SAP Lean Manufacturing - SAP Service Marketplace

„Lean Manufacturing along the Supply Chain –
efficient implementation at a global operating
automotive supplier “
Klaus Günther, Senior Manager Group Logistics
GRAMMER – Milestones
GRAMMER‘s success started more than 100 years before when Willibald
Grammer founded a saddlery in Amberg. Since then GRAMMER developed itself
from a local manufacturer of seat cushions to a global automotive supplier for the
car and commercial vehicle industry.
1880
Willibald Grammer establishes a saddlery
1954
Georg Grammer produces seat cushions for tractors
1970
Serial production of suspended seats
1982
Production of seats for trucks and busses
1985
Division automotive interior
1990
Production of passenger seats for trains (ICE)
1996
IPO of GRAMMER AG
2004
Development and production of center consoles
2005
Opening of two new production sites in China
2008
Entering the Russian truck market
2011
Takeover of EiA Electronics N.V., Belgium
2012
Joint Venture for truck seats with Yuhua in China
2013
Takeover of Nectec s.r.o., Czech Republic
GRAMMER – Globally next door to the customer
As a global player in the passenger car and commercial vehicle industry we are
located on four continents with 26 companies and more than 30 production and
sales/distribution facilities focused on highest quality.
GRAMMER – products and markets
Driver seats for tractors, construction vehicles, forklifts and municipal vehicles
GRAMMER – products and markets
Driver seats for trucks and buses; seating systems for passenger seats
GRAMMER – products and markets
Headrests, armrests and center Consoles for passenger cars
1
Motivation and initial situation
2
Supply chain with lean principle
3
Process and application overview
4
Functional details
5
Lean-capable supply network
1
Motivation and initial situation
2
Supply chain with lean principle
3
Process and application overview
4
Functional details
5
Lean-capable supply network
Without levelling in production each single demand variation has
a direct impact on the production and supply network
Production plant
OEM
Components 1
Assembly line
Challenges today
JIS plant
 Disturbances initiate a shock
wave in planning
Components 2
Low-Runner
 Event-driven plan: disturbance, planning, disturbance
 Continuous replannig leads to
instable production program
IC plant
 Changing sequences disable
optimisation
IC plant
 Missing transparency
Supplier A
Supplier B
Supplier A
 Ongoing coordination of
involved persons is required
A stable planning and according processes are a prerequisite for levelling in production,
replenishment and procurement processes
LEAN Production and SAP – a contradiction?
General question before the LEAN implementation
LEAN and SAP???
 Interface to SAP ERP?
 IT application support vs. IT-free processes (Kanban, Heijunka)
 If supported by IT: standard solution/software or individual development?
 Central data access: transparency vs. local and IT-free processes?
* Every Part Every Interval
Benefits of Lean Manufacturing in the supply chain
 Quick response on demand variations / faster reaction on market development
 Complexity of processes is reduced
 Processes are standardised
 Increase of quality in operations and logistics
 Stock level reduction
 Manufacturing processes are decoupled from exceptional events
 Number of utilised resources is optimised
 Motivation of employees is increased / absence times are reduced
1
Motivation and initial situation
2
Supply chain with lean principle
3
Process and application overview
4
Functional details
5
Lean-capable supply network
Supply Chain with lean principles
Define /
simulate
schedule
KANBAN
calculation
Alignment
Supplier park
Production plant
Components 1
Assembly line 1
push
pull
Components 2
Low –Runner
Demanddriven
Heijunka
JIS plant
JIS
Assembly line 2
push
supermarket
push
JIS plant
JIS
Goods receipt
Pull
IC plant
IC plant
OEM
External
supplier
Calculation of
safety stock
OEM
1
Motivation and initial situation
2
Supply chain with lean principle
3
Process and application overview
4
Functional details
5
Lean-capable supply network
Process steps of the „Heijunka levelled Kanban system“
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Define
schedule
Simulate
schedule
 Segmentation:
Identification of material groups with
individual planning processes and
requirements (e.g. differentiation of high
runners and low runners)
 EPEI calculation:
Determination of the minimal lot size
 Define schedule:
Specification of time intervals for the predefinition of the production sequence
 Simulate schedule:
Align schedule and actual production plan
Material requirements planning
Calculate
safety stock
Alignment
Short-term
planning
Production and replenishment control
Levelling
Pull
 Calculate safety stock:
Definition of the safety stock levels
based on number of Kanban boxes
 Alignment:
constant production quantities within
planning interval as result of MRP
 Levelling:
Creation of the production sequence
according to defined schedule
 Pull:
Replenishment of components
according to the real consumption
Process steps and elements of the
„Heijunka levelled Kanban system“
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Define
schedule
Simulate
schedule
Supported by SAP Enhancement Packages
 Enhancement Package 6 is available
 The functionality “Enhanced Lean
Manufacturing” in EhP5 replaces SAP LPO
 SAP extended the lean manufacturing
capabilities of SAP ERP (EhP2, EhP4,
EhP5, EhP6) continuously
Material requirements planning
Calculate
safety stock
Alignment
Short-term
planning
Production and replenishment control
Levelling
Pull
Supported by Consulting Solution
 Available since Q3/2011 as consulting
solution “Lean Manufacturing Planning &
Control (Heijunka)” by SAP Consulting
Lean & SAP – two different worlds?
SAP’s understanding of Heijunka and an adequate IT-solution:
 system integrated leveling keeps demand fluctuations from shop floor to enable a more
efficient production process
 there are high- and low runners, and production needs to be mixed
 different kinds of leveling have to be supported: Push, Push-Pull and Pull-Leveling
 Heijunka needs a good visualization
SAP and Lean is not a contradiction, it’s the combination of the benefits of PUSH & PULL:
 SAP covers both approaches, PUSH and PULL
 PUSH is the classic planning approach, which is performed mainly by MRP
 PULL means consumption based replenishment of goods, and is covered by ERP
processes like JIT, JIS and Kanban
 Both approaches can be combined in SAP, so that the long-term planning view can be
improved by short-term consumption information
SAP’s consulting solution “Lean Manufacturing – Planning & Control” supports a fully
integrated, IT supported Heijunka process.
System-based leveling with SAP LMPC
Initial Situation:

