Lean Supply Chain Basics MIT OpenCourseWare

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Impact of Supply Chain,Management,Only 7 of companies today are. effectively managing their supply,chain However these companies are. 73 more profitable than other,manufacturers,Deloitte Touche Study October 2003. Lean Supply Chain Basics V7 6 Slide 2,2012 Massachusetts Institute of Technology. Learning Objectives,At the end of the module you will be able to.
Recognize the importance of suppliers in,the enterprise. Describe key attributes of a lean supply,Discuss methods for the improvement of. existing supply chains,Lean Supply Chain Basics V7 6 Slide 3. 2012 Massachusetts Institute of Technology,Suppliers Are Critical In. The Value Chain,Value Specified Customer,Value Delivered.
Product Production,Development,Producible Design Meeting Value Created. Early Value Expectations Suppliers as,Involvement Partners. Typically 60 80 of Value Added by Suppliers,Lean Supply Chain Basics V7 6 Slide 4. 2012 Massachusetts Institute of Technology,What Does a Supply Chain. First Tier,Second Tier,Many transactions are,required before the end Material.
user obtains the product,or service Raw Material,Lean Supply Chain Basics V7 6 Slide 5. 2012 Massachusetts Institute of Technology,Current State of Many. Supply Chains Orders,Material Tier Two s Tier One s Prime Customer. Communications across the supply chain is like,tossing orders over a brick wall. Lean Supply Chain Basics V7 6 Slide 6,2012 Massachusetts Institute of Technology.
Lean Supply Chain Exercise,1 Gather your team around easel paper or a chart. 2 Discuss each concept on the list below, 3 On your chart write a prioritized list of concepts. that would best create a lean supply chain,Collaboration Long lead times. Efficient supply chain One supply chain for all,with little flexibility products. Limited communication Supplier commitment to,Localized focus on long term relationship.
continuous improvement Internal corporate focus,Responsive and agile Build to print. Based on product Visibility of demand,characteristics Continuous improvement. Enterprise approach activities that include,suppliers customers. Lean Supply Chain Basics V7 6 Slide 7,2012 Massachusetts Institute of Technology. Key Attributes of a Lean,Supply Chain,1 Alignment of supply chain design with.
product characteristics,2 Supplier participation in material flow. and logistics,3 Supplier involvement in design and. development,4 Seamless information flow,Lean Supply Chain Basics V7 6 Slide 8. 2012 Massachusetts Institute of Technology,1 Matching Supply Chains. with Products,Push supply chain is focused on efficiency for.
meeting predictable demand at lowest cost, Typically for long product lifecycle and mature or. commodity items, Pull supply chain is focused on responsiveness for. unpredictable demand to avoid inventory stock outs. Typically for shorter product life cycle custom,The reality is that a given product may have. components of both the efficient and responsive, supply chain designs This approach has been labeled. the Hybrid Supply Chain Lean Supply Chain Basics V7 6 Slide 9. 2012 Massachusetts Institute of Technology,2 Supplier Participation in.
Material Flow and Logistics,Just in time deliveries. Eliminates inventory but parts must show up on time. Kitting for point of use,Eliminates unpacking looking for parts requires. supplier involvement in production system design,Vendor Managed Inventory. Vendor owns it keeps track of it until it is used,Third Party Logistics. Have FedEx handle these,Different supply chain designs.
require different practices,Lean Supply Chain Basics V7 6 Slide 10. 2012 Massachusetts Institute of Technology,Atlas V Launcher Tubing. Old Method New Method, Parts individually ordered Parts shipped in re usable shadow. Shipped in bubble wrap and boxes direct to point of use. peanuts Empty box returned triggers re order,Unpacked at dock wrapping. Shelved using good 5S,Fetched when needed often,missing or damaged.
Reordered by schedule or when,stock outs discovered. Parts fasteners tools instructions,Category Reduction. Inventory Carrying Cost 35 000 per ship set,Internal Handling Cost 12 000 per ship set. Cycle Time 20 weeks to 14 weeks,Lean Supply Chain Basics V7 6 Slide 11. Reference Lockheed Martin Missiles and Space Systems 2012 Massachusetts Institute of Technology. 3 Supplier Involvement in,Design and Development,Wire Harness Cover.
Launch Lugs,JDAM Tail Kit,Mk 84 Warhead,Courtesy of Boeing Used with permission. SOURCE Karen E Darrow The Boeing Company The JDAM Experience Lean Principles in Action Lean Supply Chain Basics V7 6 Slide 12. Presentation at the SAE Aerospace and Automated Fastening Conference Exhibition September 22 2004 2012 Massachusetts Institute of Technology. Early Supplier Integration,SUPPLIER VALUE CREATION. Major modification to system,architecture,From partitioned. architecture to integrated,architecture,Reduced Wiring Connectors. Reduced unit cost,Courtesy of Boeing Used with permission.
Improved reliability,SUPPLIER INTEGRATION Re allocated Work Share. Part of proposal team PRODUCT VALUE CREATION,Understood project goals. GOAL CONGRUENCY,Original cost est 68 K,Understood requirement Final actual cost 15 K. for low cost seamless Unit costs reduced 75,assembly Total savings 2 9 B. Lean Supply Chain Basics V7 6 Slide 13, Ref Lean Enterprise Value pp 138 140 206 207 2012 Massachusetts Institute of Technology.
4 Seamless Information Flow,Requires communication on many levels. Customer Supplier,Enterprise Strategic Business Enterprise. Management Management,Program Objectives Progress Program. Management Management,Procurement Contracts Deliverables Procurement. Contracts Contracts,Engineering Design Config Engineering.
Manufacturing Hardware,Manufacturing,Operations Operations. Integrated Information Technology Environment,Lean Supply Chain Basics V7 6 Slide 14. 2012 Massachusetts Institute of Technology,Exostar Offerings. Courtesy of Boeing Used with permission, Copyright 2007 Exostar LLC All Rights Reserved Exostar Proprietary 15. Lean Supply Chain Basics V7 6 Slide 15,2012 Massachusetts Institute of Technology.
Lean Supply Chain Wrap Up Suppliers are critical to lean enterprise success Supply chains need to be understood and designed to meet the needs of the product enterprise needs Legacy supply chains can be improved through win win customer supplier teamwork Supply Chain Management is a lean enterprise core competency

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