ME FW

Manufacturing Excellence, Footwear Sourcing

Refreshment Discussion March 2017
EFFICENCY IS DRIVEN ON 4 STRATEGIC LEVELS

TECHNOLOGY PRODUCT ENGINEERING

Efficiency

LEAN & PROCESS OPERATION EXCELLENCE

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 EFFICENCY IS DRIVEN ON 4 STRATEGIC LEVELS

TECHNOLOGY PRODUCT ENGINEERING

Define strategic technology direction. Maximize technology adoption &
Successfully develop & deploy implement best practice product
technologies according business construction for most efficient
requirements. manufacturing.

Efficiency
Standardize production cells & Drive interruption free and high
management systems for effective quality output production. Enable
application of process & quick production ramp up and
technologies. minimize change over time.

LEAN & PROCESS OPERATION EXCELLENCE

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 ADIDAS STANDARD CELL & SME LEVEL 1 JARGONS

A MINI CELL is a work place design following LEAN principles to optimize production flow & efficiency through
balanced waste free processes. It simplifies cell management, is highly flexible & identifies problems faster.

1. Pace: TT ≥ 60” 2. EOLR ≤ 60 pairs/hr 3. LLER ≥ 85 %

Mini Cell Mini Cell Layout

TT : 72 sec
EOLR : 50 pairs
# Operator : 20 MP 4. Key features
• TAKT TIME
• SINGLE UNIT FLOW
• PULL PRODUCTION
• STATE OF THE ART EQUIPMENT
• OPTIMIZED WORKPLACE/ERGONOMICS
• VISUAL WORKPLACE
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AGENDA 1. LEAN MEASURABLES

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WHAT IS LEAN MEASUREMENT

Lean Measurement is a lean calculation to measure the effectiveness of

manufacturing processes related to waste elimination along the value stream.

The purpose of lean measurement is to manage and optimize the process flow
to strive the perfection through continuous improvement

The principle is to eliminate waste

Lean measurement is a Step ZERO in doing continuous improvement through PDCA

(Plan-Do-Check-Action).
Know our target
Continuous improvement

Know our baseline

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8 TYPES OF “MUDA” WASTES

• Transportation
• Inventory
• Motion
• Waiting
• Overprocess
• Over Production
• Defect
• Knowledge disconnection

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WHAT ARE LEAN KPI’S
Level 1 Level 2
KPI Definition Management Production Floor
1 TT Takt Time X
2 EOLR End Of Line Rate X
3 PPH Pair/Person/Hour XX X
4 VAR Value Added Ratio XX -
5 RFT Right First Time XX X
6 LLER Lean Line Efficiency Rate X
7 COT Change Over Time X
8 DT Downtime X
9 MLT Material Lead Time XX X
Overall Equipment XX
10 OEE
Effectiveness

8
TAKT TIME (TT)
• The pulse of the factory in seconds.
• It is not Cycle Time.
• It is a measurement of the speed at which the products or services are being made successfully
to satisfy the customer demand.
• It is only a calculation data, not reflecting the real capacity

Production TT calculation = Example =

Net operating time per day
Total daily required quantity of output
9 hour /day : 8 net working hours /day
Target output : 1200 pairs /day
8 * 3600 sec
TT= ------------------- = 24 sec/ pair
1200 pair

Takt time is the speed of product delivery

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 TAKT TIME (TT) AND CYCLE TIME (CT) ARE DIFFERENT

Cycle Time (CT)：

The ACTUAL time utilized by an operator to complete one cycle of operation, including working, loading/unloading, inspecting, etc.

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 LINE BALANCE REQUIRE TAKT TIME AND CYCLE TIME

The 8 operators necessary to produce one unit can be theoretically distributed among 5 operators and still meet the Takt time.

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PRODUCTIVITY PER PERSON PER HOUR (PPH)
• A Measurement of effectiveness of the overall production performance
• Effective way to measure and benchmark factories

PPH = Example =
Output per day Productivity per Person per Hour @ Stitching Line
Production hours * Actual no. of Output : 800 unit / day
workers Working hour : 8 hours / day
# Operator : 125 Operators
OR
800
EOLR (End of Line Rate)
PPH = ------------ = 0.80 pairs/person/hour
------------------------------
125 * 8
Actual no. of workers
EOLR is the total output of the line per day.

