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									Tomorrow’s Lean Supply Chain

                                Breakout Session # 1810
 Tim Ortel, CPCM, Materials Manager, Silicon Microstructures


                                             Date 12 April 2006
                                               Time 2:25 PM




  NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                              Hyatt Regency Atlanta
  :
  Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             2
   Lean Supply Chain Leadership
• Sales & operations planning, supply chain
  management

• New product design, end of life exit

• Replenishment trade-offs and material flow

• Assessing efficiency and yields
   NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                               Hyatt Regency Atlanta
   :
   Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             3
Supply Chain Overview

                                                Solution
                                                Recipe
                                                                                                   Incoming
Customer
                                                                                                     Parts
 Needs
                                                                                                   (Service)



                    Post Sales                                      Enterprise
                    Support &                                       Value Add
                     Service                                         & Test

 NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                             Hyatt Regency Atlanta
 :
 Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             4
What drives lean supply chains
•       Sales and operations planning
•       New product introduction
•       Current product optimization
•       End of life strategy
•       Outcome measurement (metrics)
•       Core versus non-core value add
         – Outsourcing
                 • Offshore, near shore, on shore

    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             5
Building the supply chain

• Defining which activities are internal or
  external including design & logistics
• Identify and control risk(s)
• Outsourcing (also off shore, near shore?)
     – Design? (ODM)
     – Order management?
     – Build and test? (CM, EMS)
     – Post sale support? (3PL)

 NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                             Hyatt Regency Atlanta
 :
 Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             6
                          Process Discipline


        Adjust                                                                              Plan




            Check                                                                           Do


NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                            Hyatt Regency Atlanta
:
Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             7
Sales and Operations Planning
• Integrate firm orders & forecast
• Preliminary business plan
         – New products, current models, end of life
•       Check: capacity, on hand, and on order
•       Firm up production schedules
•       Ensure on time delivery/completions
•       Ship to customers and measure results
•       Maximize leadership & minimize risk

    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             8
Product Life Cycle Planning

                     Volume Production



                              Trade Offs

                              Capacity
                              Lead Times
                              Inventory
                              Cost structure
                              Infrastructure


NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                            Hyatt Regency Atlanta
:
Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             9
Supply chain metrics – “Up Trend”

• # of customers                                                   • # of new design
• Customer                                                           wins
  satisfaction                                                     • % of revenue from
• Quality                                                            new products
  (# good/total)                                                   • Flexibility
• On time delivery %                                               • Value add
• Process compliance                                               • Linearity
• Revenues                                                         • Profits

NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                            Hyatt Regency Atlanta
:
Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             10
Desirable leadership “up trends”




                                                                                                         After
                                  On time delivery
        Before                       Revenues
                                       Profits
                                Quality (#good/total)
                              Linearity (#actual/#plan)



NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                            Hyatt Regency Atlanta
:
Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             11
These are good “down trends”

•       # Late Shipments                                               •     # Customer returns
•       # Part defects                                                 •     Lead times
•       Indirect cost $’s                                              •     Inventory $’s
•       Total # of suppliers                                           •     Variance $’s




    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             12
Desirable Leadership “down trends”




 Before
                                        # Late shipments
                                       # Customer returns
                                            Lead times                                                                After
                                            Inventory $
                                          Indirect cost $



  NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                              Hyatt Regency Atlanta
  :
  Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA                     13
What is “Lean”?

•       No “fat” – minimize overhead/waste
•       Simple – KISS principle
•       Visual – can see process, issues
•       Process speed and lead time control
•       Kaizen, continuous improvement
•       Process measurement/adjustment
•       Simplified flows of materials/process

    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             14
“Lean” Manufacturing/Service
•       Work place organization
•       Process efficiency, discipline
•       Employee cross training
•       Common part/process utilization
•       Supplier integration
•       Simple and timely metrics measurement
•       Quick risk identification and control

    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             15
Material Replenishment Issues
• Reducing lead time between send and
  receipt of parts/service
• Reducing inventories throughout the
  supply chain
• Reducing indirect transactions and
  costs
• Reducing total supplier base
• Simplifying flows to reduce risk(s)

 NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                             Hyatt Regency Atlanta
 :
 Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             16
    Replenishment tools
•       JIT – Just in Time
•       Kanban (Demand Flow)
•       Min/Max Stocking (Blanket Orders)
•       Safety Stock Provisions
•       VMI – Vendor Management Inventory
•       ATO – Assemble to Order
•       Outsourcing

    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             17
                   Replenishment Success


Send                          Streamline!                                 Need




                                                                      Lead Time

NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                            Hyatt Regency Atlanta
:
Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             18
Supplier Scorecards
• Measure, analyze and improve

     – On time delivery
     – Quality, yields, and product returns
     – Lead times
     – Total cost of business
     – Flexible capacity and value add stream
     – Problem solving and resolution

 NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                             Hyatt Regency Atlanta
 :
 Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             19
 Enterprise Supply Chain IT Tools
• ERP
 – Sales and operations planning
 – Inventory, Financials
• PLM
 – Drawings, Specifications, Bills of Material
• MES
 – Work flow, control sequence
 – Data collection and measurement


 NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                             Hyatt Regency Atlanta
 :
 Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             20
Manufacturing Execution Systems

•       Known as “MES”
•       Translates design to process
•       Aligns with workplace and tools
•       Tie to factory automation
•       Used to capture/measure data
•       Assemble and analyze data


    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             21
MES Data Measurements

•       Cycle time
•       Work content (total work times)
•       Yields and quality data
•       Equipment status and alert
•       Can generate paretos
•       A tool for risk identification, mitigation


    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             22
    MES For Tomorrow

•   An enabling enterprise tool
•   Is stand alone from ERP, or PLM
•   Can feed ERP (actuals, financials)
•   Can validate PLM (design effectiveness)
•   Can support customer audits




    NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                                Hyatt Regency Atlanta
    :
    Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             23
                              Process Discipline

    Adjust                                                                               Plan
(PLM, MES, ERP)                                                                       (PLM, ERP)



  Check                                                                                          Do
(MES, ERP)                                                                                    (ERP, MES)


  NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                              Hyatt Regency Atlanta
  :
  Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             24
Tools & Metrics Summary

Category                                    ERP                           PLM                                   MES
Cost                                         Yes                            Yes                                     Yes
Lead Time                                    Yes                                                                    Yes
Quality                                                                     Yes                                     Yes
Linearity                                                                   Yes                                     Yes
Inventory                                    Yes                            Yes

NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                            Hyatt Regency Atlanta
:
Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA                   25
Supply Chain Overview

                                                Solution
                                                Recipe
                                                                                                   Incoming
Customer
                                                                                                     Parts
 Needs
                                                                                                   (Service)



                    Post Sales                                      Enterprise
                    Support &                                       Value Add
                     Service                                         & Test

 NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                             Hyatt Regency Atlanta
 :
 Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             26
 Tomorrow’s Lean Supply Chain
• Driven by effective sales and operations
  planning
• Allows effective supply chain planning
• Balances new and current products and
  services
• Employs timely, effective replenishment
• Enables timely success measurement
  – MES, ERP generate data/analysis/correction

  NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                              Hyatt Regency Atlanta
  :
  Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             27
Tomorrow’s Lean Supply Chain

• Questions?

• tlortel@yahoo.com




NCMA World Congress 2006                                                                    April 10–12, 2006
                                                                                            Hyatt Regency Atlanta
:
Achieving High Performance in Global Business: Leadership, Outsourcing, & Risk Management   Atlanta, GA             28

								
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