2007 NOV 6/8

LEAN MANUFACTURING AND SUPPLY

CHAIN INTEGRATION FOR
Campus da FEUP
CUSTOMIZED PRODUCTS
Rua Dr. Roberto Frias, 378
4200 - 465 Porto
Portugal Concepts and examples
T +351 222 094 000
F +351 222 094 050
www@inescporto.pt
www.inescporto.pt JOSÉ CARLOS CALDEIRA
DIRECTOR
(jcc@inescporto.pt)

© 2007
Presentation Structure

• Context (customized products)

• The impact and the challenges

• Some concepts

• Examples

• Conclusions

Capital = 1250 k€

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Advantages and requirements of LEAN (some)

• Minimize stocks • Model stability

• Minimize handling • Production stability

• Fast throughput time • Continuous improvement

• Easier planning, monitoring • .....

and control

• High efficiency

• .... Capital = 1250 k€

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Context of customised products

LEVEL OF CUSTOMER ENGINEERING

CUSTOMIZATION INTEGRATION PROCESS

Parameterization Selects from pre- Pre-sales engineering

defined list of options
(cars)

Best fit Customer data is used Pre-sales engineering

to select the best
(clothes) “size” from existing list

Custom made Customer data is used Pre-sales and

to develop a unique
(special cutting tools) product pos-sales engineering
Capital = 1250 k€

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Impact of “Custom Made”

Make-to-Order process of pre-defined products (simplified)

Customer

Product Dev.
Sales Planning Purchase Production Distribution
(Engineering)

• Response time doesn’t includes engineering activities

• Some pre-sales purchasing and production activities are possible
• Customer orders can be grouped in production orders

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 Impact of “Custom Made”

Make-to-Order process of custom made products (simplified)

Customer

Product Dev. Product Cust.

Sales Planning Purchase Production Distribution
(Engineering) (Engineering)

• Customer order includes specific product/customer data

• Response time includes engineering activities
• Purchased products may depend of engineering activities
• Each customer order is a unique production order (CAD/CAM/CNC, etc.)
• Etc.

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Impact of “Custom Made”

Major transfomation in almost all processes

• Sales become more complex (from catalog to product or customer
specification)
• Engineering may become a bottleneck (is part of response time)
• Purchase of materials and components may also require unique
specifications
• Big pressure in terms of production planning and control
(minimization of set-up, shorter cycle times, etc.)
• Huge complexity increase in terms of internal and external logistics
• Etc.

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Challenges of “Custom Made”

IN THIS CONTEXT, WHAT DOES IT MEAN “LEAN”

• Stock minimization: results from the combination of unique
products and fast response time
• Handling minimization: materials flow simplification and
automation
• Throughput time: process integration (from customer to suppliers);
information flow automation
• Planning and logistics: more complex (no miracles); integrated
management of materials and information flows
• High efficiency: simplification and automation; emulate LEAN
concepts in this (very) different environment

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 Concepts for Custom Made – Internal Logistics

OTHER SUBCONTRACTED
PRODUCTION PLANTS
CUSTOMERS
PLANTS

WAREHOUSE CUT
MATERIALS WAREHOUSE UPPERS

FINISHED PRODUCTS
Cut materials Uppers
RAW MATERIALS

WAREHOUSE
WAREHOUSE

CUTTING STITCHING ASSEMBLY

DEPARTMENT DEPARTMENT DEPARTMENT
Shoes
Components

Components
WAREHOUSE COMPONENTS
(SOLES, INSOLES, ETC.)

SUPPLIERS

SUPPLIERS

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 Concepts for Custom Made – Internal Logistics
Planning & Product Purchasing
scheduling engineering Subcontracting Distribution

ILMSS

OTHER SUBCONTRACTED
PRODUCTION PLANTS
PLANTS
CUSTOMERS
Uppers

Materials DINAMIC WIP STOREHOUSE

SUPPLIERS (UPPERS, SOLES, ETC)
Components

AUTOMATIC STOREHOUSE
AUTOMATIC WAREHOUSE

FINISHED PRODUCTS
RAW MATERIALS

CUTTING STITCHING ASSEMBLY

DEPARTMENT DEPARTMENT DEPARTMENT
Cut materials Uppers Shoes
Materials

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Concepts for Custom Made – Internal Logistics

LEAN MANUFACTURING AND SUPPLY CHAIN INTEGRATION

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Concepts for Custom Made – Internal Logistics

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Concepts for Custom Made – Internal Logistics

Simulation for 1000 pairs

Containers Stock Summary

3500,00
Nº of Containers in Stock

Pairs/Lot Mov/Minu Stock

3000,00
2500,00
2000,00 10 1,25 300
1500,00
1000,00
5 2,50 600
500,00
0,00
10 9 8 7 6 5 4 3 2 1 1 12,50 3000
Pairs/Lot

Containers Flow Summary

14,00 Pairs/Lot Mov/Minu

12,00
Movements/Minute

10,00 10 1,67
8,00
6,00 5 3,33
4,00
2,00 1 16,67
0,00
10 9 8 7 6 5 4 3 2 1
Pairs/Lot

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Concepts for Custom Made – Production

Stitching Department
(70’s)

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Concepts for Custom Made – Production

Stitching Department
(80’s)

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Concepts for Custom Made – Production

Stitching Department
(90’s)

• Full automatic storage

and distribution system
• Intelligent balancing
and scheduling system
• Full production
management system
• Some posts feed cells

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Concepts for Custom Made – Production

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Concepts for Custom Made – Production

Simulation Model
Line
Status

Operating Operations
Sequences Balancing

Results New Configuration

Production Line

Balancing

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Concepts for Custom Made – Production

Management software

• Simulation
• System optimization
• Line configuration
• Work sequencing
• Working post configuration
• Execution monitoring
• Problem detection
• Full production control
• Integration with
management systems

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Concepts for Custom Made – Production

New Functionalities

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Concepts for Custom Made – Supply Chain Integration

ERP SYSTEM 1
Manufact. CAD SYSTEM 1 1 to 2 days
SALES ENGINEERING PLANNING PURCHASE PRODUCTION

Purchase
order 10 to 15 days

Supplier
SALES ENGINEERING PLANNING PRODUCTION

CAD SYSTEM 2
ERP SYSTEM 2

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Concepts for Custom Made – Supply Chain Integration

ERP SYSTEM 1
Manufacturer CAD SYSTEM 1

SALES PURCHASE ENGINEERING PLANNING PRODUCTION

Automatic information exchange

Co-ordination between production and engineering in both companies
JAVA / INTERNET application

Supplier SALES ENGINEERING PLANNING PRODUCTION

CAD SYSTEM 2
ERP SYSTEM 2

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Concepts for Custom Made – Supply Chain Integration

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Results

• From orders of thousands of units to few units

• From few models to hundreds of different models
• From large batches/lots of few models in production to hundreds of
lots of many different models, each with few units
• From response time of months to days
• From mass production and cost competition to customized
production and service level competition (without forgetting cost)

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Conclusions

• Aiming at higher added value products and services, several

companies are moving towards customization.
• This brings new challenges and needs in allmost all company’s
business processes.
• Conventional organizational models, systems and technologies
have limitations to deal with these requirements
• LEAN concepts can help the design and implementation of new
business models and systems
• In some areas, they need to be “translated” to this specific context

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 THANK YOU FOR YOUR ATTENTION

LEAN MANUFACTURING AND SUPPLY CHAIN INTEGRATION

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