Lean and Agile Intro 1 © The Delos Partnership 2004 Lean and Agile Enterprise How to get fitter and faster !

Lean and Agile Intro 2 © The Delos Partnership 2004 Fundamental needs Satisfy the Customer: Right Product Right Value Right Time

Lean and Agile Intro 3 © The Delos Partnership 2004 Customers demand… Higher Quality Faster Response Greater Variety Lower Cost Tighter measurements

Lean and Agile Intro 4 © The Delos Partnership 2004 Customers demand ? Higher Quality Faster Response Greater Variety Lower Cost Tighter measurements Customer Service Department Warehouses of Inventory Large Product range Far East Manufacturing facility Ever higher levels of internal efficiency and more PPV

Lean and Agile Intro 5 © The Delos Partnership 2004 Business response ? Higher Quality Faster Response Lower Cost Tighter measurements Six Sigma project Agile Project Cost Reduction exercise More KPI’s

Lean and Agile Intro 6 © The Delos Partnership 2004 Balancing the objectives Inventory/ Capacity Meeting Customer Requirements Organisational Costs Organisational Flexibility

Lean and Agile Intro 7 © The Delos Partnership 2004 Today’s Value ? Time is money... Time is waste...

© The Delos Partnership 2004 Lean?: waste removal

Lean and Agile Intro 9 © The Delos Partnership 2004 Before After Assembly time: -47% W.I.P.: -99% Lead time: -99% Floor space: -40% Lean example: oil cooler cell

Lean and Agile Intro 10 © The Delos Partnership 2004 Lean is elimination of waste Run Set up Set up Receive Suppliers Inspect Store Pick Set up Set up Queue Inspect Operation 10 Queue Set up Set up Run Operation 20 Inspect Store Queue Inspect Store Customers Operation 30

Lean and Agile Intro 11 © The Delos Partnership 2004 Lean - application Production process Supplying process Invoicing process Recruitment process… any others ?

Lean and Agile Intro 12 © The Delos Partnership 2004 Lean summary The use of the minimum resources, i.e. manpower, machinery, materials, space and time, and cash to manufacture and supply the product

Lean and Agile Intro 13 © The Delos Partnership 2004 Physical = Production + Distribution + Storage Costs Costs Marketability = Obsolescence + Lost Sales + Sub-optimum Costs Costs - stockout Pricing - competition Total supply chain costs

Lean and Agile Intro 14 © The Delos Partnership 2004 Waste Variability Inflexibility (Volume and Mix) Seeing the potential…

Lean and Agile Intro 15 © The Delos Partnership 2004 Waste Variability Inflexibility  Value Added  Reliability  Responsiveness (Volume and Mix) Seeing the potential…

© The Delos Partnership 2004 Agility Martin Christopher Cranfield 2003 Postponement Bottleneck Management Reduce NVA Time Streamlined Processes Synchronous Supply Reduce In-bound Lead times Velocity Agility Visibility Internal Integration Close to Customers Collaborative Planning Access to Real Demand Process Management Shared Information Close to Suppliers Event Management Collaborative Planning Level 1 Principles Level 2 Programmes Level 3 Actions Strategic Sourcing Simplification Reduce Batch Sizes

Lean and Agile Intro 17 © The Delos Partnership 2004 The ability to respond to changes from customers and markets Agility summary

Lean and Agile Intro 18 © The Delos Partnership 2004 Agile Lean H L H L Variety Variability Lean and Agile application

Lean and Agile Intro 19 © The Delos Partnership 2004 UK ChinaMorocco L M H High Low Variety Demand Variability Choose the optimum SC design

Lean and Agile Intro 20 © The Delos Partnership 2004 Focus or initiatives ?

Lean and Agile Intro 21 © The Delos Partnership 2004

Lean and Agile Intro 22 © The Delos Partnership 2004

Lean and Agile Intro 23 © The Delos Partnership 2004

Lean and Agile Intro 24 © The Delos Partnership 2004 Process Acceleration

Lean and Agile Intro 25 © The Delos Partnership 2004 Complexity or Agility ? Design Purchase Intermediate Manufacture Sub-assemble Finish Distribute “Real” Customer Places Order here Complexity/Cost Elapsed Time

Lean and Agile Intro 26 © The Delos Partnership 2004 The Value Chain Retail Outlet Retail Outlet Consumer Customer ? Customer Distribution Customer Distribution Europe Americas Far East Europe Our Company Suppliers Transport GOODS CASH Shareholders/Stakeholders

Lean and Agile Intro 27 © The Delos Partnership 2004 Where do we introduce complexity ? Marketing Selling Design Manufacturing Purchasing Finance IT Human Resources Management Product Range Customers Components Sources/Quality Suppliers Invoicing/Budgetting Systems Recruitment/Policies Strategy

Lean and Agile Intro 28 © The Delos Partnership 2004 Workshop List out examples of where you believe your organisation could respond to customers quicker, at lower cost, with a greater range of response if only….

