SAP for SCM OTIF Improvement Project-External

1. 1. Andrew Si Email: [email protected] 1 Note: 1. All rights reserved. This presentation or
any portion of it may not be reproduced or used in any manner without the express written
permission of the author. 2. The author has made every effort to remove the company specific
information. If you notice any company specific or any type of sensitive information in the
document, please advise the author.
2. 2. 2
3. 3. 3 Project Charter Project Title: Improve the Planning & Scheduling Process to Achieve OTIF
Requirements for Key Account A, B, C at Plant 123 Expected Customer BenefitsImproved On-
Time-In-Full customer delivery contributes to the goal to position Company as the "supplier of
choice" to our customers. Higher customer service level also adds value to the integrated supply
chain (ISC) of the main customers. Business Case: Plant 123 received complains from key
accounts on the order delivery performance. Improving customer service level will enhance the
customer loyalty, and generate more revenue in the future. Opportunity Statement: There are
disconnections in the order-to-cash process that caused delivery delays to the customer. This
project will use SCOR methodology and Lean tools to identify the Gaps that caused the
disconnections and take actions to bridge the gaps. Specifically in Plant 123, the project will
review both the front end planning/scheduling processes and follow through on the shop floor
execution, to improve the scheduling adherence and OTIF. Meanwhile, the excessive inventory
for production orders that are not required in the short term will be reduced and the shortage of
production orders that might cause poor customer service level will be minimized. The capacity
utilization will be more effective as the priority will be given to the production orders that are
really needed. The direct savings will come from right-sizing the WIP & capacity utilization based
on customer demands. Scope: The scope of this project is the material part numbers for the four
customers. The process starts from receiving customer orders/forecasts and ends with customer
receiving the products. Metrics METRICS BASELINE CURRENT GOAL UNITS External OTIF
Key Acct A: 95%; Key Acct B: 90%; Key Acct A: 95%; Key Acct B: 90%; Key Acct A: 98%;
Key Acct B: 95%; PRIMARY METRIC Internal OTIF Key Acct A: 43.8%; Key Acct B: 77.7%;
Key Acct A: 74.8%; Key Acct B: 78.3%; Key Acct A: 90%; Key Acct B: 90%; SECONDARY
METRIC Scheduling Adherence SECONDARY METRIC
4. 4. 4 Project Methodology
5. 5. X1 Production Order Planning Process  Demand and Supply Evaluation for New Production
Order Creation  Quality/Engineering Review for the Production Order Release X2 Production
Scheduling & Implementation X3 Throughput/Capacity/Productivity of the Constraint Work
Centers X4 Raw Material ATP 5 Sub-Projects Portfolio Y: OTIF = F(X1, X2, X3, X4)
6. 6. 6 Production Order Planning Process Demand and Supply Evaluation for New Production
Order Creation – Business Issue: • Current process for production order requirement calculation
(MRP process) is not well defined, especially for the Min/Max products. We need to have a
systematic and scientific way to evaluate the production order situation (both shortage and over
production), and cut new production orders for shortages only. – Measure/Analyze/Improve: •
Before: Production order for production shortage: 55%; After: over 85% – Progress: • Open
production order analysis T1 • Develop production order planning process for Min/Max materials
T2 • ABC based production order planning process for MRP parameters setting in SAP T3
Quality/Engineering Review for the Production Order Release – Business Issue: • Current
capacity for quality review is 10 product part numbers/day, and there are over 1000 product part
numbers in the “review list”. We need to increase the quality review capacity and make sure the
list for review is prioritized according to the most current requirements. –
Measure/Analysis/Improve: • Before: Quality review for production orders: 8 orders/day; After:
15 orders/day – Progress: • Re-prioritize the list of materials for quality review T1 • Establish the
inter-departmental procedure on quality review process T2 • Current wait time for
Quality/Engineering review is 11 days T3 • To have a Kaizen event to reduce the wait time into 2-
3 days T4 X1: Production Order Planning Process
7. 7. 7 X1: Production Order Planning Process
8. 8. Plant Min/Max Delivery Performance to Key Acct B 8 X1: Production Order Planning Process
Plant Min/Max Delivery Performance to Key Acct A 0.00% 5.00% 10.00% 15.00% 20.00%
25.00% 30.00% 75.00% 80.00% 85.00% 90.00% 95.00% 100.00% OTIF Above 80% Max OTIF
 Trendline Above 80% Max Trendline 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%
70.00% 90.00% 91.00% 92.00% 93.00% 94.00% 95.00% 96.00% 97.00% 98.00% 99.00%
100.00% OTIF Above 80% Max Delivery Performance for Min/Max (Represents customers
