The Challenges of Implementing Lean in a High Mix Environment

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[Executive Brief] The bulk of successful Lean implementations are in high volume, repetitive environments like automotive companies. Nevertheless, Lean Manufacturing has grown beyond traditional high volume automotive environments into industries as diverse as pharmaceuticals, chemicals, aircraft manufacturing, electronics, and industrial products...
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Document Transcript 11 TOYOTA    PRODUCTION   SYSTEM(TPS) The Toota ProductionSstem (TPS) methodologhas a proven track recordfor improving performanceand eliminating waste. Theapproach was developed inthe 1950s, and has evolved,leading man to regard Tootaas the global leader in LeanAs currentl practiced, Leanincorporates supportingtechniques from a variet of other elds, including The Theor of Constraints, Just inTime Inventor Management,and Six Sigma. Executive Brief HIGH MIX ENVIRONMENTSThe bulk of successful Leanimplementations are in highvolume, repetitive environmentslike automotive companies.Nevertheless, Lean Manufacturinghas grown beond traditional highvolume automotive environmentsinto industries as diverse aspharmaceuticals, chemicals, aircraftmanufacturing, electronics, andindustrial products.While the TPS techniques workgreat in high volume, low mixenvironments because of their simplicity, they have proven difcult to implement in factories that aremore complex. In these high mixenvironments, practitioners have learned to adapt the ‘classic’ Toyota techniques to work outside theautomotive environment. Managing the ow of materials through a high mix environmentis different from doing so in ahigh volume environment. Thehigh mix environment requiresadaptations of traditional LeanManufacturing techniques.LEAN FOR HIGH MIXMANUFACTURINGIntroducing Value Streams forProduct Families.Traditional Lean projects start bgrouping products into smaller setsof product families, then creatingvalue streams for each famil. Thisapproach involves designing cellsthat have equipment dedicated to theproduction of a single product famil,and then implementing single-piece ow through that cell. This approach is effective in highvolume environments (like automotive)with a relativel small number ofproducts and dedicating equipment doesn’t pose a resource problem. Complex environments, however,have thousands of products visitingdozens of work centers, using a varietof possible routes. A more general approach to dening value streams is required to (a) accommodate a largernumber of product families, and (b)enable equipment sharing amongproduct families. OF IMPLEMENTING LEAN INA HIGH MIX ENVIRONMENTTHE CHALLENGES Readers familiar withLean Manufacturing knowthat its srcins lie in highvolume manufacturing atToota manufacturing. 22 Executive Brief OF IMPLEMENTING LEAN INA HIGH MIX ENVIRONMENTTHE CHALLENGES Complex environments require a more general classication of product groupings that support the goal of establishing ow, but also allow equipment to be sharedacross product families. We call this classication a “Flow Path.” Flow Paths are a conceptthat supports Lean implementationsin complex environments. Bgrouping products into families thatvisit similar pieces of equipment, ow paths are a technique for managing hundreds or thousandsof products through complexroutings without requiring dedicatedequipment. Flow paths facilitatethe logical division of the plant into multiple ows, each of which canbe considered a “focused factory,” independent of the others. Multiple ow paths can be dened for a plant, but a product can belong to only one ow path. Flow Path Management (FPM)shares several ke principleswith traditional high volume Leanmanufacturing and the TootaProduction Sstem, includingthe elimination of waste and theapplication of pull scheduling.While TPS was invented for highvolume automotive production,FPM was invented for complexindustries such as pharmaceuticals,metals, and electronics. One of the reasons for FPM’s success in these industries is that b breaking the process down into ow paths, some of the complexit of the problemis removed - allowing visibilit into the plant’s dynamics on a more manageable scale.FPM is more likel to use advancedinventor optimization methodsbecause high mix environmentshave more variabilit.Inventor can hide waste andmask variabilit within our plant.Traditional high volume Lean usessimple calculations to determinethe best levels of capacit andinventor. Inventor levels are setin most Kanban implementationsb using simple, well-knowncalculations. Kanban card countsare initialing calculated, then,over time, management slowlreduces the card count to lowerthe inventor level.But in high mix environments,setting optimal inventor levelscannot be accomplished usingsimple rules of thumb. Asvariabilit in demand, productmix, setup times, and processtimes increase, the calculatingthe appropriate inventorlevel requires more advancedcalculations. Moreover, thesecalculations must be refreshedperiodicall as the productmix changes these advancedapproaches provide updateableoptimal levels. The same conceptholds true for determining theoptimal inventor levels for raw material or nished goods inventor buffers.GENERAL OPTIONS FORDEPLOyING LEANCompanies have several optionsfor software to help with Leaninitiatives:  ‣ Enterprise Resource Planning(ERP) software sstems areideal as corporate businessinformation sstems andas a single data repositor.However, the often encourageforecast-driven push methods,which are not Lean b nature. ‣Software specically built to support Lean manufacturing, such as Invistics’ MachSix. Lean Manufacturing softwareis an extension of ERP thatcaptures and communicatesperformance measurementsin real time. This providesvisibilit into ke performanceindicators, and accelerates andsustains the adoption of Leanbehaviors. With Lean Manufacturingsoftware, manufacturers areable to manage their valuestreams and optimize theirinventor levels, even in high-mixenvironments. This allows high-mix manufacturers to enjo the benets of lean - and eliminate waste in materials, labor, andcapacit utilization.  ACHIEVINGINVENTORY OPTIMIZATION 33 Executive Brief OF IMPLEMENTING LEAN INA HIGH MIX ENVIRONMENTTHE CHALLENGES CONCLUSIONFor more than 40 ears,high-volume manufacturers have beneted from Lean methodologies. Unfortunatel,those techniques did not alwastranslate well to a complexenvironment with huge numbersof products and high variabilitin products.Lean techniques can be adaptedto complex environments whenthe effort is focused on: ‣Using ow path managementto develop exibleapproaches to dening value streams ‣ Using advanced methods tocalculate optimal inventorlevels.While man Lean techniquescan be manuall implementedin high volume environments,processes in complexenvironments can be more difcult. Manufacturers canbenet from using softwaresolutions for implementing ow path management in a complexenvironment to better manageinventor and reduce waste.INVISTICS SOLUTIONFOR HIGH MIX LEANMANUFACTURINGThe Invistics MachSix suite wasdeveloped based on provenLean manufacturing principlesand ke Six Sigma components.MachSix modules take intoaccount suppl and demandvariabilit and provide a true ow-based approach – one that aligns our processes arounda value stream. MachSix helpsbalance relationships amongccle times, throughput, andinventor to achieve bettercustomer service levels, while providing a view into plant oor dnamics.MachSix works with existingsstems to provide a completeand robust Lean manufacturingsolution.Companies looking to implementLean manufacturing can useMachSix to eliminate waste and streamline the ow of value through manufacturing. ABOUT INVISTICSInvistics provides consultingservices and supportingsoftware solutionsthat enablehigh-mix manufacturers toachieve the right inventorlevels for their suppl chainthrough advanced analticsand actionable insights.Based on Six Sigma and Leanprinciples, Invistics solutions helpmanufacturing executives improve protability by reducing cycle times and costs, while increasingthroughput and
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