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Warehouse Simulation GameWarehouse Simulation Game7/16/20242During the Warehouse Simulation Game the principles of Lean are shown and we ask you to apply them on the spotThe game makes you think about what is value add for the customer,what is the employees role and value add in the process,and to let go of traditional roles and seemingly independent tasksThe goal is to make Lean more concrete and easier to applyIt is an interactive way to get you acquainted with the Lean principles.To understand the opportunity to improve quality,cost,and delivery performance in traditional warehousingTo gain an awareness of how JIT warehousing differs from traditional warehousingTo gain an appreciation of the following LEAN terms:-Eight types of waste-Continuous flow processing-Takt timeObjectives7/16/20243AgendaCase introductionPractice roundRound 1“Waste”Round 2“Flow”Round 3“Takt”Summary 7/16/20244Run(do)Redesign&Prepare(plan)Analyze(check)LEANtheory&examples(act)Structure of simulation rounds“Set up new round”“Design improved warehouse system”“Simulate operation”“Measure performance and identify issues”7/16/20245AgendaCase introductionPractice roundRound 1“Waste”Round 2“Flow”Round 3“Takt”Summary 7/16/20246Context7/16/20247You are 6,12,18,or 24 employees in a warehouse that produces kits for the consumer industryThe packing for these products requires special treatment,but has a similar setupThe company is currently unable to deliver the quality,cost,and delivery promises made to its customersOperationEach order is made from sheet of A4,1 photo film tube and 2 to 12 paperclipsEach operator has a workstation with 1 work instruction7/16/202481Receive and check packing2Cut packing into quarter sheets3Prepare box,add pick list4Pick pack items required for orderQCShip&5Check quality,seal order6Material handlerUnitsGoalNumber of good orders deliveredPercent wrong picked/packed items from total number of itemsGood orders delivered/number of employeesNumber of 1/4 paper sheets in production areaAverage throughput time(minutes)Indexed against round 1(=100%)Tracking key performance indicatorsKPIDescriptionCost or RevenueComment1.Quantity#of correct orders delivered Revenue 100 2.Late penalty#of orders late Cost-503.Quality penalty#of incorrect orders delivered Cost-504.WIPNumber of 1/4 paper sheets in production area Cost-105.Space#tables used Cost-100 6.Personnel#employees Cost-2007.Overhead Cost-300 Fixed8.Productivity#orders delivered/#employees9.Lead TimeTime it takes to finish first order7/16/20249AgendaCase introductionPractice roundRound 1“Waste”Round 2“Flow”Round 3“Takt”Summary 7/16/202410AgendaCase introductionPractice roundRound 1“Waste”Round 2“Flow”Round 3“Takt”Summary 7/16/202411Round 1:Traditional manufacturingEvery process has a batch size of 4Every batch must be prepared together and the material handler must be requested to deliver the complete batch to the next process(material handler can only take one batch at a time)Every operator should work as fast as possible1.Receipt5.Inspect/ship4.Pick packing3.Preparation2.CuttingLayout is by process2m6.Material handler7/16/202412Simulation round 1 Customers demand:24 orders in 10 minutes7/16/202413Time7/16/202414UnitsGoalNumber of good orders deliveredPercent wrong picked/packed items from total number of itemsGood orders delivered/number of employeesNumber of 1/4 paper sheets in production areaAverage throughput time(minutes)Indexed against round 1(=100%)Round 1 analysis:Tracking key performance indicatorsKPIDescriptionCost or RevenueComment1.Quantity#of correct orders delivered Revenue 100 2.Late penalty#of orders late Cost-503.Quality penalty#of incorrect orders delivered Cost-504.WIPNumber of 1/4 paper sheets in production area Cost-105.Space#tables used Cost-1006.Personnel#employees Cost-2007.Overhead Cost-300Fixed8.Productivity#orders delivered/#employees9.Lead TimeTime it takes to finish first order7/16/202415Round 1 analysis:Learning pointsWhat went well?What were the most significant problems?WIP levelsBottlenecksWaiting timeWorker stress/boredomTeam interactionDefect rateWhat were the root causes of these problems?How can