Appendices
“Coordination within a planning organisation:
A case study at Ahrend Production Sint-Oedenrode”
MSc BA Operations & Supply Chains
University of Groningen, the Netherlands
TABLE OF CONTENT
APPENDIX I EXTENSIVE COMPANY DESCRIPTION... 3
APPENDIX II ORGANISATION CHART ROYAL AHREND N.V. ... 6
APPENDIX III ORGANISATION CHART AHREND PRODUCTION ... 7
APPENDIX IV PLANT LAYOUT (APS) ... 8
APPENDIX V DETAILED DESCRIPTION OF PRODUCTION PROCESS ... 9
APPENDIX VI PERFORMANCE OBJECTIVES DEFINITIONS... 12
APPENDIX VII RESEARCH METHODS ... 13
APPENDIX VIII CHECKLIST FOR OBSERVATION STUDY... 15
APPENDIX IX FORMALISATION OF OPERATIONAL LOGISTICAL DECISIONS ... 16
APPENDIX X DEFINITIONS OF COMPETENCIES... 17
APPENDIX XI ASSORTMENT CODES AND SPECIALS ... 19
APPENDIX XII SERVICE LEVEL AGREEMENTS... 20
APPENDIX XIII LEGEND FOR ACTOR ACTIVITY DIAGRAMMING... 21
APPENDIX XIV ACTOR ACTIVITY DIAGRAM: ORDER ACCEPTANCE (APS)... 22
APPENDIX XV ACTOR ACTIVITY DIAGRAM: ORDER CHANGES (SUPPLY SIDE) ... 23
APPENDIX XVI ACTOR ACTIVITY DIAGRAM: ORDER CHANGES (INTERNAL INTERRUPTIONS) ... 24
APPENDIX XVII EQUALISING WORKLOAD ... 25
APPENDIX XVIII ACTOR ACTIVITY DIAGRAM: ORDER CHANGES (DEMAND SIDE)... 26
APPENDIX XIX DATA ANALYSIS ... 27
APPENDIX XX TRADE-OFFS CATEGORIES ... 29
APPENDIX XXI KNOWLEDGE AND COMPETENCIES PER TASK IN ORDERING PROCESS ... 30
APPENDIX XXII OVERVIEW CONSEQUENCES OF EXCEPTIONS ... 31
APPENDIX XXIII TEST RESULTS – PLAN RELEASE MOMENT... 32
APPENDIX XXIV OVERVIEW CAPACITY ON DAY LEVEL ... 34
APPENDIX I
Extensive Company Description
Royal Ahrend N.V.
In 1896 Jacobus Ahrend founded Wed. J. Ahrend & Son. In the early years the company was an office stationery shop. After a decade Ahrend started selling office equipment and became active as a publisher and producer of reprographic materials. Industry and commerce experienced strong growth and Ahrend grew with it. Ahrend was able to finance all its investments from its own funds. This applied, in the 1930s, to its participation in two factories making steel office furniture and warehouse facilities: Oda in Sint-Oedenrode and De Cirkel in Zwanenburg. Trading activities were expanded and Ahrend was considered a manufacturer of office furniture as well.
After the Second World War, attention was given to office equipment and Ahrend attracted new customers with well-equipped showrooms. Ahrend made a name as a designer and manufacturer of pioneering office furniture: the Revolt chair and the Facet table were highly successful products. Well-known designers like Friso Kramer (Revolt chair) and Wim Rietveld contributed to the success by innovative and appealing designs. On 22 November 1967, Ahrend changed into a company with limited liabilities and got listed at the AEX. Attempts to win a prominent position in foreign markets came to fruition in the 1980s. Acquisitions and joint ventures gave Ahrend a presence in almost every European country as well as the USA, Singapore and South Africa. New ranges of furniture and chairs won awards for design and ergonomics. Ahrend successfully puts its mission into practice, to be a top player for working environments, and remain true to its main tradition: staying a step ahead of the future through innovation.
In 1996 Ahrend became ‘royal’ and on 29 June 2001, Stonehaven Holding B.V. took over Royal Ahrend N.V. (including several daughter companies) for EUR 235 Million. In 2001, Stonehaven Holding B.V. withdrew Royal Ahrend N.V. from the AEX. In 2005, Royal Ahrend N.V. focussed activities fully on the furnishing segment by the sale of the division office supplies to the French company Lyreco. An organisational chart of Royal Ahrend N.V. can be found in Appendix II, Appendix III represents the organisational chart of APS. Nowadays, Royal Ahrend N.V. is one of the leading office furniture manufacturers in the Netherlands, by being an expert in the field of flexible office furniture solutions. Royal Ahrend N.V. is active around the globe and makes use of own factories as well as successful alliances with foreign and local partners. In 2004, there was the launch of a distribution and sales agreement with Allsteel, a manufacturer of office furniture in the U.S.. Since that moment, Ahrend was the exclusive partner to sell Allsteel products in Europe and in return for that, Ahrend could make use of the North-American distribution network of Allsteel. In 2005, Royal Ahrend N.V. acquired the Czech office furniture manufacturer Techo A.S. in order to strengthen Ahrend’s position on the Eastern European markets. Recently, Royal Ahrend N.V. initiated an alliance with the Japanese corporation Okamura in order to conquer the Asian markets. Royal Ahrend N.V. has two production facilities in the Netherlands: One location in Zwanenburg and one in Sint-Oedenrode. At the plant in Zwanenburg chairs, tabletops, and screens & panels are manufactured and at the plant in Sint-Oedenrode tables, desks and storage systems are manufactured. Besides the production facilities there are several sales centres in the Netherlands and around the globe, see Figure I-A for the locations in the Netherlands.
Markets
Local firms tightly control the Dutch office furniture market. Ahrend is the Dutch market leader with a market share of 35 per cent (2006), followed by Samas (24,9 per cent, 2006) and Gispen
(11,0 per cent, 2006)1. Developments over the last years show that sales and revenues are under
high pressure, due to competition by foreign entrants, higher customer demands and the economic cycle.
