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Lean Manufacturing: Throughput Time

 

PART I. 

 

The stated objective of this paper is two fold. First, I would like to describe the basis of a successful implementation of throughput reduction in an electronic assembly. The assembly is relatively complex and required some significant effort among various disciplines at the medical electronics manufacturing firm where the activity took place. The second, and without a doubt, the most important objective, is to encourage the reader to begin a program in their own operation to reduce waste, including excessive throughput time, for their product in order to be more competitive in the domestic as well as the rapidly expanding global economy.

Capturing your interest in a successful throughput reduction program is secondary to successfully encouraging you to move forward and begin a pilot program within your own organization.

What Happened

As this successful manufacturing organization moved beyond implementation of Class A MRPII into the area of JIT production techniques, rumblings began to be heard from the marketing and sales organization. Lengthy leadtimes that we were quoting to our customers were no longer acceptable. Competition began to appear more responsive in a way that we were not prepared to operate. It became all too obvious that in our market place as well as others noted in the literature that we would not be able to continue with the leadtimes that existed in our manufacturing operation at the time.

A group of individuals came together to explore the possibilities of doing a pilot program in leadtime reduction. Coupling that activity with a number of other objectives, eg, inventory reduc­tion, quality improvement, documentation upgrade, etc.,the team structured a pilot program.

Cutting directly to the chase, the following lists of characteristics describe this particular electronic assembly prior to the process that we followed in trying to accomplish the multiple objectives noted above. The first list indicates the measured conditions at the beginning of this project.

1. Linear travel required 19,000ft.

2. WIP level $600,000

3. Dedicated MRP stock $400,000

4. Lead time 35 days

5. Material inspection 100%

6. Unique Inventory $300,000

7. Standard labor and material 100%

After significant effort in a team environment, the second identical list of characteristics provides an insight into what results were realized in this pilot program.

1. Linear travel required 1,500 ft.

2. WIP level $120,,000

3. Dedicated MRP stock $300,000

4. Lead time 7 days

5. Material inspection 56%

6. Unique Inventory $30,000

7. Standard labor and material 80%

As you can see by comparing these two lists of information that we were able to significantly reduce investment levels. Invest­ments in both materials and brick and mortar, dedicated to this particular assembly were so significant that a new product was, for all practical purposes, provided free space and reduced cost inventory. Throughput was reduced by a factor of five and reductions in standard cost was realized. I would like to point out that these results are not unique. Similar results were experienced in other areas of the production operations.

Three lessons are important to note at this time:

1. These results were not achieved overnight. The team was in session for more than four months. This is actual lapse time and does not count the training time for each individual or the previous 18-month involvement in learning to oper­ate in a team environment.

2. Metrics are a crucial part of any successful program and the same holds true for our throughput reduction process. The before and after views become important to each team member.

3. Not all efforts will be successful. We had our frustrations; however, we continued to move forward with the idea that every element of the production process must undergo the same type of metamorphosis that we had experienced in the pilot program.

To be Continued


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