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Lean Manufacturing, Basics, Principles, Techniques
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Theoretically, the ideal lot size is one. However, if customers routinely order in quantities greater than one, the smallest lot size that a customer orders is the ideal lot size. Repetitive methodologies support small lot sizes by drastically reducing setup times and eliminating paperwork and material handling efforts associated with discrete methodologies. Rather than measuring lot sizes in absolute terms, we suggest measuring them against sales or internal consumption, emphasizing the A and B items within the ABC classification system: 1 >4 weeks sales or
usage ORDER-INVOICE CYCLE The order-invoice cycle is the amount of time that elapses between initial receipt of a customer order and the date the invoice is sent (or, in an invoiceless system, the order is shipped to the customer). There are two approaches to reducing the order-invoice cycle: (1) streamline the entire company, not just manufacturing, and (2) ship from stock. The problem with ship from stock is that it permits the rest of the company to operate ineffectively and inefficiently, and it invests resources (inventory, capital, and space) to buffer the customer from the manufacturer's processes. The first approach squeezes waste and non-value-added activities from the entire process, thereby dramatically reducing cost. Therefore, we suggest that the ship-from-stock approach be used as a stopgap while the company streamlines itself. The following values are guidelines; they will vary from industry to industry, depending on actual manufacturing times. 1 8+ weeks PARTNERING/INFORMATION SHARING Repetitive manufacturers deliberately use sole-source suppliers as the best strategy to minimize total cost, minimize lead times, maximize quality, and maximize flexibility. Their suppliers become logical extensions to their own plant. 1 Adversarial—three quotes for each purchase; price is the key. Keep suppliers in the dark so they won't know exactly what is happening. 2 Negotiating for blanket purchase orders with firm pricing and delivery schedule. Providing manufacturing data to supplier so that they can plan production levels and purchase raw materials. Negotiations still focus on price. 3 Developing long-term relationships with suppliers, multiyear agreements; suppliers make regular visits to the manufacturing plant. Provide feedback regarding on-time shipment and quality data to suppliers and track trends. Delivery and quality are as important as price. 4 Sole source—suppliers involved in design teams, suppliers regularly visit manufacturing floor to discuss issues with workers, joint involvement with cost reduction teams or opportunities. Long-term multiyear agreements in place. 5 True partnership—suppliers involved in design teams, suppliers are on the floor, suppliers have permanent badges at the manufacturer's company, kanbans for releases, and supplier access to raw material inventory levels. PLANT LAYOUT Physical plant layout is an important aspect in efficiently and effectively manufacturing products. The plant should be organized to optimize flow and minimize wait time for processes, people, and equipment. Depending on the current layout and flow, changing the layout of an entire manufacturing floor can involve major relocation of equipment. However, this should not deter an organization from pursuing the benefits of an effective plant layout. Companies are frequently amazed when they document the distances that components actually travel from the time they arrive on the receiving dock until the finished goods leave the shipping dock. 1 Classic jumbled flow—frequent flier miles for parts, lots of material handlers, full time forklift repair, forklift operators are the communication system in the plant. Travel distance for components is greater than 1 Ox the diagonal distance across the plant. 2 Better-jumbled flow, with machines that serve common parts closer together. Possibly some conveyor systems. Travel distance is 5-1 Ox the diagonal distance across the plant. 3 Manufacturing cells, pilot areas, or responsibility centers are established. Travel distance is 3-5x the diagonal distance across the plant. 4 A mixture of clustered and flow lines or cells, moving toward total flow or cellular layout. Travel distance is 2-3x the diagonal distance across the plant. 5 Total flow—material flows straight through the production process with no backtracking and no detours. No work in process build ups between manufacturing stations. Travel distance is less than 2x the diagonal distance across the plant. To Be Continued STAY CONNECTED To stay current on Lean Management Basics and Best Practices, subscribe to our weekly MBBP Bulletin... and we'll send you our PowerPoint presentation "How to Survive in an Entirely New Economy." All at no cost of course. Your personal information will never be disclosed to any third party. privacy policy
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