FIGURE I-B Net sales (million €)
0 100 200 300 400 500 600 2001 2002 2003 2004 2005 2006 Net Sales Royal Ahrend N.V. in million euros
Source: Year-reports Royal Ahrend N.V.
At this moment Ahrend is present in the Western European markets (Netherlands, Belgium, Germany, Luxemburg, Spain, Czech Republic and United Kingdom), serving these markets with own sales agencies. Besides this, there are showrooms in Russia, USA, New Zealand and Australia. A broad network of dealers strengthens the position of Ahrend on the world market. The alliance with Allsteel offered Ahrend the opportunity to use Allsteel’s distribution channels in the United States of America and sell products on the U.S. market. Recently Ahrend signed a similar alliance contract with the Japanese office furniture manufacturer Okamura, which offers Ahrend opportunities on the Asian market. With the purchase of Techo A.S. (2005) the Eastern European market (Czech Republic, Slovakia, Hungary and Rumania) is served as well. The Eastern European market shows great potential. Ahrend performed less than the market average in 2003, because it divested one of its daughters in 2002 (the German office manufacturer Mauser).
Ahrend identified six different types for its table and desk assortment:
a Desks
a Conference tables
a Canteen tables
a Low tables
a Standing tables, and
a Education tables
For the storage segment there is a classification of two storage types:
a Personal storage, and
a Communal storage
Developments
Strategy
APPENDIX II
Organisation chart Royal Ahrend N.V.
FIGURE II-A Royal Ahrend Ahrend Techo Manufacturing Sales Netherlands 13 Sales Centres Belgium 2 Sales Centres Spain 2 Sales Centres United Kingdom 2 Sales Centres Netherlands 1 St-Oedenrode Netherlands 1 Zwanenburg Czech Republic 1 Sales Centre Luxembourg 1 Sales Centre Australia 1 Sales Centre New Zealand 1 Sales Centre Russia 1 Sales Centre USA 1 Sales Centre Manufacturing SalesCzech Republic Czech Republic
Romania
Hungary
Slovakia
United Kingdom (35 % interest)
Organisation chart Royal Ahrend N.V.
APPENDIX III
Organisation chart Ahrend Production
Sint-Oedenrode
FIGURE III-A Division Manager Ahrend ManufacturingPlant Manager APS Plant Manager APZ
Purchasing Controlling
Human Resources
Operations Innovation
Customer Support
Ordering Distribution Service &
Purchasing Controlling Human Resources Production Planning Material Supply Planning Warehousing Metal Finishing Assembly Expedition Innovation Support Technical Innovation Technical Support Quality Improvement Product Development Staff
Organisation chart Ahrend Manufacturing (and APS)
APPENDIX IV
Plant Layout (APS)
FIGURE IV-AGoogle Earth picture of APS
FIGURE IV-B
Assembly
Expedition
Finishing
APPENDIX V
Detailed description of production
process
Overview production process
The production process at Ahrend was originally based on metalworking, but assembly processes came to play an increasingly important part in the course of time. APS produces a wide range of different table systems and cabinets. Schematic the production process is organised as depicted in figure V-A.
FIGURE V-A
Control Loading Delivery
Day 4 Day 5 Day 6
Metal Finishing Assembly
Day 1 Day 2 Day 3
Schematic production process in days
In more detail the production process is divided into different sub-departments with buffers between the processes, in figure V-B the process is depicted in more detail.
FIGURE V-B
Steel Metal
(batch) Metal (JIT)
HFM Metal (week) Blank Finishing (large line) Central HPM Assembly (Ahrend 700) End-prod. Finishing (flexible line) Finishing (electro forese) Assembly (Tables) Assembly (Table-legs) Assembly (Pedestals) Assembly (Tambour door cabinets) Assembly (Hinged doors) Assembly (Shop)
Each part of the basic form depicted in figure V-B will now here be briefly described in order to understand the production process of APS.
Central Warehouse (storage)
The central warehouse supplies materials and purchased parts for all the departments (Metal, Finishing and Assembly). For the metal department these are metal purchase parts and supportive materials/parts, materials that are used to make the product, but are not processed in the product. For the steel raw materials there is a separate warehouse, located at the start of the metal process. For Finishing the central warehouse supplies the powder coating, which are later stored at close to the finishing lines. For assembly all kinds of materials/parts are supplied, purchased parts, parts to assemble the products (e.g. bolts and screws) and materials to pack the products. Also materials are supplied to the expedition, where products are prepared for shipment and export products are packed in special export packaging materials.
Steel (storage)
Most of the raw materials at APS are in metal sheet form. These materials are purchased in various guises: coils (rolls of steel plate) used to make semi-finished products required for large-scale batch production, flat sheet material suitable for the production of various semi-finished products. In addition, APS uses a variety of tube materials, mainly for making the legs and frames of tables. These materials are stored in a separate storage location at the start of the metal process.
Metal department
The metal department can be divided into three parts, batch, week and JIT production. The metal department is a typical job shop sort of production layout (Bertrand et al. 1998).
Metal (batch)
In order to use machinery and raw material efficiently not everything is made to order. Certain amounts of product are made out of one sheet, this is not always the actual demand. For products that are made in batch, it is almost sure that these products will be sold in the future. Customer specific (specials) products are only produced in the quantities demanded.
Metal (week)
Also to use machinery efficiently (reduce setup-times), orders with same products are clustered within one week of production. From this process everything produced is actual demand; up to here the customer order penetrates in the production process. The parts/products are produced on actual demand, but at this moment in the process it is not known to which specific customer order the parts/products belong. This because there can be orders of different customer for the same products. After the finishing process products are assembled according to specific customer orders.
Metal (JIT)
As the name already says, this department produces Just-in-Time for the next process (Finishing), every produced here is actual demand (MTO). This is the first day of production (train, see figure V-A), the stage where cabinet bodies are made and the metal parts of table-legs are put together. Various joining techniques are used, such as welding and screwing.
