Different Production Systems

1
Different Production Systems

• There are three basic production control systems
  that are being practiced today
• 1. Push Systems (MRP, MRP II)
• 2. Pull Systems (Kanban, Conwip)
• 3. Mixed production systems (pull/push and
  push/pull systems)

2
Pull Systems of Production

• In order to achieve successful quality, cost, and
  delivery ( customer satisfaction) in our
  manufacturing system, we must have three major
  systems in place
• 1. Total Quality Control (or TQM)
• 2. Total Productive Maintenance and
• 3. Just-in-time (JIT) production

3
Single Card Kanban Control
Material Flow
1
2
3
4
Order Signal (pull)
Operation
WIP
4
CONWIP
Material Flow (push)
1
2
3
4
Order Signal (pull)
Operation
WIP
5
Push Production Systems

• Many companies today plan and control their
  manufacturing operations with information system
  based on MRP (materials requirements planning) or
  its successor, MRP II (manufacturing resource
  planning).

6
Push Production Systems

• MRP in general is called a push system
  referring to the common image of in-process
  inventory being pushed from one work center to
  the next after completion of a work order.
• Push systems plan production based on forecasted
  demand in batches.
• Alternatively they are also called made to stock
  planning and control systems.

7
Push Production Systems
8
Pull Production Systems
9
CONWIP

• CONWIP (CONstant Work In Process) is an
  alternative to Kanban where a new job is
  introduced into the line only if a job leaves the
  line.
• The system operates based on the principle that a
  departing job out of the line sends a production
  card back to the beginning of the line to
  authorize the release of a new job.

10
CONWIP
Material Flow (push)
1
2
3
4
Order Signal (pull)
Operation
WIP
11
CONWIP

• Estimating the card count (Littles Formula)
• No. of Cards (WIP) Demand x Cycle Time / Batch
  Size

12
CONWIP

• From a modeling perspective, a CONWIP system
  looks like a closed queuing network, in which
  customers (jobs) never leave the system but
  instead circulate around the network
  indefinitely.

13
Kanban

• The card signaling system used in Toyota, which
  is considered the classic pull system for JIT
  manufacturing.
• Common practice in pull production is to use
  standard-sized containers for holding and moving
  parts.

14
Necessary Conditions for Pull Production Systems

• 1. More planning and responsibility must reside
  in the hands of supervisors and worker teams.
• 2. The goal must be to produce to meet demand.
• 3. Focus and motivation is to reduce WIP.
• 4. TPM must be ongoing.
• 5. TQC must be ongoing (process monitor, SPC,
  source inspection, poka-yoke, and autonomation)
• 6. Setup times must be small (SMED)
• 7. Leveled/mixed production must be used.
• 8. Flow production must be implemented.
• 9. Cooperative work attitudes and team work
  should be ongoing.

15
Pull System as a Fixed Quantity Reorder System

• The pull system is, in effect, a variant of the
  simple reorder-point system where a
  replenishment order is placed whenever inventory
  falls to a critical level.

16
Pull System as a Fixed Quantity Reorder System

• The formula for re-order point is
• Re-order Point Demand x (Lead-Time) Safety
  Stock
• where,
• lead time (time between order and replenishment)
  processing time conveyance time

17
Pull System as a Fixed Quantity Reorder System

• Example Suppose demand for an item is 105 units
  per week given a 5-day week, demand is 21 units
  per day. If production time is 0.1 day and the
  conveyance time is 0.4 days, what is the desired
  Re-order Point (ROP)?

ROP 21(0.1 0.4) 10.5 ? 11 units Question
What happened to Safety Stock?
18
Pull System as a Fixed Quantity Reorder System

• ROP estimated in terms of containers is
• Maximum of full containers in a buffer Demand
  x (Production time Conveyance time) /Container
  size

19
Pull System as a Fixed Quantity Reorder System

• Example Same as the previous problem. Additional
  information is that each container holds three
  units. What is the number of containers (K) to
  order each time?

Answer K 21(0.1 0.4) / 3 3.5 ?
4 containers
20
Pull System Container Size Determination

• Containers size in a pull system is estimated by
  a rule of thumb, that a container should have the
  capacity to hold about 10 of the daily demand
  for the material it holds.

