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Thesis presentation

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Thesis presentation

  1. 1. Thesis title Optimization of materials flow and order control by balancing assebly line based on Lean manufacturing tools and techniques Presented by S M Sanaullah Supervisor: Dr. Ove Bayard Ulf Johansson KTH Royal Institute of Technology Production Engineering and Mnagement
  2. 2. Contents of presentation • Thesis background • Current sytem and problem description • Thesis aims and objectives • Improvement proposals • Implementation procedure • Result and discussion • Conclusion and future research
  3. 3. Thesis Backgroud • In plants materials flow • Lean manufacturing • Research methodology • Data collection
  4. 4. Case company outline • Ventilation manufacturer • Established in 1974 • 200 employees • Annual turnover 375 milion NOK • Supplier of ventilation and vacuum sytem • Norway and sweden • Huge investment in product development, market research and quality assurance
  5. 5. Current system and Problem description • 3 persons for warehouse • 1 person for materials handling • MRP and trditional push system • Materials planner • No standardize procedure for materials handling • High amount of non assembling time • Huge inventory • Ocuupied floor space • Ergonomics • Less productivity and utilization rate
  6. 6. Objectives • Reduce all kinds of inventory • Release space • Implement efficient way of material handling • Implement kanban system for materials order control • Reduce non assembling time • Increase productivity and ergonomics of workers • Rearrange the assembly shelves • Find out optimal order quantity • Balance assembly line and lay out design
  7. 7. Improvement proposals • Wagon system in assembly line • Kanban • Optimal order quantity prior to EOQ
  8. 8. Wagon sytem in assembly line
  9. 9. Advantages of wagon sytem • Less inventory and work in process • Better quality (due to the next station can´t continue unless everything is assemble from the station before) • Standardized method is established to simplify assembly • No time consume for materials searching for operator • Material wagons handled as KANBAN or as 2 bin system • Continuous flow of materials • So on
  10. 10. Kanban card/container Number of kanban cards or containers needed Demand during lead time + safety stock Conatainer size
  11. 11. Implementation procedure Kanban system • Number of kanban cards or containers needed for item 110260 • Daily demand 20 pcs, safety stock 40 pcs, container size 40 pcs, lead time 3 days (20*3 + 40)/60 = 1,67 # 2 round up We need 3 kanban container
  12. 12. Kanban sytem • Number of kanban cards or containers needed for item 110260 • Daily demand 20 pcs, safety stock 50 pcs, container size 50 pcs, lead time 5 days (20*5 + 50)/50 = 3 round up We need 5 kanban container
  13. 13. Optimal order quantity EOQ formula 2(annual volume in units)*(order cost) Inventory holding cost
  14. 14. Optimal order quantity EOQ for Item 110271 Minimum order quantity 208 pieces Cost per unit 48,5 SEK Annual demand (D) 4400 pieces Lead time 7 days Safety stock 36 pieces Order cost 300 SEK Holding cost = 48,5*20%=9,7
  15. 15. Optimal order quantity EOQ formula for item 110271 √{2(annual volume in units)*(order cost per order)/Inventory holding cost} {(2*4400*100)/9,7} =522 So, EOQ for 110260 is 522 pieces
  16. 16. Total cost (TC) Total cost = purchase cost+order cost+ inventory Holding cost Purchase cost=Cost per unit (CU)*annual demand(D) Order Cost=Per order Cost(CO)*(demand(D)/EOQ) Invetory Cost=Holding Cost(HC)*(EOQ/2)
  17. 17. Total cost (TC) for item 110271 Total cost = purchase cost+order cost+ inventory Holding cost For EOQ 522, TC=218810 EOQ 500, TC=218814 EOQ 540, TC=218813 EOQ 100, TC=227434
  18. 18. Total cost (TC) for item 110271 • Therefore, EOQ 522 pcs initiates the lowest annual total cost for item 110271
  19. 19. Result and discussion • 25% non value adding time reduced • Materials handling activites reduced 50% • Space released for 400 m² • Inventory reduced 50% • Labor productivity increades 21% • Work process productivity increased 22% • Ergonomics improved • Quality improved
  20. 20. Conclusion • Major improvements come from wagon sytem • Instead of batch and queuq, kitting system implemented • Instead kanban card to simplify materials order I use container for scheduling • If it would be possible to spend more time to study assembly line and materials handling area, then measurements and results would be more accurate and reliable. • Try to implement 5S and visual control
  21. 21. Future research • Kaban can probably be introduced in all assembly lines • Target warehouse • Review different costs continuously • Draw Value stream Mapping
  22. 22. Thank you

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