HFM (storage)
In the HFM (in Dutch: Half Fabrikaten Magazijn) semi-finished products are stored between the batch, week and JIT processes.
Unfinished/blank (storage)
Finishing
The Finishing department is divided into three parts, the large powder line, the flexible powder line and the Electrophoresis. The Finishing department has a typical process production layout (Slack et al. 2004). In the Finishing department, metal semi-finished products are degreased and painted in the right colour. APS has two powder-coating lines (large and flexible) and an electrophoresis (EF) installation that can be used for the various paint jobs. The EF installation is used for only one standard colour, mainly for the interior parts of the cabinets. The large powder-coating line is used for the colours that can be painted in larger batches, because of the longer cleaning time of paint cabins (compared to the flexible line). The flexible powder-coating line is used for smaller batches for every thinkable colour; this line has very short cleaning times of the paint cabins.
HPM (storage)
Between the Finishing and Assembly department there is also a buffer, where the painted products/parts are stored until they are assembled. Also in this storage the products/parts are stored up to one day.
Assembly
The painted semi-finished products and the purchased parts are assembled into end-products. Cabinets are completely assembled, but tables are left in the form of assembly kits that can be put together on site after delivery. Apart from the actual assembly work, products are packaged here and given an identification sticker. The Assembly department is divided into several assembly lines: Ahrend 700, Hinged doors, Tambour door cabinets, Pedestals, Table-legs, Tables and Shop. The assembly department has a typical line production layout (Slack et al. 2004).
End-products (storage) and Shipment
After assembly, all finished products and components are taken to the Shipment department. As can be seen from figure V-A after Assembly there are two more days before the products are actually shipped. These days products are checked and collected by orders (and later by freights). Products for export are packed into special packaging for international transport (overseas). When everything proceeds normally products are stored up to two days in this storage. All loads are checked before being loaded onto the trucks, to ensure that no packages are missing. APS personnel load the trucks and an external logistics service provider takes care of the actual transport.
Service
APPENDIX VI
Performance objectives definitions
The following definitions were used in the description of the performance objective of the involved departments (according to Slack et al., 2004):
a Quality a Speed a Dependability a Flexibility a Cost a Quality
Quality means ‘doing things right’. By quality here the quality of the service is meant, the installation of products and handling of complaints. This performance objective can be measured by the satisfaction of customer. Complaints about the installation of products or the products themselves negatively influence the quality objective. The way complaints are handled also influences quality, if complaints are handled within the agreed time that stands for it and the solution for the complaint solves the problem this positively influences the quality of the service.
a Speed
Speed means the elapsed time between customers requesting products or services and then receiving them. In case of APS speed stands for the response time to customer in reacting on requests in the form of offer requests, order confirmation, delivery (products and/or service) and the handling of complaints.
a Dependability
Dependability means doing things in time for the customer to receive their goods or services exactly when they are needed, or at least when they were promised. In case of APS dependability mainly is the realisation of promised delivery dates (of complete orders and/or service), measured by means of the delivery reliability rate on order level.
a Flexibility
Flexibility means being able to change the operation in some way. This may mean changing what the operation does, how it is doing it, or when it is doing it. Mix and volume flexibility are important for production (planning), they have to cope with a fluctuating product mix and volumes by making a feasible production plan for every product mix and volume for production. Delivery flexibility is important for Service & Distribution Planning, they have to be able to react on new and/or changed orders on a very short term.
a Cost
APPENDIX VII
Research Methods
In this appendix the used research methods are described more extensively.
a Individual in-depth interview
During the research project several people are interviewed. First, during the orientation phase people of all involved departments were interviewed.
Production Planning
• Head of Production Planning and Warehousing department (also MSP)
• Metal Planner
• Finishing Planner
• Assembly Planner
• Trouble shooter
Material Supply Planning
• Material planner(s)
Ordering
• Head of Ordering department
• Employee Ordering department
Service Planning
• Head of Service Planning department
• Installation planner
Distribution Planning
• Head of Distribution Planning department
• Employee of Distribution Planning
The first round of interviews had actually three goals, getting familiar with the organisation of APS, making people familiar with this research project and the first moment of gathering information from people involved. The first round of interviews had an unstructured character. The second round of interviews had the objective to gather additional more specific information and to discuss information gathered during the first round of interview (e.g. drawed Actor Activity Diagrams see appendix XIII until XVIII). The second round interviews had a more semi-structured character, with more specific questions (Cooper & Schindler, 2006). In the second round the same people were involved as in the first round.
a Observation study
During the description and analysis phase an observation study was applied on departments Ordering, Production Planning and Material Supply Planning. The objective of this study was to analyse coordination behaviour, needed competencies and approaches of people in situations were coordination is needed. During the observation the observer was physically present and personally monitored the action that took place (direct observation). The type of observation study was a systematic observation in natural setting (Class 3 study) (Cooper & Schindler, 2006), every observation a checklist (see appendix VIII) was filled in. Each time the observed employee had to coordinate about rush orders or order changes a checklist was filled in (see figure VIII-A).
Reasons for applying an observation study were:
• Overcoming deficiencies of questioning
• Observations capture the whole event as it occurs
• Participants seem to accept an observational intrusion better than they respond to questioning
• Observation is less demanding of them and normally has a less biasing effect on their
behaviour than does questioning
Some limitations of an observation study are:
• Observation must be at the scene (slow and expensive process); due to this the number of
observations is limited.
