Parts Marketplaces And Parts Presentation
Parts Marketplacesand Parts PresentationModule 9.2Min Shao and Jason KaryAlumni / Mentor / Coach: Lynn Delisle, LFM ‘01Presentation for:ESD.60 – Lean/Six Sigma SystemsMIT Leaders for Manufacturing Program (LFM)Summer 2004These materials were developed as part of MIT's ESD.60 course on "Lean/Six Sigma Systems." In some cases,the materials were produced by the lead instructor, Joel Cutcher-Gershenfeld, and in some cases by student teamsworking with LFM alumni/ae. Where the materials were developed by student teams, additional inputs from thefaculty and from the technical instructor, Chris Musso, are reflected in some of the text or in an appendix
Overview¾ Learning Objectives¾ Session Design (15-20 min.) Relate Kanban process togeneral context of partsmarketplaces Understand benefits ofeffective use of partsmarketplaces Highlight the impact improvedparts presentation can haveof on operationalperformance¾ Part I: Introduction and LearningObjectives (1-2 min.)¾ Part II: Key Concept or PrincipleDefined and Explained (4-6 min.)¾ Part III: Exercise or ActivityBased on Field Data thatIllustrates the Concept orPrinciple (3-4 min.)¾ Part IV: Common “Disconnects,”Relevant Measures of Success,and Potential ActionAssignment(s) to Apply LessonsLearned (3-4 min.)¾ Part V: Evaluation andConcluding Comments (1-2 min.) [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 2Part IV: DisconnectsPart V: Conclusion
Key Concepts: Parts Marketplace¾ What is a parts marketplace? Localized material staging designed to facilitate value-addedwork and reduce inventory levels¾ What are some of the key components of a partsmarketplace? Proximity to operator workstation Reduced storage space Less need for motorized conveyance to transport inventory toworkstation Frequent replenishment of localized inventories¾ How does Kanban relate to a parts marketplace? Kanban is a system of inventory management that facilitates aparts marketplace [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 3Part IV: DisconnectsPart V: Conclusion
Parts Marketplace in Action¾ High volume of parts per storage unit¾ Stationary Storage - Mechanizedmovement required for delivery toproduction line¾ Low volume of parts per storage unitrequiring frequent replenishment¾ Movable Storage – Wheeled partsbins enables transport to line andmultiple pick-points [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 4Part IV: DisconnectsPart V: Conclusion
Example of Marketplace at Visteon¾ “Visteon has developed marketplaces to hold parts forupstream operations. A marketplace is like a general storewhere personnel get their screws or other componentsinstead of walking down the line to get them out of abucket. With a marketplace, lift trucks are no longerneeded. In the old inventory system, workers had to keep acertain amount of raw material in a buffer at all time. Lift truckswere used to move parts around, and they created an unsafeenvironment. Using the lean philosophy, these inventoriesare timed to shrink. So instead of having weeks worth ofscrews at the general store, there are only two hours worth.Instead of using a lift truck to deliver a pallet of screws to theline, someone with a cart delivers a box every two hours.1” [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 5Part IV: DisconnectsPart V: Conclusion
Benefits of Parts Marketplaces¾ What are some of the benefits associated with theimplementation of parts marketplaces? Increased value-added work Reduced inventory In the example of one metal fabrication company, 7% ofinventoried material was scrapped and more than 50% wasreturned to suppliers to manage Ability to manage by exception visual cues indicate need toparts replenishment [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 6Part IV: DisconnectsPart V: Conclusion
Financial Impact of Parts Marketplaces10COGSInventory TurnsAvg. InventoryInventory nJulyAugSeptOctNovDecMonthAn Iterative Approach: Days of On-Hand InventoryDecrease over Time Improving Cash Position [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 7Part IV: DisconnectsPart V: Conclusion
Key Concepts: Parts Presentation¾ What is the concept of parts presentation? Organization of production material in a manner that facilitatesvalue-added manufacturing¾ What are some of the key components of partspresentation? Organization / orientation of incoming material Kitting of material [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 8Part IV: DisconnectsPart V: Conclusion
A Parts Presentation Example:¾ 15.761J - System Optimization and Analysis: Ford Pan-EuropeanDurable Container Case2 Ford Motor Company: reusable containers designed to be angled onthe production line for easy access to the parts [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 9Part IV: DisconnectsPart V: Conclusion
Application Exercise¾ Need a Volunteer¾ Instructions:1. Volunteer will be given 30 seconds to review the design of thepart to be assembled2. Compete head-to-head with instructor to determine who canassemble part the fastest while maintaining an appropriatelevel of quality3. Competitor is to receive component parts in a standard boxtypical of most supplier deliveries4. Instructor to receive component parts in a manner designed bya lean implementation team5. Ready set.go!!What are some of the benefits of improvingparts presentation? [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 10Part IV: DisconnectsPart V: Conclusion
Benefits of Enhanced PartsPresentation Process Increased ability to manage visually identification ofparts shortagesReduced production cyclesImproved organization of work areaIncreased worker safety / ergonomicsPromotes standardized work environmentEnhanced ability to detect defects and quality issues withparts [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 11Part IV: DisconnectsPart V: Conclusion
