lead-time reduction in a high variability / low volume ...•establish the effects of the current...
TRANSCRIPT
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Lead-time reduction in ahigh variability / lowvolumemanufacturing environment
A case study at a leadingLitho-laminating manufacturer
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Why did chose this topic?• Lead-time reduction is the predominant strategic objective for the business.• Focusing on ‘High variability / Low Volume’ allowed the
exploration and demonstration of the relevance of Lean in that environment.• wanted to test whether the fundamental principles encapsulated in Kingman’s equation and Hopp and Spearman’s ‘Factory Physics’ would provide insights that will be applicable in disparate environments.• I was interested in the topic!
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To what extent can ‘Lean’ assist in the understanding andimplementation of a lead-time reduction strategy in a litho-laminating packaging company?
•Establish the effects of the current operations strategy at DSSP Lockerbie on lead-times.•Identify the relevance of Lean thinking concepts such as Kingman’s equation and ‘factory physics’ to a lead-time reduction strategy at DSSP Lockerbie. •Establish lead-time reduction strategies that are relevant to DSSP Lockerbie and consistent with Lean.
Research Question
Research Objectives
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Literature Review
•Relative lack of academic literature directly on low volume / high variety manufacturing environment – though plenty if you were prepared to dig a little deeper.•Rich veins of relevant research from Hopp & Spearman / Bicheno especially on Kingman’s Equation and Little’s Law. •Found it hard to stop, and continued finding interesting snippets even after submission.
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Current State
Started with voice of the customer……..
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Current State
Looked at internal perceptions……..
Sales Finance Planning Operations Business Improvement Quality
Average Score 3.0 2.0 2.0 1.0 3.0 3.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0Sh
ort
Adeq
uate
Long
Exce
ssiv
e
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Current State
Canvassed opinion……..
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Current State
Collected data……..
BoardMill
2.33 Hours
110,0931,234,911
Push
Current State Map
DSSP Lockerbie
Representative
Company Name:
Value Stream:
Garry HencherDrawn By:
02/08/2011Date:
2
Printer
Shift = 3
Avail % = 78.7
Prod % = 79.5
Qual %= 94.9
OEE %= 59.38
Set (min) = 39.5
CT = 3895 / hr
Batch = 9076
3
Laminator
Shift = 3
Avail % = 84.9
Prod % = 57.6
Qual %= 99.0
OEE %= 48.41
Set (min) = 19
CT = 2182 / hr
Batch = 7311
2
Die-Press
Shift = 3
Avail % = 63.6
Prod % = 64.2
Qual %= 99.8
OEE %= 40.75
Set (min) = 21.5
CT = 2304 / hr
Batch = 5972
3
Gluer
Shift = 3
Avail % = 79.4
Prod % = 75.0
Qual %= 99.4
OEE %= 59.19
Set (min) = 44.1
CT = 4335 / hr
Batch = 24015
Push
111,534
Push
254.25 hours
3.35 hours
16.68 hours
2.59 hours
25.73 hours
5.54 hours
Paper Mill
542,034
89.62 hours
Daily ScheduleDail
y Sch
edule
Daily
Sch
edul
e Daily Schedule
PlannerMaterials Procurement Commercial Customer
3
Despatch
Push
Push
300 Pallets
Warehouse Distribution
3600Pallets
Pull
8 hours
Conversion Lead Time = 53.89 hours
Customer Lead Time = 672 hours
Value Add Time = 13.81 hours
Conversion
Push
263.91 hours
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Current State
Value Added Time Profile……..
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Current State
Production on time performance……..
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Current State
Demand variability……..
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Current State
Product Variety……..
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Current State
Concertina Effect……..
Printer Laminator Die-press Gluer
Printers Laminators Die-Press Gluers & Finishing
D S Smith Lockerbie
1m
1m
1m
1m
1m
1m
Simplified process flow assume same feeds / hour throughput. However actual throughput rate is impacted by the number of blanks up on a sheet, therefore m2 throughput effected.