• Reliability of results (inferences drawn by observer -> subjectivity)
• Influenced behaviour of observed people (other behaviour during observation than in
unobserved situation)
FIGURE VII-A Complete participant Participant as observer Complete observer Observer as participant Researcher’s identity is concealed Researcher takes part in activity Researcher’s identity is revealed Researcher observes activity
Typology of participant observation researcher roles (Saunders et al. 2000)
In this research the role of the observer was ‘observer as participant’, this was the most suitable one for this research. This because taking part in the activity would change the behaviour and way of executing activity; here also time was a bottleneck. Because the reason for observation was made clear to the observed people it was not necessary to conceal the identity of the researcher.
a Measurement
In the year 2007 two measurements were executed at APS by PhD-student Cees de Snoo, one in March and one during this research in June. The objective was to measure interactions, communication and collaboration between planning and the shop floor in a dynamic manufacturing environment. Each measurement was executed in a time span of one day. Each measurement consisted out of around 25 participants, 5 production planners, 1 head of production planning, 3 production leaders and contact persons of the several sub-departments within Metal, Finishing and Assembly. During the day every participant of the measurement filled in a general questionnaire. Every time one of the participants interacted with another participant (or with someone of Ordering, Material Supply Planning) a short question-list (16 short, mostly multiple-choice, questions) was filled in. By this measurement several aspects of interaction were included, frequency, reason, satisfaction, communication mode, length, insight in information of the other and communality of interest. To analyse the effect of the movement of Production to the centre of the shop floor a second measurement was executed.
a Data/document analysis
APPENDIX VIII Checklist for observation study
The following checklist was used for the observation study:Observation: Time/date:
Person: Tasks/role:
Type exception: Rush Supply Demand Intern
From / to:
Days before delivery:
Action taken:
Competencies: (V= of importance in this situation, empty = not of importance)
Expertise Behavioural
Planning skills / plan Empathy / Sensitiveness
Inventiveness Sociability / Listening / Relations
management
Comprehension quickness Communication
Environmental / Organisational awareness Persistence
Customer oriented Coaching
Result driven Teamwork / collaboration
Cope with details Initiative
Quality focus Persuasiveness
Monitor progress Decisiveness
Responsibility
Stress proof / tolerance
Creativity
Trust: (integrity, reliability, loyalty) Flexibility / ability to adjust
Independence
APPENDIX IX
Formalisation of operational logistical
decisions
In table IX-A examples are given for formalising operational logistical decisions: Accepting orders, Delivery time promising, Allocating materials, Allocating capacities and Prioritizing orders.
TABLE IX-A
Operational decision Ways of formalising
Accepting orders Defining product range, product modules and/or
materials.
Defining fixed prices for materials, machine and man-hours and fixed sales margin
Delivery time promising Defining fixed delivery periods per product group
Defining a cyclic production planning Defining agreements on the use of slack
Allocating materials Defining bills of material
Defining rules on inventory levels
Defining rules related to capacity allocation Defining agreements on delivery time of suppliers
Allocating capacities Defining routings
Defining planning rules
Defining agreements on varying capacity Defining agreements on the use of slack
Prioritizing orders Defining priority rules based on type of customer,
order size or specific customer
Ways of formalising operational logistical decisions
APPENDIX X
Definitions of competencies
According to Hoekstra and van Sluis (1999) the 42 competencies are defined as followed:
a Entrepreneur
1. Risk taking – cope with risks in order to obtain a certain benefit in the end. 2. Initiative – Look for chances and take them, operate more active than passive.
3. Independence – Taking actions based on own ideas instead of doing others a favour, own course.
4. Entrepreneur – observe business opportunities; take action to influence opportunities and willing to take justified risks.
a Adjust
5. Ability to adjust – operate effectively by adjusting on changing circumstances, tasks, responsibilities or people.
6. Flexibility – Change (when needed) behavioural style, when problem or opportunities occur in order to realise set objectives.
7. Stress tolerance – Perform effectively under time pressure and in cases of problems or disappointment.
a Organise
8. Monitor progress – Effectively monitor and control the progress of own work and that of others, with the available time and resources.
9. Plan – Determine objectives and priorities effectively and plan needed actions, time and resources in order to realise the objectives set.
10. Organise – The ability to identify and obtain the needed (human) resources for the realisation of a plan and use them effectively in order to realise the aimed results.
a Perform
11. Result driven – Focus work and decisions on the realisation of aimed results.
12. Cope with details – Show attention to details, cope with detailed information effectively. 13. Persistence – Keep up with a chosen approach or vision until the set objective is realised.
14. Quality focus – Require high quality of own and others work, strive for continuous improvement.
15. Energy – Ability to work very intensive for long period (if the job requires that), have endurance.
16. Ambition – Behave like willing to make a career and strive for success. Invest in personal development in order to achieve this.
a Analyse
17. Problem analysis – Ability to analyse problems, dismantle problems into components, describe the internal coherence and find causes.
18. Conceptual thinking – Provide a broader and/or deeper insight in problems or situations, by placing them in a frame and clarify links.
19. Learning orientation – Attention to new information, ability to apply it effectively. 20. Creativity – Come up with solutions for problems and think of new working methods.
a Expand
21. Opinion forming – Ability to assess methods and information, consider relevant criteria and come to realistic assessments and decisions based on these criteria.
22. Environmental awareness – Be informed about developments in society, politics and other environmental factors; use this information effectively in own job or organisation.
23. Vision development – Ability to develop a vision in which the organisation and its environment are able to move; formulate objectives for the long-term.
24. Organisational understanding – Show understanding of how the organisation works; take consequence into account for own organisation and/or the organisation of the customer when taking actions.
a Facilitate
26. Customer focus – Think and act out of the perspective of the customer, with their requirements.
27. Coaching – support others in developing themselves, seeing opportunities, the use and improvement of competencies.
28. Collaborate – Contribute to collaboration for communal objectives, also without self-interest, stimulate communication.
29. Listening – Ability to show interest in discussion partner, react and interrogate where needed. 30. Sensitiveness – Ability to cope with feelings, attitudes and motivations of other people, be open
for them, respect them and take them into account.
a Direct
31. Decisiveness – Ability to take decisions, also when there are uncertainties or risks involved. 32. Leading (individual) – Ability to give guidance and steering to an employee, in performing their
tasks. Get approval and action to realise certain objectives.
33. Leading (group) – Ability to give guidance and steering to a group of employees, create, stimulate and maintain collaboration in order to realise set objectives.
34. Delegate – Ability to assign own authority to take decisions and responsibilities effectively to the right employees.
