March 9, 2016 Industry Forum Blog To make your system lean you need to introduce pull and flow. A pull system is one that is designed to make only what the customer requires, when they want it and in the exact amount. Flow means producing or processing one piece at a time. Each item is passed on immediately without waiting or being stored. This makes sense, you think. No work in progress, no inventory of finished goods, no waste. Last week you read that to introduce pull and flow you had to level the demand internally, even if your customer didn’t send the orders in a level format. Let’s try it… Let’s level the quantity Your customer orders 100 parts each week; 25 red, 15 orange and 20 each of purple, green and blue. They usually pull off 20 items a day for delivery. It seems simple. You make a level plan for 20 parts each day; starting with red and working your way down the order. The only minor problem is that each colour takes a slightly different time to make. So did we create a level demand? No! Although the quantity is level each day, the time to make each days’ work is different. This results in ‘feast or famine’. One day you have more work than you can make in normal hours and on others you finish early. To make matters worse, the customer asks for a mix of colours to be delivered each day. So we have to keep some finished stock to meet demand; about 4.5 days’ worth! Let’s level the quantity and the mix each day The ideal level demand is where the same quantity of product and the same mix of variants is required in each time period. So let’s make the same number of each colour each day; 5 red, 3 orange, 4 each of purple, green and blue. Is this level demand? Sadly the answer is still no. Although the quantity and the variant mix are level each day, we still have batches. It’s better than the first scenario, but not ideal. The work content still varies throughout the day and we still have to hold some stock, albeit only 1 days’ worth, to ensure we can meet the daily order. Let’s eliminate the batches If we make 1 of each colour at a time, we not only have the same quantity and variant mix each day, but the work content is levelled as closely as possible as well. The more level the work the less inventory needs to be held in the system to meet demand. As the lead time to produce all of the colours at least once is reduced, you can respond to changes in demand from the customer much more quickly. We call this the “making Smarties” approach. It is the ultimate aim when demand levelling. Caution! While this looks good on paper, in practise there are other consequences. If changing the variant involves a change in set up on the machine, you will increase the total amount of downtime and reduce your capacity. For the “making Smarties” approach to work you will need to use SMED, or Set Up Improvement techniques, to reduce the amount of time it takes for each individual changeover. So – how level is your plan? Are you making batches or Smarties? If you need advice on any of these techniques the Industry Forum team will be pleased to help.
