2. Introduction- Lean
The purpose of lean is to remove all
forms of waste from the value stream.
– Waste includes cycle
time, labor, materials, and energy.
The chief obstacle is the fact that waste
often hides in plain sight, or is built
into activities.
3. Benefits
• Lean manufacturing delivers an
insurmountable competitive advantage
over competitors who don't use it
effectively.
4. Benefits
(1) Lower production cost higher profits and
wages
– Cost avoidance flows directly to the bottom line.
(2) Supports ISO 14001 and "green"
manufacturing
– Reduction of material waste and associated
disposal costs higher profits
(3) Shorter cycle times: make-to-order vs. make-
to-stock
5. Bottom Line and the
Language of Money
The first comprehensive implementation of lean
manufacturing yielded:
– Stock appreciation of 63 percent per year, for 16 years
(not counting dividends)
– 7.2 percent annual wage growth
9. Enterprise Resource
Planning System (ERP)
SAP Automotive ERP Suit
Main means of information flow between
Toyota and its counterparts worldwide.
Tighter collaboration links
With SAP, gain:
– Outstanding strategic,
– Operational,
– Financial,
– Marketing positions
10. E-Marketplace
iStarXchange
Initiative with i2 Technologies Inc.
Allow subscripted members able to view a single
catalogue to:
– view information on parts
– checking the prices and availability
– conduct transaction online
– forecasting supply and demand
– delivery cycle
Improved forecasting
Enhancing the planning
Enhance deployment and replenishment of the inventory
11. Trade Matrix system
Initiative with i2 Technologies Inc
Automates with equipment manufacturer
and suppliers in terms of :
– site’s inventory management
– warehousing
– Logistic and shipping
12. Main SAP Automotive Suit
ERP System
Main means of information flow between
Toyota Australia and its counterparts
worldwide.
Tighter collaboration links between TMCA
and TMC
– Logistic and shipping
– Overall Value Chain
13. BEA Web-logic Integration
8.1
Integrated within the SAP automotive suit
Main IT Backbone of TMCA
Based on Open Standard
Allow connection to their numerous
partners in the value chain via an assortment
of systems in Australia
Integrate the systems and processes that
connects Toyota Australia and its trading
partners
14. BEA Web-logic Integration
8.1
Functions:
– Electronic proof of delivery
– Online accounts payable status for suppliers
– Fleet management integration
– The Toyota Vehicle Order Processing System
(TVOPS)
– Advance Shipping Notice for vehicle
deliveries
– Vehicles inventory synchronization
16. SAP
International
collaboration
Raw Material
Suppliers
End Customer
SAP/BEA Dealers
1st Tier/ 2nd Tier
Suppliers
Manufacturing Warehouse/
Plants Parts Centers
17. Electronic “Kanban”-Card
System
Identical in function to the physical
“kanban” cards used by Toyota in Japan
4 main purpose:
– Sole means of requesting new parts
– Send for every order shipment
– Send to a specific supplier plant
– Establishing the mix and volume criteria for
assessing if an order was correct
19. Electronic “Kanban”-Card
System
PARTS TOYOTA
S UPPLIER (TMCA)
Ma te ri a l Re qu i re m e n ts Fo rca s t
O rde rs
Pl a n n i n g ANS I X1 2 8 3 0 Pl a n n i n g
Fo re ca s ts
Ka n ba n s
De l i ve ry Do ck e t Ka n ba n
S o rti n g Pro du cti o n
Li n e
De s pa tch i n g G o o ds
Ka n ba n s
De l i ve ry Do ck e t Re ce i vi n g
Acco u n ts Re m i tta n ce Advi ce Acco u n ts
Re ce i va bl e EDIFAC T REMADV Pa y a bl e
EFT EFT
BANKING
S YS TEM
20. Australian Automotive
Network eXchange (AANX)
Four major car manufacturers in Australia
are involved
Numerous service providers and non-key
suppliers
Provides IP based Extranets for the
automotive industry in Australia
Operates as a virtual point network (VPN)
Allows users to send date to each other in a
reliable and secure manner
21. Australian Automotive
Network eXchange (AANX)
Main components:
– A network that is based on available Internet
technology
– Operated by agreed and standardized service levels.
– Demonstrating proactive management of trading
partner connections
– Practice the best standard of security and privacy for
transactions and interoperability between service
providers
23. Supplier Website
Toyota Supplier.com
– www.toyotasupplier.com
TMCA focused on core competencies in
– high-end design
– engineering and
– system integration
Toyota Australia needs highly focused
core competency oriented suppliers.
24. Supplier Website
Small and diverse companies though have the
ability to display such potential to add
– Innovation
– Flexibility and
– Strength to TMCA’s supply base.