35. Disseminate vision – Ability to communicate and create a basis for the vision and objectives of the organisation in an appealing way.
a Influence
36. Communication – Ability to communicate ideas and information clear and understandable, so that the essence is understood by everyone.
37. Presentation – Ability to present yourself with an attitude and behaviour that leaves a positive impression to others.
38. Persuasiveness – Ability to persuade people of ideas, statements and plans
39. Sociability – Ability to quickly and effectively make new and maintain contacts for work; with all kinds of people.
a Create trust
40. Integrity – Ability to maintain social and ethical norms at work, also under pressure. Create trust in own professionalism and integrity.
41. Reliability – Keep promises and accept consequences, take responsibility when needed and minimise negative outcomes for others.
42. Loyalty – Go along with the policies and interests of the organisation and group of which someone is part. In case of conflicting interests support that what causes the fewest damage. The competencies (used in the observation study) mentioned by Kolk (2000) can be defined as followed:
43. Inventiveness – Ability to come up with creative ideas/solutions to react on problems or changing circumstances.
44. Comprehension quickness – Ability to quickly see through consequences of e.g. changes in an order, to respond quickly on asked questions.
45. Customer oriented – Act in the interest of customers by thinking from the perspective of the customer.
46. Empathy – Ability to place yourself in the situation of others and show interest in their situation.
47. Relations management – Ability to make new contacts and maintain existing contacts. 48. Teamwork – Ability to collaborate with other people (e.g. colleagues) in a team.
49. Initiative – Ability to take the first step (e.g. in coordination) in order to accomplish something (e.g. material/capacity check for rush order)
50. Decisiveness – Ability to take decisions when necessary (e.g. in case of order acceptance) 51. Responsibility – Ability to take responsibility when for example risks are involved.
APPENDIX XI
Assortment codes and specials
The assortment of APS is divided into 4 categories, the so-called assortment codes:a Category A (basic) – 4 weeks (20 working-days)
Under ‘normal’ circumstances2 all products in this category have a delivery time of four weeks.
Products that are sold very frequently and/or for which purchase materials/parts have short delivery time (from suppliers) or for which stock is arranged APS.
a Category B (standard) – 6 weeks (30 w-days)
Under ‘normal’ circumstances all products in this category have a delivery time of six weeks. Products that are sold less frequently (compared to category A products) and/or for which purchase materials/parts have longer (compared with materials/parts of category A products) delivery times (from suppliers) or which less or no stock is arranged at APS.
a Category C – 8 weeks (40 w-days)
Under ‘normal’ circumstances all products in this category have a delivery time up to eight weeks. Products with more customer specific requirements which are not ordered as frequently as category A and/or B products and/or for which purchase materials/parts have longer (compared with materials/parts of category A and B products) delivery times (from suppliers) or which less or no stock is arranged at APS. Also products in the end of their PLC (Product Life Cycle) are placed in this category, so less stock is needed (reduced risk for obsolete stock)
a Category D (specials) – on request 6-12 weeks (30-60 w-days)
Under ‘normal’ circumstances all products in this category have a delivery time of eight weeks or more, according to the needed work for engineering. Products with special customer specifications, for which engineering has to adjust or re-design products. These adjustments or re-designs do cost extra time for the sub-department of ordering where these orders are handled and therefore extra time is reserved in the delivery time. Special products often included special materials/parts that have a longer delivery time from suppliers.
a Specials
Specials have been divided into 3 categories, from special up to very special:
SP1 – special colours
SP2 – construction adjustments or redesign of products SP3 – a combination of SP1 and SP2
When an order is entered with products out of the different assortment categories, the product in the order with the longest lead-time determines the delivery time of the total order. Sometimes it happen that parts of the order (products with shorter delivery time) are delivered earlier and other parts of the order (products with longer delivery time) are delivered later.
APPENDIX XII
Service Level Agreements
Some organisations bring a degree of formality to the internal customer concepts by encouraging (or requiring) different parts of the operation to agree service-level agreements (SLA’s) with each other. SLA’s are formal definitions of the dimensions of service and the relationship between two parts of an organisation. The type of issues which would be covered by such an agreement could include response times, the range of services, dependability of service supply and so on (Slack et al. 2004). By means of SLA’s norms are agreed between Ahrend Sales and Ahrend Manufacturing. In this appendix the SLA’s (relevant for this research) are briefly described:
a Response time offer requests/order acceptance
According to assortment 1 w(working)-days
Specials (SP1) 1 w-days
- based on colours (table)top decoration
Specials (SP2) ` 2 w-days
- based on different configuration (table-top size, table-leg lengths etc.)
Specials (SP1+SP2) 2 w-days
- based on a combination of SP1 and SP2
Special 5 w-days
- based on needed construction change/adjustment
An order-confirmation needs to be received within 10 days by the customer.
a Delivery times
See assortment codes and specials in appendix XI.
a Changes (re-planning included)
Changes from Sales need to be communicated first and confirmed back.
Changes from Manufacturing need to be communicated first and confirmed back.
It is allowed to change orders in the first ten days after the factory has confirmed the delivery time for the order. However if because of changes materials become obsolete these costs will be charged to sales.
a Assessment APS
APS will be annual assessed on its performances according to the following criteria:
Delivery performance (on order level -> target of 97,5 %) Response times as agreed in SLA’s
Complaints handling
a Reports
Monthly APS will deliver the following reports:
Percentage of orders with non conformities per Sales Centre of the total number of orders Percentage of orders with shortages of the total number of orders
Percentage of orders with re-planning of the total number of orders Percentage of orders with damage of the total number of orders
Percentage of orders with changes, classified by categories of the total number of orders
a Complaints
Complaints are reported to APS by means of a complaint form, complaints are confirmed within 1 w-day with the solution. Complaints have to be solved within 15 days.