Disconnects of Parts Marketplaces / PartsPresentation¾ Social Factors¾ Technical Factors Marketplace incorporationwith ‘push’ legacy MRPsystems Failure to adequately engagewith supply base to maximizemarketplace / presentationeffectiveness Increased challenge ofmarketplace andpresentation implementationfor larger parts yetincreased benefit Training and disciplineassociated with partsmarketplaces Resistance to role / responsibilitychanges with partsmarketplaces potential forelimination of warehousepositions Outsourcing of parts kitting inorganized labor environment [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 12Part IV: DisconnectsPart V: Conclusion
Concluding Comments¾ Parts Marketplaces: Reducing inventory does not require fundamental changes tosupply chain or cycle reduction investment Used in conjunction with Kanban or other method of inventorycontrol, marketplaces can effectively increase the productivity ofyour workforce my reducing non-value added operations¾ Parts Presentation: Simple activities such as incoming material kitting andorganization can have a significant impact on operationalperformance. Parts presentation is a valuable tool for all types of operationsfrom assembly to machining to fabrication [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 13Part IV: DisconnectsPart V: Conclusion
Appendix: Instructor’s Comments and ClassDiscussion¾ Important issue in manufacturing leadership:¾ Presentation/outsourcing can be carried too far!!¾Can result in loss of key knowledge and long termcompetitive advantage¾Outsourcing is nice for price, and may lead to shortterm economic efficiency, but long termcannibalization of competency¾ Parts marketplace important for other parts oflean, such as ISPC and value stream mapping,etc.¾ It also depends on a PDCA, kaizen process [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MIT6/9/04 -- 14
Appendix: Instructor’s GuideSlideTimeTopicAdditional Talking Points1-21-2 minIntroduction, overview and learningobjectives Relate to Module 9.1- Kanban3-72-3 minKey Concepts: Parts Marketplaces Note the differences in the two photos. Contrast this style ofinventory management (traditional warehouse / stock room) to aparts marketplace system with reduced inventory volumeslocated strategically throughout a shop. Relate partsmarketplace concept to a supermarket.6-72-3 minBenefits Emphasize the impact on inventory turns and the financialimplications as they relate to cash. Note the increased focus onthe cash position of many publicly traded companies.8-92-3 minKey Concepts: Parts Presentation Highlight the visual ability to easily assess if parts are missingor defective, as well as the ability to standardize work with partspresentation efforts.102-3 minExercises/Activities Note the ability of the operator that does not need to sortthrough the packaging to inspect and orient parts is able toconcentrate on value-added work.TBD3-4 minDisconnects The most significant barrier to parts presentation and partsmarketplace implementation is the resistance to change of mostorganizations. The technical requirements are not intellectuallyadvanced.TBD1-2 minConcluding comments The operational and financial impact, along with the “lowtechnical entrance barriers” should make parts marketplaces andparts presentation improvement an integral component to anylean implementation. [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 15Part IV: DisconnectsPart V: Conclusion
Bibliography1. Example adapted from Professor Steven Graves 15.761J SystemsOptimization and Analysis course [Min Shao and Jason Kary] – ESD.60 Lean/Six Sigma Systems, LFM, MITPart I: IntroductionPart II: ConceptsPart III: Application6/9/04 -- 16Part IV: DisconnectsPart V: Conclusion
The most significant barrier to parts presentation and parts marketplace implementation is the resistance to change of most organizations. The technical requirements are not intellectually Highlight the visual ability to easily assess if parts are missing or defective, as well as the ability to standardize work with parts presentation efforts.
auctions, online marketplaces, listing services, and private brokerage services. Auctions and Marketplaces is Co.'s only reportable segment, which consists of its live on site auctions, its online auctions and marketplaces, and its brokerage service. CONSTRUCTION DividendRank Symbol DividendRecent Yield* #1 ARE.CA Q0.74 7.66% #2 TIH.CA Q1.56 1.49%
Marketplaces allow for exchange of value through multiple offerings and tend to follow one or a combination of growth strategies Goods Services Data Marketplace type Offerings Click on growth buttons to interact Example: Having a strong digtial bank proposition, DBS also launched multiple marketplaces in other industries with end-to-end .
presentation implementation for larger parts yet increased benefit ¾ Social Factors Training and discipline associated with parts changes with parts elimination of warehouse positions Outsourcing of parts kitting in organized labor environment Min Shao and Jason Kary] - ESD.60 Lean/Six Sigma Systems, LFM, MIT 6/9/04 --
1C Select appropriate presentation aids, materials and techniques 23 1D. Brief others involved in the presentation on their roles and responsibilities within the presentation 33 1E Select techniques to evaluate the effectiveness of the presentation 40 Summary47 Learning checkpoint 1: Prepare a presentation 48. Topic 2: Deliver a presentation 55
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platform and facilitate peer -to-peer connections and exchanges; and Redistribution marketplaces that seek to redistribute surplus food from farmers, producers, retailers, restaurants and consumers to reduce food waste. These marketplaces are enabling a wide array of new entrants to participate in the food sector.
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