Monday, November 26, 2007

Kanban in the Kitchen: a Recipe for Supply Chain Education

I saved this article a while back from Hawkeye Planner, but I can't even remember when I first received it. Long story short, it's a great example that everyone can relate to that demonstrates Supply Chain Management in a nutshell.

Kanban in the Kitchen: a Recipe for Supply Chain Education
The supply chain is for smart people. Not too many people understand the basic concepts, let alone the more sophisticated approaches and ideas. Supply chain professionals always try to promote and share what they are doing, but their presentations are usually met with glossy-eyed stares. What we are trying to do is extremely complicated, so unfortunately people just don’t get it. HOGWASH!

The supply chain is one of the most simple, easy-to-explain functions around. The supply chain has one simple goal—to fulfill product and service demand effectively and efficiently. And the activities are not some theoretical construct; the supply chain always ends up with physical products that are bought, made, moved, and stored. Yes, some of the strategies and processes become complicated. Still, they can always be tied back to the real world. For a broad audience to understand (and support) supply chain management, they need a very practical education with tangible example. For that, all you have to do is go to the kitchen.

I tried this education with someone who is probably the furthest away from supply chain management—my mother. My mother has been a homemaker for over 30 years; she is a smart woman who runs the household (and my father) like a business. Would she understand supply chain concepts?

I started with her shopping list. What was she planning on getting from the supermarket? Bread, turkey, cheese, potatoes, chicken breast, one quart milk, Cheerios, asparagus, tomato soup. How did she decide what to get? Well, she was planning on serving leftovers tonight because they would be out all afternoon. Dinner the following evening would be chicken with asparagus and mashed potatoes. Lunch tomorrow would be sandwiches and soup. And of course, father has cereal for breakfast each morning. And why go today? Well, it was going to rain tomorrow, so she didn’t want to drive in wet weather.

“Mom,” I said, “You are a supply chain expert.” She looked at me as if I was ten years old. “Seriously, you are. Let’s look at all of the things that you did. First, you figured what the demand for food would be—that’s forecasting. Fortunately, your customer, Dad and yourself, will consume whatever you make. Then you decided how and when you were going to your meal—that’s production scheduling. You knew that today wouldn’t be a day to cook, but you already planned out tomorrow’s menu.”

“Then, you figured out the ingredients that you needed—that’s material requirements planning. You mentally went through your meal plan and figured out what ingredients went into each. We call that a Bill of Materials explosion. I noticed that you didn’t put mustard or mayonnaise on your list. I am guessing that you already have enough in the refrigerator to last you a while, so no need to buy more. And you are buying tomato soup, although I see that you already have one in the cupboard. I know what you always say; it’s always good to have an extra can for a rainy day. In my world, that’s inventory management with safety stock rules built in.”

My mother thought for a moment, then laughed and messed my hair. “I’m glad that we are both supply chain experts, even if you do need a lot of fancy names for all of the things that I do normally. Will any of these fancy ideas actually help me to do anything better?”

We talked for a few more minutes about where she could improve. I looked through the cupboards and found a lot of extra cans of soup and other goods. I rearranged the cabinets to have a spot for each item and threw out some of the old (obsolete) products. Then we talked about how many cans of tomato soup she needed at any one time. We wrote a card under each can that said “Buy 1 can of tomato soup”. As she used that can, she would pull the card as use it as part of her shopping list.“

I like this little setup, son,” my mother said as she smiled. “What do you call this?”

“It’s called Kanban, Mom. It a Japanese inventory and replenishment technique.”

“Can-Ban: got it, works great for cans. I can’t wait to tell my friends down at the gym about how my son is so smart.” She gave me a big hug.

“I’m sure they will appreciate it,” I replied. “Oh, and Mom, about Sunday dinner this week. You know that I love meatloaf, but maybe Dad would appreciate something different. Maybe we should talk about managing New Product Introductions.”

My mother smiled and shook her head. “That time you almost got me. Your father wants something different than meatloaf? Now you’re dreaming.”