a Mock-ups
APPENDIX XIII Legend for Actor Activity Diagramming
Do Activity Do Activity Do Actor-IS Interaction Get IS-init. Interaction Do Action Object Object Object Condition= Condition= Actor Information System= Actor (e.g. Sales Centre)
= Information system (e.g. ERP-system)
= First transaction in process (between actors) = Activity (performed by actor)
= Actor – Information System interaction (e.g. enter order in ERP-system) = Simultaneous Activity
= Information System – Actor interaction (e.g. get order information for ERP-system)
= Activity of Information System (e.g. generate material requirements) = Backward transaction
= Last transaction
= Condition for transaction
APPENDIX XIV
Actor Activity Diagram: Order
Acceptance (APS)
FIGURE XIV-A
Organisation
Business Process= Ahrend Production Sint-Oedenrode (APS)= Order acceptance
ACTOR ACTIVITY DIAGRAM
Setting:Situation July 2007 Source: interviews at APS Mady by S. Keuper Date: 9-7-2007 Sales Centre Ordering Production Planning (PP) BAAN (Production) Material Supply Planning (MSP) Request for offer (specials) Make offer Offer Assess offer Send to customer Enter Order EDI Receive order Assess requested delivery time Request Assess consequences for MSP and PP If shorter delivery time asked Contact supplier (if needed) Confirmation/rejection Possible delivery time If not possible by either MSP or PP Accepted order Request If within released weeks Cornfirmation/ rejection Accepted order Orders with normal delivery time are accepted right away
BAAN (Sales)
Standard products and accepted offers for special products from customers
Distribution Planning
Determine possibilities
APPENDIX XV
Actor Activity Diagram: Order changes
(supply side)
FIGURE XV-A Organisation
Business Process
= Ahrend Production Sint-Oedenrode (APS) = Order changes (supply side)
ACTOR ACTIVITY DIAGRAM
Setting:Situation July 2007Source: interviews at APS Mady by S. Keuper Date: 8-7-2007
Supplier Material Supply Planning (MSP) Production Planning Ordering CentreSales DistributionService & (Production)BAAN
Delivery problem
Assess problem
Make re-plan list Re-plan
list
Check re-plan list
Re-planned orders Re-planned orders Re-planned orders If complete order
changes and orders are within 7 days before delivery
Check re-planned orders
Determine consequences
Determine affected orders Re-plan affected orders
Re-planned
orders Re-planned orders If within 7 days before delivery Consult If order is known as important/urgent If within released weeks
APPENDIX XVI
Actor Activity Diagram: Order changes
(internal interruptions)
FIGURE XVI-A Organisation
Business Process
= Ahrend Production Sint-Oedenrode (APS) = Order changes (internal interruptions)
ACTOR ACTIVITY DIAGRAM
Setting:Situation July 2007Source: interviews at APS Mady by S. Keuper Date: 8-7-2007 Sales Centre Ordering Production Planning MMS (Manco System) Material Supply Planning (MSP) Service & Distribution
Manco announcements for orders (Finishing, Assembly, Central Warehouse) Check reason manco Try to fix problem Manco material/ purchased parts Check reason manco Contact supplier if necessary Feedback Manco (delivery time materials/parts Check if delivery date can be met
If manco is caused by purchased materials/parts
End of loading day (+/- 16.00u)
Enter action/info in MMS (re-plan, new order etc.) If solution there is a
solution
Manco list Mancolist
Manco announcements for orders (Purchase materials/parts)
Make temporary manco list (14.30u) Own parts Enter action/info in MMS Expedition Manco Re-plan order if needed Manco If manco is known for important order (semple setup or large order)
Manco
APPENDIX XVII Equalising workload
FIGURE XVII-AService Planning (SP) Material Supply Planning
(MSP) Production Planning
Ordering Sales Centre (SC)
Week is filled
Print capacity graph
Determine order to be moved Storage orders?
[YES] [NO]
Move orders
Capcity flattened enough?
[NO]
Determine other order to move
Fixed delivery date?
[NO] Contact Ordering Check possibilities Contact SC Check possibilities Movement possible? Approve movement [YES] Release plan
Start equalizing workload Informed about weeks in process
Informed about weeks in process Inform about fixed dates
APPENDIX XVIII Actor Activity Diagram: Order changes
(demand side)
FIGURE XVIII-A Organisation
Business Process
= Ahrend Production Sint-Oedenrode (APS) = Order changes (demand side)
ACTOR ACTIVITY DIAGRAM
Setting:Situation July 2007Source: interviews at APS Mady by S. Keuper Date: 9-7-2007 Sales Centre Ordering Production Planning (PP) BAAN (Production) Material Supply
Planning (MSP) PlanningService Distribution Planning
Order change Quantity-Delivery address-New Sales Cancelled Sales orderline-Article number-Delivery date/time-Identify kind of change Identify order status Determine which department(s) has to be informed Order change If material/parts are ordered at the
supplier Contact supplier
(if needed) Determine effect on order Confirmation/effect on order Order change Determine effect on order Communicate change with planners If order is released (4 weeks before delivery) Confirmation/ effect on order Order change If within 6 days before delivery Communicate with installation planners
Effect on order (if not possible) Order change If within 7 days
before delivery
Change plan (if possible)
Effect on order (if not possible) Confirmation/ possible delivery time Change purchase order Change plan Change plan (if possible) Determine effect
on order Determine effect on order
Determine effect on order
If both plans are affected Possible
APPENDIX XIX
Data analysis
FIGURE XIX-AEqualising difference (assembly hours added/removed after delivery plan)
-90 -80 -70 -60 -50 -40 -30 -20 -10 0 10 20 30 40 50 60 70 80 90 12 14 15 16 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 2006 2007 Week H our s
Equalising difference (added/removed assembly hours after release of delivery plan)
FIGURE XIX-B
Number of re-planned orders
0 10 20 30 40 50 60 70 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 2005 2006 2007 Month/Year Ord ers
FIGURE XIX-C
Delivery reliability rate
0% 20% 40% 60% 80% 100% 120% 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 2004 2005 2006 2007
Delivery reliability (APS) Delivery reliability (VKC) Target
Delivery reliability rate of APS since implementation BAAN
Some remarks to this figure:
a Low delivery performance 2004 – The low delivery performance in 2004 was caused by the
implementation of a new ERP-system (BAAN) at that moment. Half way the year 2004 this brought some problems, which negatively influenced the DRR.
a
Difference between measurement APS and Sales – This difference can be caused by differencesbetween the ERP-systems of APS and Sales or the difference in moments of invoicing between APS and Sales. It happens that orders are kept open deliberately in order to keep up the DRR.
