ANNOUNCEMENT

Developing and Managing Contracts in Mining

Conference

16-18 March 2009

Holiday Inn

Brisbane Qld

Contract Tendering, Negotiating and Management Strategies between Clients and Suppliers in the Mining Industry

Greg West Managing Director, and Chris Corben Director, Farthing West; will be facilitating a highly interactive and practical workshop on

18 March 2008.

Topic

Managing client/contractor relationships to assist contract negotiations

To register for the conference contact IQPC on

02 9229 1000

or, email at

registration@iqpc.com.au

Heijunka Planning
Heijunka A foundational strategy of the Toyota Production System	Professionals working in Lean Six Sigma appreciate that Heijunka Planning is one of the foundational strategies in the Toyota Production System.  In spite of its significance, Heijunka Planning is frequently not included in the implementation of Lean Six Sigma in the Western World. Heijunka is concerned with achieving smooth flow within the factory.  Effectively, Heijunka planning provides stability to the production program by mathematically decoupling it from much of the day-to-day and week-to-week fluctuations in market demand. In recognising variability in demand and factoring in the planning constraints …A Probability based Heijunka planning tool can enable customer orders to be satisfied with significantly less stock than traditional planning tools.
The Planner’s Challenge	The combination of rules, real time stock, latest sales, marketing sales forecasts and real time production data presents an intellectual challenge to the Planner.   There is no exact result that can be deterministically derived by a series of linear programming rules.  Typically the Planner uses experience to choose a practical solution.
Heijunka Planning Tool	While the Planner’s reasons for selecting a practical solution are often intuitive, the Heijunka planning tool has a tangible goal – stability or smooth flow in production.  Thus there is a mathematically attainable goal for optimisation.  To achieve this goal the Heijunka planning tool runs thousands of scenario daily using Monte Carlo simulation techniques.  It then selects from the best of these results. The output is the hourly, daily, weekly and monthly plans for the lines.  In addition to stability of the production plan and lower stock holding, the Heijunka planning tool provides security to the business because planning constraints are explicitly captured and are not reliant on person centred experience. Many of the rules used by the Planner and other key operational persons can be captured through an interview process.  However, there are other planning rules that will be “tacit”.  That is, they are used by the Planner but remain unspoken – often because the Planner only understands them at an intuitive level.   Over time the Heijunka planning tool captures and incorporates these rules. By interrogating the output of the Heijunka planning tool with the Planner and other key operational persons and comparing them to the decisions the Planner would recommend, these “tacit” rules will be exposed.   Through this process the sophistication of the Heijunka planning tool rapidly improves as more and more of the planning constraints are incorporated into the algorithm.  The smoothing of the production plan that results from implementing Heijunka planning will decouple the plant from the higher variability of the market pull.  The introduction will be based around the practical ability of the plant to change from product to product.
A Practical Approach	In the initial phase, Heijunka planning focuses on increasing the level of confidence and reliability of batch runs (time and quantities of actual versus plan).  This requires disciplined planning, including the establishment of realistic production rates.  In the journey towards Lean, it is sensible to focus attention on reducing the changeover times on the lines.  The maximum benefit of Heijunka planning is achieved by the relentless focus to “make every SKU in smaller quantities more often”.  Shorter changeover times and shorter runs result in smaller overall stock fluctuation, increased flexibility to react to varying demand and a more balanced stock position across all SKUs.  Heijunka planning is also aided by maintaining stable production crews, the systematic load balancing of individual jobs (and their standardization), a focus on producing quality at the source, eliminating bottlenecks and identifying “sweet operating points”.  The process of implementing an efficient Heijunka planning algorithm to perform accurate daily operational decisions also requires a reliable set of electronic data, covering real time stock, latest sales, marketing sales forecasts, real time production data.
Key Performance Indicators (KPIs)	In helping clients through the introductory phase Farthing West also assists in developing an in-depth understanding of the actual constraints that have limiting / conflicting impacts on individual lines and current planning strategies.  Initially we validate the first key Heijunka planning outputs in “manual” mode.  This includes the development of specific KPIs relevant to manage both the planning process in particular but also the business. These KPIs include a graphical representation of stock history by SKU (in units and in days), by product family (or line, whichever impacts on constraints) and the graphical representation of sales, trends and forecasts. Example of overall stock tracking KPI: Example of stock profile tracking KPI.  This graph is used for individual SKU tracking or any grouping (such as per line). Example of production rate optimization versus actual market demand.  This graph enables management to adjust the resources across all areas of the factory on a daily basis.
More …	Please contact us, or our business partner Quantum Business Enterprises for more information on Heijunka Planning.