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Summary
Summary
Lean materials management is a constant challenge in most supply chains and is one of the most critical issues facing manufacturing organizations. Success is defined by controlling all components of an operation, including the costs of quality, delivery speed and flexibility, and the synchronization of the correct parts delivered as needed. Lean Materials Planning & Execution shows how to capitalize on Lean systems and thinking to cut costs, increase performance and make internal and external customers happy.This book explores the roots of high-performance materials management to guide today's professional toward the right process controls at the right time. Written in a practical, easy-to-understand format, Lean Materials Planning & Execution describes supply chain management best practices and delineates a variety of important Lean and Class A metrics as tools for achieving maximum effectiveness. It covers all important management systems that are essential to high performance, such as sales and operations planning, clear-to-build and process ownership, along with the role of materials manager in getting maximum effectiveness from these tools. This is a must read for materials managers, production managers and top management in manufacturing organizations.
Author Notes
Donald H. Sheldon, CFPIM, CIRM, is President of DH Sheldon & Associates, an international consulting firm headquartered in New York. Mr. Sheldon is a seasoned practitioner and leading expert in the various processes required to achieve world-class manufacturing excellence. He is a sought-after speaker, has been published in numerous magazines and journals and is the author of Achieving Inventory Accuracy, Class A ERP Implementation, World-Class Master Scheduling and co-authored The Road to Class A Manufacturing Resource Planning (MPR II).
Table of Contents
Preface | p. xiii |
About the Author | p. xv |
Web Added Value | p. xvii |
Chapter 1 Evolution of Materials Management and Lean | p. 1 |
Introduction | p. 1 |
History | p. 2 |
Enterprise Resource Planning | p. 4 |
Lean and Materials Management Defined | p. 9 |
Discussion Questions | p. 10 |
Chapter 2 Applying Lean to the Planning Process and How It Affects Materials Planning | p. 13 |
Introduction | p. 13 |
Pull Systems and Planning | p. 13 |
5-S | p. 14 |
Red Tagging | p. 20 |
Kanban | p. 21 |
MRP and Lean Pull Systems | p. 23 |
Waste in Materials Management | p. 25 |
Unnecessary Material Movement | p. 26 |
Unnecessary Worker Movement | p. 26 |
Space | p. 28 |
Time | p. 28 |
Material | p. 29 |
Effort | p. 29 |
Creativity and Knowledge | p. 30 |
Kaizen | p. 30 |
1-Day Kaizen (Blitz) | p. 31 |
The Week-Long Kaizen | p. 32 |
Typical Kaizen Projects in Materials Management | p. 33 |
Setup Reduction/Single Minute Exchange of Die | p. 34 |
Lean Inventory Strategy | p. 35 |
Make to Stock | p. 37 |
Assemble to Order | p. 38 |
Make to Order | p. 38 |
Engineer to Order | p. 39 |
Discussion Questions | p. 40 |
Chapter 3 Lean and Excellence in Supply Management | p. 43 |
Lean and Choosing Suppliers and Supply-Chain Partners | p. 43 |
Partner Development Criteria | p. 44 |
Implementing Supplier Partnerships | p. 48 |
Reverse Auctions | p. 49 |
Vendor Managed Inventory | p. 31 |
Consigned Inventory | p. 52 |
Time Fences in Lean Materials Management | p. 53 |
Logistics as a Competitive Advantage | p. 54 |
Supplier Performance Ratings and Certification | p. 56 |
Class A ERP | p. 57 |
Maturity Profiles | p. 57 |
Metrics in Procurement | p. 58 |
Class A ERP Procurement Metric | p. 59 |
Discussion Questions | p. 60 |
Chapter 4 Data Integrity in Lean Environments | p. 63 |
Introduction | p. 63 |
Inventory Balance Accuracy | p. 64 |
Inventory as an Asset | p. 65 |
Allowing for the Elimination of Buffer Inventory | p. 65 |
Control Group Method: Effective Steps and Results | p. 66 |
Control Group: Step 1-Item Selection | p. 67 |
Control Group: Step 2-Recounting the Same Locations | p. 67 |
Control Group: Step 3-Determining Root Cause | p. 69 |
Control Group: Step 4-Eliminating the Reason for Inaccuracies | p. 70 |
Control Group: Step 5-Ten Error-Free Days | p. 70 |
Control Group: Step 6-Initiating a Second Control Group | p. 72 |
Control Group: Step 7-Establishing a Cycyle Count Process | p. 72 |
Physical Inventory | p. 72 |
Cycle Counting | p. 74 |
The Objectives of Cycle Counting | p. 76 |
ABC Stratification | p. 76 |
Inventory Accuracy Metrics | p. 78 |
Bills of Material and Routing Record Accuracy | p. 81 |
Components of Bills of Material Accuracy | p. 81 |
The Process Owner of Bills of Material | p. 82 |
Measuring Bills of Material Accuracy | p. 33 |
Simple Make-to-Stock Environments | p. 85 |
Routing Records | p. 86 |
Where Routing Record Accuracy Is Paramount | p. 87 |
Summary on Data Accuracy in Lean Environments | p. 88 |
Discussion Questions | p. 88 |
Chapter 5 Master Scheduling in Lean Materials Management | p. 91 |
Introduction | p. 91 |
The Master Production Schedule | p. 91 |