Supplier-centric web site
– Provide opportunities to expand TMCA supplier
network.
25. Supplier Website
Access Flow From Toyota
Australia Suppliers web site
26. Agent Oriented Domestic
Marketplace
Will be able to support a broader base of services
given further growth in e-Market infrastructure
Baseline interaction and directory services
Specialty market services, such as:
– Dynamic trading;
– Cooperative supply chain integration
and management
Enables and facilitates the relationship between
business participants
– Suppliers and service providers; and
– Supporting systems
27. Agent Oriented Domestic
Marketplace
Many-to-many relationships supported between
TMCA and these business partners.
Enables both TMCA and suppliers to leverage
economies of scale in their trading relationships
Allows access to a more liquid marketplace
Further allows the use of dynamic pricing models
– e.g. Auctions (one of the services provided in the proposed
e-marketplace)
– Improve the economic efficiency of the market where
uncertainty about prices and demands are common.
28. Agent Oriented Domestic
Marketplace
Many-to-many relationships supported between
TMCA and these business partners.
Enables both TMCA and suppliers to leverage
economies of scale in their trading relationships
Allows access to a more liquid marketplace
Further allows the use of dynamic pricing models
– e.g. Auctions (one of the services provided in the proposed
e-marketplace)
– Improve the economic efficiency of the market where
uncertainty about prices and demands are common.
31. Real Time Inventory
Tracking Module
To be incorporated into the BEA system,
which comprises of 4 agents
– Forecast Agent
– Inventory Agent
– Order Agent
– Multi - Tier Visibility Agent
33. Agent Based Supply Chain
An agent-based transport and logistics coordination system
(collaborative e-market), are designed to accomplish
transport and logistic coordination tasks among different
automotive manufacturers in Australia.
Consist of 4 generic roles agents in supply chain:
• Distribution Hub Agent
• Logistics Coordinator Agent,
• Manufacturer Agent
• Transporter Agent.
37. Existing Supply Base
As the company had grown over the years, so had
the supply base
In the late 1980s: there were several thousand
suppliers of production materials in a complex
network of business relationships
Suppliers were picked primarily on the basis of
cost, little regard was given to:
– overall supply chain costs
– complexity of dealing with such a large network of
suppliers.
38. Existing Supply Base
As the company had grown over the years, so had
the supply base
In the late 1980s: there were several thousand
suppliers of production materials in a complex
network of business relationships
Suppliers were picked primarily on the basis of
cost, little regard was given to:
– overall supply chain costs
– complexity of dealing with such a large network of
suppliers.
39. Existing Supply Base
Beginning in the early 1990s:
Shifted toward longer-term relationships with a
subset:
– tier 1
– tier 2
– below suppliers.
Ford made its expertise available:
– just-in-time (JIT) inventory
– total quality management (TQM)
– statistical process control (SPC)
40. Ford Production System
Ford 2000 initiative produced five major,
corporation wide reengineering projects
One was Ford Production System (FPS)
Aimed at making Ford manufacturing
operations:
– Leaner
– more responsive
– more efficient
41. Ford Production System
Aspired to level production and move to a
more pull-based system, with:
– synchronized production
– continuous flow
– Stability
throughout the process
42. What was Ford’s intentions
when reengineering its
production system, and how
were they going to do this?
43. Exhibit 2
Moving from Push to Pull
Process Push Pull
Design Design strategy Please everyone Mainstream customer
Vehicle More is better wants minimal
combinations
Marketing Pricing strategy Budget-driven Market-driven
Vehicle purchase Higher Lower
Incentives
Manufacturing Capacity planning Multiple material/ Market-driven and
and supply capacity constraints, (no constraints FPV/
Driven by program CPV* + 10% for
Budget vehicle, +15 for
components
Schedule and build Maximize production Schedule from
make whatever you customer-driven order
can build bank, build to
schedule
44. Exhibit 2
Moving from Push to Pull
Process Push Pull
Dealer network Dealer ordering Orders based on Orders based on
Allocations and customer demand
Capacity constraints
Order to delivery Longer (60 + days) Shorter (15 days or
times less)
Inventory High with low Low with rapid
turnover turnover
Dealership model Independent Company-controlled
dealerships, dealerships (Ford
negotiations with Retail Network)
company
45. One Important Part of FPS
was Synchronous Material
Flow (SMF)
Ford defined as “a process or system that produces
a continuous flow of material and products driven
by a fixed, sequenced, and leveled vehicle
schedule, utilizing flexibility and lean
manufacturing concepts.”
