Title: Lean Supply Strategies: Applying the 5S Tools to Supply Management
1Lean Supply StrategiesApplying the 5S Tools to
Supply Management
- ISM International Conference
- Modified November 15, 2004
- Kimball Bullington, Ph.D., P.E.
- MTSU
2Outline
- What is a Supply Strategy?
- What is Lean Supply?
- What is 5S?
- Developing a Supply Strategy Using 5S
3What is a Supply Strategy?
- Strategy A plan for achieving
- organizational goals.
4Supply Strategy Constraints
- The Supply Strategy should support the Corporate
Strategy. - The Supply Strategy should support the Operations
Strategy. - The Supply Strategy should give our customers
confidence in the quality, reliability, and
safety of our products.
5Outline
- What is a Supply Strategy?
- What is Lean Supply?
- What is 5S?
- Developing a Supply Strategy Using 5S
6Lean Supply
- Supply in a Lean Production environment
- Supply that supports Lean Production
- Supply for diet food manufacturing
7Lean Production
- The latest incarnation of JIT
- Based on Toyota Production System.
- Waste elimination
- Widely used in automotive manufacturing other
repetitive mfg.
8Outline
- What is a Supply Strategy?
- What is Lean Supply?
- What is 5S?
- Developing a Supply Strategy Using 5S
9Five S
- Yet another acronym
- An organizational method for lean production .
- A pillar of the visual workplace.
- Housekeeping
10Five S
- Sort (seiri)
- Set in Order (seiton)
- Shine or purity (seiso)
- Standardize (seiketsu)
- Sustain (shitsuke)
5S
11Five S
- Sort
- Set in Order (Sweep)
- Shine (Straighten)
- Standardize
- Sustain
RED TAG
12Sort Supplier consolidation or rationalization
- Reduces waste of working with wrong suppliers
- Focuses efforts of selection, evaluation, and
improvement on a few suppliers - Reduces transaction waste
- Increases opportunity for partnering and leverage
13Barriers to Consolidation
- Fear of loss of competition
- Doubtful savings
- Dilbert
- Lack of commitment to the selection process
- Pets
14Five S
- Sort
- Set in Order
- Shine
- Standardize
- Sustain
15Set in Order
- A place for everything and everything in its
place. - Tool cutouts
- Taped outline on floor or bench
16Set in Order
- A place for everything and everything in its
place. - Tool cutouts
- Taped outline on floor or bench
17Set in OrderSegmentation
- Risk value
- Spend value
- Design value
- Time value
- Location value
18How Can I Be Successful? Evaluation of Current
Supply Base
- Number of Suppliers
- Breakdown by Commodity
- Skills / Process Evaluation
- Performance Evaluation
- Location of Suppliers
19Supplier Characterization Matrix
High
Critical 2 Special Situations
Critical 1 Long-term Relationship
Risk
Non-Critical 2 Transactional
Non-Critical 1 Contractual
Low
High
Annual Spend
20Supplier Characterization Matrix
High
Critical 2 Special Situations
Critical 1 Long-term Relationship
Risk
Non-Critical 2 Transactional
Non-Critical 1 Contractual
Consolidate
Low
High
Annual Spend
21Supplier Characterization Matrix
High
Critical 2 Special Situations
Critical 1 Long-term Relationship
Consolidate
Risk reduce Consolidate
Risk
Non-Critical 2 Transactional
Non-Critical 1 Contractual
Low
High
Annual Spend
22Supplier Characterization Matrix
High
Critical 2 Special Situations
Critical 1 Long-term Relationship
Consolidate
Risk reduce Consolidate
Risk
Non-Critical 2 Transactional
Non-Critical 1 Contractual
Consolidate
Low
High
Annual Spend
23(No Transcript)
24Supply Base Segmentation
Design JIT
Design
JIT
25Uncertainty Framework
Hau Lee, 2002
High
Hydro-electric power, some food products
Telecom, high-end computers, semiconductor
Grocery, basic apparel, food, oil and gas
Fashion apparel, computers, pop music
Supply Uncertainty
Low Functional Products
High Innovative Products
Demand Uncertainty
26Uncertainty Framework
Hau Lee, 2002
High
Hydro-electric power, some food
products Risk-hedging SC
Telecom, high-end computers, semiconductor Agile
SC
Grocery, basic apparel, food, oil and
gas Efficient SC
Fashion apparel, computers, pop music Responsive
Supply Uncertainty
Low Functional Products
High Innovative Products
Demand Uncertainty
27Supply Chain StrategiesHau Lee
- Efficient Supply Chains cost-focused
- Risk-Hedging Supply Chains risk-focused
- Responsive Supply Chains demand-focused
- Agile Supply Chains demand-focused but
risk-conscious
28Five S
- Sort
- Set in Order
- Shine
- Standardize
- Sustain
29Shine
- Keep everything clean and swept
- System maintenance and inspection
- Problems (e.g., oil leaks) are more easily
spotted when the workplace is in order
30ShineInspection - Surveys
- Site surveys
- Supplier self-assessment
- Remote surveys
- 3rd party certification surveys
- 3rd party quality awards
31SWOT AnalysesCommon Themes
- Strengths
- Current supplier provides product for process
mkt. - Weaknesses
- We are a small customer with little leverage
- Lack of management depth for small suppliers
- Opportunities
- Setup reduction
- Cost reduction
- Threats
- Loss of technology leadership
32Shine
- Sometimes you just have to show up and make
something happen. - Danner
33Five S
- Sort
- Set in Order
- Shine
- Standardize
- Sustain
34Standardize
- Standardize ensures that your progress in 3S
implementation is not wasted. - Procedures, schedules, practices
35Standardize
- Align supply chain partner incentives
- Include in personal plans
- Make the status visible (e.g., of suppliers)
- Assign audit responsibilities
- Ticklers
36Standardize Problems Avoided
- Growth of supplier base
- Size of supplier base unknown
- Segmentation deteriorates classification
unknown - Suppliers not visited regularly
- Surveys conducted informally or with renegade
processes
37Five S
- Sort
- Set in Order
- Shine
- Standardize
- Sustain
38Sustain
- Demings point number 1 Constancy of purpose
- The leadership of supply is responsible for
sustaining the process. - MBWA
- Prepare contingency plans for crises
39Five S
- Sort supplier consolidate
- Set in Order - segment
- Shine - survey
- Standardize 3S scheduled
- Sustain sustaining leadership
- Five S is the foundation of lean manufacturing
and it can be the foundation of lean supply.
40Five S References
- James P. Womack and Daniel T. Jones, Lean
Thinking , 1996.) - Hiroyuki Hirano, 5S for Operators 5 Pillars of
the Visual Workplace (Productivity Press, 1996.) - Hiroyuki Hirano, 5 Pillars of the Visual
Workplace (Productivity Press, 1990.) - Kimball Bullington, 5S Supply Base Maintenance,
Quality Progress, Jan., 2003 - Hau Lee, The Triple-A Supply Chain, Harvard
Business Review, October, 2004.
41Lean Supply StrategiesApplying the 5S Tools to
Supply Managementn
- Modified from 2003 ISM International Conference
Presentation - November, 2004
- Kimball Bullington, Ph.D., P.E.
- MTSU