Lean Manufacturing
with SAP
1. SAP Solutions as a Backbone for Lean Processes
2. Heijunka Planning
3. Kanban Sizing and Execution Processes
4. Lean Solution Customer Cases
Agenda
1. SAP Solutions as a Backbone for Lean Processes
2. Heijunka Planning
3. Kanban Sizing and Execution Processes
4. Lean Solution Customer Cases
Agenda
Lean Principles
Product Recalls Inspection & Sorting Costs Line Rejects Testing Costs Rework Repair Returns Type I (Visible) Waste Excess/ Obsolete Inventory Misused Capacity Expediting & Fire FightingExcessive System Transactions Unhappy Customers Overtime Premium Freight Pricing & Invoicing Errors Field Service Costs Extended Receivables Long Cash-To-Cash Cycle Times Employee Turnover Frustration Reputation In Market Planning Delays Excessive Paperwork Customer Complaints DE-Focus On Current Business Complaint Processing & Resolution Lost Sales Lower Profitability
Lean attacks all the things that do not
add value for the customer. If the
customer is not willing to pay for it -- it
is waste -- and should be targeted for
elimination or improvement.
Lean:
Exposes and attacks waste
Sets a goal of continuous improvement,
delivering ever-increasing benefits
Lean never ends. . .
Becoming “Lean” enables enterprises
to lower their manufacturing, quality
and inventory costs while delivering
products to their customers
--consistently and with shorter lead
times
Identify the
value stream
and remove
wasted actions (muda)
Value Stream
2
Accurately specify
value
by product
/service
Value
1
Make the product or service
flow
Flow
3
Based on the
pull
of the customer
Pull
4
Through managing toward
perfection
Perfection
5
Employee
empowerment
to make
decisions
Empowerment
6
Lean Process Basics
The Building Blocks of Lean:
Three Aspects
1
2
3
4
5
1
2
3
4
5
MINDSET
Toolbox
Lean
Tools
Principles
1
2
3
4
5
1
2
3
4
5
Lean and Continuous Improvement Drives
Operational Excellence
Continuous improvement
is at the heart of supply
chain operational
excellence.
Measuring performance on
a continuous basis and
using those measurements
to drive improvement is
core to operational
excellence.
Source: ARC Insights - Can Continuous Improvement Programs and Technology Coexist?
AMR: East Meets West- Lean Manufacturing
and ERP Are a Better Fit Than You Think
SAP supports different aspects of Lean with
different Solutions (Lean-Tools)
Solution: Enterprise Core for
Manufacturing Operations
Integration of the plant with the
extended enterprise and supply chain
to increase responsiveness,provide
visibility throughout the entire supply
chain and support pull-driven line
replenishment
Solution: Product
Quality Compliance
Part and process traceability for
defect containment and root
cause analysis reduces the
defect "detection to correction"
window
Solution: Manufacturing
Visibility and Intelligence
Support of continuous improvement
initiatives; actionable and role-specific
KPI's provide visibility in a clear and
concise manner
Solution: Customer
and Supplier
Collaboration
ERP explodes production to
component requirements
and shares this with
suppliers as well as
specific Kanbans
Solution: Lean Level Scheduling
Heijunka scheduling matches production to demand,
provides scenario analysis and re-plan effort to level
demand or resolve issues
SAP for Lean Manufacturing Operations
•
Flow Manufacturing Techniques
•
Line Design
•
Sequence of events
•
Operational method sheets
•
Capacity line balancing
•
Takt calculations
•
Backflush
•
Supply Chain Management
•
Customer & Supplier Collaboration
•
Demand Planning
•
Predictive & Preventive Maintenance
•
Quality Management Support for Six Sigma
and ISO 9000
•
Batch Tracebility
•
High Volume
Make-to-Order
Manufacturing
•
Repetitive
Manufacturing
(Order-less
production)
•
Production Order
Manufacturing
•
Assemble-to-Order
Manufacturing
Manufacturing Operations
Mixed Mode
Manufacturing
Lean Planning and Levelling
•
Heijunka Scheduling
•
Kanban Loop Sizing
Lean Execution
•
Kanban Pull / Signaling
•
RFID-enabled Kanban
•
Six-Sigma Analysis of Kanban
Processes
•
Manual Supply to Production
with Container-independent
Summarized JIT-Calls
•
Automatic Supply to
Production
•
Alert-based Process
Monitoring
Customers achieved a higher degree of on-time delivery, improved production flexibility, cycle time reduction from
goods receipt to shipment, inventory reduction through increased visibility, flexibility via adaptive business process
model, optimization of resource utilization & inventory
1. SAP Solutions as a Backbone for Lean Processes
2. Heijunka Planning
3. Kanban Sizing and Execution Processes
4. Lean Solution Customer Cases
Agenda
Lean Processes Throughout the Supply-Chain
Leveling Process: building products at a constant rate in small batches to reduce variability across
the supply-chain. This process can be further broken into:
Leveling planning: Product classification (MTO/MTS), Setting inventory targets, etc.