…material‘s
requirements
fluctuate over
time…
… but efficient
manufacturing
needs steady
quantities
Solution:




demand fluctuations are covered by a buffer; buffer size is calculated according to fluctuations’ size
and service level required
goods are produced in leveled, steady quantities, filling the buffer
all calculations are performed by the system; manual interaction needed only in case of exceptions
many other leveling variants possible (e.g. Pull / Push-Pull), depending on requirements
Heijunka-Board – the electronic way:
graphical planning table with SAP LMPC add-on





production orders with e.g. leveled quantities can be displayed, sequenced etc.
rhythm wheel / production schedule functionality can be used
mixed sequence of high / low runners
direct access to relevant data
conflicts (e.g. missing components, tools, etc.) can be visualized
 solution combines the features of a Heijunka-board, combined with the comfort of a planning cockpit
Capacity
view
Stock level
view
Visualization
of order
sequence
flexible &
adjustable
menus and
buttons
Alerts, e.g. for
buffer level,
constraints not met,
etc.
Sequencing
according to
different
criteria (e.g.
setup matrix)
Alle relevant data
available (> 900
columns in ALVGrid)
1
Motivation and initial situation
2
Supply chain with lean principle
3
Process and application overview
4
Functional details
5
Lean-capable supply network
Functional system support –
segmentation is a prerequisite for optimised Heijunka planning
Material requirements planning
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock
Short-term
planning
Alignment
Levelling
Segmentation

Product related analysis





Variation of overall demand
Average volume
Product min/max demand
Support during determination of



Value/benefit contribution
Analysis of available capacity






Asset utilisation
Disturbances
Cycle time

Safety stock
Stock to cover increasing
demand
With consideration of




Operating times
Maintenance
EPEI


OEE-Influence, pre-setup
Reserve capacities
Setup changes
Stock areas, box sizes and
box availabilities
Operating times
EPEI classes
Production and replenishment control
Pull
Master data maintenance alignment/levelling:
Principe of the EPEI calculation
Material requirements planning
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock
Short-term
planning
Alignment
Levelling
EPEI calculation
Overall shift duration
Production duration
Stop time
Shift decoupling
Setup time
Based on demand
forecast and output
rate for the whole
product portfolio per
shift (incl. Scrap)
Based on statistical
reports of shift
protocols (average
values)
Establishing of a
shift decoupling
covering 80% of
occurred stop times
Usage of the
residual available
time per shift for
setup
Determination of EPEI, lot size and target stock levels
Production and replenishment control
Pull
Master data maintenance for alignment/levelling
EPEI calculation
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Define
schedule
EPEI calculation
 EPEI is the shortest time
interval, where each product is
produced at least once
 EPEI is the operational smallest
lot size – in contradiction to the
economic lot size
 Target is the standardised
process for the determination of
the moving stock
Simulate
schedule
Material requirements planning
Calculate
safety stock
Alignment
Short-term
planning
Levelling
Production and replenishment control
Pull
Master data maintenance for alignment/levelling
Calculate safety stock
Material requirements planning
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock
Alignment
Short-term
planning
Levelling
Production and replenishment control
Pull
Calculate safety stock
Average demand
Replenishment, consumption
SAP enhancement package 5:
 Improved support to calculate
safety stock
 SAP ERP proposes the number
of Kanban boxes
 Periodic process to update the
Stock variation
parameter settings
 Customer demand or a specific
forecast can be used for
calculation
 Less gap of material with
reduced stock level
Disturbances, buffer
Operating time
Requirements planning:
Alignment
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Alignment
 Alignment for each
production line after
MRP run for high
runner
 Production capacity is
adapted to alignment
 Customer specific
implementation is
possible
 Daily production
quantities basis for
sequencing
 Planning of low
runners by date
Define
schedule
Simulate
schedule
Material requirements planning
Calculate
safety stock
Alignment
Short-term
planning
Levelling
Production and replenishment control
Pull
Production and replenishment control:
Pull
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Define
schedule
Simulate
schedule
Material requirements planning
Calculate
safety stock
Alignment
Pull
Consumption plant
Manufacturing:

