71,01,142,57,329,70,8
42,572,282,990,297,198,299,2100,0
AABBBCCC
6900107001000110042500730029700800
12345678
Percentage of total value
cumulated percentage category
Consumptiondata MU
Part No. Rank Part No.
57261438
12345678
Sum 100.000
Source: Porsche Consulting
For the reduction of inventory management cost only a small part of the inventory is closely monitoredABC-Analysis: sample calculation
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt54
100
cumulated percentage
50
Rank
1 2 3 4 5 6 7 8
0
x
x
x
x
xx
x
x
A-Part B-Part C-Part
Source: Porsche Consulting
For the reduction of inventory management cost only a small part of the inventory is closely monitoredABC-Analysis: sample calculation
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt55
Source: Porsche Consulting
For the administration of A- and B-parts inventory “Inventory Management Systems” are applied Parameters of Inventory Management Systems
1. Demanda.) constant vs. variable demandb.) defined vs. random demand
2. Replenishment lead times
3. Actuality of inventory level
4. Excess demand
5. Exchange of inventory
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt56
Source: Porsche Consulting
The production planning is conducted from general to detailed
Three levels of production planning and control
Aggregate sales and production planning
Customer order
Master Production Schedule
Materials Requirements
Planning
Rules for batch size and capacity planning
Raw material request Detailed production plan
Production control
Plan
ninn
g ho
rizo
nt
Level 1
Level 2
Level 3
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt57
Requirement forecast Customer orders
Master Produktion Schedule (MPS)
Construction changeInventory transactions
Materials Requirements Planning
Available inventoryOpen purchase ordersBatch sizeDLZSecurity stocks
Purchase order Work order Orders of the rescheduling
Inventory data Part lists
Source: Porsche Consulting
The MRP-algorithm breaks the MPS down to single production and purchase orders Materials Requirements Plannig
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt58
ManufakturPrimary requirement
Requirement of saleable products which is determined through the production planning
ManufakturSecondary requirement
The secondary requirement can be derived from the need of assemblies, components, and raw materials (primary requirement)
Determination of the secondary requirement can be conducted in two ways:
Program controlled requirement calculation MRP-algorithm
Consumption controlled requirement Deduction of requirement calculationfrom historical data
ManufakturTertiary requirements
Requirement of process and operating materials
Source: Porsche Consulting
There are different types of requirements
Types of material requirements
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt59
Final product
Assembly 1 RPT: 1 week
Assembly 2 RPT: 2 week
Component 1.1 RPT: 2 week
Subassembly 1.2 RPT: 1 week
Component 2.1 RPT: 2 week
Component 2.2 RPT: 2 week
Primary requirement
Secondary requirement
Materials Requirement Planning:Deduction of secondary requirements from requirements of primary products
Source: Porsche Consulting
The production structure describes the quantity relation between the components and assemblies of a productProduct structure schematic
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt60
Shovel
Production time: 1 Week
Blade
Production time: 4 Week.
Bolts
Production time: 1 Week.
Shovel handle
Production time: 3 Week
1 x 2 x 1 x
A
B C D
Source: Porsche Consulting
The MRP-algorithm makes time dependent net requirement planning possible
MRP based on an example
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt61
Weeks 1 2 3 4 5 6 7 8 9
Ordered shovels 20 100 80 60
Return due to rework
15 20
Inventory 10 10 10 10 10 5 20 25 5
Net production 15 85 60 60
Required blades 15 85 60 60
Inventory 5 0 0 0
Net production 10 80 60 60
Requiredbolts
30 170 120 120
Net inventory 30 170 120 120
Required shovel handle
15 85 60 60
Inventory 30 30 15 10 10
Net production 0 80 60 60
ASecurity stock: 5lead time: 1 week
BSecurity stock: 0lead time: 4 weeks
C (2 pieces)Security stock: 0lead time: 1 week
DSecurity stock: 10lead time: 3 weeks
Source: Porsche Consulting
The MRP-algorithm solves the material requirements on the requirements level
Example MRP-algorithm
