Lean Supply Chain Action Learning Program September 2007

Objectives of the Proposed Program Enable participating companies to learn with and from each other by tackling real projects of vital importance to the companies Demonstrate the effective application of lean principles in warehousing, transport, procurement and distribution Disseminate the learnings to promote the application of lean supply chain principles by local companies Promote South Australia as a world class centre for supply chain excellence

Lean Supply Chain Focuses on the Value Stream Encompasses warehousing, distribution, transport and procurement Removes waste, mistakes, inflexibility Involves developing a “lean mindset”

May involve… Eliminating, combining, rearranging, simplifying stages Removing commercial obstacles Promoting free flow of information Improved logistics methods and systems Strategic positioning of inventory Involving supply chain partners in the change process

Action Learning A process in which a group of people come together regularly to help each other learn from their experience. Participants typically come from different situations where they are involved in different activities and face individual problems. The intention is to introduce some change, and use the intended change as a vehicle for learning through reflection.

The Lean Supply Chain Action Learning Program Each project is undertaken by a team of three to five; one or two from the company and the remainder from other companies The team works intensively together, one day per week over five weeks, learning and applying lean principles to the problem Outcomes and recommendations are presented to the host company senior management Key elements of the process are videotaped as a case study to promulgate via DVD to South Australian companies and via the Web to the World.

Project Selection Criteria Addresses an issue of high priority to the company Likely to benefit from “fresh eyes” Potential to demonstrate best practice/lean principles Likely to achieve a tangible outcome in the time available Company willing for outcomes to be used in the public domain as a case study

Typical Projects Examining the overall supply chain to determine strategies to improve customer service, reduce or eliminate inventory, reduce lead time and non-value adding activity Apply Lean Principles to warehouse processes and work flow to reduce double handling and improve customer service etc Develop a new warehouse layout to reduce distance traveled, increase storage density Examine the existing warehouse organisation structure, job roles and skills and devise a development program to build involvement, teamwork and effectiveness of the people Etc

Process Improvement Methodologies Lean Principles and Value Stream Mapping Cycle Time Reduction and Flow Process Charting Business Process Re-engineering

Stages in Value Stream Mapping Start with the Customer and work back Become familiar with the present process Observe and measure the present process Create a Value Stream Map of present process Identify non-value adding and waste Develop an improved process to reduce overall lead time Create a Value Stream Map of the new process Plan the implementation and win buy-in

Project Steps Preparation Project –Day 1 –Day 2 –Day 3 –Day 4 –Day 5 Dissemination

Preparation –Companies are canvassed for potential projects –Facilitator meets with each company to: Set the Minimum Critical Specification for the project Establish any constraints Identify resources to be provided by the company

Preparation (continued) –Team is selected –Facilitator identifies relevant learning resources eg readings and case studies relevant to the project, to be used to prepare the team –Team is briefed at an initial meeting at the host company.

Day 1 - Plan the Project –Become familiar with the current situation –Clarify the objectives of the project –Identify the skills and capabilities within the group –Share learnings from pre-reading and from experience to identify possible approaches and tools to be used –Agree on the overall approach and the roles of each team member –Develop a project plan –Reflect on the effectiveness of the team and the process

Day 2 Record and Examine –Identify, gather and assemble relevant data and information –Consult with stakeholders –Document the current situation using the appropriate tools eg Value Stream Mapping, Activity Sampling, Flow Charting, Storyboarding etc –Analyse the current situation to identify opportunities for improvement eg elimination of non-value adding activity, cycle time reduction etc –Initial brainstorming of ideas and options –Pose questions to be researched and answered before Day 3 –Reflect on the effectiveness of the team and the process

Day 3 Develop –Review outcomes of research between sessions –Intensively brainstorm options and short list eg story boarding, mind mapping etc –Test short listed options with the key stakeholders in the company –Synthesize the proposal –Identify further information or data to be collected to validate the proposal –Assign responsibilities for next session –Reflect on the effectiveness of the team and the process

Day 4 Refine and Justify Refine the proposal based on the research between sessions Document the proposal eg Value Stream Map, Layout Diagram, Flow Chart etc Prepare a cost benefit analysis of the proposal Develop an implementation plan Plan tasks and assign responsibilities for next session Reflect on the effectiveness of the team and the process

Day 5 Present Outcomes –Prepare a report with recommendations and justifications –Prepare a presentation for the host company’s senior management –Present to Senior Management and obtain their feedback –Reflect on the effectiveness of the team and the process and document the learnings

Dissemination –Presentations by project team at seminars and site visits –Video case study of the project, for inclusion with other case studies on a DVD for distribution to SA companies –Web site explaining and promoting the program with downloadable case studies and streaming video or slide presentations to illustrate, accessible around the world as a showcase for South Australian supply chain excellence

Into the future Recruit more companies into the program locally and interstate. Encourage overseas companies to follow the example, and to contribute their case studies to the data base Provide a platform for benchmarking, locally and internationally

Funding The initial projects under Lean Supply Chain Action Learning Program have been funded by the SA Department of Trade and Economic Development (DTED)