Leveling Execution: Tracking execution and adjusting the pace based on actual demand
Kanban – or material pull – process A consumption based replenishment process. Can be broken
into a planning and execution phases:
Kanban planning: Assessing capacity, Replenishment frequency & Kanban Loop Size
Kanban execution: Triggering replenishment jobs, managing SUKs, etc
Although lean manufacturing is viewed as a principled approach to several aspects of an enterprise from
people empowerment to continuous improvement, the operational deployment of lean replenishment, as
defined by the Toyota Production System, is based on two well defined processes:
DC
Assembly
Component
Ingredient
Warehouse
Retail
MPS Propagation
Forecast
Forecast
Leveling
Pull
Pull
Pull
Heijunka – Definition
Heijunka: Term of the Toyota Production System (TPS)
“The distribution of production volume and mix evenly over time”
Heijunka – Leveling of Production volume and Product mix
Convert uneven customer pulls into an even and predictable manufacturing schedule
Stabilize the material and value flow
Decrease production lead times and inventories
Increases production flexibility and delivery reliability
Mission: “Produce any product every day several times”
© SAP 2009, SAP Lean Manufacturing as Part of the ERP/SCM Solution / Page 14
SAP ERP
Heijunka – Production Leveling
Load Leveling Volume and Mix
Uneven Production
Volume and Product Mix
Leveling:
Production Volume
Leveling:
Product Mix
Material A
Material B
Material C
M
D
M
D
F
Material A
Material B
Material C
M
D
M
D
F
Material A
Material B
Material C
M
D
M
D
F
© SAP 2009, SAP Lean Manufacturing as Part of the ERP/SCM Solution / Page 15
SAP ERP
Heijunka – Production Leveling
Requirement situation
of a shift or day
Lot calculation by MRP
or Kanban control
cycles
Heijunka: Sequencing
/Leveling of finished
goods
Heijunka: Sequencing
/Leveling of
semi-finished goods
Load Leveling Volume and Mix
Material A
Material B
Material C
Material A
Material B
Material C
Material A
Material B
Material C
30 PC
20 PC
60 PC
10 PC
5 PC
20 PC
Material D
Material E
Material F
Heijunka Planning – List/Graphical View
ALV Grid to display the
actual planning results
1. SAP Solutions as a Backbone for Lean Processes
2. Heijunka Planning
3. Kanban Sizing and Execution Processes
4. Lean Solution Customer Cases
Agenda
SAP ERP Kanban Philosophy
Kanban
Type of
Production
Principle
Procedure
Technique
Control
Background
Backflush
Controlling
Object
Benefit
'Pull-production': Consumption controls replenishment (on direct request from
demand source)
Self-controlling control cycles, supply areas
Aim: Self-controlling production process, reduction in manual postings,
automatic replenishment, no need to plan staging. Replenishment data
constantly available in the control cycle.
Process optimization and shortening of the process chain. 'Lean manufacturing':
simplification of the planning process, more employee responsibility, reduction in
administrative work in production.
Reduction of stocks, reduction of lead times
...By setting the kanban to FULL (goods receipt)
...Per order with combination of production order of product-related (cost collector)
with combination of repetitive manufacturing or production order.
Kanban (container and card) in connection with the trigger for replenishment
Material flow via containers: replenishment signal is triggered when demand
source empties a container (int. production, external vendor, storage location)
(req.-based material request) at time of actual demand (demand-based replen.).
The Kanban or Material Pull Process
1.