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LEAN LINE EFFICIENCY RATE (LLER)
• The Principle : How efficiently the optimum workload is established in the production line
• The improvement in LLER represents optimum use of workforce
Only can be measured
when production line
achieve target
LLER = Example =
TCT TT
Ideal workers required
Actual no. of Workers * 100%

3600 sec
TT = -------------- = 25 sec.
144 pairs
159 sec 6.36
Ideal Operator = ------------ = 6.36 LLER = ------- * 100% = 63.6%
25 sec 10
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 RIGHT FIRST TIME (RFT)
• Right First Time is a core Lean measurement that evaluates percentage of an operation (or series of
operations) ability to produce products without the requirement of any additional re-work.
• RFT is measured to see how good a process under control. The higher RFT value means less variation
in the process.
RFT =
No. of pairs checked at evaluation point – total defect (rejected, rework, repair)
* 100%
No. of pairs checked at evaluation point
Evaluation point : Selected points in the process where pairs are evaluated for quality guidelines.
Example =
OR No of pairs checked at EP : 100 pairs
Defects : 10 pairs ;
100-10
EOLR RFT @ EP = ------------ * 100% = 90%
---------------------------------------------- 100
OR EOLR = 90 pairs
No. of pairs checked at evaluation point 90
RFT @EP = ------------- * 100% = 90%
90+ 10

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RIGHT FIRST TIME (RFT)

EXAMPLE OF CALCULATING RFT ACROSS MANY EVALUATION POINT (EP)

Article : ABC

RFT at Evaluation Points (Cutting, Stitching Preparation, Assembling)

RFT @ Cutting : 99.0% , RFT @ Preparation : 96.0% , RFT @ Stitching : 95.0% , RFT
@ Assembling : 98.5%
What is my RFT
performance?
RFT for article ABC:

99% x 96% x 95% x 98.5% = 88.9%

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MATERIAL LEAD TIME (MLT)
• Measures how fast the raw materials are being converted into finished goods (measured in days)
• Focuses on non-value adding activities from the time Raw materials are released from the
Warehouse into Production shop floor until it is delivered to Finished Goods warehouse

Total WIP in the system Example =

MLT = WIP in prod floor = 28000
End of Line rate (EOLR) Input of Raw materials = 24000
Waiting for carton completion = 4000
For WIP, count the total unit number : Total WIP = 56000
1. Released from Raw Material warehouse to Production line
2. Currently being processed (WIP in Safety stock, repair,
inspection, processed)
EOLR = 10000 pairs/day
3. Finished unit number in packing and inspection
56000 pairs
MLT= ------------------- = 5.6 days
10000 pairs /day

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VALUE ADDED (VA),NON VALUE ADDED (NVA) & NON VALUE ADDED
BUT NECESSARY (NVAN)

Value added activity

This is what our customer is willing to pay for. Activities which transform raw materials or information to
fulfill the customers needs.

Non-Value Added activity

“Muda” or waste is activity the customer is not willing to pay for. These activities demand time, space or
materials that add no value to the customer

Non-Value Added but Necessary activity

“Muda” or waste activity the customer is not willing to pay for, but must be performed to complete the work
i.e. quality inspections etc.

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VALUE ADDED RATIO (VAR)
• VAR is a measurement to showcase the large portion of wastes reside in the manufacturing system.
The lower the VAR, the more waste is in manufacturing system.
• It is measured in percentage (%) & is measured in VSM (Value Stream Map)

TCT Example =
VAR = * 100% Total Cycle time = 1130 sec
MLT MLT = 3.2 days or 92,160 sec
* 1 Day equal to 8 working hour = 8 x 3,600 = 28,800 seconds / day

* In a group of processes or a single process:

1130 sec
VAT (value added time) VAR = * 100% = 1.23%
VAR = 92160sec
TCT

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VALUE ADDED RATIO (VAR)
Cutting Preparation Sewing Assembly

Cutting need 4 seconds to
cut 1 unit. of material., but
need ½ day to send whole
batch of material to next
process i.e.(Preparation)
Preparation need 125 seconds
to prepare 1 unit. of material,
but need 0.7 day to send
whole batch of material to
next process (Sewing)
Sewing need 600 seconds to
prepare 1 unit. of material.,
but need 1 day to send whole
batch of material to next
process (Assembling)
Assembly need 400 seconds
to prepare 1 unit of product,
but need 1 day to send whole
batch of product to next
warehouse