21
Single Card Kanban Control
Material Flow
1
2
3
4
Order Signal (pull)
Operation
WIP
22
Kanban Post
23
Kanban Card Calculations

• The following simple formula is used in
  estimating the number of Kanban cards at a
  station
• Parts consumed during 1 Kanban cycle
• No. of Kanbans
• Number of parts per container
• Where
• Parts consumed Average
  demand x (1?) x (kanban cycle time)during 1
  Kanban cycle

24
Simple Pull System

• Example Let unit processing time be 0.1 days,
  demand be 21 units per day and the container size
  be 3 units. Furthermore, the stations are next to
  each other so that conveyance time is assumed to
  be zero. What is the required number of cards for
  this Kanban system?

K (21(0.1)/3 0.7 ? 1 card.Question what
happened to ? ?
25
Kanban Card CalculationsProduction Kanban with
Constant Reorder Quantity

• CT Kanban Cycle Time
• Kanban waiting time in receiving post
• Kanban transfer time to ordering post
• Kanban waiting time in ordering post
• Lot processing cycle (internal setup run
  time in- process waiting time)
• Container transfer time to final buffer
• Container waiting time in the final buffer
• No. of Cards Demand x (1 ?) x Cycle
  Time/Parts in a container

26
Kanban Card CalculationsProduction Kanban with
Constant Reorder Quantity

• Example
• Kanban waiting time in receiving post 15
  minutes
• Kanban transfer time to ordering post 0.5
  minutes
• Kanban waiting time in ordering post 0.5
  minutes
• Internal setup 6 minutes
• Run time 3 minutes/unit
• In-process waiting time) 0 minute
• Container transfer time to final buffer 0
  minute
• Container waiting time in the final buffer 17
  minutes
• Container size 3 units
• Determine the number of Kanban cards.

27
Kanban Card CalculationsProduction Kanban with
Constant Reorder Quantity

• Answer Assume that 1 day is 480 minutesP
  150.50.5(63(3)0)017/4800.1 day
• so
• K 21(0.1)/3 0.7 ? 1 card.

Question What happened to ? ? How much safety
factor did we build in by using K 1 ?
Answer (1-0.7)/0.7 43
28
Kanban Card CalculationsWithdrawal Kanban with
Constant Reorder Quantity

• CT Kanban Cycle Time
• Kanban waiting time in receiving post
• Kanban conveyance time to upstream buffer
• Container conveyance time to downstream buffer
• Container waiting time in downstream buffer
• No. of Cards Demand x (1 ?) x Cycle Time/Parts
  in a container

29
Kanban Card CalculationsWithdrawal Kanban with
Constant Reorder Quantity

• Example same data as before, this time
• Kanban waiting time in receiving post 15
  minutes
• Kanban conveyance time to upstream buffer 10
  minutes
• Container conveyance time to downstream buffer
  120 minutes
• Container waiting time in downstream buffer
  25 minutes
• What is the number of withdrawal cards needed?

Answer CT 151012025 170 minutes 0.354
days. K 21(0.354) / 3 2.48 ? 3
cards. Question How much safety factor did we
have?
Answer (3 - 2.47)/2.48 20.1
30
Kanban Card CalculationsSupplier Kanban with
Constant Order Cycle

• CT Kanban Cycle Time
• Negotiated delay (lead time in hours)
• Kanban conveyance time to supplier
• Truck waiting time at supplier plant
• Material conveyance time from supplier to
  company
• No. of Cards Demand x (1 ?) x Cycle
  Time/Parts in a container

31
Kanban Card CalculationsSupplier Kanban with
Constant Order Cycle

• Example same as before, in addition
• Negotiated delay (lead time in hours) 36
  hours
• Kanban conveyance time to supplier 4 hours
• Truck waiting time at supplier plant 2 hours
• Material conveyance time from supplier to
  company 4 hours
• What is the needed supplier kanban cards?

CT 36424 46 hours 1.5 days K 21(1.5)/3
10.5 ? 11 cards
32
Kanban Card CalculationsSignal Kanban for Lot
Production

• CT Kanban Cycle Time
• Kanban waiting time in receiving post
• Kanban transfer time to ordering post
• Kanban waiting time in ordering post
• Lot processing cycle (internal setup run
  time in- process waiting time)
• Container transfer time to final buffer
• No. of Cards Demand x (1 ?) x Cycle Time/Parts
  in a container

33
Factory Physics

• Bottleneck rate rate of the process center with
  the least long term capacity.
• Raw process time sum of the long-term average
  process times of each workstation in the line.
• Critical WIP level The smallest level of WIP,
  where the maximum line productivity is achieved
  (at the maximum bottleneck rate).

34
Factory Physics

• Throughput TH the average output of a
  production process.
• Capacity of a station upper limit in its
  throughput.
• Work in process (WIP) the inventory between the
  start and the end points of a production routing.
  All the products between, but not including the
  stock points.
• Cycle time (CT) average time from release of a
  job at the beginning of a routing to until it
  reaches an inventory point at the end of the
  routing. I.e., the time the part spends as WIP.
  It is more difficult to define this for the
  entire product.

35
Factory PhysicsLittle's Law

• The Little's law provides the fundamental
  relationship between WIP, cycle time (CT), and
  throughput (TH).
• Law 1. (Little's law)
• Throughput WIP/Cycle Time
• or
• Cycle Time WIP/Throughput
• It turns out that this law is valid for all
  production lines, not just those with zero
  variability. Moreover, it also applies to a
  single machine, a line or the entire factory.
  Some important uses of the Little's law follows.

36
Factory Physics Cycle time reduction

• From
• Cycle Time WIP/Throughput
• we deduce that reducing cycle time implies
  reducing WIP provided that the throughput remains
  the same. Hence large queues are a sign of
  opportunity to improve cycle time as well as WIP.

37
Factory Physics Law 2 (Best case performance)

• The minimum cycle time (CTbest) for a given WIP
  level, w, is given by
• ? T0 , if w ? W0
• CTbest ?
• ? w/rb , otherwise
• The maximum throughput (THbest) for a given WIP
  level, w, is given by
• ? w/T0 , if w ? W0
• THbest ?
• ? rb , otherwise

38
Factory Physics Law 3 (Worst Case Performance)

• The worst case cycle time for a given WIP level,
  w, is given by
• CTworst wT0
• The worst case throughput for a given WIP level,
  w, is given by
• THworst 1/T0

39
Factory Physics Law 4 (Variability)

• In steady state, increasing variability always
  increase average cycle times and WIP levels.

40
Factory Physics Law 5 (Variability placement)

• Variability early in a routing has a larger
  impact on WIP and cycle times than equivalent
  variability later in the routing.

41
Factory Physics Law 6 (Move batches)

• Cycle time over a segment of routing are roughly
  proportional to the move batch sizes used over
  that segment.

42
Factory Physics Law 7 (Process batches)

• In stations with significant setups
• 1. The minimum process batch size that yields a
  stable system may be greater than one.
• 2. As process batch size becomes large, cycle
  time grows proportionally with batch size.
• 3. If setup times are long enough, there will be
  a process batch size greater than one for which
  the average cycle time is minimized.

43
Factory Physics Law 8 (Pay me now or pay me
later)

• If you can not pay for variability reduction, you
  will pay in one or more of the following ways
• 1. Long cycle times and high WIP levels.
• 2. Wasted capacity (low utilization of
  resources).
• 3. Lost throughput.
• 4. Unhappy customers.

44
Factory Physics Law 9 (Lead-time)

• The manufacturing lead-time for a routing that
  yields a given service level is an increasing
  function of both the mean and variance of the
  cycle time of the routing.

45
Factory Physics Law 10 (CONWIP Efficiency)

• For a given level of throughput, a push system
  will have more WIP on average than an equivalent
  CONWIP system.
• Corollary For a given level of throughput, a
  push system will have longer average cycle times
  than an equivalent CONWIP system.

46
Factory Physics Law 11 (CONWIP robustness)

• A CONWIP system is more robust to errors in WIP
  level than a pure push system is to errors in
  release rate.

47
Drum-Buffer-Rope (DBR) Technique

• The DBR technique is first used in the OPT
  software developed by Eliyahu Goldratt, the
  father of the TOC.
• The main idea of DBR is based on bottleneck
  scheduling and the Theory of Constraint (TOC).
• The goal is to schedule the bottleneck for full
  utilization and subordinate the rest of the
  system to the needs of the bottleneck.

