In my last post I looked at strategies to manage changeover sequencing if your supplier gives you trouble. Basically, you can sometimes reduce the damage by fine-tuning the prioritization (i.e., by using the limited raw materials to make the most important parts). This second post in this series looks at similar situations if your customer acts up, or if your own system makes problems. In other words, after discussing “source” in the last article, we now look at the “make” and “deliver” part. Admittedly, some of the approaches are similar to the problems with “source.”
Changeover sequencing helps you to produce more efficiently with smaller lot sizes, less inventory, and/or less changeovers. But despite a good changeover sequence, sometimes things blow up in your face. Your supplier does not deliver, your customer wants more than you planned, or your main process went belly-up and is waiting for repairs. In any case, something is forcing your hand and messing up your changeover sequence, or more generally your entire production sequence. What do you do? Well, depending on what happened, you may have options to mitigate the damage. This first post will look at mishaps originating from your supplier, and the next post will look at difficulties originating from your customer or even from your own system.
For all your products, you have to decide between make-to-order and make-to-stock. A similar decision is needed for components or raw materials that you produce or purchase. As described in my precious posts, the key criteria is the quantity and the fluctuation. In this last post in this small series I will look at where to make the cut, and what other factory play a secondary role for your production system.
In my last post I started to look at when to produce make-to-stock and when to produce make-to-order. There are quite a few factors that influence this decision (more on this in my next post), but the most important ones are the total sales or production volume as well as the fluctuations thereof. To understand these, you could use a Pareto analysis, an ABC analysis, or an ABC-XYZ analysis. I do like to include not only quantity but also fluctuations, but usually I need to divide this into only two groups, and the three groups of ABC or nine groups of ABC-XYZ is, in my view, a bit of an overkill. Anyway, let’s have a look:
One of the questions for any production system is if the product is produced on stock before the customer order (make-to-stock, MTS), or only on demand after the customer order (make-to-order, MTO). In many cases this is an easy decision. Custom-made items are always make-to-order, since you cannot start before you know what the product will be. Everything else does have exceptions. Let me dig deeper into the decision tree on deciding which items to produce on order, and which ones for stock. This is a short series of blog posts, and the first one looks at the key aspect (but not the only one) in deciding between make-to-order and make-to-stock.
Changeover sequencing is simply creating a production sequence that reduces the changeover effort. For example, in injection molding, colors are often changed from light to dark to reduce the cleaning effort. However, like all production sequencing (like leveling, lot sizing, prioritization,….), it adds to the replenishment time. Especially if you are using pull production, a consistent replenishment time reduces fluctuations, whereas an inconsistent replenishment time increases fluctuations and hence waste. But how can we get a more consistent replenishment time?
Changeovers take away time from production, and often require larger lot sizes as well. The best response would be of course to reduce changeover times, but this is a lot of work and may not always be possible. Another frequent option is to sequence the changeovers to reduce the overall changeover time. This post looks at a way to sequence production while also being able to prioritize production.
Balancing the need of high material availability with low inventory is tricky. Pull systems are a very good way to achieve this. But sometimes people argue with me that planning can be better if you use all the available information to create a production plan which then outperforms a pull system. In theory, this could work, but in practice it rarely does. After all, that is what conventional push systems are trying to achieve, usually with mediocre results. Let’s have a look.