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© The Delos Partnership 2005 BAE SYSTEMS Proposal to BAE Systems for review of the feasibility of achieving the Site Logistics Vision Prepared by : Gordon Hammond Richard Watkins
© The Delos Partnership 2005 Introduction This document proposes how the Delos Partnership can respond to BAE Systems request for consulting support in their project designed to improve the cost effectiveness of the Logistics function at BAE Salmesbury in preparation for the challenges posed by the JSF project
© The Delos Partnership 2005 Project Requirement Project Objectives to determine how BAE Salmesbury can 1.Improve the effectiveness of Inventory Management and Logistics at Samlesbury site Implement Site Logistics Vision - simplification Operate with Lean Partnerships to ensure the right levels of Cost/Quality and Delivery are achieved for BAE Systems customers. 2.Prepare the way for handling high volume JSF production using “World Class Manufacturing” tools and techniques. Project Scope : 1.Initially Salmesbury – possible extension to Warton and all Air Systems 2.Inventory and Logistics management process [inbound goods for production] supplying the business units.
© The Delos Partnership 2005 Key Project issues 1.Today BAE make 1 T45 per month; in future the site will be required to make 1 JSF per day A massive change in working practise will likely be needed to support this move Additional resources are not an option either from a cost or space point of view 2.Today BAE enjoy a good reputation with customers. The project needs to address how to maintain this in the context of the site’s development
© The Delos Partnership 2005 Final Assembly “Final Assembly” Current Map of “Goods” flows T45 JSF Airbus Typhoon CentralLogisticsFacilityCentralLogisticsFacility BAE Salmesbury site Intermediate Manufacture and assembly CFC Treat Fabs M/C Spares External Suppliers/BAEsites Subcontract and purchased parts Components Sub-contract operations Sub-contract operations Sub-assemblies
© The Delos Partnership 2005 Final Assembly “Final Assembly” Key Project Issues T45 JSF Airbus Typhoon CentralLogisticsFacilityCentralLogisticsFacility BAE Salmesbury site Intermediate Manufacture and assembly CFC Treat Fabs M/C Spares External Suppliers/BAEsites Subcontract and purchased parts Components Sub-contract operations Sub-contract operations Sub-assemblies Can these flows be eliminated or simplified?
© The Delos Partnership 2005 Final Assembly “Final Assembly” Key Project Issues T45 JSF Airbus Typhoon CentralLogisticsFacilityCentralLogisticsFacility BAE Salmesbury site Intermediate Manufacture and assembly CFC Treat Fabs M/C Spares External Suppliers/BAEsites Subcontract and purchased parts Components Sub-contract operations Sub-contract operations Sub-assemblies How can the flow of goods and services be effectively managed using Lean partnerships ? How can the flow of goods and services be effectively managed using Lean partnerships ?
© The Delos Partnership 2005 Current Perceived Issues As a result of previous consulting day we identified the following issues : 1.Poor Inventory Accuracy in Business Units and in Central Logistics Facility –Inventory transactions not completed –Backflushing causes additional inventory errors –Inventory called off but held centrally unnecessarily –Lack of proper use of BAAN ERP 2.Some Purchasing contracts enforce take or pay for inventory, and high MOQ’s [minimum Order Quantities] hence high inventories 3.Planning carried out within business units, and hence inventory not managed within business units – lack of responsibility. 4.Lack of understanding of Inventory Management practises. 5.Gaining acceptance from all involved in a revised Logistics operation
© The Delos Partnership 2005 Your Requirements 1.To prepare an agreed revised Samlesbury Site Physical Logistics Vision –Does it meet needs of JSF Project ? –Does it accord with Best Practise ? –Is it consistent with Manufacturing Strategy ? 2.To provide recommendations on how to achieve the Site Physical Logistics Vision –Right process Flows –Options on BAE Managing Logistics or outsource –Impact on stakeholders –Timings of implementation 3.To support BAE SYSTEMS to develop draft business case to establish financial viability of the recommendations –Establish costs and benefits –Outline Risks
© The Delos Partnership 2005 The Delos Approach Key to our approach is to work with local personnel to develop the requirements for BAS systems vision, and create an understanding of what “World Class” would look like on the BAE Salmesbury site. This would identify clear gaps and identify a programme of work that will be needed to close those gaps.