48
Drum-Buffer-Rope (DBR) Technique

• One way to insure the continuous operation of the
  bottleneck is to use a CONWIP mechanism from the
  beginning of the line, up to and including the
  bottleneck (the pull side).
• Push the material downstream once it passes the
  bottleneck (the push side).
• Therefore, the DBR system is a mixed pull/push
  control system.

49
Drum-Buffer-Rope (DBR) Technique

• Each order is scheduled to depart the bottleneck
  at such time that, if unimpeded from there on,
  will arrive at the customers hand just in
  time.
• All planned orders with known due dates are
  scheduled to depart from the bottleneck as
  described above by using the following formula
• depart time order due date - (sum of all
  remaining operations after the bottleneck)

50
Drum-Buffer-Rope (DBR) Technique

• In order to schedule the jobs following the
  bottleneck, they are made available to the
  downstream operation immediately (i.e., pushed).
• This pushing is continued until each jobs
  earliest arrival times to downstream stations are
  calculated.
• Once these times are at hand, the process then
  orders the jobs on those machines by using single
  machine scheduling heuristic with earliest due
  date criterion.

51
Drum-Buffer-Rope (DBR) Technique

• If during this ordering phase a job is delayed to
  depart a downstream machine (will cause a delay
  in fulfilling the order on time), yet another
  heuristic is used to reschedule that job on the
  bottleneck and the upstream operations, with the
  hope of delivering it to the customer on time.
• If a successful solution can not be found this
  way, then either the job is scheduled for
  overtime, or alternate routing is sought for for
  resolving the conflict.

52
Drum-Buffer-Rope (DBR) Technique

• The processes prior to the bottleneck (upstream)
  are scheduled moving one machine at a time
  upstream from the bottleneck. The idea here is to
  schedule the jobs to arrive at the bottleneck
  just in time
• First the departure time from the machine just
  prior to the bottleneck is calculated. Note that
  we do know the scheduled depart time of the job
  from the bottleneck.
• Therefore,desired arrival to bottleneck
  desired departure - processing time at the
  bottleneck desired departure from the process
  just prior to the bottleneck

53
Drum-Buffer-Rope (DBR) Technique

• This process is applied to all jobs.
• Similar to the bottleneck the desired arrival
  times are calculated by using
• desired arrival desired departure - processing
  time desired departure from the process just
  prior (upstream) to this operation
• Once the arrival times are at hand, again, one
  machine sequencing heuristic is used for
  scheduling the jobs on this machine.
• This process continues until all jobs are
  scheduled on all machines.

54
Drum-Buffer-Rope (DBR) Technique

• This is also called infinite capacity planning in
  MRP terminology and also used similarly in i2
  Technologys famous Factory Planner (FP)
  software.
• Once the first machine is scheduled, this
  provides us with the desired arrival time of the
  raw material to support the just established
  schedule.
• According to this first machine start schedule,
  we then look at on hand and on order inventories
  to see if we can support the calculated schedule.
  If, for some jobs there is no raw material, then
  they should be ordered to arrive just in time.
  This is the supply-chain-planning phase of the
  DBR.

55
Drum-Buffer-Rope (DBR) Technique

• The hardest part of the DBR is to convert the
  infinite capacity plan into finite capacity plan.
  This is not a small task.
• The problem, mathematically speaking, is a very
  difficult problem to solve. Let alone to find the
  optimal solution, it is sometimes impossible to
  find a feasible solution which satisfies all
  capacity constraints.
• Several heuristic procedures have also been
  suggested to find a good feasible solution.
• However, those heuristics can not guarantee a
  feasible solution even if there exists one.

56
Drum-Buffer-Rope (DBR) Technique

• To protect the bottleneck from random
  fluctuations in process times, setup times and
  other unforeseen variability, a buffer time is
  established in front of the bottleneck machine.
  This time buffer protects the bottleneck by
  bringing the jobs to the bottleneck buffer by W
  time units earlier than needed so that the
  bottleneck will never starve for jobs.
• Here, W is the time buffer for the bottleneck.
  Its size depends on how much protection is
  desired to keep the bottleneck from running out
  of work.