FIGURE XIX-D Order change - article number (total: 29)
May 2006 0 2 4 6 8 10 12 14 16 Befor e Mater ials ar e orde red Within relea sed/re queste d wee ks Within 7 day s befo re delive ry Within 6 day s befo re delive ry
Order change - article number (total: 13) May 2007 0 1 2 3 4 5 6 7 8 9 Befor e Mater ials ar e orde red Within relea sed/re queste d wee ks Within 7 day s befo re delive ry Within 6 day s befo re delive ry
Order change (demand side) type: article number on moment before delivery FIGURE XIX-E
Order lines with fixed delivery date
6000 8000 10000 12000 er of or de rs 15% 20% 25% 30% 35% % f ixed
APPENDIX XX
Trade-offs categories
Slack and Lewis (2002) divided the five generic performance objectives (appendix VI) into four trade-off categories: FIGURE XX-A Service Working capital Capital expenditure Cost versus versus versus versus versus versus Trade-off categories
(Source: Slack and Lewis, 2002)
Service
Examples:
a Degree and number of service checks
a Average waiting time for service (delivery time)
a Ability to keep waiting time short even in peak periods
a Range of services offered
Cost
Examples:
a Cost of providing a service/product
a Cost of arranging for out of stock part to be delivered
Capital expenditure
Examples:
a Costs of purchasing
a Extra physical capacity or automated processes
a Slack capacity
a Equipment for wide product/service range
a Capital expenditure on storage space
Working capital
Examples:
a Level of parts inventory kept in stock
APPENDIX XXI
Knowledge and competencies per task
in ordering process
In this appendix required knowledge and important competencies in the ordering process are described, distinguished per task defined for the ordering process of APS.
a Quotation
Required knowledge of Important competencies
Products (assortment) Customers oriented
Engineering, Purchasing and Production Environmental / organisational awareness
Production system (processes / possibilities) Result driven
Technical constructions Teamwork / Collaboration
Cost-price calculation Sociability / Listening / Relations management
Lead times (procurement / production) Creativity
Independence
a Order acceptance (order-delivery-date promising)
Required knowledge of Important competencies
Products (assortment) Environmental / organisational awareness
Sales process Customer oriented
MSP, PP, DP and SP processes Result driven
Lead times (procurement / production) Empathy / Sensitiveness
Sociability / Listening / Relations management Consequence of accepting exceptions
(rush/changes) Communication
Capacity filling Teamwork / Collaboration
Need for coordination (when about what) Trust (integrity, reliability, loyalty)
ERP-system (administrative processes) Comprehension quickness
a Order entry/processing
Required knowledge of Important competencies
ERP-system (administrative processes) Environmental / organisational awareness
MSP, PP, DP and SP processes Cope with details
Lead times (procurement / production) Result driven
Needed information for other departments Quality focus
a Capacity filling
Required knowledge of Important competencies
Production system (assembly departments) Environmental / organisational awareness
PP process Result driven
Lead times (procurement / production) Customer oriented
Capacity level Empathy / Sensitiveness
Sales process Sociability / Listening / Relations management
Communication
Teamwork / Collaboration
Trust (integrity, reliability, loyalty)
Comprehension quickness
a Complaint handling
Required knowledge of Important competencies
ERP-system (administrative processes) Environmental / organisational awareness
Sales process Customer oriented
Installation process Organisational understanding
MSP, PP, DP and SP processes Result driven
Lead times (procurement / production) Empathy / Sensitiveness
Capacity filling Sociability / Listening / Relations management
Communication Consequence of accepting exceptions
(rush/changes) Teamwork / Collaboration
APPENDIX XXIII Test results – Plan release moment
FIGURE XXIII-AOrder change - article number (total: 8) Test phase 0 1 2 3 4 5 6 Befor e Mater ials ar e orde red Within relea sed/re queste d wee ks Within 7 day s befo re de livery Within 6 day s befo re de livery
Order change - article number (total: 8) Test phase 0 1 2 3 4 5 6 Befor e Mater ials ar e orde red Within relea sed/re queste d wee ks Within 7 day s befo re de livery Within 6 day s befo re de livery
Order changes in article number during test phase (left: 4 weeks release, right 3 week release) FIGURE XXIII-B
Order change - cancellation (total: 74) Test phase 0 5 10 15 20 25 30 35 40 45 50 Befor e Mater ials ar e orde red Within relea sed/re queste d wee ks Within 7 day s befo re de livery Within 6 day s befo re de livery
Order change - cancellation (total: 74) Test phase 0 5 10 15 20 25 30 35 40 45 50 Before Materi als ar e orde red Within relea sed/re queste d wee ks Within 7 day s befo re de livery Within 6 day s befo re de livery
Cancellations of orders during test phase (left: 4 week release, right: 3 week release) FIGURE XXIII-C
Order change - delivery address (total: 110) Test phase 0 10 20 30 40 50 60 Befor e Mater ials ar e orde red Within relea sed/re queste d wee ks Within 7 day s befo re delive ry Within 6 day s befo re delive ry
FIGURE XXIII-D Number of orders re-planned (total: 553)
0 50 100 150 200 250 300 350 400 450 Befor e rele ased/r equest ed we eks Within relea sed/re queste d wee ks Within 7 day s befo re de livery Within 6 day s befo re de livery