ThroughputRate m2
QueueLength
Output from process i.e. Feeds into printers, laminators, and die-press are sheets of board 1m2 while sheets are cut on die-press to 9 blanks of 0.11m2. These small blanks are feeds into gluer.
Wave moves upstream
dependent on run length
This is a visualisation of ‘concertina’ effect, similar to sinusoidal wave in non-uniform media. This will have the effect of constraining upstream processes if WIP levels exceed finite storage capacity in front of machine.
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Current State
Critical Path analysis……..
Printer
354 356
354 356
Order Placed
0 1
0 1
Laminator
610 613
610 613
Die-press
630 632
630 632
Gluer
658 664
658 664
Despatch
664 672
664 672
Repro
114 354
1 240 Earliest start & finish time
Latest start and finish time
Critical path
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Current State
Current State in summary……..•provides a fertile ground for both lean improvement activities and a strategy of lead-time reduction. •The system is characterised by excessive WIP levels as evidenced by the queues of product waiting to be processed, and the observed ‘concertina’ effect. •The current state shows that the safety buffer of 4 weeks is fully utilised. •System and operational changes are required to allow a lead-time reduction to happen without an adverse effect on service levels to customers.
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Relevence of Kingman’s equation and ‘Factory Physics’
Established critical WIP level & PWC……..
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Relevence of Kingman’s equation and ‘Factory Physics’
Excessive WIP Levels echoing observations……..
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Relevence of Kingman’s equation and ‘Factory Physics’
What If scenarios……..
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Relevence of Kingman’s equation and ‘Factory Physics’
ahhhhhhhh……..
CTq =ca
2 + ce2
2
u1− u
te
CTq =0.81+ 0.56
2
0.61− 0.6
5.17
CTq = 5.31
CT =ca
2 + ce2
2
u1 − u
te + te
CT = 5.31+ 5.17 =10.48
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Relevence of Kingman’s equation and ‘Factory Physics’
Impact of utilisation on lead-time……..
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Relevence of Kingman’s equation and ‘Factory Physics’
Cumulative Demand / Capability……..
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Relevence of Kingman’s equation and ‘Factory Physics’
Arrivals vs. Departures……..
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Kingman’s equation and ‘Factory Physics’ provide an insight into both the current state, and likely consequences of attempting to reduce lead-time. These fundamental principles also provide a guide to where efforts would be best placed to achieve a given outcome:•The practical worst-case / capability curve analysis provided an internal benchmark which illustrated that WIP levels are higher than required for current throughput levels.•Reducing the impact of high utilisation levels will have a large impact on lead-times. This might take the form of reducing the load by ‘smoothing demand’ (reducing arrival variation, failure demand) or increasing capacity (reducing process variation, remove waste). •Changing a buffer such as reducing the time buffer (lead-time) is likely to cause a reciprocal increase in inventory. This may absorb the effects of variability, but may result in poor performance of the system.•Focussing purely on process variation using six sigma or indeed Lean techniques is unlikely to have a sufficiently large impact on the system to allow a significant reduction in lead-time.
Relevence of Kingman’s equation and ‘Factory Physics’
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Relevence of Kingman’s equation and ‘Factory Physics’
Arrivals vs. Departures……..
