Here’s a typical operation described in a Lean Enterprise Institute forum. Sound familiar?
“Many discrete manufacturing industries produce a range of products using a limited set of resources. Some products have steady demands while some other products have orders with specific quantities and due dates. There may be a lot of variation in work order quantities. Each work order may pass through varying operations… A factory has to plan production for a set of orders with different quantities using a limited set of resources… There may be several alternative resources available for an operation and operations may not have dedicated resources. How do you analyze and plan the dynamically changing product mix with limited resource capacity in a rational manner?”
These high mix/low volume operations are very challenging for lean because there have not been truly lean technology tools to help with complexity, variation and very dynamic change. We use our Areteium solution for analysis and modeling and Dynamics AX for execution in lean operations. Dynamics AX is world-class for lean execution, no other ERP comes close.
While we have technology, the lean principles of pull, flow, leveling, and operator balance and the methodology to implement are the same. Here’s the big picture of how we do it.
1. Understand Demand Patterns
Using transaction history, we identify runners, repeaters, and strangers for end products and for subassemblies. Using Areteium, this can be done in less than a day.
2. Determine Make To Order (MTO) vs. Make to Stock (MTS)
We compare the lead time of your operations with the lead time that your customers demand. In some cases, rapid fulfillment dictates MTS even though MTS has more waste than MTO. We want as much MTO as possible. Normally we recommend a hybrid of MTS for runners and MTO for strangers. In the middle are the repeaters where Dynamics AX aggregates demand to create kanbans of specific quantity. Areteium provides the lead time ladder and identifies potential candidates for MTS. This can be done in days not weeks.
3. Define Product Families
According to our MTO and MTS determination, we define product families by grouping common processes. Areteium matches products to families based on best fit. Thousands of products? No problem.
4. Design a Future State and Get Quantitative
We design the value stream to flow wherever possible and pull only where necessary. We decide on the appropriate signaling method whether purely visual using kanban, electronic kanban, heijunka with leveling, or fully make-to-order kanbans and take the simplest solution possible in each case. Areteium calculates the supermarket sizes and the capacity at each process needed to support our mix and volume. We identify playbooks for low volume or high volume. The challenge is to design in the flexibility to address constantly changing mix and volume.
5. Implement the Future State Supported by Appropriate Technology
For execution with Dynamics AX, actual orders are scheduled into the available capacity. We adjust by shifting work and leveling in order to deliver on time. Inventory is held only to absorb demand variation and no more. Using Areteium, we can very quickly resize all supermarkets to reflect mix or volume changes. On the shop floor, operators use an electronic board to see their work load and scan completions quickly. Operators work using visual factory but have complete visibility to their work including both capacity and material available.
With technology, many companies get bogged down sometimes after months of effort. Using the right technology tools, this process can be done in a few weeks for even very complex operations. The right tools make all the difference.
About mcaConnect
Established in 2002, mcaConnect has grown into one of the largest US-based Microsoft Gold Certified Partners focused exclusively on delivering Microsoft Dynamics AX and CRM solutions and services to mid-market and enterprise-size manufacturing, energy, and distribution companies. Headquartered in Denver, CO, mcaConnect has offices throughout the world to support multi-national implementations.
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