Project business and “production to order” should also include supply chain planning.

All series productions plan their supply chains, consider the supply chain’s flexibility and load, and use KANBANs to assure organization within systems.

I was working for a mining machine producer, producing loaders guide on rails, on crawlers, or on wheels, drilling machines for different sizes of holes and machines, which hammered lose material from the walls of the tunnel. The plant had a large area on which all laths stood, an area in which all milling machines stood, an area in which all large machines stood, e.g., the horizontal lath and the vertical machining centers, an area for welding, and an assembly and testing area.

We analyzed the workflow and the necessary operations for the different parts. We found that more than 80% of the parts used the same sequence of machines. A welded structure was mainly machined after welding in the area of the large machines. Most of the turned parts needed a milling or drilling operation afterwards.

To better understand the system, we grouped parts into families and defined that machines that were preferably used for these parts and always in the same sequence. We explained these rules to production preparation and engineering, and asked them to maintain consideration of this production sequence during their work. After six months of correcting, improving, and asking why the rules were not maintained, we were able to define virtual value streams within the company.

We then convinced management to put some of these virtual lines together physically. We implemented a KANBAN system for the newly created value streams and described the rules for using these value streams. The most difficult job was to make people work according to these rules in the value streams. We expected people to work on different machines within the value stream to assure balancing of the value streams, and we did not allow for parts to overtake each other. Making these value streams work took us three months, with entire days spent in production. In the end, the results were amazing, as follows:

–          Inventory in process was reduced by 80%;

–          Throughput time was reduced by a factor of three;

–          The scrap rate was reduced by 30%;

–          Machine utilization times improved by 10%; and,

–          People to transport material and to organize were no longer necessary.

This result convinced management and we were assigned the task of rolling out this system throughout the entire plant. We were able to apply this system to 80% of all production. The rest of the parts were produced in the old way. In the end, overseeing this small volume was not difficult. The reduction of complexity for this limited amount of parts reduced also for them the thru flow time.

The aforementioned improvements were only a part of the improvements that we achieved. Over time, engineering understood the advantage of production in value streams and considered this in their designs. Therefore, increasing the share of parts produced in the new value streams was possible.

Another project we worked on was the production of electronic control units. A plant was set up to produce electronic control units in a highly flexible manner. The plant could not rich prices, requested by the market. Increasing production capacity was necessary, and we planned to implement this extension in value streams. We defined flow lines, but found obstacles in every control unit that prevented us from transforming the units into such a flow line. Here, we started to define design criteria that needed to to be fulfilled. Implementing this design handbook brought us success. We now had a direct comparison between the flow lines and conventional production. We achieved cost, inventory, thru flow time, and quality improvements of more than 25% in the flow lines. The plant manager in the conventional plant attempted to produce this in his plant according to the same principles of a flow line, but without putting the lines together physically. He could never close the gap between the two productions, which remained at an approximate 20% difference.

Let us bring the learning from the above examples to a conclusion:

  • The production of your parts should always be done in flow lines. Particularly for part production, we can always find similarities in design principles that allow us to use the same value stream setup for a family of parts.
  • Assembly work can be done in one place for very bulky parts. For equipment that can still be moved, a flow in the assembly is also advisable where possible.
  • Tests should always be done in a separate area with the right infrastructure and the necessary test equipment.
  • Eliminate the thinking that “our products are different; we cannot build up flow lines.” The advantage is so great that putting significant effort into analyzing the similarities in your production will pay off.
  • Define design guidelines that are preconditions for production in a flow line.

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