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LEANSYSTEM.WORDPRESS.COM
LEARNING TOGETHER ABOUT INDUSTRIAL ENGINEERING, LEAN PRODUCTION SYSTEM, SIX SIGMA, AND ERP SYSTEM
Reducing Lead Time the Most Important Factor in Achieving World-Class Operations
In the 1960s and 70s, manufacturers competed on the basis of cost efficiency. In the 1980s, quality was the rage and Zero Defects and Six Sigma came into vogue. Cost and quality are still crucial to world-class operations, but today, the focus is squarely on speed. Nearly all manufacturers today are under pressure from customers to cut lead times. And rapid-response manufacturing pays big dividends. Let's clarify what we mean by lead times. Customer lead time refers to the time span between customer ordering and customer receipt. Manufacturing lead time refers to the time span from material availability at the first processing operation to completion at the last operation. In many manufacturing plants, less than 10% of the total manufacturing lead time is spent actually manufacturing the product. And less than 5% of total customer lead time is spent in the production process. The cumulative cycle times of the processes in the value stream are the theoretical limit to how much we can reduce lead times, without investing in different equipment. Clearly, there is ample opportunity to reduce lead times in most organizations. Reducing lead times doesn't involve speeding up equipment to cut the cycle times or getting plant personnel to work faster. What is does involve is the rapid fulfillment of customer orders and the rapid transformation of raw materials into quality products in the shortest amount of time possible.
Reducing Lead Time the Most Important Factor in Achieving World-Class Operations
Here is a lead time analysis for a product line at a plant we recently visited: Activity Processing In-transit Set-up/ changeover In queue On hold-waiting for materials On hold-quality Total Total Days 3 .5 .5 30 4 2 40 % 7.5 1.3 1.3 75.0 10.0 5.0 100
At this company, actual production accounted for only 7.5% of the total manufacturing lead time. As in most plants, the largest contributor to lead time is queue time -- the time product is sitting idle waiting to be processed at the next operation. Waiting in inventory, tying up cash, adding no value and causing unnecessary customer waiting.
Institute local scheduling between work cells. Visual shop floor scheduling tools, like kanban systems, can be used to minimize WIP between cells and to eliminate queue time throughout the value stream.
By employing these principles, many world-class manufacturers have shrunk lead times by 50-80%, gained market share, improved profitability and increased employee morale on the shop floor.
World Class Product Development and Manufacturing are controlled by several Laws:
The Law of Focus :
The Law of Focus says 80% of the delay in any process is caused by 20% of the activities. - Based on this we will look for constraints in any system.
Total available hours Value added work time = Waste (non-value added work time)