Achieving lean requires multiple efforts
like more and more manufacturers, Johnson Controls, an automotive group, has also adopted Lean production. However, there are two things that distinguish Johnson Controls from many lean practitioners: the information technology it uses to support lean processes, and its ability to integrate suppliers into these processes
with the spread of lean principles, industry experts expect them to be widely practiced, and the case of Johnson Controls illustrates the reason
johnson controls' lean journey began with a pilot plan in a workshop. "We used Kanban and other tools to create a smooth production schedule," recalled Greg pothoff, Senior Supply Chain Manager for North America at Johnson Controls. "The end result was a 40 percent reduction in inventory."
obviously, the management of Johnson Controls hopes that this success can be repeated in other workshops, but the company also recognizes that it will be very difficult if each workshop implements lean as the first time - manually. This inspired the search for an IT system that could support lean
finally, Johnson Controls obtained such a system from factory logic. This solution has now been applied in nine workshops of Johnson Controls, and the implementation continues at the rate of about two workshops per month. At the same time, pothoff said Johnson Controls is using the electronic signage feature embedded in the factory logic suite to send demand signals to its suppliers
continuous improvement and waste elimination are the top concerns of lean manufacturers. According to the survey data,
many companies expect to use lean driven strategies to reduce production and supply chain costs
"in every workshop adopting this solution, we have seen many percentage points of inventory reduction and high percentage points of efficiency improvement," pothoff added. "And whether our suppliers realize this or not, the ability to stably complete the production schedule enables us to send them more accurate demand signals."
lean enterprises and other
lean production, which essentially requires the elimination of scrap, variability and inflexibility, have existed for decades, of which Toyota may be the most well-known practitioner. Although the best in class companies have made great progress in using this technology, lean production has only recently become popular among manufacturers in the United States. Efforts to apply Lean principles to the supply chain are much closer and are hampered, at least in part, by the lack of appropriate IT solutions
"in the past year, the lean solution market realized by technology has been greatly developed, mainly because there are more solutions available - including those from manufacturers who jointly develop products with customers," said Jane Biddle, vice president of production research of aberdeengroup, "Every detail of this has increasingly become a consensus that the use of technical solutions to support and expand the implementation of lean is a prerequisite for the realization of flexible manufacturing, which is the basis of a supply chain that accurately responds to customer needs."
some industry experts believe that enterprises are looking forward to extending lean into their supply chain, because the potential returns here are greater than those obtained at the factory level
"the company recognizes that there are greater opportunities to reduce costs in the supply chain than in the enterprise," said Kevin Piotrowski, senior director of product marketing at infor, an enterprise solution provider, "When the supply chain is inefficient, suppliers can accept inventory. Production managers may think that they have reduced inventory by implementing lean factory, but the result is to pay a higher price because suppliers are forced to bear additional buffer inventory to meet the needs of manufacturers."
although lean planning is difficult to promote in the factory floor, the complexity of today's supply chain makes planning in this field even more troublesome. Perhaps the biggest challenge is to eliminate inefficient communication methods before suppliers
supplyweb, a managed solution using EDI and web-based communication tools, is used by more than 80 TRW automobile plants
thousands of suppliers can communicate electronically through this solution
"many manufacturers still rely on paper-based activities to complete supply chain communication, but in fact, it is inefficient to use manual communication to convey the demand for replenishment of inventory," said Jeff Herrmann, chairman and chief marketing officer of supplyworks (direct material supply management software provider). "In a lean supply chain, it is extremely important to automate the communication between manufacturers and suppliers."
for example, if a company wants to minimize inventory, it must carry out high-frequency, small batch production. However, this actually leads to the need for more communication transactions with suppliers so that delivery can keep pace with production
"hours - even minutes are crucial to our production line," said Tim Michas, LCN supply chain manager, "Every day we receive deliveries from 90% of our suppliers, and more than half of them send us goods twice a day. Automating our communication will better support multiple daily deliveries.