Inventory Strategy | p. 93 |
Product Families | p. 95 |
Bills of Material | p. 95 |
Planning Bills of Material | p. 97 |
Capacity Planning in the Master Production Scheduling Process | p. 100 |
Customer Orders and Schedule Leveling | p. 102 |
Massaging the Daily Schedule | p. 102 |
Rule for Master Production Schedule Level Loading | p. 104 |
Fence Rules in Master Scheduling | p. 105 |
Management System Requirements | p. 106 |
The Sales and Operations Planning Process | p. 107 |
Master Scheduling Process Ownership and Summary | p. 108 |
Discussion Questions | p. 108 |
Chapter 6 Materials Planning for Excellence in Lean Environments | p. 111 |
Introduction | p. 111 |
Order Policy Decisions | p. 114 |
ABC Stratification | p. 116 |
Process Ownership and Lean Materials Planning Metrics | p. 116 |
Enterprise Resource Planning Integration with Lean and Six Sigma | p. 118 |
Running the Material Requirements Planning Net-Change Calculation | p. 120 |
Inventory Management | p. 121 |
Discussion Questions | p. 123 |
Chapter 7 Warehouse Management and Organization | p. 125 |
Introduction | p. 125 |
Good Inventory Organization and Storage Patterns-The Beginning Checklist | p. 126 |
Point-of-Use Storage | p. 134 |
Storage Patterns | p. 134 |
Dedicated Storage | p. 134 |
Random Storage | p. 135 |
Zone Storage | p. 136 |
Golden Zoning | p. 137 |
Storage Layout | p. 138 |
Carousels for Storage | p. 138 |
Location Systems | p. 139 |
Stock Determination | p. 140 |
Aftermarket Stocking | p. 140 |
Discussion Questions | p. 142 |
Chapter 8 Top Management Sales and Operations Planning | p. 145 |
Introduction | p. 145 |
What Is the Sales and Operations Planning Process? | p. 146 |
History | p. 147 |
Balancing the Needs of Business | p. 147 |
Enterprise Resource Planning Process at the Center | p. 149 |
Summary of the Roles of Players in Sales and Operations Planning | p. 151 |
Timetable for Sales and Operations Planning | p. 153 |
Decisions in the Sales and Operations Planning Process | p. 154 |
Sales and Operations Planning Agenda | p. 155 |
What Businesses Need a Sales and Operations Planning Process? | p. 162 |
Who Drives the Sales and Operations Planning Process? | p. 163 |
Discussion Questions | p. 164 |
Chapter 9 Demand Planning | p. 167 |
Introduction | p. 167 |
Business Planning as an Input to Demand Planning | p. 168 |
Marketing Plans as an Input to Demand Planning | p. 169 |
Sales Planning as an Input to Demand Planning | p. 172 |
Historical Inputs to the Demand Planning Process | p. 173 |
Understanding the Outputs of Demand Planning | p. 174 |
The Weekly Demand Review | p. 175 |
Process Ownership in the Weekly Demand Review | p. 177 |
Measuring the Demand Plan | p. 177 |
Discussion Questions | p. 179 |
Chapter 10 Integrating Lean and Six Sigma with Enterprise Resource Planning | p. 181 |
Introduction | p. 181 |
Continuous Improvement | p. 181 |
Unnecessary Worker Movement Revisited | p. 184 |
Lean and Process Mapping Tools | p. 184 |
Functional Manufacturing Versus Process Flow | p. 187 |
Customer-Focused Quality (Six Sigma) | p. 189 |
DMAIC Process | p. 190 |
D-Define the Problem and the Tools to Use | p. 190 |
M-Measure and Collect Data | p. 192 |
A-Analyze the Data for Possible Solutions | p. 192 |
I-Improve the Process | p. 193 |
C-Control the Process and the Solution | p. 193 |
Other Six Sigma Tools | p. 194 |
Six Sigma Belt Recognition | p. 194 |
Discussion Questions | p. 195 |
Chapter 11 Metrics in Lean Materials Management | p. 197 |
Introduction | p. 197 |
Two Basic Types of Metrics | p. 197 |
Major Class A Enterprise Resource Planning Measures | p. 198 |
Starting the Measurement Process | p. 202 |
Lean Measures | p. 203 |
Customer-Driven Quality | p. 205 |
Discussion Questions | p. 206 |
Chapter 12 High-Performance Management Systems | p. 209 |
Introduction | p. 209 |
Monthly Sales and Operations Planning Management System | p. 209 |
Monthly Project Management Review System | p. 210 |
Weekly Management System Performance Review | p. 212 |
Agenda for the Weekly Performance Review | p. 214 |
Weekly Clear-to-Build | p. 216 |
Weekly Project Review | p. 217 |
Daily Class A Enterprise Resource Planning Management System Events | p. 217 |
Daily Schedule Alignment | p. 218 |
Daily Walk-Around | p. 218 |
Visible Factory Boards | p. 220 |
Shift Change Communication | p. 220 |
Other Management Systems in High-Performance Businesses | p. 221 |
Discussion Questions | p. 222 |
Chapter 13 Software Tools | p. 225 |
Introduction | p. 225 |
Role of Enterprise Resource Planning Software in Lean Materials Management | p. 228 |
Simple Enterprise Resource Planning Software System Criteria | p. 228 |
The Next Level of Detail: Software Specs | p. 231 |
What about the "Corporate Standard" System View? | p. 232 |
Final Thought on Software | p. 233 |
Discussion Questions | p. 234 |
Chapter 14 Education and Training in Lean Materials Management | p. 237 |
Importance of Educating All Parties | p. 237 |
Training | p. 239 |
Discussion Questions | p. 240 |
Answers to Discussion Questions | p. 241 |
Index | p. 243 |