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Lead-time reduction stratagies relevant to DSSP Lockerbie
Postponement……..investment in sheeter
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Lead-time reduction stratagies relevant to DSSP Lockerbie
Circa 2 weeks out of lead-time required for physical flow
BoardMill
2.33 Hours
110,0931,234,911
Push
Future state
DSSP Lockerbie
Representative
Company Name:
Value Stream:
Garry HencherDrawn By:
15/08/2011Date:
2
Printer
Shift = 3
Avail % = 78.7
Prod % = 79.5
Qual %= 94.9
OEE %= 59.38
Set (min) = 39.5
CT = 3895 / hr
Batch = 9076
3
Laminator
Shift = 3
Avail % = 84.9
Prod % = 57.6
Qual %= 99.0
OEE %= 48.41
Set (min) = 19
CT = 2182 / hr
Batch = 7311
2
Die-Press
Shift = 3
Avail % = 63.6
Prod % = 64.2
Qual %= 99.8
OEE %= 40.75
Set (min) = 21.5
CT = 2304 / hr
Batch = 5972
3
Gluer
Shift = 3
Avail % = 79.4
Prod % = 75.0
Qual %= 99.4
OEE %= 59.19
Set (min) = 44.1
CT = 4335 / hr
Batch = 24015
Push
111,534
Push
254.25 hours
3.35 hours
16.68 hours
2.59 hours
25.73 hours
5.54 hours
Paper Mill
48 hours
Daily ScheduleDail
y Sch
edule
Daily
Sch
edul
e Daily Schedule
PlannerMaterials Procurement Commercial Customer
3
Despatch
Push
Push
300 Pallets
Warehouse Distribution
3600Pallets
Pull
8 hours
Conversion Lead Time = 53.89 hours
Customer Lead Time = 367.98 hours
Value Add Time = 13.81 hours
Conversion
Push
1.51 hours
ConsignmentWarehouse
2
Sheeter
Shift = 1
Avail % = 80
Prod % = 80
Qual %= 95
OEE %= 60
Set (min) = 10
CT = 6000 / hr
Batch = 9076
186,000
131 Reels
Pull
Pull
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Lead-time reduction stratagies relevant to DSSP Lockerbie
Demand smoothing / heijunka
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Lead-time reduction stratagies relevant to DSSP Lockerbie
Visibility of WIP in planning
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Lead-time reduction stratagies relevant to DSSP Lockerbie
Vicious vs. Virtuous Circle
Long lead-times
Poor Forecasting / Demand variability
requirement to buffer against
variability
Short lead-times
Better Forecasting /
Demand stability
reduced requirement
to buffer
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Lead-time reduction stratagies relevant to DSSP Lockerbie
Swap Buffers – increase Capacity
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Lead-time reduction stratagies relevant to DSSP Lockerbie
Future State – Critical Path
Printer
240 242
240 242
Order Placed
0 1
0 1
Laminator
497 500
497 500
Die-press
517 519
517 519
Gluer
545 550
545 550
Despatch
550 558
550 558
Repro
1 240
1 240 Earliest start & finish time
Latest start and finish time
Critical path
Sheeter
190 192
1 3
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There are significant opportunities for lead-time reduction at Lockerbie, not least of which is the opportunity to compress the supply chain lead-time for board by integrating a ‘Sheeter’ into the business. While the time for the physical flow of product can be compressed, it is important to note that lead-time is equally affected by the impact of information flows. The capacity of office systems like artwork generation was mapped as part of this research, and excessive re-work loops caused by inaccurate or missing information will impact on overall lead-time if these processes are not considered.
Lead-time reduction stratagies relevant to DSSP Lockerbie
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Conclusions
• The researcher concludes that an understanding of Lean provides a context with which to judge the potential risks and rewards of a strategy of lead-time reduction.
• ‘Lean’ gives the organisation the means to make an informed decision. It presents the Management Team with both an appreciation of the likely consequences, and the tools and techniques that will make the strategy successful.
• Without this perspective the strategy might not only prove ineffective, but could detrimentally affect customer service.
• Kingman’s equation and ‘Factory Physics’ provide general ‘laws’ that can be applied to a broad manufacturing context and still hold true. They help illuminate underlying factors that can be hidden from casual observation, helping to reveal a path to a transformation based on the appropriate use of Lean tools and techniques.
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Recommendations for future research
• Focus on non-physical flows. • Revisit Kingman’s on installation of Shop Floor
Data Capture. • Post sheeter installation review.