CT : 4 sec CT : 125 sec CT : 600 sec CT : 400 sec

LT : 0.5 day LT : 0.7 day LT : 1.0 day LT : 1.0 day

Total Cycle time ( TCT) : 4 sec + 125 Sec + 600 sec + 400 sec = 1130 sec
Material Lead time (MLT) : 0.5 day + 0.7 day + 1.0 day + 1.0 day = 3.2 day = 92160 sec
1130 sec
VAR = * 100% = 1.23%
92160sec

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VALUE ADDED RATIO (VAR)
In a group of processes or a single process:

Take and put main material on machine = 3 seconds

Stitch the stripes = 585 seconds
Re-check stitched result = 10 seconds CT : 600 sec
Put down nearby before the next process= 2 seconds LT : 1.0 day
Sum = 600 seconds

NVA , NVAN = 3+10+2 = 15 sec

VAT = 585 sec

585 sec
VAR = * 100% = 97.5 %
600sec

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LEAN MEASURABLE ARE LINKED WITH KEY BASIC EXPECTATIONS

SPEED COST QUALITY

VAR PPH RFT

HOW FAST THE PRODUCT HOW EFFICIENT HOW STABLE ARE
FLOWS THROUGHOUT VSM IS THE PROCESSES
MANUFACTURING

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DOWN TIME (DT)
Definition:
Period of time when a machine or equipment is not working or not functional.
Unit: Sec or Min or Hr.

Type of Downtime:

• The time when the factory is not intended to be in

Planned stop production (include time when no order)

• The time when the equipment has stopped

Unplanned stop producing when it was scheduled for production.

Any unplanned stoppage at the line and off the line

Downtime
Available time - Uptime

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PLAN AND UNPLANNED STOP CATEGORY

Planned stop category: Unplanned stop category:

Weekend/ Insufficient
No Schedule Set up
Holiday personnel

Meeting/
Break/ Process Equipment
Training/
Lunch interruption Breakdown
Tours

General Preventive Jams or

Insufficient
Cleaning Maintenance minor
Material
stoppages

Capital Support
Development Testing system
Improvement
failure

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PLANNED STOP
Category of planned stop:
No Type of loss/ stop Definition Example
Production is not running on Saturday and/or
Production is not scheduled during weekends Sunday where operations do not run 7 days/
1 Weekend/ holiday week
Production is not running during the company's
Production is not scheduled during holidays
paid holiday
The equipment is not scheduled for production
Equipment is not scheduled for production due due to lack of demand or unusually good
to lack of demand performance has resulted in schedules
2 No schedule
completed earlier
Shift is not scheduled because the capacity is
Production schedules do not require a third shift
not needed
Management decisioin to stop production when
3 Break/ lunch unrelieved break/ lunches
operators take breaks or lunches
The process must stop when operators are
unrelieved meeting/ training
required to be in meetings
The process does not produce product for sale
Meeting/ training/ equipment use for operator or staff training
4 while training is being conducted
tours
Equipment has been shut down because of
The process does not produce product for sale
visits by people who do not normally work in
while tour is being conducted
the production area
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PLANNED STOP

Category of planned stop:

No Type of loss/ stop Definition Example
Cleaning done for general housekeeping
The equipment requires a 2 day shutdown for
5 General cleaning reasons, and there is some flexibility around
general cleaning each year
when and how much is done
Preventive Equipment is taken out of service for
6 Equipment is shut down for annual PM.
maintenance scheduled preventive maintenance (PM)
To accommodate a machine/ software revision The equipment will be shut down to
7 Capital improvement
or upgrade accommodate the installation for new drives
Planned use of equipment for experiments or Process running to improve performance or
8 Development test to support development activity where the assist in the development of new or improved
product is not sold products where the product is not be sold

