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Production Control &

Logistics
Automotive Standards & Best Practices
Material Flow Management & Organization /
Production Planning Strategy (PC&L)

World-Class Standards & Best Practices of Operational Excellence

© Lean & Mean Consulting. All rights reserved. 2016
2015
Training Objectives
 Understand the function and philosophy of the PC&L

 Learn how to anticipate variability in demand and ensure high

responsiveness to any changes in schedules

 Learn why leveling production is needed to optimize utilization

of the resources

 Get familiar with key elements of the production control: S&OP

and MPS

 Learn the standards and best practices of the material flow

organization

 Learn the principles of leveling supplies and optimizing logistic

organization

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Agenda
1. Introduction to PC&L
2. Customer Relationships & Production Leveling
 Production Levelling
 Sequencer & Withdrawal Plan
 Master Production Schedule (MPS)
 The Sales & Operation Plan (SOP
3. Internal Flow Management
 Reception Area
 Flat Storages & Overflow Stock Management
 Line Supply with Small Train
 Flow Racks
 Withdrawals, Shipment Preparation & Pool Stock
 Handling Operation Standardization
4. Supply Leveling & Logistics Optimization
 Supply Leveling
 Stabilize the suppliers
 Increase the deliveries frequency
 Use of small containers

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Understand the PC&L function
5 main PC&L principles

1. Withdrawal organized by the customer

2. Stocks are located by the supplier site

3. Frequent delivery with mix of references

4. Standardize processes in the logistics

5. „Leveling” of customer needs at medium and long term

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 Control the Lead-Time
The Leveling
 Leveling of Production
 Leveling of Supplies

Leveled orders Our plant High demand variability

FG shop-stock +
RM & BOP

pool-stock
Stock

Supplier

Filter:
Customer

Leveled production

Objective: Constant level of production, and

NOT constant level of stocks!

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Understand PC&L function
Reduction of the Lead Time

 Major components of Lead Time that generate stocks:

1. Overproduction
2. Lack of flexibility
3. Lack of reliability
4. Poor organization of the Production and the PC&L
5. Quality Problems
6. Irregular Withdrawals and Deliveries

 Exceptional risks
 Which ones?

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Reduction of the Lead Time (1)
Overproduction

1 – Production over needed demand

 Gap between
production and
customer needs = NO respecting the rules of
TAKT-TIME
 Unstable production
rhythm

 Pull System + Production Leveling

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Module. 04

Material Flow Management & Organization / Production Planning Strategy (PC&L)

Simulation game
The Batch Size / Withdrawal Frequency
Stage 1.
• You produce three products: yellow triangles, green circles and blue squares
• Production batch size for the first stage is 4
• You have three options for delivery / withdrawals frequency:
• 1 / day
• 2 / day
• 4 / day
Task:
• Calculate the maximum stock before loading any truck (how many pieces in
total).
• Fill in just the grey fields only.
Note:
• Truck load reflects customer order and must be respected.
• Trucks come to pick up parts in due times (at 9.00, 12.00, 15.00 and 18.00)
• Depending on batch size and withdrawal frequency, you may need to have some
stock available before production begins (safety stock)

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Simulation – S1
The batch size / Withdrawal frequency
Max stock
before loading

Batch size : 4
Stock before
loading

1 delivery / day

Stock before
loading

2 deliveries / day

Stock before
loading

4 deliveries / day

Stock needed at the

beginning of the day

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Production Control & Logistic (PC&L)
Customer Relationship & Production Leveling

Customer Relationship &

Production Leveling

GROSSDOCK

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 Production leveling
The principles to stabilize the Production (1)

Sequencer
Truck Schedule

C1 C2 C3

stabile
6h 8h 10h 12h 14h
TT

TT
A Customer

TPA

Constraints!
Variability departure time due to potential issues related to:
- Customer
- Forwarder
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Production leveling
The principles to stabilize the Production (2)

Sequencer Constraints!
The demand mix and
quantities fluctuate!

TPA

A
Customer

We need a
stabile Takt- To absorb
Time Variations of
Pool stock Qties/ref

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The Sequencer
A mean to express a mixed and leveled Customer Demand

 Shares the workload over the day / shift

 Generates frequent withdrawal from Shop-stock & brings the

customer demand information to the production lines
(Takt Time transmission)

 Organizes truck preparation area ( TPA )

 Manages the flows to and from Pool Stock

 Initiates Indirect Labor Standardization (handling)

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The Master Production Schedule: MPS
Customer Demand Treatment & Leveling
ZOOM
c c c c c
B B B BB
AA A AA
M T W T F
C
C C
C C C C C
C
C
B B B
B B B B B
B B
leveling
A A A A A A A A
A A
W1 W2 W3 W4 W5 W1 W2 W3 W4 W5
Customer demand Decided Production

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The Master Production Schedule: MPS
Objectives

 Decide the Production (Part N° & Quantities) for the ongoing

week.