Is a replenishment process driven by actual “customer (int./ext.) consumption”
Not to confuse with demand – i.e. order – driven that is a process relying on projected future consumption
2. Advantages of the material pull process:
almost forecast independent , relies on “average/leveled” demand over a relatively large horizon to
calculate all the process parameters (buffer size, replenishment batch size, capacity, etc.)
simplified (avoids MUDA) and robust (Poka Yoke) process compared to push systems
3. The replenished quantity is mostly equal to the consumed quantity except for:
Whenever the process parameters (number of Kanban) is updated. This causes the replenished
quantity to be change based on changes in the number of Kanban
Whenever additional Kanban must be released to respond to unusually high peaks in demand, the
system while increase the replenished quantity accordingly
Replenishment
Process
(int. / ext.)
Pull
Customers
Consumption
Waiting for actual or very short term demand to reduce inventory and then triggering replenishment
INV
Kanban
Supply source
Demand source
Material
Full
Empty
KANBAN Processes
The following supply sources are supported: In-House
Production, External Procurement and Stock Transfer
Replenishment
is triggered
automatically
• Order
• Purch. order ...
Supply area
Status to EMPTY
Empty
Ext.procurement
Stock transfer
In-house prodn
Sup
pl
y
sourc
e
Production process
Setting the Kanban to EMPTY
Goods receipt
is posted
automatically
Full Kanban
Production process
Supply area
Status to FULL
Full
Ext. procurement
Stock transfer
In-house prodn
Su
p
p
ly
sou
rce
Setting Kanban to FULL
You can set/change a kanban status as follows:
In the kanban board
With the kanban signal
Barcode entry
Manual entry
With a PCS system (+ BAPI interface)
Indirectly using a goods receipt or a backflushing
transaction
Via kanban using a special RF handheld
Via RFID devices and tags
R-1230 R-1240
20 pc 20 pc
EMPTY EMPTY FULL
EMPTY FULL W AIT EMPTY Supply area Material Container quantity Container R-1230 20 pc Supply area line 3
Bios Motherboard Supply area line 4
Bios
Process Flow: Setting the Kanban Status
Kanban – Process with RFID
Kanban
(with RFID Tag)
Source
Material
Full
Empty
RF Gate
Automatic Kanban status change and
creation of a replenishment element
Automatic Kanban status change,
goods receipt posting and
creation of the material document
eKanban Board
Both views of the eKanban board support
an automatic refresh functionality
Exception based Kanban monitoring:
Alerting
Following types of alerts are supported in the Kanban process
1. Alert when errors occur while changing Kanban status
2. Alert when replenishment elements are deleted
3. Alert when max. limit of EMPTY Kanbans is exceeded
4. Alert when deliveries are delayed
It is possible to influence the triggering of alerts via a new
BAdI
Without MRP
With MRP
MRP creates no receipt elements
(forecast via long-term planning)
Replenishment elements
(delivery-relevant) are created by KANBAN
per container
Components of kanban parts can
only be procured using
consumption-based planning or
with KANBAN
MRP creates receipt elements (not
delivery-relevant) as a forecast
Replenishment elements
(delivery-relevant) are created by KANBAN per
container (in container-control,
printing the cards triggers
replenishment)
Components of KANBAN parts can
be planned any way you like
KANBAN Without / With MRP
KANBAN: In-House Production
(with/without MRP Forecast)
Kanbans and Cost Collector (manuell
KANBAN)
Planned Orders / MRP (Run Schedule
Quantity) and Cost Collector (Forecast
with MRP)
Production Orders (Forecast with MRP)
The following alternatives are available
KANBAN: External Procurement
(with/without MRP
Forecast
)
Purchase Orders
Scheduling Agreements
Stock Transport Orders (Cross-Plant)
(Cross-Company Code is possible)
Stock Transport Scheduling Agreement
(Cross-Plant, Cross-Company Code is possible)
Source List
Summarized Jit-Call
The following alternatives are available
Supplier with Internet
Web-based KANBAN as part of the SAP ERP
Customer with R/3 System
Confirmation
of kanbans
in process
Information on
empty kanbans
: Full
: In Process
: Empty
Supply source
Demand source
Material
Full
Empty
Web-based Kanban with SAP SNC (SCM)
POD
Supplier
receives an
Alert-Notification
Supplier can
easily access
