A Lean Logistic Framework: Applications in the Wood Fiber Supply Process

Transcription

1 April 2018 A Lean Logistic Framework: Applications in the Wood Fiber Supply Process Paula Fallas Valverde MS Candidate, Forest Products, Virginia Tech Henry Quesada Pineda Associate Professor, Virginia Tech Brian Bond Professor, Virginia Tech

2 Agenda What is Lean? What role does Lean Thinking play in a supply chain? Lean Thinking- Supply Chain- Logistics-VSM Mapping Project Introduction and Project Scope Case Study 1 (Current and Future State) Conclusions Questions

3 Lean Thinking 01 Overproduction 02 Transportation 03 Defects 04 Motion 05 Waiting 06 Overprocessing 07 Inventory Lean Thinking Goal Continuous Waste Reduction to Maximize Flow

4 Lean Supply Chain Management Lean supply chain management is for businesses who want to streamline their processes by eliminating waste and non-value added activities. Companies have a number of areas in their supply chain where waste can be identified as time, costs, or inventory. To create a leaner supply chain companies must examine each area of the supply chain. Which Areas?

5 Lean Thinking- Supply Chain- Logistics Outbound Logistics Inbound Logistics Shipping, receiving and procurement Supplier collaborations Customer Collaborations Research Scope

6 Logistics Logistics are the activities required in order to comply effectively with the quantity need of products in the place and time it is need by the customer. It is the link between manufacture and consumption of a product or between suppliers and production, all separated by distance and time" (Kazandijan & Norton, 1999). $ $ $ $ $ $

7 What is Value Stream Mapping? What is a value stream? A value stream is all the actions (both value-added and non-value added) currently required to bring a product through the main flows essential to every product: The project focused on logistic activities. What is the value stream map? What is a value stream map? Special type of flow chart that uses symbols and metrics to depict the flow of inventory and information.

8 Objectives Goal: To develop a lean logistic framework for the Wood Fiber Supply Chain Specific objectives: 1. To map and determine lean metrics for the wood fiber supply chain processes from stumpage to log yards at selected processing sites 2. To implement value stream mapping (VSM) for the wood fiber supply chain including cost fulfillment, operational, and fulfillment-stream performance indicators. 3. To disseminate the lean logistic framework to the industry related to the wood fiber supply chain.

9 Logistics and Supply Chain Analyzed from Stumpage to Log Yard Supplier s Inventory Stumpage Outbound Logistics Transportation Customer Log Yard

10 Industry Case Studies

11 Case Study 1: A Paper Mill Standing Timber/Inventory Point Value of Inventory Carrying Cost Customer/Receiving Operations Transit Time Inventory (ADOH) Ordering Processing Time Value of Inventory Carrying Cost Delivery frequency Planned order frequency Value of Inventory Carrying Cost Lot Size Delivery frequency Planned order frequency Demand Inventory (ADOH) Outbound Logistics/Transportation

12 Case Study 2: A Lumber Mill Supplier/Logger (Gatewood) Inbound Logistics/Transportation Receiving Operations/Log Yard Transit Time Inventory (ADOH) Transit Time (Yard to Line) Inventory (ADOH) Value Inventory Carrying Cost Value of Inventory Carrying Cost Delivery frequency Planned order frequency Value of Inventory Carrying Cost Performance Metrics Right Quantity Right Quality (% of Cull) Demand Lead Time Inventory (ADOH)

13 Case Study 3: Logger Company Standing Timber/Inventory Point Inventory (ADOH) Customer/Receiving Operations Transit Time Inventory (ADOH) Ordering Processing Time Value of Inventory Carrying Cost Delivery frequency Planned order frequency Value of Inventory Carrying Cost Lot Size Delivery frequency Planned order frequency Demand Value of Inventory Carrying Cost Outbound Logistics/Transportation

14 Key Findings by Case Study Company

15 Case Study 1: A Paper Mill

16 Supplier/Logger Order to Shipment Inventory (ADOH) Value Inventory Carrying Cost Truck Payload MOQ Performance Metrics

17 Inbound Logistics/Transportation Transit Time Inventory (ADOH) Value of Inventory Carrying Cost Planned Order Frequency Planned Delivery frequency Performance Metrics

18 Receiving Operations/Log Yard Inventory (ADOH) Value of Inventory Carrying Cost Performance Metrics

19 Waste Identified in Case Study 1: Paper Mill

20 Case Study 1. Paper Mill Future VSM Lower Scope Gain in Percentage Wood Flow Planning: Mill Management Tract Allocation: Procurement Inventory 21% Communication : Mill Carrying Costs Management, Procurement and Supplier Truck Scheduling Coordination: Inbound /Outbound Mill Management Tract Allocation: Procurement Logistics 10% Source: Rodgers, B., Visser, R., Shaffer, R., & Gallagher, T. (2002). Planning and Communication: State of the Forest Industry and Opportunities for Improvement in the Wood Supply Chain.

21 Logistics and Supply Chain Analyzed from Stumpage to Wood Yard Supplier s Inventory Stumpage Customer Log Yard Outbound Logistics Transportation -21% of Inventory -21% of Inventory -10% of Transportation costs -21% of Inventory

22 Future VSM & Total Cost of Fulfillment

23 Gap Matrix for Case Study 1

24 Main Conclusions Most of perfect-order execution metrics such as: quality, product, customer service, location, and quantity, are not tracked in the three case study firms. The main causes for waste include: lack of communication among supply chain partners, weak supplier collaborations, demand variability, quota management, and poor inventory management. The completion of such tools aid in identifying communication gaps and disjunctions between different elements of the supply chain. The application of VSM to the wood fiber supply chain opens the possibility of improving collaboration and information sharing practices between the supply chain partners.

25 Main Conclusions The results could be improved if the implementing party is closer and more familiar with the company s processes. Similar issues related to communication and collaboration have been reported in previous WSRI reports. Consumer companies should implement the idea of core suppliers. This categorization could reduce inventory, reduce inefficiencies, and improve the information flow between different elements to enhance productivity.

26 Acknowledgement: Research funded through a grant from the Wood Supply Research Institute (WSRI) and by the Department of Sustainable Biomaterials at Virginia Tech 26