New Balance Athletic Shoe Inc. GROUP 1 Adit / Bhagas / Bima Dwi / Estie / Etgar Ferry / Hanif / Irreza
Magister Manajemen Universitas Indonesia
Case Summary New Balance, Inc. is an American footwear maker founded in 1906 Jim Ji m Da Davi viss bought the company in 1972 It is one of the largest makers of sports footwear in the world
The only footwear maker with manufacturing presence in the US
Case Summary In 2005, Adidas bought Reebok, prompting swift response from New Balance Management
NB2E was adopted from Toyota Production Produ ction System to increase efficiency and reduce lead time
New Balance has already introduced New Balance Executional Excellence (NB2E) program aimed at lean manufacturing
Case Summary THE US BIG FOUR (2004)
US Sales: $3,225 M | Worldwide: $13,739.7 M
US Sales: $790 M | Worldwide: $8,057 M
US Sales: $1,087 M | Worldwide: $3,785 M
US Sales: $1,022 M | Worldwide: $1,500 M
Case Summary New Balance Sales: USA vs Outside USA (in million USD) 1,200.00 1,000.00 800.00 600.00 400.00 200.00 -
USA
Outside USA
significant t for New Balance Sales in the USA is very significan
Problem Identification Operational Operational Issues
Quality Problem
Cost Issues
Late Deliveries
Made in USA Late Samples Fully Outsource
Inventory Inefficiencies
Lean Manufacturing Scaling current business model Improving performance via N2BE
The Th e THEORIES
The Th e THEORIES Lean Manufacturing •
•
A production practice involving never ending effo ef fort rtss to eliminate or reduce waste in design, manufacturing, distribution, and customer service processes Centered on preserving value with less work o o
enhance efficiency and profitability focus on speed to achieve shortest possible
cycle time •
In Lean Manufacturing, inventories will be best utilized to avoid over production
The Th e THEORIES continued Principles of Lean Manufacturing 1. Eliminat ate e waste 2. Minimize inventory 3. Max axiimize flow 4. Pull production from customer demand 5. Meet customer requirements 6. Do it right the first time 7. Empower workers 8. Design for rapid changeover 9. Partner with suppliers 10.Create a culture of continuous improvement (Kaizen)
The Th e THEORIES continued Wastes in Lean Manufacturing Any activity activity that does not add value to the product or service
8 Types of Waste Overproduction, Waiting, Transportation, Non-VA Processing, Inventory, Underutilizing People, Defects, Motion
Anal alys ysis is Case An
Anal alys ysis is Case An New Balance® Lean Process (N2BE) Lean Indicators
Issues/Recommendation
1)
Supplier
-
Purchasin Purc hasing g Ord Order er and Lead Time take too long
2)
Procurement
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Implement B2B system for purchasing
3)
Manufacturing
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Integrated communication system for forecasting, manage production level and data (e.g. trend)
4)
Warehousing
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Too many inventories low level of inventory
5)
Logistics
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Lead Time 5 weeks from Asia Pacific to Warehouse
6)
Customer
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New Bala New Balanc nce e alr alrea eady dy imp imple leme ment nt NB2E need to better implement the system