measure): # of Materials Above or Equal Min # of Materials in MinMax Scope
9. 9. 9 Production Order Scheduling & Implementation – Business Issue: • Shop floor has no
visibility beyond the current “hot orders”. Even if there is capacity left after all the “hot orders”
for the day are completed. We need a master schedule to prioritize production orders. –
Measure/Analyze/Improve: • The Excel Macro that helps us to prioritize the production orders and
create production schedule has been reviewed and rewrote. 2010 Q4 • 7 Day finite schedule was
produced and pilot run 2010 Q4 • Color code production orders to set priorities categorically, but
not specify the exact sequence. Daily production order sequence is made on the shop floor. 2011
Q1 – Discussion: • The best level of granularity of shop floor scheduling • The routing/duration
discussion for SAP master data (post Aug 1st) X2 Production Order Scheduling Finite Schedule
(Form) by ProdOrd by Day/Shift Radom Schedule “Hot List” Schedule Categorical Schedule by
Priority Level 7 Day Schedule but Allow Daily Re-sequence
10. 10. 10 X2 Production Order Scheduling 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00%
Plant 123 Scheduling Adherence
11. 11. 11 Increase the Capacity/Productivity/Throughput of the Constraint Work Centers – Business
Issue: • The overall production rate of plant123 is determined by the pace of the slowest work
center(s). We need to improve the productivity/throughput of the constraint work center(s) to
complete the past due orders, to increase customer inventory to Max, and to prepare for future
demands. – Measure/Analyze/Improve: • Bottleneck Identification: Pickle & Hot Press •
Throughput Improvement – Progress: • Productivity of pickle work center improved by 22.8%
2010 Q4 • Over production cycle time reduced by 50% 2011 Q2 X3:
Throughput/Capacity/Productivity of the Constraints
12. 12. 12 X3: Throughput/Capacity/Productivity of the Constraints -40 -20 0 20 40 60 80 100 120
Avg Days Late vs Sch Inferred Actual LT 3 per. Mov. Avg. (Avg Days Late vs Sch) 3 per. Mov.
Avg. (Inferred Actual LT) Actual Lead Time/Lateness of ProdOrd Completion New Average In-
house Prod Time: 56days.
13. 13. 13 Ensure Raw Material ATP – Business Issue: • The current process to evaluate the raw
material requirement is not based on a systematic analysis of the demand and supply situation of
the raw material inventory. On top of that, focus on reduce the inventory level slowed the reaction
to the current demand on raw materials. We need to establish a process to evaluate the raw
material requirement in a more systematic and scientific way – Progress: • First round of Raw
Material supply and demand analysis 2010 Q4 • First batch of purchase orders of Raw Materials
that below the critical level of inventory 2010 Q4 • Establish procedure for raw material
requirement review process 2011 Q2 – Discussion: • Use SAP to drive raw material replenishment
X4: Raw Material ATP
14. 14. 14 X4: Raw Material ATP Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Apr May Jun 7/12
7/18 7/25 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011
2011 2011 2011 2011 FG 396 443 426 443 374 522 467 910 1,843 2,204 2,312 2612 3083 3189
3401 3976 4069 3950 WIP 3,993 3,005 2,918 2,529 2,227 1,915 1,718 1,435 2,422 2,373 2658
3164 3735 3514 2792 2579 2404 2345 RM 5,825 5,646 5,024 4,786 4,676 4,088 4,142 3,505
3,430 3,442 3,143 5324 6079 5776 6230 5843 6031 6005 0 2,000 4,000 6,000 8,000 10,000
12,000 14,000 RM WIP FG INVENTORY
15. 15. 15 Solution Matrix Review: Are the Xs’ Correctly Identified & Addressed? 0.00% 20.00%
40.00% 60.00% 80.00% 90.00% 92.00% 94.00% 96.00% 98.00% 100.00% Min/Max Delivery
Performance to Key Acct 0.00% 20.00% 40.00% 60.00% Scheduling Adherence -50 0 50 100 150
Avg Days Late vs Sch Actual Lead Time/Lateness of ProdOrd Completion Phase 1Phase 2Phase 3
Planning (X1) ↑ ↓ ↑ Scheduling (X2) - ↑ ↑ Throughput (X3) - - ↑ Raw Mat (X4) ↑ ↑ ↑ OTIF ↑ ↓ ↑
16. 16. Phase Summary Phase I Phase II Team SCM, CI, Site Mgmt Include IT Tools SCOR Level3
Lean, 6 Sigma, TOC Add VSM, SCOR Level 4 (with Info Flow) Design High Level Review for
Disconnections; Good Priority of Xs A more Thourough Review for Disconnections Measure
Corp Metric + Cust Metric SAP Generated Metric & Rpt Analyze /Improve Excel/Access Based
Tools Plus System Solution System Based Solution Control SAP MRP SAP Rpt on Plant & Cus
Inv
17. 17. 17
 Recommended


Entrepreneurship Fundamentals
 

Photoshop CC Essential Training (2015)

 

Solving Business Problems

 

SEO: Getting Personal

Kirsty Hulse


 Learn BEM: CSS Naming Convention
In a Rocket

How to Build a Dynamic Social Media Plan

Post Planner

Gwyneth Paltrow: "When you have an e-commerce business, no press is bad

press"
LinkedIn Pulse

10 Insightful Quotes On Designing A Better Customer Experience

Yuan Wang


 Data Skills Are Key to Social ROI
Knowledge@Wharton

Prototyping is an attitude
With Company