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt62
Source: Porsche Consulting
Despite the logical consistency, the MRP-algorithm has some serious weaknesses
MRP weaknesses
Uncertainty- Concerning the requirement forecast (distribution)- Concerning the through-put-time/replenishment lead times of the single components Reaction: Creation of security stocks
Planning to avoid infinite capacities
Rolling planning horizon
System „Nervousness“- Adjustment of the requirement forecast- Delay in delivery - Machine break downs and staff shortage
Constant, i.e. batch size independent replenishment lead times
Instabilities in the process security not considered volatile output
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt63
Source: Porsche Consulting
The production planning is conducted from general to detailed
Three levels of production planning and control
Aggregate sales and production planning
Customer order
Master Production Schedule
Materials Requirements
Planning
Rules for batch size and capacity planning
Raw material request Detailed production plan
Production control
Plan
ninn
g ho
rizo
nt
Level 1
Level 2
Level 3
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt64
Planned production orders Workplace through-put-times
Through-put scheduling
Supply of capacity
Capacity scheduling
Opened production orders
Source: Porsche Consulting
The MRP-algorithm does not determine the date nor the capacity for the order execution Date and capacity planning
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt65
Types of networks
PERT MPM CPM
Process: n/aEvents: node
Process: nodeEvents: n/a
Process: arcEvents: node
Process
Event Event Event Event
Programm Evaluation and Review Technique
Metra-Potential-Method
Critical Path Method
Source: Porsche Consulting
Different methods of the network plan analysis are applied to optimize the through-putNetwork plan analysis
Process Process
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt66
Sequence:
i j k
j FAZj FEZj
D SAZj SEZj
Rules:
From left to right:
- FAZj = max i Element von P(j) {FAZj+ tij}
- FEZj = FAZj + Dj
- FAZ1 = SAZ1
From right to left:
- SAZj = min i Element von S(j) {SAZi – tij}
- SEZj = SAZj +Dj
- FEZn = SEZn
Variables:- j: Process number
- Dj:Duration of the process j
- P(j):Predecessor of j
- S(j):Succesor of j
-FAZj: earliest possible starting date of j
-FEZj: earliest possible ending date of j
-SAZj: latest possible starting date of j
-SEZj: latest possible ending date of j
Tjk
-Tjk: Time from the beginning of the process j till the beginning of the following process k; tjk can be smaller than Dj
Source: Porsche Consulting
The scheduling for a production process can be accomplished through the MPM network plan technique Definition MPM network plan
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt67
Source: Porsche Consulting
Based on information of the individual manufacturing steps…
Scheduling in the MPM network plan
Process D Predecessor Duration of the process
ABCDEFG
Start: 102040303018
End: 0
-ABAD
B,DC,E,F
-tAB = 10tBC = 10tAD = 10tDE = 8tBF = 20; tDF = 7tCG = 40; tEG = 30; tFC = 18
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt68
Source: Porsche Consulting
… the basic network structure is determined
Scheduling in the MPM network plan
A F G0 10
10
01810
B C
20 40
30
D
E
30
10
10
20
7
8
40
18
30
Process D Predecessor Duration of the process
ABCDEFG
Start: 102040303018
End: 0
-ABAD
B,DC,E,F
-tAB = 10tBC = 10tAD = 10tDE = 8tBF = 20; tDF = 7tCG = 40; tEG = 30; tFC = 18
j FAZj FEZj
D SAZj SEZj
Network plan elements
Rules:
From left to right:
- FAZj = max i Element von P(j) {FAZj+ tij}
- FEZj = FAZj + Dj
- FAZ1 = SAZ1
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt69
Source: Porsche Consulting
Forward scheduling determined the earliest starting and end points (FAZ and FEZ)-in accordance with defined rulesScheduling in the MPM network plan
A F G0 10
10
60 60
01810
B C10 30
20 40
10 40
30
D
E
30
10
10
20
7
8
40
18
30
Forward scheduling
Process D Predecessor Duration of the process
ABCDEFG
Start: 102040303018
End: 0
-ABAD
B,DC,E,F
-tAB = 10tBC = 10tAD = 10tDE = 8tBF = 20; tDF = 7tCG = 40; tEG = 30; tFC = 18
j FAZj FEZj
D SAZj SEZj
Network plan elements
Rules:
From left to right:
- FAZj = max i Element von P(j) {FAZj+ tij}
- FEZj = FAZj + Dj
- FAZ1 = SAZ1
