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EPEI Part 3 – EPEI and Supermarket Sizes

Phil Coy – @leaniac

Managing Director of Strategic Services

In a lean value stream, processes can be linked in one of three ways – in one-piece flow, in FIFO lanes, or with a supermarket between them. Multiple processes in one piece flow can also be considered as a single process with multiple steps within that single process. For example, an assembly line in one piece flow with multiple stations functions essentially as one. When its running all the workstations are running, when it’s stopped all are stopped.

From that perspective then we can see that every process is bounded by where inventory stops and that every process has an associated inventory. The reason that inventory is placed between processes is to protect the downstream process from stockouts and to allow the upstream process to service its downstream “customer” as it is able. Let’s say that our downstream process requires a unit every 30 seconds but the upstream process is only capable of making a unit every 20 seconds. We would have to run the upstream process for more hours than the downstream process in order to allow enough units to be built up in advance so that the downstream process could run at its normal rate without ever being starved for work. This situation is nicely handled with a FIFO lane that allows enough inventory to build up so that the downstream process always has a unit to work on.

Similarly in the case where an upstream process has changeovers and some capacity limits, inventory in a supermarket between them allows the downstream process to pull from the supermarket as needed. The responsibility of the upstream process then is to replenish the supermarket based on downstream use. This is a classic pull system normally implemented with kanban cards.

As defined in previous posts, Every Part Every Interval (EPEI) is the time it takes to produce every member of the product family including the changeovers between products. Therefore the EPEI of a process establishes the amount of inventory needed in its downstream supermarket to prevent stockouts that would impact the downstream process.

For example, if a process has an interval of 3 days, we would have to have a 3 day supply of inventory in the supermarket since it would take a 3 days to cycle through all the members of the product family till we get back to making the same part again. And when we run the upstream process, we run with a production lot set to 3 days inventory. In this way, EPEI establishes the amount of inventory required in a supermarket. Applying this across the value stream, calculating the EPEI of each process determines the amount of inventory needed in every work-in-process supermarkets. And that in turn directly impacts the lead time through the value stream.

In our continuing focus at EPEI, next we’ll take a deeper look at changeovers.