To create pull production between two processes, you can add either a FiFo lane or a supermarket. In one case you will have the FiFo as part of a bigger kanban or CONWIP loop, and in the other case you split the value stream into two different kanban or CONWIP loops.
Some questions that I have been pondering are: Which one has less inventory for the same delivery performance? Is it better to use a big loop or two smaller loops for the WIP and delivery performance trade off?
Reducing inventory is one of the goals of lean manufacturing. In my last post I described why we need inventory in the first place, and why too much inventory is bad for you. Now let’s look at how we can achieve a good inventory level. First, an important statement: Inventory is not a lever that you can pull. It is more the result of other good lean improvements. In fact, merely pulling this lever and reducing inventory will actually make things worse. To gain the true benefits of lower inventory, other measures have to be taken. In this post I would like to describe what happens if you simply reduce inventory, and how to do it to achieve a lower inventory without causing mayhem in the process.
Inventory is expensive. Depending on your environment, inventory will cost you between 30% and 65% of its value. Toyota is known for (among other things) small inventories. Whereas Western companies often have weeks’ or even months’ worth of inventory, Toyota’s inventory is measured in hours.
It is no surprise that inventory reduction is high on the list for many companies. In fact, the term “lean” by itself implies lower inventories. But why do we have inventory in the first place? And why is (too much) inventory considered evil in lean manufacturing? In this post I would like to tell you the reasons why we have inventory in the first place, and why too much is bad. In my next post I will explain what happens if you simply reduce inventory, and discuss in more detail better approaches on how to reduce inventory.
In my last post, I described how supermarkets work in theory. But while knowing the theory helps, actually creating a working supermarket is much more difficult. Are there situations where supermarkets are not so useful? (Hint: Yes!). And what is needed to have a working supermarket? Let’s find out!
Kanban, FiFo lanes, and supermarkets are the backbone of many pull system. Some people even define lean production through its use of kanban and supermarkets. Yet why are supermarkets so useful? First we will look at what exactly makes an inventory into an supermarket. My next post will then give tips and hints on the practical use of supermarkets on the shop floor.
Standard wisdom for creating a good material flow is to use FiFo lanes (First in, First out). In other words, the first part that goes into the line should also be the first part that comes back out. As such, FiFo lanes and its big brother, Supermarket, are essential for any lean material flow. However, some rules of wisdom can be bent and others can be broken. Here are the top five cases when NOT to use a FiFo lane.
In my previous post, I discussed how to Determine the Size of Your FiFo Lane – The FiFo Formula. My preferred method is still an expert estimate. However, if you are interested in the math, here is a small JavaScript calculator that estimates a FiFo size for two processes.
FiFo lanes are an important tool to establish a pull system. They are often combined with kanban. However, while there is a lot of information on how to calculate the number of kanban (the Kanban Formula), there is very little information available on how large a FiFo should be. In my last post I talked about why we need FiFo lanes. In this post I want to discuss how large a FiFo should be.