ean Enterprise A Set of Mutually-Reinforcing Lean Practices Value Translate these Principles into Action Design supplier network architecture Design of supplier network driven by strategic Fewer suppliers; clustered control pplier selection based on performance Develop complementary supplier Ensured process capability(certification) ltes evelopment (SPC, Greater responsibilities delegated to suppliers Create flow and pull throughout Linked business processes, IT/s infrastructure upplier network cnro nd delivery(JIn effective coordination mechanisms Partnerships strategic alliances Open and timely communications Maximize flexibility responsiveness Increased interdependence &"shared destiny" 小 Flexible contracting Rapid response capability Optimize product development Integrate suppliers early into design a through early supplier integration development IPTs Collaborative design; architectural innovation Open communications and information sharing Target costing: design-to-cost Integrate knowledge and foster Knowledge-sharing; technology transfer Aligned technology roadmaps This lecture highlights key enablers practices by focusing on 是· Synchronized production and delivery Partnerships and strategic alliances Early supplier integration into design and development IPTs 6-Bozdogan -Lean Supplier Networks, September 2002 2002 Massachusetts Institute of Technology
6 - Bozdogan -Lean Supplier Networks, September 2002 © 2002 Massachusetts Institute of Technology Lean Enterprise Enterprise Value A Set of Mutually-Reinforcing Lean Practices Translate these Principles into Action Design supplier network architecture • Design of supplier network driven by strategic thrust • Fewer suppliers; “clustered control” • Supplier selection based on performance Develop complementary supplier capabilities • Ensured process capability (certification) • Targeted supplier development (SPC, Kaizen) • Greater responsibilities delegated to suppliers Create flow and pull throughout supplier network • Linked business processes, IT/IS infrastructure • Two-way information exchange & visibility • Synchronized production and delivery (JIT) Establish cooperative relationships & effective coordination mechanisms • Joint problem-solving; mutual assistance • Partnerships & strategic alliances • Open and timely communications • Increased interdependence & “shared destiny” Maximize flexibility & responsiveness • Seamless information flow • Flexible contracting • Rapid response capability Optimize product development through early supplier integration • Integrate suppliers early into design & development IPTs • Collaborative design; architectural innovation • Open communications and information sharing • Target costing; design-to-cost Integrate knowledge and foster innovation • Knowledge-sharing; technology transfer • Aligned technology roadmaps This lecture highlights key enablers & practices by ng on: • Synchronized production and delivery • Partnerships and strategic alliances • Early supplier integration into design and development IPTs focusi
ean Synchronized Production and Delivery Enterprise Throughout the Supplier Network is a Central Value Lean Concept ■|nte les ■F|OW usIng takt flow n chain On -t Mini Effer e prod Striv Grea supp 7-Bozdogan -Lean Supplier Networks, September 2002 2002 Massachusetts Institute of Technology
7 - Bozdogan -Lean Supplier Networks, September 2002 © 2002 Massachusetts Institute of Technology Lean Enterprise Enterprise Value Synchronized Production and Delivery Throughout the Supplier Network is a Central Lean Concept Integrated supplier lead times and delivery schedules Flows from suppliers pulled by customer demand (using takt time, load leveling, line balancing, single piece flow) Minimized inventory through all tiers of the supply chain On-time supplier delivery to point of use Minimal source or incoming inspection Effective two-way communication links to coordinate production & delivery schedules Striving for zero quality defects essential to success Greater efficiency and profitability throughout the supplier network
ean Enterprise Aerospace Firms Have Faced an Uphill Value Challenge in Synchronizing Flow with Suppliers PERCENT OF SUPPLIER SHIPMENTS TO STOCKROOM/FACTO W/O INCOMING OR PRIOR INSPECTIONS 45.00 42.4 35.00 3000 25.00 Defense/commercimlore than 75% of sales to defer 20.00 or commercial markets 1500 10.7 10 5.00 0.00 Defense(25) Commercial 9) (Year: 1993: N= Number of responding business units/c Bozdogan -Lean Supplier Networks, September 2002 @2002 Massachusetts Institute of Technology
8 - Bozdogan -Lean Supplier Networks, September 2002 © 2002 Massachusetts Institute of Technology Lean Enterprise Enterprise Value Aerospace Firms Have Faced an Uphill Challenge in Synchronizing Flow with Suppliers PERCENT OF SUPPLIER SHIPMENTS TO STOCKROOM/FACTO W/O INCOMING OR PRIOR INSPECTIONS 10.7 42.2 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 Defense (25) Commercial (9) (Year: 1993; N= Number of responding business units/c Defense/Commercial : than 75% of sales to defen or commercial markets More
ean Supplier Certification has been an Important Enterprise Early Enabler of Achieving Synchronized Value Elow-in Aerospace OF ERS OF A TYPICAL AEROSPACE ENTERPRISE 39 : 1038 N=Number of respondents answering this question for all three ye 9-Bozdogan -Lean Supplier Networks, September 2002 2002 Massachusetts Institute of Technology
9 - Bozdogan -Lean Supplier Networks, September 2002 © 2002 Massachusetts Institute of Technology Lean Enterprise Enterprise Value Supplier Certification has been an Important Early Enabler of Achieving Synchronized Flow in Aerospace PERCENT OF DIRECT PRODUCTION SUPPLIERS OF A TYPICAL AEROSPACE ENTERPRISE THAT ARE CERTIFIED (1991, 1993, 1995) 7.40 6.86 2.55 15.28 10.86 10.38 5.63 19.62 23.19 20.11 15.63 36.33 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 Industry (48) Airframe (13) Electronics (20) Engines and Other (15) (N=Number of respondents answering this question for all three years) 1991 1993 1995
ean Enterprise Closer Communication Links with Suppliers Value Paved the Way for Synchronizing Flow TYPES OF INFORMATION PROVIDED TO RESPONDING BUSINESS UNITS BY THEIR MOST IMPORTANT SUPPLIERS ON A FORMAL BASIS. 1989 Vs. 1993 90.00 口 Production Cost data 8333 口 SPC Data 80.00 70.51 Actions 70.00 6923 a Financial Information not Publicly 60.00 Available a Feedback on Purc/Supplier 85000 72 40.00 a3000 20.00 10.00 1989(381432,1516.14) 1993(56569554154) (N=78: Total number of responding business units) 10-Bozdogan-Lean Supplier Networks, September 2002 @2002 Massachusetts Institute of Technology
10 - Bozdogan -Lean Supplier Networks, September 2002 © 2002 Massachusetts Institute of Technology Lean Enterprise Enterprise Value Closer Communication Links with Suppliers Paved the Way for Synchronizing Flow TYPES OF INFORMATION PROVIDED TO RESPONDING BUSINESS UNITS BY THEIR MOST IMPORTANT SUPPLIERS ON A FORMAL BASIS, 1989 vs. 1993 48.72 70.51 17.95 83.33 41.03 88.46 19.23 70.51 20.51 52.56 17.95 69.23 0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 1989 (38,14,32,15,16,14) 1993 (55,65,69,55,41,54) (N=78: Production Cost Data SPC Data Performance Improvement Actions Longer-term Business Strategies & Plans Financial Information not Publicly Available Feedback on Purc/Supplier Mgmts Operations Total number of responding business units)