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt70
Source: Porsche Consulting
Forward scheduling determined the earliest starting and end points (FAZ and FEZ)-in accordance with defined rulesScheduling in the MPM network plan
A F G0 10 30
10
01810
B C10 30
20 40
10 40
30
D
E 18
30
10
10
20
7
8
40
18
30
Forward scheduling
Process D Predecessor Duration of the process
ABCDEFG
Start: 102040303018
End: 0
-ABAD
B,DC,E,F
-tAB = 10tBC = 10tAD = 10tDE = 8tBF = 20; tDF = 7tCG = 40; tEG = 30; tFC = 18
j FAZj FEZj
D SAZj SEZj
Network plan elements
Rules:
From left to right:
- FAZj = max i Element von P(j) {FAZj+ tij}
- FEZj = FAZj + Dj
- FAZ1 = SAZ1
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt71
Source: Porsche Consulting
Forward scheduling determined the earliest starting and end points (FAZ and FEZ)-in accordance with defined rulesScheduling in the MPM network plan
A F G0 10 30
10
48 60 60
01810
B C10 30 20 60
20 40
10 40
30
D
E 18 48
30
10
10
20
7
8
40
18
30
Forward scheduling
Process D Predecessor Duration of the process
ABCDEFG
Start: 102040303018
End: 0
-ABAD
B,DC,E,F
-tAB = 10tBC = 10tAD = 10tDE = 8tBF = 20; tDF = 7tCG = 40; tEG = 30; tFC = 18
j FAZj FEZj
D SAZj SEZj
Network plan elements
Rules:
From left to right:
- FAZj = max i Element von P(j) {FAZj+ tij}
- FEZj = FAZj + Dj
- FAZ1 = SAZ1
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt72
A F G0 10 30
10
48 60 60
606001810
B C10 30 20 60
20 40
10 40
30
D
E 18 48
30
6042
6020
30 60
10
10
20
7
8
40
18
30
Backward scheduling
Process D Predecessor Duration of the process
ABCDEFG
Start: 102040303018
End: 0
-ABAD
B,DC,E,F
-tAB = 10tBC = 10tAD = 10tDE = 8tBF = 20; tDF = 7tCG = 40; tEG = 30; tFC = 18
Source: Porsche Consulting
Backward scheduling determines the latest start and end points (SAZ and SEZ)
Scheduling in the MPM network plan
j FAZj FEZj
D SAZj SEZj
Network plan elements
Rules:
From right to left:
- SAZj = min i Element von S(j) {SAZi – tij}
- SEZj = SAZj +Dj
- FEZn = SEZn
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt73
A F G0 10 30
10
48 60 60
606001810
B C10 30 20 60
20 40
10 40
30
10 30
D
E 18 48
30
6042
6020
30 60
10
10
20
7
8
40
18
30
Backward scheduling
Process D Predecessor Duration of the process
ABCDEFG
Start: 102040303018
End: 0
-ABAD
B,DC,E,F
-tAB = 10tBC = 10tAD = 10tDE = 8tBF = 20; tDF = 7tCG = 40; tEG = 30; tFC = 18
Source: Porsche Consulting
Backward scheduling determines the latest start and end points (SAZ and SEZ)
Scheduling in the MPM network plan
j FAZj FEZj
D SAZj SEZj
Network plan elements
Rules:
From right to left:
- SAZj = min i Element von S(j) {SAZi – tij}
- SEZj = SAZj +Dj
- FEZn = SEZn
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt74
A F G0 10 30
10
48 60 60
606001810 0 10
B C10 30 20 60
20 40
10 40
30
10 30
22 52
D
E 18 48
30
6042
6020
30 60
10
10
20
7
8
40
18
30
Backward scheduling
Process D Predecessor Duration of the process
ABCDEFG
Start: 102040303018
End: 0
-ABAD
B,DC,E,F
-tAB = 10tBC = 10tAD = 10tDE = 8tBF = 20; tDF = 7tCG = 40; tEG = 30; tFC = 18
Source: Porsche Consulting
Backward scheduling determines the latest start and end points (SAZ and SEZ)
Scheduling in the MPM network plan
j FAZj FEZj
D SAZj SEZj
Network plan elements
Rules:
From right to left:
- SAZj = min i Element von S(j) {SAZi – tij}
- SEZj = SAZj +Dj
- FEZn = SEZn
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt75
A F G0 10 30
10
48 60 60
606000 60421810 10
B C10 30 20 60
20 10 30 40 6020
10 40
30 22 52
D
E 18 48
30 30 60
10
10
20
7
8
40
18
30
Source: Porsche Consulting
The delay of a process on the critical path (FAZ=SAZ and FEZ=SEZ) leads to a delay of the entire manufacturing process, because there are no buffersCritical path in a network plan
The critical path is a path which determines the date of product completion/duration of project The extension of a process along the critical path leads to a shift of the end date of the total production process The critical paths used for the MPM network plan technique are characterized that FAZ and SAZ, or rather FEZ and SEZ
correspond with each other Non-critical paths contain buffers, i.e., single processes may last longer to some extent without becoming critical paths
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt76
Planned production orders Workplace through-put-times
Through-put scheduling
Supply of capacity
Capacity scheduling
Opened production orders
Source: Porsche Consulting
Based on the through-put scheduling the synchronization of the target date with available capacities is accomplishedProduction control
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt77
306 12 18 24 36 42 48 54 600
Buffer
Buffer
Buffer
T/TU
A
B
D
C
E
F
G
Source: Porsche Consulting
The Gantt diagram visualizes the buffers in a production network
Gantt diagram
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt78
306 12 18 24 36 42 48 54 600
24
68
10
AB
D C
C
E
F
Wor
king
hou
rs
Capacity limit
The “capacity mountains” evolve from the process duration and capacity requirements
Comparison of capacity demand and supply
306 12 18 24 36 42 48 54 600
24
68
10
AB
D C
C
EF
F
Capacity limit
Wor
king
hou
rs
* Predecessor from previous example with estimated capacity expensesSource: Porsche Consulting
When orders are shifted within a time buffer, available capacities can be balanced and adjusted Capacity scheduling with “capacity mountains” *
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt79
Source: Porsche Consulting
Some recommendations for further readings for deepening the subject
List of Literature for operational production management
Nahmias, StevenProduktion and Operation Analysis, 3rd ed.Irwin 1997
Krajewski, Lee J.; Ritzman, Larry P.Operations Management – Strategy and Analysis, 4th ed.Addison-Wesley 1996
Eversheim, W.; Schuh, G.Produktions und Management - Betriebshütte, 7. Aufl.Springer 1999
Günther, H.-O., Tempelmeier, H.Produktion und Logistik, 4. Aufl.Springer 2000
Neumann, K.Produktions- und Operations-Management Springer 1996
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt80
Agenda
June 20th, 2014
14:00 Introduction to Manufacturing
Agenda:
Lecturer:
Strategic Decisions
Achieving Operational Excellence
Dennis Knoll Project Manager, Porsche Consulting
Questions & Answers
Operational Management
17:15 End
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt81
The focus of “Lean Production” is to improve quality, cut costs and enhance the delivery service provided to the customerRelationships
Quality
Costs Delivery Service
Customer satisfaction
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt82
In contrast to “traditional thinking”, “Lean Production” starts by looking at throughput timesThe approach: Short throughput times instead of high inventory levels
“Traditional thinking” “Lean Production”
High inventory levels Short throughput times
Maximum ability to deliver Maximum ability to react
High customerorientation
High customerorientation
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt83
Example
A short throughput time is obtained by reducing all the elements in the process chain that add no valueReducing activities with no added value
Previously Now
Throughput time = 180 min. Throughput time = 120 min.
Value added No value added Value added No value added
Weld on nutPick up material
Place part in fixtureSpot welding,
applying sealantRemove material(28 items) from conveyor belt; place part in fixture
Spot welding
Remove material(60 items) from conveyor belt; place part in fixture
Weld on stud bolt
Buffer stock of material
Action:Work contents
combined in a new sequence and distribution (total remains the same)
Action: Automatic
loading Conveyor belts
shortened, so that bufferstocks have tobe reduced as well
120 min.SS 60 min. 60 min.SS 60 min.
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt84
Critical questions have to be asked in order to identify elements in the production process that add no valueQuestions
How many of the tasks performed are essential for the production process?
How many of the tasks only increase product cost instead of product value?
How many of the tasks have a genuine bearing on what customers
Everything, that is not value-adding,
is waste!
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt85
Value-adding activities only account for a small proportion of the work process
Breakdown of the work process
Work process
Value-adding
Not value-adding with obvious waste
Not value-adding withhidden waste
Value-adding
Activities that add tothe value of the productActivities for which the
customer is preparedto pay
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt86
Some forms of waste are immediately obvious ...
Breakdown of the work process
Work process
Value-adding
Not value-adding with obvious waste
Source: Porsche Consulting
Not value-adding withhidden waste
Obvious waste
Activities that are definitely not requiredto add value to the product
Has to be eliminated, e.g. scrap, rework,
inventory, waiting time
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt87
... other forms of waste are hidden
Breakdown of the work process
Work process
Hidden waste
Work that does notadd to the product’s value but which may be required under certain circumstances
Can only be reduced, e.g. changeover, transport
time, movement time (without product)
Source: Porsche Consulting
Not value-adding with obvious waste
Not value-adding withhidden waste
Value-adding
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt88
There are three areas that can be examined to eliminate waste in the manufacturing processTypes of waste
* The Japanese word for waste is MUDASource: Porsche Consulting
7 types of waste*
In the manufacturing process
In the product
In the machinery/equipment
1 Overproduction
2 Inventory
3 Transport
4 Waiting time
5 Space/surface area
6 Rework/defects
7 Movement time
Areas for eliminating waste
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt89
Produced products that are not required by the following process cause waste in the production area Types of waste
Space/surface area
Rework/defects
Movement time
Inventory
Waiting time
Transport
Overproduction
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt90
Porsche vehicle assembly „before“Porsche vehicle assembly „before“
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt91
The only effective method of reducing waste is to eliminate the apparent safety
Reducing inventory in small steps
Problems are hidden
ExamplesMachine failuresMissing materials/partsBottlenecks in productionQuality problems
Problems become obvious
Easy problem identificationForced to find a quick
solution
Causes can be eliminated
Solving root causes to these problems enables production to run with lower inventory
Problems
Inventory (WIP)
Problems
Source: Porsche Consulting
Problems
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt92
Quelle: Porsche AG
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt93
Quelle: Porsche AG
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt94
The proportion of added-value tasks is not increased by performance increase levels but by eliminating waste in the processEliminating waste versus performance increase
Performance increase = Compressing the value adding process
Improvement = Replacing waste with value adding tasks
Addedvalue
Waste
A
A
W
A
A
W
Addedvalue
Waste W
A
WW
A
A
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt95
> 70% reduction in assembly time
Source: Porsche AG
25%
50%
75%
100%
92 93 94 95 96 97 98 99 00 01 02 03 04 05
Model change964 993
Model change993 996
-71%
Year06 07 08
Model change996 997
Porsche 911 manufacturing hours
91
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt96
The just-in-time vision clearly states how production has to function
Just-in-time vision – 5R
Just in time – 5R
The right part …
Zero defects… of the right quality
Now… at the right moment
One part… in the right quantity
Here… in the right place
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt97
Lean Production is based on four principles
The just-in-time framework
Flowprinciple
Takt principle
Pull principle
Zero-defects principle
Just-in-time production system
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt98
Ideally, Lean Production is implemented in a given order
Ideal approach
Flowprinciple
Takt principle
Pull principle
Zero-defects principle
Just-in-time production system
Realization of production flow by process couplingand realignment
Improving and stabilizing all processes within the company
The downstream process only takesthe parts it requires
Achieving rhythm by leveling the work contents
Goal
1 2 3 4
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt99
The guiding process vision is based on four principles
Supplier
Supplier
Value Add• 15% Porsche• 85% Suppliers
Principles• Pull• Takt• Flow• Zero-Defects
Source: Porsche AG
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt100
All principles have to be developed uniformly
The just-in-time framework
Flowprinciple
Takt principle
Pull principle
Zero-defects principle
Just-in-time production system
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt101
Coupling and alignment of processes are the first step of implementing aLean ProductionThe just-in-time framework
Source: Porsche Consulting
Flowprinciple
Takt principle
Pull principle
Zero-defects principle
Just-in-time production system
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt102
Applying the flow principle in assembly means to work hand-in-hand
“One-piece flow” in assembly processes
One-piece flow assemblyBatch size assembly
Long throughput time as a result of high inventory levels and buffers
Reduced throughput time through elimination of inventory and buffers
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt103
The second column of the just-in-time framework represents the Takt principle
The just-in-time framework
Source: Porsche Consulting
Flow principle
Takt principle
Pull principle
Zero-defects principle
Just-in-timeproduction system
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt104
The customer takt is the rhythm of the just-in-time production system, which is set by the average customer demand“Heartbeat of the factory”
Takt! Takt! Takt! Takt!Custo-mer
Custo-merOrders Smoo-
thing
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt105
Workload
Attempts to produce to the actual market demand simply result in a phase-delayed productionThe actual workload is delayed
* Permissible Fluctuation LimitSource: Porsche Consulting
Production fulfils the sales requirements,but with a time delay Phase-delayed production
J F M A M J J A S O N D
Upper PFL*
Lower PFL*
Months
Results are the following effects on the company: A: Underutilization; Examples:
Machinery idle time, Filling up the stores,De-motivation of the employees, Redundancies, short-shift work, Model offensive, in-sourcingB: Overloading, Examples:
Suppliers become process bottlenecks, Reduced quality due to deadline pressure,De-motivation of the employees, Overtime, special shifts, New recruitments, outsourcing
Overloading
Underutilization
(A)
(B)Actual workload
Inquired Workload
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt106
The goal of a just-in-time production is to approach the ideal situation by “leveling” the productionLeveling of the production
* Permissible Fluctuation LimitSource: Porsche Consulting
Solution ideaDaily production volume is held constant over a
longer time of a periodSlight fluctuations in demand are compensated
by a finished goods store or flexible working timesMajor fluctuations in demand are recognized by
the sales department in good time and passed on to the production planning department
Continuous production volumeover a longer period
J F M A M J J A S O N D
Upper PFL*
Lower PFL*
Months
Workload
Direct impact on operationsPurchase volumes are easier to planPersonnel numbers are constantDeadlines are clearly seenRapid recognition of problems
Overloading
Underutilization
Ø Lower PFL
Planned amount
Inquired workload
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt107
7,5 hrs. = 27.000 sec.
ExampleCalculation of the “customer takt” (takt time)
Source: Porsche Consulting
„Customer takt“ is calculated with the net working time plus the daily customer demand
Daily working time
Unpaid breaks
Allocation/recuperation times
Net working time
„Gross working time“
245 piecesDaily customer demand
Customer takt (takt time)110 sec.
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt108
The time required to perform one cycle of work is referred to as cycle time
Definition of cycle time
Source: Porsche Consulting
Example
140
90
120
0
60
30
Work station(station/employee)
Cycle timeIn seconds
E
80
D
140
C
114
B
95
A
56
Time perwork step
Totalcycle time work
station D
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt109
The comparison of takt time and cycle time exposes essential starting points of avoiding wasteComparison of cycle time to customer takt time
Source: Porsche Consulting
Example
120
60
0
Cycle timeIn seconds
30
Work station(station/employee)
90
140
E
80
D
140
C
114
B
95
A
56
Takt time= 110 sec.
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt110
With a balanced takt time the employees cycle time corresponds to the customer takt and respectively to the takt timeEffects of different cycle times
Customer takt/takt time („available time“)
Cycle time(„required time“)
Idle time or over overproduction
Overtime oradditional employees
Even capacity utilization
Source: Porsche Consulting
Example
Target
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt111
Example
Balancing the takt implies the even distribution of work content across all employeesApproach to takt balancing
... after removing waste2
KAIZEN
KAIZEN
KAIZEN
Current Situation
... after further improvements... after evenly distributing work content
1
3 4
80
140114
95
56
110Sec.
EM 5EM 4EM 3EM 2EM 1
73
137
10090
50
110Sec.
EM 5EM 4EM 3EM 2EM 1
10
110110110110
EM 4 EM 5
110Sec.
EM 3EM 2EM 10
110110110110
EM 1
110Sec.
EM 5EM 4EM 3EM 2
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt112
73
137
10090
50
110 Sec.
EM 5EM 4EM 3EM 2EM 1Quantity of employees in the process chain
Sum cycle times
(EM Sec.)/Piece
Customer takt
Sec./Piece
The quantity of employees per process chain is determined by the sum of all work contents in combination with the takt timeCalculation of the required quantity of employees
EM 5
110 Sec.Custom-er takt
EM 4EM 3EM 2EM 1
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt113
The third column of the just-in-time framework represents the Pull principle
The just-in-time framework
Flow principle
Takt principle
Pull principle
Zero-defects principle
Just-in-timeproduction system
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt114
The “Pull principle” uses the replenishment system, where a “hole” pulls in the consumed products from the upstream process“Pull principle” – Replenishment system
„Push principle“ “Pull principle“
Psychological strain to store the parts at the downstream process
Psychological strain to store the parts at the upstream process
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt115
The “Push Principle” is distinguished by complex production management of material and information flowThe PPS* steers the whole factory
Single processes are planned and controlled
Precision control on the physical level
Scheduling
Programplanning
PPS*
Volume planning
* PPS: Production planning and steeringSource: Porsche Consulting
Material flow
Information flow
Physical level
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt116
Traditional PPS systems have to support the “Lean Production” with its control loopsProduction schedules itself
Control loopInformation flow
Material flow
The shop floor controls itself on actual demand
Only the last process ofthe chain is triggered on a planned-deterministic basis
Source: Porsche Consulting
Precision control on the physical level
Scheduling
Programplanning
PPS
Volume planning
Physical level
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt117
A market oriented production with high relevance to customer demand is only possible with a comprehensive conversion from „Push“ to „Pull“ Method: “Push” vs. “Pull”
Source: Porsche Consulting
„Push“ „Pull“
Dealer/Client
Stock
Information Order
StockStock
Jahresplanung
Monatsplanung
Wochenplanung
Tagesplanung
Annual planning
Monthly planning
Weekly planning
Daily planning
Finish AssemblyBody shell
Dealer/Client
Information Order
Jahresplanung
Monatsplanung
Wochenplanung
Tagesplanung
Annual planning
Monthly planning
Weekly planning
Daily planning
Finish Assembly Body shell
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt118
The first step towards the “Pull Principle” is the installation of supermarkets
Method: supermarket
Information flow
Material flow
Supplier Customer
Supermarket
Final assembly
Supermarket
Machining
Supermarket
Pre-assembly
Supermarket
Material flow
Information flow
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt119
Comparable to a supermarket the consumption of products by the customer triggers productionMethod: supermarket
Supermarket shelf
Using the “If something goes out it must be replaced”principle, overproduction is avoidedReplenishment is according to the “First In – First Out”
principle
Source: Porsche Consulting
Volume depends on:Consumption/demandReplenishment time
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt120
Supermarkets enable an approximation of the ideal of synchronous production by limiting inventory levelsVision
Inventory
Reality
Ideal
Inventory
Clearly definedinventory insupermarket
Inventory
“Push principle” “Pull principle”Supermarket
Synchronousproduction
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt121
The Zero-defects principle represents continuous improvement and stabilization of processesThe just-in-time framework
Source: Porsche Consulting
Flowprinciple
Takt principle
Pull principle
Zero-defects principle
Just-in-time production system
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt122
With the aid of ANDON systems, employees can transmit a signal in the event ofa malfunction, fault or errorFault recognition – ANDON
Signal: orange light indicates a “call for help”Signal: if no help is forthcoming after a few minutes or the problem has not been
solved, a red light comes on and the production line stops
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt123
KAIZEN describes the path leading to “just-in-time production system”
KAIZEN versus “just-in-time production system”
Just-in-timeproduction system
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt124
KAIZEN means “to continuously improve”
The meaning of KAIZEN
KAI = change
KAIZEN = A “change for the
better”
ZEN = good (for the better)
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt125
KAIZEN pursues the path towards “continuous improvement” in small steps
Paths toward improvement
Innovative improvements in major steps
InnovationLengthy planning period neededHigh investment outlayEmployees not closely involvedMajor steps/changes (irreversible)Target often not achieved
Continuous improvementsin small steps
KAIZENOnly short planning period neededLow investment (or none) Intensive cooperation with employeesSmall steps (can be modified at any time)Continuous progress towards a target
Improve-ment
Time
Improve-ment
Time
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt126
Clear targets are comprehensible on all levels - and omnipresent, …
Source: Porsche AG
Porsche engine assembly: December 1995Porsche engine assembly: December 1995
Target 94/95Productivity improvement ≥ 6%
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt127
KAIZEN is the basic philosophy for the management process in a “Lean Enterprise”The five key points of KAIZEN
All improvements are made from the viewpoint of the product
1
Added value and waste are separated2
Standards are the foundation for improvements
3
The downstream process is the customer4
A crisis or problem is an opportunity for improvement
5
Just-in-time production system
“Continuous Improvement in small steps with involvement of all employees”
Basic Philosophy:
Source: Porsche Consulting
Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt128
Agenda
June 20th, 2014
14:00 Introduction to Manufacturing
Agenda:
Lecturer:
Strategic Decisions
Achieving Operational Excellence
Dennis Knoll Project Manager, Porsche Consulting
Questions & Answers
Operational Management
17:15 End
100% Power, 0% Fat