Oh well, I guess that some things don’t change.

Copyright © 2006-2007 Hawkeye Planner LLC. All rights reserved.

Saturday, November 17, 2007

Foreign Flashback:Nissan 180SX Manufacturing in Japan

I thought this video was worth posting because I am having a very difficult time finding automotive manufacturing content from Japanese companies. I know many auto firms cooperate with Japanese companies, but it appears they keep their information out of the public arena. From what I have seen, Europeans seem to be the least concerned with letting insiders into their plants and the Japanese seem the be the most elusive.

This video is completely in Japanese and is well over 10 years old, but it is still interesting to see how the Nissan 180SX (S13 chassis) was manufactured. Production for the car began in 1989 and ended in 1998. If I had to guess, this video is probably from the early 90's. As you watch the video note that virtually everything is performed manually by the production workers including welding and glue application/window placement.

Cutting Edge: Intel's Fab 32 (Arizona)

Intel's Fab 32 is a Cutting Edge $3 Billion Dollar, 300mm Fab with a 45nm process that will go into production in the second half of 2007 (Now!). Intel's Press Release and video tell you almost everything you need to know:

"When completed, Fab 32 will become Intel's sixth 300-mm wafer facility. The structure will be about 1 million square feet with 184,000 square feet of clean room space. The project will create up to 1000 new Intel jobs at the Arizona site over the next several years. During the construction phase, more than 3,000 skilled trades people will be hired to work on the project.

Intel currently operates four 300-mm fabs that provide the equivalent manufacturing capacity of about eight 200-mm factories. Those factories are located in Oregon, Ireland and New Mexico. The company also has an additional 300 mm fab currently under construction in Arizona (Fab 12) scheduled to begin operations later this year, and one expansion in Ireland (Fab 24-2) scheduled to begin operations in the first quarter of next year.

Manufacturing with 300-mm wafers (about 12 inches in diameter) dramatically increases the ability to produce semiconductors at a lower cost compared with more widely used 200-mm (eight-inch) wafers. The total silicon surface area of a 300-mm wafer is 225 percent, or more than twice that of a 200-mm wafer, and the number of printed die (individual computer chips) is increased to 240 percent. The bigger wafers lower the production cost per chip while diminishing overall use of resources. Three-hundred-mm wafer manufacturing will use 40 percent less energy and water per chip than a 200-mm wafer factory."

Thursday, November 15, 2007

Car & Driver: VW's Transparent Factory Tour

The Transparent Factory is so impressive I decided it was worth posting two tours because they contain differing information. This Car & Driver tour includes much more information about the facility including a Q&A with Volkswagen that is very insightful into their thoughts about the VW Phaeton. Enjoy!

Sunday, November 11, 2007

Semiconductor Manufacturing Revisited

Because of the complexity involved in manufacturing semiconductor chips, I thought it would be worth providing some additional reading material in addition to the Applied Materials technical tutorials. Hardware Secrets and Tom's Hardware are both good sites for computer articles, so you may also want to check out their other articles sometime.

I have spent some time inside cleanroom environments, and they are quite an interesting place to be. The machinery is very expensive costing in the millions of dollars for many tools, and the air generally contains less than 10 particles ≥0.5 ┬Ám (microns) in diameter (200 times smaller than the size of a human hair). In layman's terms: If you have a job in which you work inside a cleanroom and you go to work and have allergies that morning, you will feel great inside the cleanroom because there are no particles (dust, pollen, etc.) to affect you! The air is kept clean by a huge air handler system that circulates a large volumne of air through HEPA filters that capture any particulate.

The last bit of information worth adding about semiconductor manufacturing is that it is a very complex environment from a production control perspective. Many products in the world are made by batch processes such as paper, chemicals, Coca-Cola, etc. On the other hand many products are made in discrete units with a lot of 1 (Cars are a good example). Semiconductors wafers are generally run together as a lot, but you sometimes split or merge wafers from that original lot and to a secondary lot. Additionally, in some tools you input a lot of wafers (say a quantity of 25), but the tool processes the wafers individually (these tools are fittlingly called single wafer processors). To make things even more difficult there are sometimes batch tools such as diffusion furnances (as shown on the right) where you place multiple lots into the furnace and wait several hours for the processing to finish. In summary, line balancing is very important and can make a large impact on how smoothly the wafers are processed!