57
Drum-Buffer-Rope (DBR) Technique

• Let Lj represent the sum of processing times of
  all operations for job j before the bottleneck,
  and W be the desired time buffer.
• Since (j-1) jobs must go through the bottleneck
  before job j can be scheduled, we can write the
  desired relation as
• Lj W ? ? (bi)
• Here, bi is the processing time of job I on the
  bottleneck operation.

58
Drum-Buffer-Rope (DBR) Technique

• The advantage of the DBR technique is its ability
  to provide a means for supply chain planning.
• Furthermore, by using a pull system upstream from
  the bottleneck, the WIP is also controlled.
• The cycle time is reduced significantly since the
  material is ordered just in time.
• The production system is utilized to its fullest
  potential by insuring that jobs are always
  available for the bottleneck.
• Job-shop environment can also be scheduled by
  using the DBR technique.

59
Supply Chain Planning

• Lean manufacturing philosophy recognizes that to
  acquire the best purchased items, it is often
  necessary to work with suppliers to make them the
  best.
• This means joint problem solving, practicing
  quality at the source, and exchanging
  information.
• This simply means establishing partnerships with
  your suppliers.

60
Supply Chain Planning
61
SUPPLIER FOCUS

• Supplier focus is now recognized by WCM companies
  for increasing competitiveness.
• Suppliers are no longer important to success,
  they are critical to success.

62
SUPPLIER FOCUS
In essence, when customers and suppliers work
together to reduce the waste and inefficiencies
in design, manufacturing and logistics, the
resulting partnership provides significant
improvements that increase the competitive
strength of each member.
63
Who is Your Supplier?

• Your vendor
• Another facility within the company
• Another department within the plant
• Another process in the plant
• The employee right next to you providing your
  incoming material

64
New Form of Supplier Relationship

• From suppliers point of view, manufacturers are
  customers. Suppliers should guarantee quality,
  delivery and cost (QDC) to the manufacturers.

65
New Form of Supplier Relationship

• In the delivery area, frequent, small lot,
  on-time deliveries should be targeted in order to
  make manufacturer-supplier linkages tighter.
  This can be achieved by establishing a pull
  (Kanban) system between the two parties and
  within each plant.

66
New Form of Supplier Relationship

• In the quality area, the idea of quality at the
  source should be practiced as much as possible.
  
• Lean manufacturing and one piece flow should be
  practiced to the fullest extent.
• Use of Poka Yoke and SPC should be encouraged to
  the fullest extend.
• Help train your suppliers to start and travel on
  the Lean Manufacturing Journey.

67
New Form of Supplier Relationship

• More and more manufacturers are requiring their
  suppliers to guarantee six-sigma quality, which
  becomes exceedingly difficult in the push or
  batch manufacturing world.
• This is another reason manufacturers are
  demanding their suppliers to become lean by
  turning into one piece flow cellular
  manufacturing systems with 100 inspection.

68
New Form of Supplier Relationship

• The most dependable, cooperative suppliers should
  be identified and a close working relationship
  should be developed functioning as an extended
  factory from the manufacturers point of view.
• Having dedicated suppliers for production of
  certain parts is just like arranging machines for
  a dedicated material flow within a plant.

69
New Form of Supplier Relationship

• More and more suppliers are getting closer to the
  manufacturers for improved communication,
  logistics, and reduced cost.

70
Vendor Selection and Certification

• The entire process of achieving certification as
  a quality vendor is focused on building
  excellence in ones manufacturing operations.
• The basis for evaluating performance and ones
  current market position can be categorized into
  six elements

71
Elements of Vendor Certification

• Management systems
• Design, specifications, and change control
• Incoming purchased materials
• In-process operations and practices
• Finished goods
• Measurement and test systems

72
Elements of Vendor Certification Management
Systems

• Top managements commitment, leadership and
  adherence to policy of Lean manufacturing and
  continuous quality improvement
• A quality manual (and plan?) for processes and
  procedures
• Employee education and training programs to
  support LM and TQ.
• An emphasis on quality systems for defect
  prevention
• A program for annual quality improvement (AQI)
  for the elimination of waste
• Statistical methods for problem identification
  and problem solving

