UTD C4ISN Seminar Series. Saeed Mogharabi, Ph.D., CPIM Director Business Solutions Zensar Technologies Ltd. Your Transformation Partner

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1 UTD C4ISN Seminar Series Saeed Mogharabi, Ph.D., CPIM Director Business Solutions Zensar Technologies Ltd. Your Transformation Partner

2 Lean SCM Solution Case Study Introduction Challenges Lean Concepts Opportunity Assessment Solution and Roadmap to Implementation References Q and A

3 Agile, Aligned, and Adaptive SC Network Communicates Real Time With Customers About Last Minute Demand Changes? About Delivery Capability (ATP, GOP, CTD)? About Value and Service Communicates Real Time With Employees About When, What and How Much To Replenish? Purchase or Make, and Location? Right quantity of Resources and Material, right place, right time! Communicates Real Time With Suppliers About True Demand, Time Phased About Inventories and Costs About Quality and Performance

4 Supply and Demand Concepts Demand Supply Real Time Sales and Operations Planning Change Recognition and Mitigation STAYING ON TRACKS!

5 XT Technologies XT Technologies Overview: Leading Mfg & Distributor of Product ID and Printing Technologies Global Mfg and Supply NW 45,000 active items, with 17,000+ in inventory Above Average Engineering and BOM (60+% of components are FG products as well) Installed mission critical base of 250,000+, needing replacement, parts, and supplies! Corporate Purchasing, Finance and IT On Oracle for 4+ Years, now on R Solution includes Financials, Mfg, Planning, Procurement, and Inventory Management 5

6 XT Technologies Challenges XT Tech Challenges Included: Components Shortages Excess and Expedite" Buying Broken Processes Growing SKU and Product Complexity Variable supply and demand Lack of Collaboration with Suppliers Erroneous Moves and Shipments Plunging Service Level Employee Turnover 6

7 XT Tech Operational Disconnects Disconnects Included: Silos of sub systems Inaccurate and delayed data Less than 85% service level Lots of waste throughout No visibility into spike demand Erroneous planning options & prams Inaccurate ASL and Sourcing Rules Not using Auto-Create and Planner WB Standard POs vs. Open PO with Releases 7

8 Lean Concepts 8

9 Lean Concepts - SCM Key Concepts Include: Eliminate wastes of all kind Flow Mfg and demand pull production vs. push Understand what the customer values and wants, then provide exactly that Make, engineer, configure to order vs. make to stock Continue to improve processes and train employees (kaizen) Keep it simple! 9

10 Lean Enterprise! Extend lean to broader enterprise - OE may be bottleneck not Mfg! Let customer orders drive production activities and increase responsiveness (fill rates not run length) Analyze and manage all segments of total cycle times Pre processing Processing Fixed Processing Variable Post Processing Logistics Accounting 10

11 Benefits of Applied Lean Enterprise Lean concepts have been around since the 1950 s, however only recently ERP is used to plan and respond to demand. Potential Benefits Include: Inventory Accuracy, 30%+ Obsolete Inventory Reduction, 50%+ Complete On Time Shipments, 15%+ Supplier & Employee Satisfaction, 30%+ Total Cycle Time Reduction, 35%+ Waste Reduction, 45%+ 11

12 Scope and Practical Approach to Implementation

13 Big Bang or Divide and Conquer? Scope of Work: One Product Line, 1,700 SKU, One Mfg Line, 50 Suppliers Kanban Planning and Execution Inventory Consignment and VMI isupplier Portal and iprocurement Implementation Planning Process (options, input, output, and people) Daily MRP, with 3:00 pm net change with SO Implement Oracle MSCA in One US location Prototype ASCP and IO on a Dev/Test Instance Explore WMS, RFID, and AUTO ID Concepts, Tools and Value

14 Set Up and Verify Supplier Information

15 Set Up and Verify Supplier Information

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17 Kanban Planning and Execution Process improvements include: Set up an item as kanban Set up the pull sequences of the item Generate and Print Kanban Cards (standard or custom) Replenish (signaling Empty ) a kanban card Import requisition and create a release Retrieve ASN from the receiving open interface, and change the status to In-Transit Launching a new kanban plan, and view plan details in WB Update the plan details to production How to purge a pull sequence, or undo an item from kanban How to manage spikes in demand

18 BOM and Engineering Data Improvements include: BOMs had not been updated ever since first data conversion! Data Quality Team was established to work on BOM accuracy An intensive cycle count effort began to address inventory accuracy issues Exploring modularizing common components

19 Mobile Supply Chain Apps (MSCA) Out-of of-the-box: Complete and Integrated Receiving Direct, Std, Inspect, Cross-Dock, Print Manufacturing Moves, Issues, Returns, Scrap, Completions Inventory Misc. Transactions, Transfers, Physical, Cycle Counts Shipping Pick, Confirm, Ship, Confirm, Print Receive, Replenishments, Pick, Ship, WIP Moves, Cycle Counts,

20 Moves for MSCA Record Accuracy! High frequency and impact moves Suppliers Consignment Receiving Kanban Bins Mfg Cells Shipping

21 Planning Options and Parameters GIGO!

22 Planning Options and Parameters

23 Planning Options and Parameters

24 Planning Options and Parameters

25 Planning Options and Parameters

26 Planning Options and Parameters

27 Planning Options and Parameters

28 Planning Options and Parameters

29 Improvements Summary Process improvements include: Items Grouping based on Replenishment Method Forecasting and Demand Planning Demand Spike Management Kanban Planning and Execution Planning Options and Parameters (input data!) Supplier User Management and isupplier portal Mobile Receiving, Moves, and Shipments Sourcing Rules, Lead Times and Safety Stock ASL and Supplier Information - iprocurement New product introductions process Planner WB, and Open PO with Releases

30 Customizations and Extensions Customizations and Extensions: Demand Spike Management Kanban Calculation Kanban Card Layout Supply, Demand and Inventory Reports

31 Conclusions To implement Lean Mfg and SCM concepts: Enforce Lean principles as the foundation Accurately and timely capture transaction data Introduce ERP as an enabler tool to provide integrated information wisely Eliminate non-value-adding activities, and Streamline core business processes Keep in mind - users must understand and guide the processes, and maintain the data!

32 Next Steps Team from Planning, Finance, Mfg and IT are rolling out the solution to all Products, Lines, and Locations. isupplier Portal Roll Out was limited to 50 suppliers, making up 80% of business. Planning to implement WMS next Other modules under consideration ASCP and IO

33 References Toyota Danaher Group Alcatel - Indiana Mills and Mfg - Pella Corporation - Alcoa QASCO - OGMA - American Saw (Newell Rubbermaid) Emerson Electric Ventana Medical Systems

34 References Making It Lean: The Road to Enterprise Productivity, White Paper by Deloitte Consulting and Oracle Creating the Lean Enterprise, David Baum, Profit Magazine, Nov 04 The Lean Journey: The Quest for Efficiency in the Manufacturing Industry, EIU Study with Arizona State University & PRTM A Real-World Approach to the Lean Enterprise, a MSI webcast Collaboration in Manufacturing: The Role of Partners and Customers, a new white paper by Managing Automation Championing Lean, Katheryn Potterf, Profit Magazine, August 2005 Collaboration in Manufacturing: Achieving Operational Adaptability, a new white paper by Managing Automation The Lean Manufacturing Enterprise, an Oracle Flash Demo Association for Mfg Excellence, 2005 conf proceedings, The Triple-A Supply Chain, Hau Lee,

35 Thank you