Lead time analysis from order to delivery : A study of lead time in the material flow and the information flow for the aftermarket at Siemens Industrial Turbomachinery AB

Abstract: Siemens Industrial Turbomachinery AB (SIT) is a company that produces and delivers medium sized industrial gas turbines to customers all over the world and is located in Finspång. The Service section of SIT handles the aftermarket of turbines with both planned and unplanned inspections/repairs. SIT-Service experience that their lead time to customers is too long and a yearly survey with customers confirmed this. Service strives for a higher customer service and since the company suspect that internal processes have safety time built into can time quickly build up. Service has different service lines depending on what kind of maintenance needed and if planned/unplanned. Different options in a combination with several departments involved in these big projects make the flow hard to visualize and makes it complex.This report has studied how SIT-Service can enable a lead time reduction from order to delivery where the flow for Parts was chosen to be mapped and analyzed for one of the service lines. This orientation of the study was partly based on directions from the company and partly delimitations by the writers of the report. Directions from the company were for example to investigate a standard scope and to visualize the flow by mapping it, all with a focus on lead time. Delimitations developed to exclude sales and transportations as well as to only investigate one turbine type and one service line. To be able to follow the flow was a decision made to investigate the flow for Parts.The study has mapped times and activities in the Parts flow from received purchase order (PO) from customer to when parts are ready to leave SIT Finspång. This mapping includes several departments and several transactions in the ERP-system, activities, tasks, queues and uncertainties. The mapping investigated how the lead time was built up by the system and one angle of the mapping was to investigate if the times in the system were consistent with the matching times in reality. To be able to suggest any changes in the Parts flow regarding lead time, the mapping was classified based on value-adding/non-value-adding, wastes, critical chain and bottlenecks. This was followed by a use of different principles in how to enable lead time reduction. These principles were: elimination, simplification, parallelization and a combination of critical chain and bottlenecks.The results and conclusions based on the two analysis parts have been divided into two parts where suggestions in the first one are believed to have a larger impact on the total lead time. This part consists of five big areas of time with several suggestions, from concrete to more general. One of the most important areas is that SIT needs to improve how the company uses the Planned delivery time; to standardize and to make sure that it is used in the same way by all involved which could eliminate unnecessary times built in. Another important area is that the Goods receiving process time could be reduced for a majority of material in the ERP-system since this differs today even if material is handled the same in reality. The second part consisting of 14 smaller areas of suggestions are believed to have a smaller impact on the total lead time but are still considered to be important to implement. All suggestions have an order of implementation which recommends what should be done first for SIT-Service. If the suggestions are implemented is it believed that SIT-Service can shorten the lead time in the Parts flow and also to get a more efficient organization.