do you know how much money is stuck in your factory?
TRANSCRIPT
How much money
factory?is stuck in your
Let’s start with the basic measures to judge a factory’s performance:
How much money is going in the factory?
How much money is stuck in the factory?
How much money is flowing out of the factory?
Operational expense
Work in Process (WIP)
Sales
C h a l l e n g e T h e P r e s e n t
Somehow everyone keeps a track of inflow and the outflow of money
C h a l l e n g e T h e P r e s e n t
but rarely is the money stuck in the factory accounted!
C h a l l e n g e T h e P r e s e n t
What is WIP and why is it important?
WIP is basically any inventory which has begun the manufacturing process but is not a completed product.
Actual WIP = Input - Output
C h a l l e n g e T h e P r e s e n t
Advantage of a higher WIP:
Disadvantages of a higher WIP:
Not realising the pain areas of the production line,
Having a higher reaction time to quality problems and
Having a higher throughput time for orders.
A higher WIP helps everyone to keep busy without actually
increasing the production.
C h a l l e n g e T h e P r e s e n t
C h a l l e n g e T h e P r e s e n t
On the other side, there are various
disadvantages of a lower WIP
C h a l l e n g e T h e P r e s e n t
A lower than required WIP will result in:
Drying upyour line
Lowering your e�ciencies
Reducing your production
output
Increasing your operational
expenses.
C h a l l e n g e T h e P r e s e n t
This makes it quite unprofitable for anymanufacturing setup.
C h a l l e n g e T h e P r e s e n t
One of the major reasons of higher WIP in the manufacturing process are
the variations in theoutput of different processes
or simply put...
an unbalanced manufacturing process.
C h a l l e n g e T h e P r e s e n t
This results in a disrupted flow of the materialthrough the setup...
resulting in money being stuckin the factory.
So, how much money is actually stuck in your
factory?
C h a l l e n g e T h e P r e s e n t
Let us consider a factory producing
25,000 denims every day,
working for 8 hours with 1,000 machines.
C h a l l e n g e T h e P r e s e n t
If we were to put a number to money stuck in this factory based on standard WIP assumptions,
then the total money amounts to
$ 2.33 Mn.
From a process centre perspective, this is the money stuck:
C h a l l e n g e T h e P r e s e n t
Store
15 daysof storage
$ 1.13 M
Cutting
3 daysof inventory
$ 0.23 M
Sewing
30 mins of eachworkstation and
0.5 day at loadingand exit station
$ 0.36 M
Washing
3 days equallydivided betweenloading, process
and exit.
$ 0.23 M
Finishing
5 days withmajor inventoryloading station
$ 0.38 M
Is it possible to reduce the money stuck
in a factory?
C h a l l e n g e T h e P r e s e n t
C h a l l e n g e T h e P r e s e n t
Reducing the WIP levels in your factory
In order to reduce the WIP levels in your factory you need to
reduce either Failure Factor or Transit Time.
Optimum WIP = (Failure factor + Transit Time) x Capacity of succeeding process in unit time
Where,
Failure factor = unit time by which the process has been delayed historically
Transit Time = the time required for transferring the material from the preceding process to the current process.
Let us review possibilities in each of
the process centres
C h a l l e n g e T h e P r e s e n t
FABRIC STORE
Ideally sourcing locally or from nearby places would help you in
reducing fabric storage and throughput time.
C h a l l e n g e T h e P r e s e n t
Failure Factor
Number of days delayin receiving a specific
lot of fabric
Qualityrejections
Possibilities of reducing money in the process centres
FABRIC STORE
A track of delays in receipt of fabric and transit time would help in
calculating the optimum WIP and also understand if any reduction is possible.
C h a l l e n g e T h e P r e s e n t
Transit Time
Time taken between
fabric ordering and delivery
Possibilities of reducing money in the process centres
CUTTING PROCESSES
Any delay will directly result in loss of production capacity, thus a
proper priority for execution of order needs to be ensured.
C h a l l e n g e T h e P r e s e n t
Defective lay Delay in receivingfabric from store
Possibilities of reducing money in the process centres
Failure Factor
CUTTING PROCESSES
Transit Time can be neglected
as this would be miniscule
C h a l l e n g e T h e P r e s e n t
Possibilities of reducing money in the process centres
Transit Time.
SEWING PROCESSES
A proper tracking of time yielded unproductive due to machine breakdown,
operator absence, trim/material unavailability will give you data point required to
calculate optimum WIP for each workstation.
C h a l l e n g e T h e P r e s e n t
Failure Factor
Delay in receiving the cutpanels from cutting department
O� standard time for thepreceding machine / workstation
LOADING STATION WORK STATION
Possibilities of reducing money in the process centres
FINISHING DEPARTMENT
C h a l l e n g e T h e P r e s e n t
Failure Factor
Not being able to find the rightsizes and colours to pack a carton
Possibilities of reducing money in the process centres
So what are the measures you can take
to counter these factors?
C h a l l e n g e T h e P r e s e n t
Understanding and tracking each of these factors in your factory
Taking concentrated e�orts to reduce them will enable in optimising your WIP.
Also, this exercise needs to be repeated after a stipulated time period to ensure the WIP levels are catering to the current manufacturing environment in your factory.
C h a l l e n g e T h e P r e s e n t
There are solutions like
by which provide tracking benefits to help you in optimising your
throughput time by tracking all these factors with least human intervention
www.threadsol.com
For an elaborate insight on the topic, visit
www.stitchdiary.com
C h a l l e n g e T h e P r e s e n t