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Page 1: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

Business, Management and Administration

Academic Sponsors: Porsche Consulting

Collège des Ingénieurs

Manufacturing

Business Management and Administration

B AM

Page 2: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 3: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 4: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 5: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 6: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt5

Porsche AG in Zuffenhausen

Plant Stuttgart-Zuffenhausen

Source: Porsche AG

Page 7: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 8: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 9: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 10: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 11: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 12: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning
Page 13: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

© A

IRB

US

S.A

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ll rig

hts

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fiden

tial a

nd p

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ieta

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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

Page 14: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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.

Page 15: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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)

Page 16: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 17: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 18: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 19: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 20: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 21: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 22: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 23: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 24: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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)

Page 25: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 26: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 27: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 28: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 29: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 30: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 31: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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%**

Page 32: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 33: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 34: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt33

Page 35: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 36: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 37: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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)

Page 38: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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 )

Page 39: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 40: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 41: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 42: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 43: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 44: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 45: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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*

Page 46: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 47: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 48: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 49: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 50: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 51: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 52: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 53: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 54: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 55: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 56: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 57: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 58: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 59: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 60: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 61: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 62: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 63: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 64: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 65: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 66: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 67: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 68: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 69: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 70: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 71: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 72: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 73: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 74: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 75: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

Page 76: BMA Business, Management and Administration · 2014-06-28 · Porsche Consulting 26 INT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt Processing of raw materials Pre-commissioning

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

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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

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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

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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” *

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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Porsche vehicle assembly „before“Porsche vehicle assembly „before“

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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

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Quelle: Porsche AG

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Porsche ConsultingINT1101_PRES_110520_4_DAK Vorlesung_Manufacturing.ppt93

Quelle: Porsche AG

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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.

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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

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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.

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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

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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%

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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

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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

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