This is the material that I presented the major conference of Logistics news paper.
- 1. Ph.D/PMP Lee Seouk Joo KPI Version 0.9
2. My Project Profile:
- CJ DNS, e-Business(1999-2001)
[email_address] , www.facebook.com/pmforum 3.
- Global competition - Life Cycle/Lead Time - GlobalSupplyNetwork
- Core Competence - Process Visibility - SCM3PL 3PL Global Logistics
-( , ) - One-Stop Service - e-Logistics Global Logistics 6.
- Supply chain network coordinating
Supplier /Factory Trucker Freight Forwarder Carrier terminal Airlines Cargoterminal Freight Forwarder Trucker DC/Buyer Goods Issues Pick Up Export clearance Build Up Departure Arrival Break down Import clearance Delivery Goods Receipt Step 1 Step 4 Step 2 Step 3 Step 8 Step 5 Step 7 Step 6 Step 9 Internet EDI CVO 7. e-Logistics is the redesign and implementation ofwarehouse and transportation management processes using e-business as a competitive enabler. Raw materials supplier DC retailer (buyer) Component supplier e- Logistics
- Collaboration across Enterprises
E-Logistics 8. Outbound Logistics Inbound Logistics Integrated e-Logistics(Danzas ) Sales and Marketing (customer) Production (customer) Storage DemandForecasts MaterialsPlanning Monitoringthe Suppliers Monitoringthe Orders Deliveriesto Customers Customer service Monitoringthe speed of circulation The Control of Recycled Material Product Development and Planning (customer) Information flow Monetary flow 9. Achieving operational excellence in the supply chain is a journey, not a destination The only way to maintain the level of operational excellence needed to survive in this environment is through continuous improvement. Manufacturers Wholesale Distributors Suppliers Customers Contract Manufacturers Logistics Providers Supplier Exchanges CustomerExchanges Logistics Exchanges Virtual Manufacturers Retailers Steve Banker and Sid Snitkin, Continuous Improvement: A Foundation for Operational Excellence, Supply Chain Management Review , March/April 2003. Operational Excellence Goods Flow Information Flows Financial Flow 10. 11. ? .. ? !!!!!!!!! ? ? ? 12. ..? ,
6 GUTTER! 13.
. . 14. 6 :VS.(*)
Data Process Mapping (CFPM)
6-12 3~12 4~5 15. Process Improvement
Step 1 (.05)/2HRS Step 2 (.13)/4HRS Step 3 (.05)2HRS (.05) DPU (.15) DPU (.10) DPU (.30) Overall TDU 16. What do we Need to improve?Precision or inconsistency Off-Target, Low Variation High Potential Defects Good Cp but Bad Cpk On Target High Variation High Potential Defects No so good Cp and Cpk On-Target, Low Variation Low Potential Defects Good Cp and Cpk
- Variation reduction and process centering create processes with less potential for defects.
- The concept of defect reduction applies toALLprocesses (not just manufacturing)
LSL USL LSL USL LSL USL 17.
- managers delegate away their knowledge process
- performance is not measured
- processes and policies are developed piecemeal and
- informally rather than designed as a whole
- for want of a owner processes tend to be unmanaged,
- neglected as a priority and rarely updated
- jobs, measures and infrastructure are often misaligned with the current process
Current Processes 18. TheValue of Measurement 19. IRS / SIGMA(with 1.5 Sigma Shift) 2 3 4 5 6 7 100K 10K 1K 100 10 1 (233 ppm) Best in Class (0.43 ppm) Journal Vouchers (6210 ppm) (3.4 ppm) 6 (66810 ppm) 20. Cost Of Poor Quality (COPQ)
- Sigma levels impact sales
Six Sigma has a tremendous impact on revenues and the bottom line.From: Harry and Schroeder,Six Sigma: The Breakthrough Strategy Revolutionizing the Worlds Top Corporations , (2000) Improved profits Focus on KPIs Increasingvalue Greater quality at lower costs Stronger operating ratios Growing capabilities Improved processes Customers get Owners get Sr. executives get Participants get and results Sigma Level Cost of Poor Quality 2 3 4 5 6 Not competitive 25-40% of gross sales 15-25% of gross sales 5-15% of gross sales < 1% of gross sales 21. 75% of process projects provide benefits.75% of application development projects fail Process orientation works Process Orientation Works 22. 23. 24. 25. 26. Strategic Learning Loop Initiatives & Programs test the hypotheses Output (Results) reporting Management Control Loop funding Input (Resources) update the strategy PERFORMANCE 85% of management teams spend less than one hour per month on strategy issues 92% of organizations do not report on lead indicators 60% of organizations dont link strategy & budgets 78% of organizations lock budgets to an annual cycle 20% of organizations take more than 16 weeks to prepare a budget STRATEGY BALANCED SCORECARD BUDGET MAKE STRATEGY A CONTINUOUS PROCESS 27. KPI 28. Business Process Architecture 29. Process Hierarchy Systems Skills SUB - PROCESS ACTIVITY BUSINESS PROCESS Standards Instructions Forms TASK 30. Process Architecture 31. Source: Alec Sharp, Clariteq Current Processes-continue Culture, core competencies, and management systems
- Lack of support for workflow
Business Process Workflow Design Information Systems Motivation & Measurement Policies and Rules Human Resources Facilities (or other) enables enables enables enables enables enables
- Inappropriate performer or process measures
- Internal rather than customer focus
- Measures of tasks vs. outcomes
- Out-of-date policies, rules, numerical limits
- Excessive approve, inform, check, or review steps
- Excessive hierarchy or centralization
- Mismatches between task value and performer
- Inappropriate recruiting and placement
- Mismatch of work needs and facility
- Layout that impedes flow of people or material
Mission, strategy,goals, and objectives supports 32. KPI 33. KPI 34. KPI 35. CSF/KPI 36. 37. KPI 38. KPI framework 39. KPI 40. 41. KPI Framework 42. KPI 43. KPI ? 44. KPI 45. KPI 46. KPI . 47. 48. KPI 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. BSC 69. 70. KPI 71. Any Questions 72. 73. 6