In my last post I gave some basics on how to reduce the lot size in order to reduce both inventory and fluctuations (mura). There are many different reasons why you may have larger lot sizes in the first place. Depending on the root cause, the possible solution may differ. In this and the next post I will look at these different root causes and possible solutions in more detail.
Material Flow
How to Reduce Your Lot Size Part 1—Introduction
In lean, the perfect lot size is one. Ideally, you should be able to make your products in a lot size of one. However, especially in mass production, larger lot sizes are common. Getting down to smaller lot sizes, or ideally to a lot size of one, is not always easy, and sometimes may not even be economically feasible (yet!). Let me discuss ways to reduce lot sizes.
Should You Split Your Production System into Two?
In a recent discussion on setting up a new line, a question came up: Should we make a single line (or generally a production system), or should we establish two (or even more) separate independent production lines? There are usually a handful of arguments for either side, and cost is only one of them. Sometimes the issue is clear, but sometimes you have to judge the different factors to decide. This post will give you an overview of the different factors that are relevant. Let’s dig a little bit deeper on how to approach this issue.
Examples of Job Shop to Flow Shop Conversions
I am a strong believer in the advantage of flow shops. To me, job shops are an inherently chaotic system. While there are ways to manage job shops, these are merely (more or less) successful attempts to put a Band-Aid on the chaos. To me, only a conversion to a flow shop will bring underlying stability. In this post I would like to give you both historic and current examples of successful conversions from a job shop to a flow shop.
Changeover Sequencing under Duress: Problems with Make and Deliver
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 under Duress: 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.
Make-to-Order vs Make-to-Stock: Additional Decision Factors
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.
Make-to-Order vs Make-to-Stock: The ABC XYZ Analysis
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: