To understand continuous flow manufacturers'
MRP II systems requirements and to distinguish them from batch
process or repetitive requirements, operations must be examined
from five perspectives:
• Processes: Continuous flow
manufacturing sites are generally large facilities spread out
over many acres containing a multitude of plants, production
trains, tanks, silos, tankcar storage tracks, waste treatment
ponds, and administration buildings. The proverbial "plant
tour" may last several hours and involve walking or driving
many miles. Process flow follows a fixed path through large
scale special purpose equipment. Production activity is capital
intensive, with labor content reduced to peripheral functions
like control room monitoring, quality control, and maintenance.
Operationally, the strategy is to leverage manufacturing to the
hilt and mass produce a standard product with the lowest cost
per unit possible.
It should be noted that, with few exceptions,
a continuous flow manufacturing site is never 100% pure
continuous flow from purchase receipt thorough shipment of
finished goods. There usually exists a hybrid mix of continuous
flow, batch processing, and repetitive filling and packaging.
There may be an initial batch operation which mixes ingredients
and feeds them to a continuous flow line. Or a continuous flow
plant may send output to a batch operation, which then passes it
on to another continuous flow area. In most cases, continuous
flow processing ultimately feeds bulk product to a packaging
line which is batch or repetitive in nature. The continuous
portion of the total process may account for 90% of
manufacturing value added, or it may account for only 10%.
• Capacity: The challenge of scheduling
to optimize capacity utilization in a continuous flow plant is
not a difficult one. Standard doctrine says to run the plant
twenty-four hours a day, seven days a week, year round.
Production lines and equipment are well-balanced, so it is
unusual to have buffer stocks within the physical confines of a
continuous flow line. Capacity availability is at all times
clear and visible. The line either runs or it doesn't.
The capacity planning and scheduling challenge comes in the
form of allowing downtime at appropriate intervals for
preventive maintenance or changeovers. Longer-term, the
challenge is to acquire additional plant capacity or to make major
sourcing decisions. Matching aggregate production capacity to
market demand is a management decision, and the wrong choice can
have dire consequences.
• Products: Continuous flow
manufacturers produce enormous quantities of bulk commodities
like paper, cloth, oil, herbicide, flour, steel, and resin. In
chemical processing, product differentiation usually occurs
near the end of the process by varying blends, or through
packaging in different types and sizes of containers. In paper
processing, paper grade is usually determined at the front end
during pulpmaking, with further differentiation occurring in the
final slitting and packaging stages. In textiles, yarn
production determines the ultimate weights, colors, and blends,
while weaving and cutting can add an unlimited number of
patterns and sizes to the final product. In all cases,
continuous flow processes output a relatively small number of
bulk items, and then batch or repetitive finishing and packaging
processes provide an unlimited variety of finished products.
• Inventories: Most continuous flow
operations managers will tell you they have some raw materials
inventory, virtually no in-process inventory, and a little
finished goods inventory. In reality, there often exists several
months worth of these inventories, often lined up in tankcars
outside the plant. This may be required due to seasonal
availability of raw materials or seasonal demand from customers.
In most cases, the materials management function is not
controlling stock levels tightly. This problem is further
compounded when there are shelf life limitations for these
In their defense, it should be noted that the
ramification of a stockout of raw material feeding a flow line
can be catastrophic. If a dedicated line goes down, it can be
time consuming and costly, not to mention dangerous, to restore
operations. However, most continuous flow manufacturers can
benefit greatly from formal inventory control capabilities
provided by MRP II.
• Markets: To be competitive,
continuous flow manufacturers are under tremendous pressure to
keep prices down, and to spread production costs across as many
units of product as possible. However, in some cases quality can
be a big competitive differentiator. Specialty paper producers
can get a better margin for premium writing papers and facial
tissues. Another differentiation strategy is to provide
It is interesting to note that during the past
decade, a number of batch process manufacturers (particularly in
foods) have converted their resources to continuous flow
processing to get better control of quality and costs. At the same
time, certain continuous flow manufacturers (chemicals) have
retooled their flow processes into batch production to allow
them to compete more from standpoint of product variety and the
ability to deliver specialty items. In any case, all manufacturers
are constantly reevaluating their operations strategies to
determine how best to survive through the year 2000.
To be Continued
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