73
Elements of Vendor Certification Management
Systems (contd)

• Documentation control of process requirements and
  specifications
• An organizational structure for fostering
  participative quality management
• A formal program for cost of quality
• The internal quality system audit

74
Elements of Vendor Certification Design
Specifications and change control

• System for defining and communicating a
  customers quality requirements into critical
  final-product control specifications
• Procedures to perform process capability for new
  product development
• Design review procedures
• Procedure for making customer and design review
  changes
• FMEA analysis performed for new product designs
• Print and engineering change control system
• System to distribute and communicate design
  changes

75
Elements of Vendor Certification Design
Specifications and change control (contd)

• System for process improvement and design
  revisions
• System for new-job startup process and
  documentation control
• System for product identification and lot
  traceability to the design level.

76
Elements of Vendor Certification Incoming
Purchased Material

• Assessment of suppliers capability
• Qualification of supplier
• Certification of suppliers
• Receiving inspection instructions and
  documentation, with feedback for any problems
• Formal program for initiating, documenting, and
  implementing corrective actions with preventative
  measures
• Identification, isolation and disposition of
  nonconforming material

77
Elements of Vendor Certification Incoming
Purchased Material (contd)

• Reinspection and traceability of reworked parts
• Material planning, scheduling and job release
  control system
• Material storage control system for purchased
  components and supplies.

78
Elements of Vendor Certification In-Process
Operations, Control, Practices

• Process sheets and standard work instructions of
  each operation of each part, incorporating visual
  information where possible
• Knowledgeable and involved operators in Lean
  manufacturing, Kaizen and TQM.
• Setup instruction sheets for all equipment
• Instruction sheets for first- and last- piece
  inspection and in process inspection.
• Work flow and material identification and control

79
Elements of Vendor Certification In-Process
Operations, Control, Practices (contd)

• Inspection, scrap audit reports, and feedback
  control
• Customer return and rework procedures
• SPC and corrective actions
• Procedures for performing, documenting and
  distributing process-capability analysis
• Total preventative management (TPM) program in
  place.

80
Elements of Vendor Certification Finished goods

• Material storage control system (FIFO?)
• Packaging and handling instructions
• Material distribution control (test, verify,
  record)
• Proper storage facility for quality preservation
• Final inspection and control at shipping
• Audit history and tracking of product quality

81
Elements of Vendor Certification Measurement and
Test Systems

• Gauge control program (incoming, in-process,
  final)
• Calibration schedule and records for all
  measurement and test equipment
• Traceability and conformance to national and
  international standards
• Deterioration tracking and maintenance program
  (fixtures, tooling, molds, patterns, etc.)

82
Elements of Vendor Certification

• The list of elements above, in essence, provides
  a means to objectively evaluate the effectiveness
  of the quality systems/procedures and
  performance/adherence present in a manufacturing
  organization
• This evaluation, in turn, provides a basis for
  decision making, corrective actions, and ongoing
  quality improvement.

83
Supplier Lead Times

• Vendors are continuously pressured by their
  customers for more frequent deliveries and
  shorter lead times
• Particularly those manufacturers which have
  advanced significantly along the lean
  manufacturing journey and converted into Kanban
  manufacturing control system are expecting more
  frequent deliveries just in time.
• Often several times a day and smaller quantities.
• If the vendor is not already into the lean
  manufacturing journey, they can satisfy these
  demands only at the expense of excess inventories.

84
Supplier Lead Times

• Excess inventories and build to stock environment
  always increases manufacturing cost and
  compromises quality
• Larger lot production causes longer cycle times
  and thus longer lead times for promise to
  customers.
• Longer lead times, higher inventories, lower
  quality and increased manufacturing costs often
  leads to lost customer orders and abandonment by
  the customers
• In order to remain competitive we must become
  lean. Lean manufacturing is the key to staying
  competitive and winning more contracts, more
  profits, and growth.

85
Goal in Supplier Relations

• Become a lean manufacturer and help transform
  your customers and vendors along your supply
  chain to become lean as well.
• This will require providing necessary technical
  know-how to your supply chain partners through
  company sponsored workshops, pilot projects and
  visits to help speed up their journey into lean
  manufacturing.