Release 2 of the consulting solution
supports the Heijunka aligned Kanban
system with shop stock
Replenishment:




MRP generates the demand forecast
Kanban-/JIT-calls support pull-based
replenishment from production,
storage and the supplier
Kanban board with automatic update
Batch building box
Short-term
planning
Levelling
Production and replenishment control
Pull
Production and replenishment control: Pull
Supplier – KANBAN: control cycle calculation
Master data maintenance for alignment/levelling
Segmentation
EPEI
calculation
Define
schedule
SAP Enhancement Package 5:
 Graphical display of demand
and the calculated stock level in
the supermarket
 Calculation of the number of
Kanban boxes within the control
cycle
Simulate
schedule
Material requirements planning
Calculate
safety stock
Alignment
Short-term
planning
Levelling
Production and replenishment control
Pull
Production and replenishment control: Pull
Supplier KANBAN board: consumer view
Segmentation
EPEI
calculation
Define
schedule
Features:
Simulate
schedule
Calculate
safety stock
Consumer
 Empty KANBANs already
assigned to the supplying plant
are marked in red
 Full KANBANs in the
supermarket of the consuming
plant are marked in green
 KANBANs in transit with delivery note are marked in yellow
 JIT call via SAP standard
 Display:
 Schedule line ID (customer)
 Box number of customer
 Processing status in supplying

plant
Planned delivery time
Source
Alignment
Levelling
Pull
Benefits through a lean oriented supply chain…
 Levelled production and material flow
 Peaks on capacity requirements on people and machines are reduced
 Bullwhip effect especially to intercompany suppliers is reduced
 Continuous customer delivery is improved
 Stable consumption of supplier parts (internally/externally) is ensured
 Less impact of variances in sales quantities and disturbances to the production plan
 Lead time and stock level are reduced
 Integration of shop floor and SAP supported material requirements planning and procurement
processes
 Simplification of the planning process with reduced planning effort
 Transports and their capacity is easier to plan
 Stock level planning is optimised: buffer stock is reduced  Stock areas get smaller  costs
of stock keeping are reduced
Lean: Processes and IT are aligned to an efficient flow
Lean processes
Segmentation
In SAP ERP
EPEI
calculation
Define
schedule
Simulate
schedule
Calculate
safety stock
Alignment
Levelling
Pull
Operational lean processes supported by SAP ERP
Supplier park
Production 1
Pull
Assembly line 1
Define/simulate
schedule
pull
JIS plant
JIS
OEM
Assembly line 2
Production 2
Low -Runner
push
Supermarket
push
Goods receipt
Pull
External
supplier
JIS plant
JIS
OEM
Calculate
safety stock
Production plant
Segmentation
IC plant
push
Alignment
Calculate
safety stock
IC plant
Levelling
EPEI
calculation
The transfer of the processes to SAP ERP avoids
disruptions and increases the positive effect of levelling
in production with impact on the whole supply chain
1
Motivation and initial situation
2
Supply chain with lean principle
3
Process and application overview
4
Functional details
5
Lean-capable supply network
Lean & Levelling, but when?
 Process oriented
 Demand is in principle continuously, a preview is available
 Stable processes and a stable bottleneck (maybe challenges during ramp-up/phase-out)
 Straight oriented material flow
 Partners and involved departments are able to adapt to levelled requirements and delivery
 Short term additional demands can – even though – be covered
 Combined planning of high runners with levelling and low runners by requirement date
 Relatively short setup times
 IT oriented
 SAP SCM is too complex (heuristic with characteristic based or model mix planning)
 Standard capacity levelling in SAP ERP (graphical planning table) has gap of transparency
 Infinite planning is „too less“ ( finite planning with Heijunka board is required)