So on to the articles:
How Chips are Manufactured brought to you by Hardware Secrets
Semiconductor Production 101brought to you by Tom's Hardware

Friday, November 9, 2007

Direct from Dell.... (Austin, TX)

Dell has a very fascinating history, business model, and supply chain strategy and the company is well known in the computer arena. Dell has had suffered from some issues over the last few years, but overall the company's operations are solid. This Dell Plant Tour Video is a little dated, but it is still very interesting to see the general framework at the Dell factory.

I happen to have studied Dell very closely since about 2001, and I was lucky enough to attend many presentations by Dell employees (and even know several). A few things to note are that as of 2004-2006 Dell operated under the following structure:
  • Laptops are made overseas (generally in Taiwain) by ODMs and air freighted to the US. This likely is due to labor savings and the density to price ratio.
  • Dell's Topfer Manufacturing Center in Austin, TX (TMC is building PN2) assembles Desktop PCs while the building next door (PN1) builds servers.

Additionally, since this video was made many changes have been implemented at TMC:

  • Barcode scanning has been changed to RFID on the totes that move around the factory.
  • Inventory is kept low because Dell does not keep a component inventory warehouse themselves. Their components are kept at consignment warehouses next door where the suppliers own the inventory until it is pulled for a customer order.
  • The Boxing line is still performed manually in some instances, but for certain platforms the High Velocity Kitting line completes the process via automation.

Thursday, November 8, 2007

Facility Showcase: BMW Leipzig

BMW has a short yet detailed video on their facility in Leipzig, Germany. It discusses the thought process that went into deciding facility attributes, and also provides some insight into BMW as a whole. The robotics in the body shop, paint shop, welding, etc. are amazing to watch, and the facility layout is also quite impressive. From what I can tell there are few if any paper travelers at Leipzig, and the operation itself appears world class.

Wednesday, November 7, 2007

Maserati: Italian Luxury

Maserati has an interesting history with ownership changing many times over the years. Within approximately the last decade, Maserati has gone from Fiat ownership, to join Fiat/Ferrari ownership, to full Ferrari ownership, back to full Fiat ownership (which is even more interesting since Fiat owns Ferrari). Over this period Ferrari helped reinvigorate Maserati and even developed the engine and drivetrain which is shared amongst the different models.

Maserati's plant tour shows some great examples of component commonality because their lineup appears to have many common parts with different exterior styling to address very specific customer segments.

  • Quattroporte - Four Door sedan (Quattroporte means four doors in Italian)
  • GranTurismo - Hard Top Coupe (2+2)
  • GranSport - Hard Top Coupe (2+2)
  • Gransport Spyder - Two Seat Convertible; No back seat
  • Coupe - Hardtop Coupe (2+2)

In fact, per the video the only difference between the the Quattroporte and Granturismo is that the Quattroporte has a larger grille. Maserati only manufactures ~7,000-10,000 vehicles per year, but would like to increase that number as sales in North America increase.

Some interesting points from the Maserati Plant Tour video that I noted as I watched it were that:
  • Maserati has implemented a JIT methodology, and looked to have much of their information on the Paper travelers that move with each car.
  • Around the 3 minute mark the spokeswoman notes that the vehicle being shown is definitively an american car because of the cup holders!
  • Engines are tested as modules by Ferrari and also Final Tested in a finished car up to 250 kpm. Each car is then driven 80km over city streets, mountain roads, and highways.
  • If you pick up your car at the Maserati showroom you will find your car covered with a blue cover so you can unveil your car, open your champagne, and party with Maserati! You also get your own photographer so you can be assurred the event is documented. Note: Sounds very similiar to Ferrari to me!