Number of orders re-planned (total: 553)
0 50 100 150 200 250 300 350 400 450 Befor e rele ased/r equest ed we eks Within relea sed/re queste d wee ks Within 7 day s befo re delive ry Within 6 day s befo re delive ry
APPENDIX XXIV Overview capacity on day level
Overview capacity on day level (after release of assembly/delivery plan):FIGURE XXIV-A
Capacity week 40
North
Assembly department
1 V00083092 Arnhem Employee 1 Customer 1 V00083824 Groningen Employee 2 Customer 2 V00082076 Utrecht Employee 3 Customer 3 2 V00082077 Utrecht Employee 4 Customer 4 3 V00081811 Utrecht Employee 5 Customer 5 V00082078 Utrecht Employee 6 Customer 6 4 V00084231 Alkmaar Employee 7 Customer 7 V00082080 Utrecht Employee 8 Customer 8 5 V00084056 Utrecht Employee 9 Customer 9 V00084552 Amsterdam Employee 10 Customer 10
DayTotal assmbly
hours Total Fixed Total Fixed Total Fixed Total Fixed Total Fixed Total Fixed Total Fixed Total Fixed
1 186 0 5 40 20 42 12 54 32 11 8 34 18 2 188 0 7 1 40 1 41 7 54 26 14 12 32 11 3 184 0 6 38 7 42 5 53 5 13 2 32 14 4 181 0 6 40 2 40 4 54 21 13 9 28 8 5 196 0 10 42 2 42 12 56 29 10 6 36 26 935 Customer Ahrend 700 Day Order SC Entered by
Warehouse Shop Tables Table-legs Pedestals Tambour -door cabinets Hinged doors 2 7 2 4 4 0 17 4 1 5 0 5 5 1 0 7 1 2 2 0 2 2 0
Ahrend 700 Hinged doors Tambour
-door cabinets Pedestals Table-legs Tables Shop Warehouse
0 0 17 7 40 0 17 0
4 1 2 1
APPENDIX XXV
Original project description (Dutch)
01-02-07 Afstudeeropdracht Master TBK, TM of Bedrijfskunde
Orderacceptatie, planning, materiaalvoorziening en productie:
Communicatie over en gebruik van plannen bij Ahrend B.V., Sint-Oedenrode
Aanleiding en achtergrond
Ahrend Productiebedrijf Sint-Oedenrode B.V. produceert kantoormeubelen, vooral bureaus en kasten (13 meubellijnen; zo’n 150 orders per dag). Producten worden op klantorder geproduceerd, wat resulteert in een enorme variëteit aan half- en eindproducten. Verkoopcentra in binnen- en buitenland onderhouden de contacten met de klant; intern verloopt het proces via de afdelingen orderacceptatie, planning, materiaalvoorziening en productie. Een goede afstemming tussen al deze afdelingen is cruciaal voor het realiseren van een hoge leverbetrouwbaarheid, efficiënte productie en winstgevendheid.
De basis voor de planning ligt in het MRP-systeem. ‘Orderacceptatie’ wijst orders toe aan een bepaalde week, rekeninghoudend met maximale capaciteiten. ‘Planning’ plant orders op dagen en dagdelen. ‘Materiaalvoorziening’ is verantwoordelijk voor de inkoop van materialen. In de productie worden drie afdelingen onderscheiden: achtereenvolgens metaalbewerking, verven/lakken, en assemblage.
De meeste tijd zijn de medewerkers echter bezig met het aanpassen van en communiceren over reeds vrijgegeven plannen: door allerlei ‘verstoringen’ (bijvoorbeeld machine-uitval, productafval, inkoopproblemen, orderwijzigingen) moeten de plannen voortdurend gewijzigd worden. Dit leidt tot een enorme hoeveelheid communicatie, overleg en samenwerking. Momenteel zijn structurele en toevallige afhankelijkheden tussen personen, afdelingen en taken onvoldoende inzichtelijk. Een beschrijving en analyse van de werkelijke communicatie tussen personen en afdelingen kan inzicht geven in de noodzaak, inhoud en efficiëntie ervan. Door het samenspel tussen de diverse afdelingen met elk hun eigen belangen en werkwijzen in kaart te brengen, kunnen zwaktes boven tafel komen en alternatieven onderzocht worden. Het bedrijf verwacht dan ook concrete aanbevelingen (en mogelijk ook implementatie) van verbetermogelijkheden t.a.v. de afstemming en samenwerking tussen personen en afdelingen.
Vanuit de universiteit bezien bouwt het project bouwt voort op een eerdere integrale analyse van het planningsproces. Parallel aan het afstudeerproject wordt een detailstudie over samenwerking tussen planning en productie uitgevoerd, net als de integrale analyse in het kader van een promotietraject over ‘de organisatie van samenwerking in planningsprocessen’.
Doel van het onderzoek en mogelijke onderzoeksvragen
Doel van het onderzoek is de communicatie en samenwerking tussen verschillende afdelingen over orders, orderwijzigingen en productieplannen bij Ahrend te analyseren en voorstellen te doen voor herontwerp. Mogelijke onderzoeksvragen zijn:
• Welke personen en afdelingen zijn op welke momenten betrokken bij het accepteren van
orders en orderwijzigingen en het maken en aanpassen van productieplannen? Wie is wanneer verantwoordelijk voor het maken, ‘updaten’ en uitvoeren van een specifiek productieplan?
• Hoe is het samenspel tussen de afdelingen orderacceptatie, planning, materiaalvoorziening
en productie momenteel georganiseerd? Hoe wordt omgegaan met afhankelijkheden tussen afdelingen en personen en welke coördinatiemiddelen worden gebruikt?
• Hoe kan communicatie en overleg over plannen, planwijzigingen en planuitvoering efficiënt
en doelmatig worden ingezet tussen de verschillende afdelingen?
• Hoe kan samenwerking rondom het planningsproces worden bevorderd en wat zijn
daarvoor de vereisten qua personen, communicatie- en IT-middelen, organisatie, processtructuur, etc.?
Verschillende onderzoeksmethoden kunnen in het project worden gebruikt zijn interviews, documentenanalyse, vragenlijst, analyse van kwantitatieve gegevens, observatiestudie en meedoen (participatief onderzoek). In overleg wordt bepaald in hoeverre het project een meer diagnostisch dan wel meer ontwerpend karakter krijgt.
Overige informatie