-- Kelly Thomas, senior vice president of technologies
this demand is exactly LCN closers (the company manufactures hardware parts for safety doors) Reasons for implementing lean. The company implemented a lean program in 2000 to solve some operational problems, said Craig Lucas, process innovation manager. After seeing that many of its basic production processes have been improved, LCN intends to solve more complex problems, such as integration with suppliers
"our goal is to produce according to order and realize zero inventory of finished products," Lucas said. "Fax and e-mail do not support this business model, and the ultimate consequence is that when the factory needs parts, it can not get them."
to support its business model, LCN is adopting a request based, order based software solution from supplyworks, which provides a variety of ways to communicate with suppliers
improve the forecast level
it is one thing to achieve a smooth communication process in order to replenish inventory, but it is another thing to ensure that suppliers can always deliver on time without using expensive technology to accelerate delivery. The latter requires accurate demand forecasting
"almost everyone knows that planning is the key to implementation - the problem is that many companies have been reluctant to take the necessary measures to ensure the accuracy of forecasts," Kelly Thomas, senior vice president of I2 technologies, a supply chain manager, said that providing accurate forecasts to suppliers is crucial to ensuring the continuity of the supply chain - especially for manufacturers operating in a just in time production environment. "
as Thomas pointed out, an unexpected sudden increase in demand may lead to a halt in production if the supplier cannot deliver enough parts to support the sharp increase in orders. The alternative is that the manufacturer or its supplier reserves a large amount of safety stock, but this will increase the cost of the supply chain
"there will never be a 100% accurate forecast," Thomas said. "However, the best in class companies understand that the more accurate the forecast is, the fewer interruptions will be, and the easier it will be to resume the plan in case of accidents, so the supply chain efficiency will be higher."
once the company improves forecast accuracy and production stabilizes, it can start smooth production and improve efficiency, said Sami cassis, vice president of factory logic. Lean manufacturers consume many parts every day and then receive more parts from their suppliers. The stability ensures that the manufacturer can continuously produce the same amount of products and receive sufficient retention from the supplier. In this way, production can be carried out continuously without the frequent start and stop
smooth production divides the total order quantity of a planning stage into each progress stage. In this way, the company can determine the production sequence of a certain progress stage. It then sends the schedule to the supplier so that the supplier can plan accordingly
"accurate forecasting ensures that suppliers as a whole have the ability to meet demand. Smooth production ensures that the same number of products are produced every day, so that suppliers can know exactly what they will need at a certain time," cassis said. "When the manufacturer operates according to a stable production schedule, there is nothing to worry about in the supply chain field, because there will be no accidents."
check whether the joint of the oil system is tightened
once the company improves the prediction accuracy and can integrate with suppliers through electronic communication, the overall supply chain efficiency will be improved. Take the example of TRW Automotive, one of the largest tier one automotive suppliers in the world whose importance is self-evident in Michigan. After managers set the key goal of balancing requirements with existing suppliers, TRW began to implement infor automotive supplyweb solution, a solution that includes EDI and web-based communication tools to facilitate supplier management
"there is a greater opportunity to reduce costs in the supply chain than in the enterprise."
-- Kevin Piotrowski, senior director of infor product marketing
currently, in North America and Europe, more than 80 TRW factories are using supplyweb to promote communication with suppliers. In many cases, supplyweb eliminates printed and faxed order notifications, and suppliers do not need to print TRW's EDI messages after receiving them, said Eric ordona, North American business relationship manager of TRW Automotive information systems
with supplyweb, TRW factories can send traditional total purchase orders (PO), classified purchase orders and notices to suppliers. However, supplyweb also sends documents inherent in the lean replenishment approach, such as Kanban and supplier managed inventory (SMI), ordona said
"the frequency and when the communication occurs depends on the type of communication," ordona said. "Usually, the purchase order will be updated several times a day, although the document does not need to be changed very frequently - usually once a week," ordona said, "Kanban and SMI are updated more frequently - up to several times per hour - because these methods require suppliers to obtain as accurate information as possible: in particular, existing raw material inventory and material warehousing information."
in terms of operation, productivity has been improved to some extent, ordona said. For example, communicating more plan related information with suppliers reduces the number of non value-added queries later. This enabled TRW to start rapidly reducing inventory and the cost of stocking these inventories, while achieving a return on investment in about 20 months
"some factories have done quite well in inventory management," ordona said. "However, supplyweb and inventory visibility also expose poorly run factories and enable them to control their inventory and supply chain."
although other manufacturers may not have achieved that level of success, they are making progress. For example, LCN is continuing to integrate with suppliers. Although the company