© The Delos Partnership 2005 The Delos Approach Assess 1.Understand Project Requirements 2.Set up Project Plan 3.Define deliverables 4.Define detailed resource requirements Workshops 1.Create Task Team[s] 2.Provide Understanding through Workshops 3.Create Action plans that will be needed to attain “Word Class” 4.Define resources Review 1.Review JSF needs 2.Review Strategy 3.Create plans for use of World Class practise 3.Create Cost/Benefit Analysis for alternative approaches Report 1.Prepare recommendations 2.Prepare report 3.Present Findings
© The Delos Partnership 2005 Assess Assess 1.Understand Project Requirements 2.Set up Project Plan 3.Define deliverables 4.Define detailed resource requirements ObjectiveSpecify and Understand detail Project Requirements What is Site Logistics Vision ? What is Manufacturing Strategy ? What is impact of Outsourcing requirement What will be project resource requirement, and availability Outcome Project Plan – Timescales and resources Project Deliverables WhoDelos Partner – Gordon Hammond HowInterview of key personnel at BAE Systems Salmesbury, and prepare project plan Timing Two days on site
© The Delos Partnership 2005 Understand Objective1.Provide Understanding of Best Practise in –Inventory Management and Control –World Class Best Practise –Value Stream Mapping –Waste Elimination tools and techniques [kanbans/POU etc.] 2.Create Actions Plans for improvement of –Inventory Management –Inventory Flow OutcomeAction plans and resource requirements for delivery of Site Logistics Vision. WhoDelos Partners and associates – Gordon Hammond, Richard Watkins, Andrew Sinclair and Tim Waddington plus Task Team members from BAE Systems How1.Inventory Management Workshop 2.Value Stream Mapping Workshop Timing Two days on site for each workshop plus one day follow up for each. Workshop 1.Create Task Teams] 2.Provide Understanding through Workshops 3.Create Action plans 4.Define resources
© The Delos Partnership 2005 Review Objective1.Work with Task Team on Inventory management to develop plan to improve Inventory Management 2.Work with Task Teams to create plan for simplifying inventory flows, and implement World Class Best Practise for JSF 3.Review implications of BAE systems vs outsource of Logistics management Outcome1.Plans for implementing Best Practise 2.Request for Quotation from potential outsourcing partners. WhoDelos Partners and associates plus Task Team members from BAE Systems How1.Task Team Meetings 2.Interview of those involved with Management of Logistics function, and working with potential lean partners Timing1. Four days for each task Team. 2.Five days for review of lean partnering options. Review 1.Review JSF needs 2.Review Strategy 3.Create plans for use of World Class practise 3.Create Cost/Benefit Analysis for outsource
© The Delos Partnership 2005 Report Objective1.Prepare report for BAE Systems management on recommendations on –Requirements to achieve Best Practise at Salmesbury –Cost/Benefit of Outsourcing Logistics Function Outcome1.Report on Findings 2.Presentation to BAE Systems management WhoDelos Partners and associates How1.Creation of report 2.Presentation of report to Management Timing1.Two days Report 1.Prepare recommendations 2.Prepare report 3.Present Findings
© The Delos Partnership 2005 Projected Costs from Delos Cost ItemQuantityCost perTotal Cost AssessConsulting days 2 days£ 1,500£ 3,000 WorkshopDelegate days on workshops 1 workshops 7 delegates on each £ 700£ 4,900 ReviewConsulting days 4 days – Task Team 5 days – Alternative approaches £ 1,500£ 13,500 ReportConsulting days 2 days£ 1,500£ 3,000 Total£ 24,400 Notes : 1.Workshop costs excludes the hire of any hotel rooms or associated costs if the event is held off site 2.In addition hotel and out of pocket travel and subsistence expenses will be charged at cost for Delos associates; 3.The above costs are excusive of VAT
© The Delos Partnership 2005 The Delos Team Depending on the detailed aspects of the assignment, we will provide support from the following team. Detailed CV’s are available for each, but to illustrate the lack of an “academic approach”, we illustrate their real experience in the following table: Partner /Associate Work ExperienceClientsAreas of expertiseRelevance to Project Gordon HammondCINCOM SystemsBAE Systems – VSEL ABRO Defence industry, and data accuracy Project Management Richard WatkinsICI AgrochemicalsBNFL Messier Dowty International ICI MOD Defence Aerospace Agency [Baan user] Inventory Management Planning and execution Lean and Agile developments Data Accuracy and Inventory Management Effective use of ERP systems Workshops Tim WaddingtonPhilips ElectronicsDominick Hunter Merck Pharmaceutical Lean ManufacturingDeveloping Logistics Vision Workshops Paul WarrickICI Paints, Crown Cork and Seal, Lonza Biologicals SAB Wabco Elementis Pigments Procurement Outsourcing contracts Outsourcing of operations Andrew SinclairCooper industries Bestobell Faiveley Transport Inventory Control Developing World Class operations Management of Inventory Outsourcing operations
© The Delos Partnership 2005 Outline Plan OctNovDec Assess Workshop Lean Follow up Lean approach Review of Lean alternatives Report GH 3,4,5 RW,TW 24,25,26 RW/TW PW GH
© The Delos Partnership 2005 World Class Definition As part of the request for information, BAE Systems Salmesbury have asked for our definition of World Class Logistics. The Delos Partnership have prepared for their clients an assessment of the levels of expertise which clients can and should obtain in the “pursuit of perfection”. Our assessment document is attached, which covers all aspects of the operations of the business.
© The Delos Partnership 2005 Assumptions for this proposal An outline project plan and costings for the project will be provided prior to sign off and contractual agreement by BAE Systems. BAE Systems will provide a Project Manager to act as manager of the internal resources required for the project Delays will not be encountered and BAE Systems staff will be available at agreed dates and times. The proposal is valid for 3 months from the date of this proposal.
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