One key to SMF was In-Line Vehicle Sequencing
(ILVS):
– used vehicle in-process storage devices (such as banks
and ASRSs) and computer software to assure that
vehicles were assembled in order sequence
46. Order to Delivery
The purpose of OTD:
– reduce to 15 days from 45 to 65 days
Pilot studies in 1997 and 1998 identified
bottlenecks throughout Ford’s supply chain:
– Marketing
– material planning
– vehicle production
– transportation processes
47. Ford’s Approach to
Implementing an Improved
OTD Process
Ongoing forecasting of customer demand from
dealers
A minimum of 15 days of vehicles in each assembly
plant’s order bank
– to increase manufacturing stability
Regional “mixing centers” that optimize schedules
and deliveries of finished vehicles via rail
transportation
A robust order amendment process
– to allow vehicles to be amended for minor color and trim
variations without the need to submit new orders
48. Ford Retail Network
July 1, 1998, launched first Ford Retail Network
(FRN) in Tulsa, Oklahoma
– under the newly formed Ford Investment Enterprises
Company (FIECo).
Two primary goals:
– to be a test bed for best practices in retail distribution
and drive those practices throughout the dealer network
– to create an alternative distribution channel to compete
with new, publicly owned retail chains such as
AutoNation.
49. Enterprise Model Comparison
Ford
Breakthrough Objectives/Key Initiatives
Customers
Dealers Ford Retail
Network
OT
D Order
Mgmt
FPDS
Bill of
Material
DTD
Outbound
Logistics Supply
chain
Leadership
Plan/Site
FP Operations
S
Inbound
FP Logistics
S
CFOP
Suppliers
Animated title moves behind picture(Intermediate)To reproduce the shape effects on this slide, do the following:On the Home tab, in the Slides group, click Layout, and then click Blank.On the Home tab, in theDrawing group, clickShapes, and then under Rectangles click Rectangle (first option from the left). On the slide, drag to draw a rectangle.Select the rectangle. Under DrawingTools, on the Format tab, in the Size group, do the following: In the ShapeHeight box, enter 3.17”.In the ShapeWidth box, enter 9.5”.Drag the rectangle slightly above the middle of the slide. Select the rectangle. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following:Click Align to Slide.Click Align Left.Under DrawingTools, on theFormat tab, in the ShapeStyles group, click the next to ShapeOutline, and then click NoOutline.Under DrawingTools, on the Format tab, in the ShapeStyles group, click the FormatShape dialog box launcher. In the FormatShape dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following:In the Type list, select Linear.In the Angle box, enter 0. Under Gradient stops, click Add gradient stops or Remove gradient stops until two stops appear in the slider.Also under Gradient stops, customize the gradient stops as follows:Select the first stop in the slider, and then do the following: In the Position box, enter 0%.Click the button next to Color, and then under Theme Colors click Orange, Accent 6, Darker 50% (fifth row, 10th option from the left).Select the next stop in the slider, and then do the following: In the Position box, enter 100%.Click the button next to Color, and then under Theme Colors click Orange, Accent 6, Darker 25% (fourth row, 10th option from the left).To reproduce the “heading” text box on this slide, do the following:On the Insert tab, in the Text group, select TextBox. On the slide, drag to draw a text box.Enter the heading text, and then select text. On the Home tab, in the Font group, do the following:In the Font list, select Calibri.In the FontSize box, enter 38.Click Bold.Click the arrow next to FontColor, and then under ThemeColors click Orange, Accent 6, Darker 25% (fourth row, 10th option from the left).On the Home tab, in the Paragraph group, click AlignTextLeft.Drag the text box just above the rectangle, in the right half of the slide. To reproduce the second text box on this slide, do the following:On the Insert tab, in the Text group, click TextBox. On the slide, drag to draw a text box.Enter three lines of text with paragraph breaks, and then select the text. On the Home tab, in the Font group, do the following:In the Font list, select Calibri.In the FontSize list, select 28.Click Bold.Click the arrow next to FontColor, and then under ThemeColors click White, Background 1 (first row, first option from the left).On the Home tab, in the Paragraph group, click the Paragraph dialog box launcher. In the Paragraph dialog box, do the following:On the Indents and Spacing tab, under General, select Left in the Alignment box.Under Spacing, select 12 in the After box.Drag the second text box onto the rectangle, below the “heading” text box. To reproduce the full-color picture on this slide, do the following:On the Insert tab, in the Images group, clickPicture. In the InsertPicture dialog box, select a picture, and then click Insert.On the slide, select the picture. Under PictureTools, on the Format tab, in the Size group, click the Size and Position dialog box launcher. In the Format Picture dialog box, resize or crop the image so that the height is set to 5.08” and the widthis set to 2.61”. To crop the picture, click Crop in the left pane, and in the right pane, under Crop position, enter values into the Height, Width, Left, and Top boxes. To resize the picture, click Size in the left pane, and in the right pane, under Size and rotate, enter values into the Height and Width boxes.Also in the Format Picturedialog box, click Glow and Soft Edges in the left pane, and then, in the Glow and Soft Edges pane, do the following:Under Glow, click the button next to Presets, and then click Blue, 5 pt glow Accent color 1 (first row, first option from the left).Click the button next to Color, and then under ThemeColors click White, Background 1 (first row, first option from the left).Drag the full-color picture on top of the rectangle, to the left of the text boxes. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following:Click Align to Slide.Click Align Top. To reproduce the second picture on this slide, do the following:On the Insert tab, in the Images group, click Picture. In the InsertPicture dialog box, select the same picture, and then click Insert. On the slide, select the picture. On the slide, select the picture. Under PictureTools, on the Format tab, in the Size group, click the Size and Position dialog box launcher. In the Format Picture dialog box, resize or crop the image so that the height is set to 2.44” and the widthis set to 2.61”. To crop the picture, click Crop in the left pane, and in the right pane, under Crop position, enter values into the Height, Width, Left, and Top boxes. To resize the picture, click Size in the left pane, and in the right pane, under Size and rotate, enter values into the Height and Width boxes.On the slide, drag the new picture directly below the first one, and then, in the Format Picture dialog box, in the Crop tab, under Picture Position, adjust the Offset X and Offset Y settings to align the content of the two images so that they appear continuous.Also in the FormatPicture dialog box, click Picture Corrections in the left pane, and in the Picture Corrections pane, under Brightness and Contrast, do the following:In the Brightness box, enter 70%.In the Contrast box, enter -70%.Select the smaller picture. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following:Click Align to Slide.Click Align Bottom. Press and hold CTRL, and then select both pictures. On the Home tab, in the Drawing group, click Arrange, point to Align, and then do the following:Click Align Selected Objects.Click Align Center. To reproduce the animation effects on this slide, do the following:On the slide, select the “heading” text box. On the Animations tab, in the AdvancedAnimation group, click AddAnimation, and then under Entrance click Fade.On the Animations tab, in the Timing group, in the Start list, select WithPrevious.On the Animations tab, in the Timing group, in the Duration box, enter 2. On the Animations tab, in the Timing group, in the Delay box, enter 1.5.On the slide, select the “heading” text box. On the Animations tab, in the AdvancedAnimation group, click AddAnimation, and then under Motion Paths click Lines.On the Animations tab, in the Timing group, in the Start list, select WithPrevious.On the Animations tab, in the Timing group, in the Duration box, enter 2. On the Animations tab, in the Animation group, click EffectOptions, and then click Left.On the Animations tab, in the Animation group, click EffectOptions, and then click Reverse Path Direction.On the slide, select the motion path for the “heading” text box,point to the starting point (green arrow) of the motion path until the cursor becomes a two-headed arrow. Press and hold SHIFT, and then drag the starting pointabout 1.5” off the left edge of the slide. (Note: If your lines of text are longer than in the example above, you may need to further increase the length of the motion path. )On the slide, select the second text box. On the slide, select the “heading” text box. On the Animations tab, in the AdvancedAnimation group, click AddAnimation, and then under Entrance click Fade.On the Animations tab, in the Animation group, click the Show Additional Effect Options dialog box launcher. In the Fade dialog box, do the following:On the Effect tab, in the Animate text list, select By Letter.In the % delay between letters box, enter 5.On the Timing tab, in the Start list, select AfterPrevious.In the Duration list, select 0.5 seconds (VeryFast).On the TextAnimation tab, in the Grouptext list, select By 1st Level Paragraphs.To reproduce the background on this slide, do the following:One the Design tab, in the Background group, click Background Styles, and then click Format Background. In the Format Background dialog box, click Fill in the left pane, select Gradient fill in the Fill pane, and then do the following:In the Type list, select Radial.Click the button next to Direction, and then click From Center (third option from the left).Under Gradient stops, click Add gradient stops or Remove gradient stops until three stops appear in the slider.Also under Gradient stops, customize the gradient stops as follows:Select the first stop in the slider, and then do the following: In the Position box, enter 0%.Click the button next to Color, and then under Theme Colors click White, Background 1 (first row, first option from the left).In the Transparency box, enter 0%. Select the next stop in the slider, and then do the following: In the Position box, enter 40%.Click the button next to Color, and then under Theme Colors click White, Background 1 (first row, first option from the left).In the Transparency box, enter 0%. Select the next stop in the slider, and then do the following: In the Position box, enter 100%.Click the button next to Color, click More Colors, and then in the Colors dialog box, on the Custom tab, enter values for Red: 232, Green: 227, and Blue: 216.