 Satisfy 4 Constraints (sorted according priority):

 Achievable
 Answer the Customer Order
 Respect the SOP
 Leveling the production activity

 Maintain constant production level with FG stocks fluctuating

between „min-max” levels.

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 What is S&OP?

S&OP - Sales & Operations Plan

is a cross-functional business plan that involves sales
and operations:
 Sales represent Demand
 Operations represent Supply

Which time horizon?

 The horizon should be longer than longest lead-time of one of the critical resources. For instance:
 Human Resources: recruitment time, necessary training, etc.
 Space for production: time for construction or extension, adaptation, equipment, etc.
 Machines: time for capital availability (CAPEX), delivery lead-time, assembly, run & rate, testing, validation
 Raw materials: suppliers capacity, flexibility, delivery lead-time, etc.
 Benchmark: 12/18 months (min. 6 months)

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 Sales & Operations Planning
What are the inputs and outputs of the S&OP process?

„input”

From Market:
•Marketing Forecast
•Customer Forecast
From Exterior:
•Suppliers Capacity STANDARD
From Operations:
•New Product Launches S&OP PROCESS
•Plant Capacity
•Human Resources Capacity
„output”
• current month S&OP
•Previous S&OP
• compared to prior S&OP
•Initial Inventory Level
From Finance: • compared to budget
•Financial Targets • goal : 95% for each To Customer
•Budget section, every month •Shipment plan
• one set of figures To Exterior
•Procurement plan
To Operations
•Operations plan
•Load balance between sites
•Inventories plan
•Resources plan
•Action plans
To Finance
•Revenue plan
•Budget (once a year)
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Sales & Operations Plan: SOP
Objectives
 To anticipate & to adapt: medium term vision & plant steering
 Vision of volumes over 6 months (or longer) by product family

 To define the level of production (by family)

 Customers Consumption (volumes, start-up & end of production)
 Capacity Equipment

 To define the plant’s organization at medium term

 Define the working calendar according to customer calendar ( working days in a
month)
 Plans for repairing, renovation and necessary technical downtime - maintenance
(TPM)
 Identify the necessary human resources (number of operators + staff (indirect))
 The supply of critical resources (raw materials and materials, but also the demand
on the media) and to take into account the constraints and their Lead-Time

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Production Control & Logistic (PC&L)
Material Flow Organization

Internal Flow
Management

CROSS-DOCK

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 Production Control & Logistics
Internal Flow Management

Agenda:

 Internal Flows: General Organization of the Layout

 Reception Area
 Flat Storages & Overflow Stock Management
 Line Supply with Small Train
 Flow Racks
 Withdrawals, Shipment Preparation & Pool Stock
 Handling Operation Standardization

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Material Flow Organization
Lay-out & Flow
Incoming zone
Sequencer
truck truck truck

Empty packaging
Pool-stock
1 2 …

TPA zones
queue
Supermarket

N°1

Often and regular picking

Line A
Shop-stock

Line B
N°2 Shop-
stock

Finish goods flow

N°3

Line D
Line C

Shop-
Heavy stock
equipment
Frontal feeding by small
train

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 Reception area
Flow & lay-out of the Flat Storage / Supermarket

Incoming Dock 1 Empty packaging Dock 2 Empty packaging

Inspection

Train 2
Empty packaging

Train for supply

Train 1

Train of reception

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 Supermarket Management (1)
Supermarket Organization: dynamic racks supply

Reception area

Pallets loaded on small train

Transport of
Small train feeds the supermarket
Small boxes
With small boxes

SUPERMARKET Transport of
Overflow stock pallets

SUPERMARKET

Pallets that do not fit in the supermarket

are stacked in the overflow stock

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 Line supply with small train (1)
Small train Cycle
Small train feeding the line with
small boxes and evacuating
empty boxes
Freq.: 30 – 50’
The small train replenishes the
line thanks to withdrawal
Kanbans
SUPERMARKET
The small train driver can decant
a few components from their
boxes if:
- There is time-gain
- No quality risks
SUPERMARKET
The capacity of assembly
line flow racks is about
twice the small train cycle
time
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Line supply with small trains
Characteristics

 Optimize the standard work time:

 Make the time measurements of the work elements (movements,
handling).
 Reduce movements.
 Eventually, line several loops together (ex: with removal of rubbish).