these be resolved?QualityFirst pass yieldCostProductivityInventoryDelivery%on time to customerLead timePerformanceHow can performance be improved?7/16/202416InflexibilityWasteVariabilityReducing waste(“muda”)means lowering costs,improving quality and achieving consistent throughput(service level)Customer demandOutputCustomer demandOutputReducing inflexibility(“mura”)means becoming able to deliver to the client what he asks at the right time in the right amount (service level)Reducing variability(“muri”)means improving process reliability i.e.lowering cost and improving qualityThree lean enemies waste,inflexibility and variability address all operational targets7/16/202417Typical learning points7/16/202418The layout is poor:-Does not support this product-Prevents people understanding the system-Hinders communicationOperators often have nothing to do:-Batch manufacture-Waiting for material handler-System empty at start of shiftHigh levels of inventory tie up cash and create a quality riskDespite a lot of activity,the customer demand has not been metIt is a frustrating system to work inModule:WasteModule:One Piece FlowModule:Kanban8 types of wasteOverproductionProduce too much or too fastOver processingMore steps in the processes than requiredTalentNot fully utilizing the talent of all employeesMotionEvery motion that is not adding valueDefects/ReworkRepairing bad quality or mistakesTransportationMovements between processesInventoryEverything that is inexcess of the minimum required to perform the tasksWaitingWaiting for parts,until someone else has completes his cycleLean Introduction Training207/16/2024Continuous Flow Processing is often the first step to removing wasteThe traditional layout and configuration of processes and departments creates wasteContinuous flow processing7/16/2024211 piece flow and pull systemFinal customer dictates sequence and pace:pull systemCustomer-supplier relation at each process step(e.g.process 3 is customer of process 2 and process 3 is supplier of process 4)The system is using a 1 piece flow having standard 1 piece WIP Each process makes to replenish supermarket downstream(Kanban)Kanban Supermarket is identified as the place to put 1 single part between each process7/16/2024231.Receipt3.Set up2.Cut4.Pick pack5.QualityFinalcustomer AgendaCase introductionPractice roundRound 1“Waste”Round 2“Flow”Round 3“Takt”Summary 7/16/202424Round 2:Summary of design changes7/16/202425Improved layout(to optimize material flow)Continuous flow processing-Batch size of 1(from operator 3 onwards)-No need for internal packaging-Work is passed directly between operatorsMaterial handler freed up to study performancePull system implemented to control inventory and to allow customer to set pace-Each station works only if demand exists at the next downstream-Demand is signaled by empty Kanban space(WIP storage)-Customer pulls 1 order from last process every 25 secondsSimulation round 2 Customers demand:24 orders in 10 minutes7/16/202426Time7/16/202427UnitsGoalNumber of good orders deliveredPercent wrong picked/packed items from total number of itemsGood orders delivered/number of employeesNumber of 1/4 paper sheets in production areaAverage throughput time(minutes)Indexed against round 1(=100%)Round 2 analysis:Tracking key performance indicatorsKPIDescriptionCost or RevenueComment1.Quantity#of correct orders delivered Revenue 100 2.Late penalty#of orders late Cost-503.Quality penalty#of incorrect orders delivered Cost-504.WIPNumber of 1/4 paper sheets in production area Cost-105.Space#tables used Cost-1006.Personnel#employees Cost-2007.Overhead Cost-300Fixed8.Productivity#orders delivered/#employees9.Lead TimeTime it takes to finish first order7/16/202428Round 2 analysis:Learning pointsWhat went well?What were the most significant problems?WIP levelsBottlenecksWaiting timeWorker stress/boredomTeam interactionDefect rateWhat were the root causes of these problems?How can these be resolved?QualityFirst pass yieldCostProductivityInventoryDelivery%on time to customerLead timePerformanceHow can performance be improved?7/16/202429Module:Takt TimeModule:Workforce FlexibilityModule:Poka Yoke11)21)3456OperatorLine is clearly imbalancedWhat should be done?How much work should each person have?1)Assume these processes must remain batch operation1312331030Analyzing the problem of waitingTime per order,Seconds7/16/202431Solving the problem of waitingTime per order,SecondsThe correct pace of productionexactly achieves customer demand in the production time availableFor a balanced line with minimal waste,each process must complete one operation at this pace:the takt timeTakt time=Available time Customer demand=10 minutes*60 seconds 24 orders=25 seconds per orderTakt time=25s1)Assume these processes must remain batch operation11)21)3456Operator13123310307/16/202432Solving the problem of waitingTime per order,Seconds-Line BalancingTakt time=25s1)Assume these processes must remain batch operation11)21)3456Operator1312252325Auxiliary waste due to isolated batch processes1)Work elements have to be redistributed to ensure every process will produce at customer driven paceCross training will be necessaryProductivity will be improvedNon value added time focused at one operation:time may be usefully filled until further productivity improvements are possible7/16/202433AgendaCase introductionPractice roundRound 1“Waste”Round 2“Flow”Round 3“Takt”Summary 7/16/202434Round 3:Summary of design changesLine balanced to takt time Flexible workforceIn-station quality checks(Poka Yoka)7/16/202435Simulation Round 3 Customers demand:24 orders in 10 minutes7/16/202436Time7/16/202437UnitsGoalNumber of good orders deliveredPercent wrong picked/packed items from total number of itemsGood orders delivered/number of employeesNumber of 1/4 paper sheets in production areaAverage throughput time(minutes)Indexed against round 1(=100%)Round 3 analysis:Tracking key performance indicatorsKPIDescriptionCost or RevenueComment1.Quantity#of correct orders delivered Revenue 100 2.Late penalty#of orders late Cost-503.Quality penalty#of incorrect orders delivered Cost-504.WIPNumber of 1/4 paper sheets in production area Cost-105.Space#tables used Cost-1006.Personnel#employees Cost-2007.Overhead Cost-300Fixed8.Productivity#orders delivered/#employees9.Lead TimeTime it takes to finish first order7/16/202438Round 3 analysis:Learning pointsWhat went well?What were the most significant problems?WIP levelsBottlenecksWaiting timeWorker stress/boredomTeam interactionDefect rateWhat were the root causes of these problems?How can these be resolved?QualityFirst pass yieldCostProductivityInventoryDelivery%on time to customerLead timePerformanceHow can performance be improved?7/16/202439Analyzing opportunity for growth Time per order,SecondsCurrent takt time of 25 seconds 1)Assume these processes must remain batch operation11)21)3456Operator1312252325Company now has immediate opportunity to meet higher demand with existing trained workforceBenefits of flexible line can be captured by reconfiguring with more personnelLine needs to be rebalanced at new takt time,and further cross training will be necessary7/16/202440Rebalanced line for growth in round 4Time per order,Seconds1)Assume these processes must remain batch operation11)21)3456Operator1312252325Productivity will be further improved because of greater utilization of batch processesFrom 25s.To 15s.!7/16/202441Review of ObjectivesTo understand the opportunity to improve quality,cost,and delivery performance in traditional warehousingTo gain an awareness of how JIT warehousing differs from traditional warehousingTo gain an appreciation of the following LEAN terms:-Eight types of waste-Continuous flow processing-Takt time7/16/202442AgendaCase introductionPractice roundRound 1“Waste”Round 2“Flow”Round 3“Takt”Summary 7/16/2024438 types of wasteOverproductionProduce too much or too fastOver processingMore steps in the processes than requiredTalentNot fully utilizing the talent of all employeesMotionEvery motion that is not adding valueDefects/ReworkRepairing bad quality or mistakesTransportationMovements between processesInventoryEverything that is inexcess of the minimum required to perform the tasksWaitingWaiting for parts,until someone else has completes his cycleLean Introduction Training447/16/2024
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