The Impact of Variability on Process Performance

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The Impact of Variability on Process Performance
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RadPad Scenario
SkiBums.com is a manufacturer of ski equipment
and apparel. SkiBums.com has just introduced a
new type of snowboard called the RadPad. And
since its prime target market is
baggy-pants-wearing boarders who use the word
gnarly far too much, it is anxious to release
the product by the time of the winter X-Games.
The product is fairly simple to make, requiring 5
steps performed in serial. The process is a
lean process utilizing only a small amount of
work-in-process inventory. The basic process
will be nearly identical to the production line
for the other snowboard RadX. Sample processing
times for each step in the RadX process are
provided in the table on the next page (a station
consists of machines and people responsible for
one step in the production). Your 17 year-old
CEO explains to you that the process should be
capable of producing 68 units per 20 hour period
in order to meet the potential demand. He
explains that underproduction could result in
lost revenue and overproduction will result in
higher operating costs. Would a replica of the
current process for RadX be appropriate for the
new RadPad? Is it too little or too much
capacity?
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RadPad Scenario Processing Time Data (in minutes)
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RadPad Scenario
Station 1
Station 5
Station 4
Station 3
Station 2
CT 16.97
CT 16.93
CT 15.77
CT 17.13
CT 17.00

• How many boards can you make in 20 hours?

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Process Simulation
Station 1
Station 5
Station 4
Station 3
Station 2

• Inventory buffers between stations start out
  with 4 units in each.
• Each hour, each station will be able to produce
  between 1 and 6 units according to their die
  roll.
• Throughput rate (capacity) of each station?
• The amount each station produces and puts in
  inventory is limited by the amount of
  work-in-process inventory available.
• We will simulate production for 20 hours.
• Station 5 will count the actual production at
  the end of the simulation to calculate the
  throughput rate (capacity) of the system.

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Production Lines and Buffers
Station 1
Station 2
Completed
Buffer
If the buffer has 4 units of inventory and
Station 2 is capable of producing 2 units per
hour, how many units will be completed by Station
2 in one hour? What if Station 2 is capable of
producing 6 units per hour?
Actual Production
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Game sequence

• Step 1 Production
• Roll the die.
• Take min(inventory, die roll) from your
  inventory and put it in front of you.
• Step 2 Replenishment
• Push over these units to the next stages
  inventory.

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Game 1

• Initial Buffer size between each station is 4.
• What is the total production over 20 hours?

Team
Total Production
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Game 1

• Result
• Why
• Solutions

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Game 2

• Initial Buffer size between each station is 8.
• What is the total production over 20 hours?

Team
Total Production
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Game 2 Impact of Buffer Size
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Game 3

• Initial Buffer size between each station is 4.
• Use coin instead of die (heads 3, tails 4)
• What is the total production over 20 hours?

Team
Total Production
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Production Simulation Summary
Variability hurts!
With limited WIP, production variability reduces
the effective throughput rate (capacity) of the
system. Why does variability occur? Machine and
human variations, errors, raw material quality
problems,
Whats the solution?
Increase inventory Disadvantage costly Reduce
variability e.g. Toyota Production System