Reduce Lot Sizes
The concept of “lot size” is common in manufacturing systems. The larger a lot or batch, the longer the lead time before the next operation will receive the batch. Batches include groups of several invoices, expense reports, resumes, or similar work. This concept is like our previous discussion of transfer versus process batching. Recall for transfer batching, units of work are immediately transferred to the next operation rather than batched. The concept is to avoid purchasing large lots, i.e., several years of supply of material to gain upfront lower prices with a negative consequence of several years’ supply. The likelihood for obsolescence increases with time. The goal is to use small lots. But this strategy requires establishing a Lean system that can adapt to changes in external demand. Several Lean concepts discussed in this chapter help reduce lot sizes. As an example, the application of SMED enables more frequent job set-ups that allow smaller lot sizes. Also, higher process yields do not require extra work to be done to make up for lost production.
The goal of JIT and Lean system deployments is to continuously move the production of work from larger batches toward single unit flow. The advantage of single unit flow is dynamic matching of capacity to external demand. In unit flow, a product or services lead time is reduced to that required to produce one unit. This enables a flexible production schedule, so commonly designed products can be more frequently produced. This results in lower inventory and higher customer satisfaction. Figure 3.9 shows the unit flow concept.
FIGURE 3.9
Reduce Lot Sizes
Mixed Model Scheduling
If designs have commonality and processes are leaned out to reduce setup times and lower lot sizes, then a production system can move toward a mixed model production schedule to further reduce lead time. A simple example is shown in Figure 3.10 in which five products labeled А, В, C, D, and E are produced over five working days using either a batch or mixed model production schedule. In the batched schedule system, the lead time to produce a product is five working days because each of the five products requires one day of the schedule. In contrast the mixed model production schedules lead time is reduced to one working day or by 80%. This is because the production sequence is hourly rather than daily and provides smaller lot sizes of the five products. The advantage of a mixed model production scheduling system is that because of smaller lead times it can dynamically respond to changes in external demand by adding
FIGURE 3.10
Mixed Model Scheduling
or removing products from the production schedule. If the demand for product “A” temporarily doubles, then its production can be increased within an hour if components are available. Alternatively, if demand temporarily decreases then the product “A” production schedule can be immediately decreased.