Lean and Agile Intro 29 © The Delos Partnership 2004 Workshop List out the Barriers to improving your organisation’s ability to respond to customers Faster Wider Lower cost

Lean and Agile Intro 30 © The Delos Partnership 2004 The Delos Model Vision Strategy Prioritisation Prioritisation Innovation Innovation Demand Support Supply Supply

Lean and Agile Intro 31 © The Delos Partnership 2004 Vision and Strategy Vision –Clear statement of direction –Understood by all “We will be able to see things wirelessly” – Logie Baird

Lean and Agile Intro 32 © The Delos Partnership 2004 Strategy Making right choices between : PRODUCT LEADERSHIP – Product Design CUSTOMER SOLUTIONS – Market Response OPERATIONAL EXCELLENCE – Cost Leadership

Lean and Agile Intro 33 © The Delos Partnership 2004 Innovations Manager Strategy Innovation Manager Development Ideas Project Plans Development Plans Supply Plans Project System Prioritised Plans

Lean and Agile Intro 34 © The Delos Partnership 2004 Demand Management Strategy Demand Manager Sales and Marketing System Forecast Plan Manufacturing And Purchasing ERP System Consensus Forecast

Lean and Agile Intro 35 © The Delos Partnership 2004 Master Scheduler Strategy Master Scheduler Sales Forecasts Customer Orders Manufacturing Plan Purchasing Plan MRP System Balanced Plan

Lean and Agile Intro 36 © The Delos Partnership 2004 People Values TraditionalNowFuture Process problems Not my jobOwnershipAccountability Management Style SuperviseFacilitator/ Team Leader Coach Working Style IndividualTeamEmpowered Teams Training and Education Non-existentLuxuryNecessity KnowledgeIgnorantUnderstandsExpert Attitude to People LiabilityCostAsset

Lean and Agile Intro 37 © The Delos Partnership 2004 Challenge Tradition FactorHistoricalNowFuture DeliveryPromiseRequiredNeed SuppliersAdversariesPartnersSeamless QualityAcceptable6 sigmaZero defects ScheduleForgetFollowAdhere InventoryAssetLiabilityZero MaintenanceRemedialPreventEliminated ComplexityNormalReducedEliminated TeamworkRareCIT’sConstant PeopleFollowersThinkersLeaders

Lean and Agile Intro 38 © The Delos Partnership 2004 Behavioural problem If you measure me rationally I will behave rationally But if you measure me irrationally I will behave irrationally If you measure me rationally I will behave rationally But if you measure me irrationally I will behave irrationally

Lean and Agile Intro 39 © The Delos Partnership 2004 Vertical Functional Organisation MD Sales Marketing Technical Operations Finance HR R&DR&D R&DR&D MKTGMKTG MKTGMKTG SALESSALES SALESSALES OPSOPS OPSOPS ACCTSACCTS ACCTSACCTS HRHR HRHR Directors Managers Supervisors/Team Leaders

Lean and Agile Intro 40 © The Delos Partnership 2004 The Answer is not just in the Technology Enterprise Resource Planning Lean Six Sigma Total Preventative Maintenance Operating Equipment Effectiveness Design for Manufacture Agile

Lean and Agile Intro 41 © The Delos Partnership 2004 Integration the right blend! CULTURE/ BEHAVIOUR TECHNOLOGY WAYS OF WORKING

Lean and Agile Intro 42 © The Delos Partnership 2004 Delos Change Journey MobiliseDesignCommunicateReviewUnderstandASSESSASSESS EDUCATION STRATEGY & DESIGN DEFINE & MEASURE BENEFITS ORGANISATION SYSTEMS VISION OF THE FUTURE VISION OF THE FUTURE

Lean and Agile Intro 43 © The Delos Partnership 2004 Change Minds not just systems Successful change CULTURE TEAMWORK SHARED VISION COMMUNICATION WAYS OF WORKING ACCURACY AND DISCIPLINE POLICIES AND PROCEDURE HARDWARE PLANNING TOOLS LEAN TOOLS AGILE TOOLS SOFTWARE ACCURATE DATA VALID SCHEDULES TOOLS