This post is part of our series discussing the 7 lean manufacturing guidelines. In this post we’ll discuss supermarkets as a way to design a lean future state.
The third of the seven guidelines for designing a lean future state is to use supermarkets to control production where continuous flow does not extend upstream.
Ideally, in a lean manufacturing environment, every operation flows from the first, but that may not be possible due to limitations that you just can’t get around. That’s not to say that we don’t continually poke and prod these limits, but often we are up against what our production equipment can support.
What limits continuous flow?
Typical factors that prevent flow include:
- Changeover times – Changeover times include activities such as switching colors on a paint line, changing temperatures for a heat treat, or refreshing chemicals in a plating process.
- Inherent batch requirements – Process manufacturing processes hit this limitation all the time with engineering constraints of vessel size and surface area.
- Limitations of resources – This limitation happens when you are waiting for tools, fixtures, or other scarce resources to free up from one process so they can be used by another.
Without continuous flow, how do you prevent downstream delays?
When flow cannot be supported, we recommend you establish a buffer inventory (commonly referred to as a supermarket) after the process where flow is not possible. This supermarket will allow the downstream process to always have inventory to draw on as needed.
The process itself is responsible for maintaining a supermarket inventory to protect its downstream processes from stockout delays. When inventory is removed from the supermarket by the downstream process, a pull signal is sent to replenish that supermarket. Ideally this is “use one, make one” but sometimes you end up making several at a time for the same reasons that flow wasn’t possible. The pull signal or kanban can be anything – a physical card is common but an empty tray, an empty rack, or a depleted spindle are equally valid.
Now you can calculate targeted stock levels for supermarket items.
Because you have a supermarket, you are back to a make-to-stock (MTS) scenario. As such, you can calculate a targeted stock level from actual history, forecasted demand, lead time, and safety time understanding the service level of the inventory that must be supported. The service level reflects the level of stockouts that you are willing to allow. There is a direct relationship between the amount of inventory, the lumpiness of spikes and dips in demand, and your tolerance for disruption to downstream processes due to stockouts. This calculation of the targeted stock level lets the team know how many kanbans are needed.
How do supermarkets impact production scheduling?
For production scheduling, supermarkets with pull signals again are very simple. Each process supports its own supermarket on an as-needed basis only. There is no independent scheduling needed, the process simply responds to replenish the supermarket as it is drawn down.
Future state design must include supermarkets for every process which cannot flow and must include not just the concept of kanbans but the number of kanbans needed by item and the targeted stock level. Beyond that, processes for continual review of targeted stock levels to “resize” the kanbans are needed. Kanban itself is not an inventory reduction strategy until it is tied with processes to review and reduce the number of kanbans needed. Our Areteium lean planning software can help you map out your value streams and lean manufacturing future state design – with supermarkets when needed.
Stay tuned for the next segment on this series about scheduling operations at one point.
Written By: Phil Coy