 Use one train to supply several lines.

 Loops organized by the logistics.

 After a HOSHIN workshop the train activity must be reviewed

and adjusted.

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Small train. Few examples

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Flow Rack
Application of Kaizen in line supply

 Search for the best locations for components.

 Reduce variability:

 Reduce useless movements, blockages, catching, difficulties.

 Optimize the supply of components (distance, sliding in the flow racks).

 Optimize the “flow rack” capacity according the cycle of small

train.

 Progress step by step & optimize continuously

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Flow racks - Benchmarking

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 Withdrawals & Shipment Preparation (1)
Withdrawal flow of FG & WIP

The withdrawal train takes the WK

from the Sequencer to pick the containers
out of the Shop Stock Shop Stock Shop Stock Shop Stock
(Frequency to be decided on. In a Lean
factory it takes between 15’ to 30’)

WK
WK

The forklift truck or small train brings the

Sequencer
products into the TPA (Truck Preparation
Area) or into the Pool Stock according to
the WK. Decision is made by Logistics
through placing the right WK in the
Sequencer
WK
WK
POOL STOCK

TPA

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Handling operation standardization
Principles

 „A full for an empty”

 No empty runs

 No handling inside the production lines

 Leveling of workload

 Standardization allows the optimization (organization = cost)

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Training Modules of PC&L

GROSSDOCK

Supplies Leveling &

Logistics Optimization

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Supply Leveling
Establish the Transport Scheme and the Transport Program

 The Transport Scheme (TSc) defines:

 The route (main route et sub route) followed by each carrier from
Supplier to the factory
 The assignment of the docks to the routs

 The Transport Program (TP) defines:

 The delivery times
 The number of trucks
 The workload of the trucks drivers
 Firm 1 month, horizon 6 month
The factory

A B C
1-6-X
Main route

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Stabilize the Suppliers
Manifest

 Manifest (pick-up sheets, loading list):

 It is the truck packing list expressed by part Number in packaging units (PU).

 It is as well the document to check-up loading & shipment. It is used to keep

tracks off any shortage.

 It is expression of a firm order

 It is the proof of loading

 It is the transport documentation (Delivery Note)

 It is reception document (physical or computerized)

 The manifest allows to control the BOP physical flow

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Stabilize the Suppliers
Deliveries Follow Up

 Check deliveries against manifest

 Report shortage

 Appraise suppliers MPM

 Repot MPM towards Suppliers

 Follow up action plan

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Increase the deliveries frequency
Current situation for RM & BOP transportation

Suppliers

A 1-1-X

B 1-1-X

The Factory

C 5-3-X 1-3-X
Customer

D 5-2-X

E 5-3-X

CURRENT SITUATION
Separated Flows, few deliveries: loss of synergies and of
savings

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Increase the deliveries frequency
Establishing a Milk Run: Requisite

 Project Management structure driven by PC&L with

purchasing involvement

 S&OP / MPS / SP / TP

 Supply Leveling & Manifest Management

 „E” (Ex-works)-group of incoterms transportation

 Needs expressed in packaging units

 12h access to supplier shipping area

 Knowledge of the nationals laws

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Use of small containers
Principles

The aim is to supply the line work stations in small

containers.

 Purchasing negotiates, with support from the material planners,

the transition to small containers.

 Use reusable (returnable) containers.

 HOWEVER, In some cases it is more reasonable to:

 Repack. Only a small container may enter the supermarket.
 Supply in disposable (one-time) containers. In this case, the supply to work stations
without loss of time and waste removal must be guaranteed.

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Use of small containers (1)
Recommendations
1. The box has at least one "standard" side measuring 200, 300 or 400mm (enable to
standardize the width of supermarkets and flow racks)

2. The height and the other side (see 1st criteria) of the box, are designed to optimize
the ratio "Number of Parts / Box Volume"

3. The surface of a standard pallet can be exactly filled with a set of boxes

4. One part number per box (left and right detached)

5. Full box weight does not exceed 12 kg (and meets Health & Safety criteria)

6. The box is stackable

7. The box is solid enough to do project life time rotations

8. The box has plain walls (recommended)

9. The box has a flat bottom

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© Lean & Mean Consulting. All rights reserved. 2016
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