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UNPLANNED STOP

No Type of loss/ stop Definition Example

Preparing the equipment to start production.
Start up Warm up time, process initialization, stabilization
time, etc
Preparation at the end of production run to bring
Shutdown the process to a stop and/or prepare it for a
period of inactivity.
Changing from one product, size, lot, program,
1 Set-up Change over
cutting tools, material, etc
Downtime required to clean equipment between
production runs, lots or products. Where the
Cleaning
cleaning is required to prevent contamination of
the next product
Intermittent operation of a portion of a machine
Removal of product
to remove product
Operators or mechanics are missing that are
Insufficient No operator or mechanic to run or fix
2 required to keep the process running or restore it
personnel the machine
to running condition after breakdown

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UNPLANNED STOP

No Type of loss/ stop Definition Example

Processing problem that results from A plugged filter causes production to stop. The
Process
3 a failure of the process to continue as detection of bubble stopped the process. The batch
interruption
expected of chemicals did not precipitate as expected
Failure of a mechanical, electrical part and software
Equipment Production is interrupted due to an
4 of the equipment that must be repaired before
breakdown equipment failure
production can resume
A production supply is not available because: a
supplier did not deliver, a planner did not order,
Insufficient Lack of supplies needed to keep the transportation failed, a delivery system failed, the
5
material process running supply was bad quality, the input buffer was empty,
wrong material delivered, waiting material from
upstream process, etc

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UNPLANNED STOP

No Type of loss/ stop Definition Example

Minor short duration interruptions of the process
Jam & minor that are quickly and easily corrected that may or
6 Short duration machine stoppages
stoppage may not be recorded and the root cause is not
always known.
Requirement to wait for the result of a test prior to
Production is stopped while making a test starting or resuming production. This could be a
7 Testing
or waiting for the test result start-up test or retest following repair or an
assessment stop
Downtime resulting from the failure of a computer
Failure of an information system system, such as a planning, execution, or process
Support system monitoring/ control system.
8
failure An essential utility is unavailable such as
Utility failure electrical power, water, vacuum, compressed air,
chilled water, etc.

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CHANGE OVER TIME (COT)

The time between the last good pair of one production run and the first good pair
of the next run

Time of completing first Time of completing last

COT = -
(Change Over Time) unit of new product unit of old product
(in good quality)

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RAMP UP TIME

The time between the start of a new model run in production until its output
reached the target consistently.

Previous COT New Model

model Installation
&
Set up
RAMP UP TIME

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OVERALL EQUIPMENT EFFECTIVENESS (OEE)

OEE measures 3 factors with 6 different kind of losses.

Downtime How much time per shift was machine

( Breakdowns) actually running?
AVAILABILITY
Setup and
Adjustments

Minor How well did the machine perform

Stoppages (compared to the defined speed) when
PERFORMANCE it was actually running?
Reduced
Speed
Production How many products were good the first
Rejects time? (RFT)
QUALITY
Startup
Rejects

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OVERALL EQUIPMENT EFFECTIVENESS (OEE)

- Availability: Actual production time left after

subtracting all planned downtime. B D F
- Performance: How well the machine was
running when it was running.
- Quality: How many good parts versus bad A C E
parts the machine has produced.
Available time
OEE = Availability% x Performance% x Quality% Non
Planned production time Scheduled
A production
Availability = ___Production time_____ Availability
B Production time Loss
Planned production time
C Target output
Performance = (Total pieces /Production time) Perf.
Ideal Run Time D Actual output Loss

Quality = Good Pieces E Actual output Lost effectiveness

Total Pieces Quality
F Good products Loss

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 ASC & SME LEVEL 1 JARGONS : EASIER TO UNDERSTAND

A MINI CELL is a work place design following LEAN principles to optimize production flow & efficiency through
balanced waste free processes. It simplifies cell management, is highly flexible & identifies problems faster.

1. Pace: TT ≥ 60” 2. EOLR ≤ 60 pairs/hr 3. LLER ≥ 85 %

Mini Cell Mini Cell Layout

TT : 72 sec
EOLR : 50 pairs
# Operator : 20 MP 4. Key features
• TAKT TIME
• SINGLE UNIT FLOW
• PULL PRODUCTION
• STATE OF THE ART EQUIPMENT
• OPTIMIZED WORKPLACE/ERGONOMICS
• VISUAL WORKPLACE
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Mini stitching cell
Vertical storage, Auto feeding & layering, Visual display
AGVs
Modula – mould storage and transportation
Finished good warehouse