Lecture 4 Production Logistics Course Logistics 10 February

Lecture 4 Production Logistics Course Logistics 10 February, 22 th 2010 Hessel Visser 1. 1

Production Logistics Course Overview PRoduction Logistics course • Introduction from Production Orientation to Customer Relations • Just in time effects film from Push to Pull by Hewlett Packard • The way to Lean Manufacturing • The case MOBA egg sorters 1. 2

Brief History of the Model T After 20 years of experimentation, Henry Ford finally saw the fruits of his labour in October of 1908 with the Model T. This was the vehicle he had wanted to build since his first Model A in 1903 1. 3

In October of 1913, mass production of the automobile began. Ford had previously organized workers and components to enhance the production of the Model T, but the moving assembly line quickly improved the speed of chassis assembly from 12 hours and 8 minutes to 1 hour and 33 minutes. 1. 4

In 1914 Ford produced 308, 162 cars, which was more than all other auto manufacturers combined. It was also in 1914 that the Model T, in the interest of streamlining the production process, was no longer available in black, red, blue, green or grey; it was now available in "any colour 1. so long as it is black. " 5

2. 000/Year $ 850. 1. 000/Year $ 260. 1909 time 1926 Mass production did allow for flexibility in the price tag. Henry Ford introduced the Model T at $850 for the Touring Car, but by October of 1924, he was able to offer the Ford Runabout for as low as $260. Few things Factory other than the price ever changed on the Model T 1. 6

The Vision of “Lean” in the USA • 1 2 Perhaps best stated by James Womack, and Daniel Jones in two popular books… The Machine That Changed the World (1990) Lean Thinking 1. 7

What has been changed in car industry? 1. 8

Evolution of manufacturing systems SCM ERP MRP II MRP SIC 1960 Supply Chain Management Enterprise Resources Planning Manufacturing Resources Planning Material Requirement Planning Statistic Inventory Control 1970 1980 1990 2000 1. 9

Stockless Production From Push to Pull • At HP there was in 1983 a division which wanted to make a change over from Push to Pull. • It was the Greely Colorada Division • They made Disc Units • Their goal was to get a batch quantity of one piece 1. 10

The Film Stockless Production Be aware of the problems in this simulated production line. Don’t look only to the working procedures. Watch to the people themselves. Write down all what you find remarkable. 1. 11

Produce and Package the Box Halve a box Box with wire stich Box with sticker Sticker on box To Stitch To sticker Tape it To Pack Box in the Box 1. 12

Performance-Indicators 1 Method Push Measurement 6 pieces Space Pull 3 pieces Pull 1 piece Work on Hand Cycle time Lead time Rework Quality Problems 1. 13

Results at HP Subject Inventory Space Before 2, 8 months 4000 m 2 Work on Hand 5 days Productivity 100% After 1, 2 months 2000 m 2 2, 5 days 115% 1. 14

KAIZEN aimed at customer total quality care robots production circle suggestion box automation work area discipline TPM (total productive maintenance) kanban quality improvement just-in-time 0 -fault activities of small groups cooperation of management and employees improving productivity development of new products The Kaizen umbrella 1. 15

CASE MOBA egg-sorters 1. 16

Moba market position • • World-wide market leader in egg grading equipment Market share > 60% Export > 90% Major markets: – Europe – Asia & Australia – Japan 1. 17

Company information • • Founded 1947 Main office Barneveld 43, 000 m² Subsidiaries in USA, UK, Asia and Japan 280 employees 50 employees R&D € 60 million revenue PBT > 10% 1. 18

Company information • • • Marketing & Sales Research & Development Engineering Manufacturing Assembly Service 1. 19

Products • • • Automatic graders up to 180, 000 eggs/h Auto candling technology Farm packers Container handling Automatic packaging Software for track and trace 1. 20

Auto candling technology • • • Crack (24 hits per egg) Dirt (4 pictures per egg) Blood (Xenon light) Weighing Leaker detection 1. 21

MOBA How did it look in 2000? 1. 22

Why do we have to change? Misfit between market requirements and internal capabilities: – time to market unacceptable (R&D) – customer specific configurations tend to be more complex (from machine to system) – delivery times very long – high warranty costs => Monopolist behaviour <= 1. 23

Situation early 2000 • • • Centralised organisation Responsibilities diffuse Bad mentality and de-motivated crew Outdated production equipment Dirty working places Implementation Baa. N very complex and time and labour consuming • Inflexible planning and control 1. 24

Seven Categories of Waste 1. 2. 3. 4. 5. 6. 7. Overproduction Waiting and Queues Unnecessary Transport Bad Processes Inventories Unnecessary Personal Movements Lack of Quality 1. 25

What does 5 S mean? The 5 S are translated from Japanese to English and Dutch: 1. Seiri /Sort / Selecteren en Scheiden 2. Seiton /Set in order / Schikken en Sorteren 3. Seiso /Shine / Schoonmaken en Schrobben 4. Seiketsu/ Standardise / Systematiseren, Standaardiseren en structureren 5. Shitsuke /Sustain / Stimuleren en Stijlvol werken/ 1. 26

Total results at MOBA • • Sheet metal lead time 9 weeks tot 1 Less space in stock room from 4200 m 2 to 1700 m 2 40 % shorter lead time overall Better quality: almost no scrap Easier handling More profit 1. 27