Kanban
information via
the Internet
ASN
© SAP 2009, SAP Lean Manufacturing / Page 43
KANBAN: Stock Transfer (Move-Kanban
)
Stock Transfer with Reservation
(IM-Storage Locations)
Direct Transfer Posting (WM / IM-Storage Locations)
Stock Transfer from WM with Transfer Orders /
Transfer Requirements
Stock Transfer from eWM with Deliveries
The following alternatives are available
Cross-plant KANBAN
Procurement and Withdrawal to Cost Center
Reporting Point Kanban for Inhouse Production
KANBAN with SD Delivery
Event-Driven KANBAN (one Time Kanban)
Special Kanban Processes enabled by SAP ERP
Kanban
Separate Goods Receipt
Independent Supply Source
Define your own Status Sequences
Define your own Activites at Status Change
Alternative Procedures for Triggering Replenishment
Pull List
Special Features for Kanban Processes
Advantages of KANBAN within SAP
Ease of use through Barcode, RF handheld & RFID
Replenishment elements and material posting
integrated within SAP also to FI/CO processes
Integrated alerting functionalities
Material forecast from MRP
Integration of printing and transmission functions
of Kanban cards
„Classical“ und „event driven“ (one time) Kanban
Web-based Kanban for suppliers
BAPI-Interface to non SAP systems
1. SAP Solutions as a Backbone for Lean Processes
2. Heijunka Planning
3. Kanban Sizing and Execution Processes
4. Lean Solution Customer Cases
Agenda
SAP
®
Solutions for RFID Help Automotive
Giant Take Honors at EURO ID 2007
QUICK FACTS
Modine Europe – Pliezhausen Plant
Why SAP
Fully integrated kanban functionality
Existing, implemented logistics
modules were producing world-class
results
Benefits
Reduced number of containers used at
the production line (inventory at the
production line) from 302 to 140
Integrated supplier over the internet
with no additional effort
Reduced line-side inventory by 50%
and associated floor space
Reduced range of material coverage
by 20 days
Modine Europe GmbH.
Location: Germany
Industry: Automotive – supplier
Products and Services: Manufacturing
of fuel-cell components
Web Site: www.modine.com
Size: 2,300 employees in 10 European
locations
SAP® Solution and Services: mySAP™
ERP application
Implementation Partners: SAP®
Consulting, part of SAP Customer
Services Network, advised for 1 day.
“We have a win-win situation because
our material requirements planning and
logistics processes have become more
streamlined. Employees working on the
production line can control operationsl
business themselves.”
Thomas Schuster
Project Manager,
Modine Europe GmbH
Challenges and Opportunities
Reduce safety buffer that tied up capital
without jeopardizing delivery
performance
Implementation Highlights
Logistics Department initiative
Dedicated plant floor operations team
for implementation
QUICK FACTS
Success Story: Lean in Action from SAP
at Greenheck Fan and Wilson Tool
1. SAP Solutions as a Backbone for Lean Processes
2. Heijunka Planning
3. Kanban Sizing and Execution Processes
4. Lean Solution Customer Cases
Agenda
Disclaimer
This presentation outlines our general product
direction and should not be relied on in making a
purchase decision. This presentation is not subject to
your license agreement or any other agreement with
SAP. SAP has no obligation to pursue any course of
business outlined in this presentation or to develop or
release any functionality mentioned in this presentation.
This presentation and SAP's strategy and possible
future developments are subject to change and may be
changed by SAP at any time for any reason without
notice.
This document is provided without a warranty of any
kind, either express or implied, including but not limited
to, the implied warranties of merchantability, fitness for
a particular purpose, or non-infringement. SAP
assumes no responsibility for errors or omissions in
this document, and shall have no liability for damages
of any kind including without limitation direct, special,
indirect, or consequential damages that may result from
the use of this document. This limitation shall not apply
in cases of intent or gross negligence.
Further Information
Documentation
Kanban Documentation
Heijunka Planning
Demos
(internal)
Heijunka Planning in SAP
RFID enabled Kanban
SNC Internet Kanban
Kanban consignment stock transfer
© SAP 2007 / Page 56 © SAP 2007 / Page 56 © SAP 2007 / Page 56
