Lean Material Basics
MRP/ERP
We now have very sophisticated material requirement planning (MRP) and enterprise resource planning (ERP) software systems to help manage purchases of goods and services and tie all our plants and suppliers together worldwide. There are internet-based supply chain services, and technology continues to advance offering higher-level planning systems (Figure 23.1). However, drawbacks come with these advanced systems. The systems usually are not capable of planning to the hour, often lack data accuracy, require large investments, both in capital and hours for training and implementation, and require continuous maintenance. Many companies have set up their procurement systems and supply chains to match the software. This is a major flaw as it should be the other way around. *
Figure 23.1 Smartbin system. (Photo supplied by Snow Jiang—courtesy of Bombadier, Montreal, Quebec, Canada—Jiang, Mr. Green Ju, Operations Director, Tomas Andersson, General Manager; the Smartbin system is supplied by Bossard Worldwide, http://www.bossard.com.) (Source: BIG Archives.)
The Achilles heel of MRP is managing lead-time offsets and keeping the data in the system accurate to a class “A” level. If someone scraps a part but doesn’t update the MRP system, it (MRP) still thinks the part is available for use; thus, the MRP system doesn’t trigger the reorder quantity. Class “A” performance is assessed by meeting 50 measurement criteria (Figure 23.2, which are composed of operational and behavioral measurements. Behavioral metrics deal with doing the right things, while performance measurements assess if you are doing things right.
Figure 23.2 MRP class-A checklist. (Source: BIG Archives; AlliedSignal Training Materials furnished by Alban Associates Inc.)
We are not proposing companies eliminate MRP entirely. We still need MRP for the Bill of Material (BOM), parts lists, supplier forecasting, to manage non-kanban parts, etc. Some companies will try to use kanban and MRP together in the beginning. We support this approach, if necessary, but the approach requires the company must manage two systems. What companies find is the kanban bin always triggers before MRP. If they continue to let MRP trigger, we find the lead-time offsets are so bad that they normally end up with significant excess materials in the system and on the floor.
Consigned Inventory
This inventory is in the manufacturers or customer’s facility but still owned by the supplier. Sometimes the inventory is owned by the customer but in their supplier’s plant, normally fenced in. This inventory can also be tied into flex fence management.
Breadman Systems
Breadman is a term normally applied to parts consigned or vendor managed and centralized in one or several locations within the plant and taken to the lines by operators, supervisors, or material handlers.
Kanbans
Kanban literally means “watch over a board for a period.” Kanbans facilitate inventory management by providing a trigger—i.e., sign or signal for replenishment. According to Taiichi Ohno, kanban is a means through which JIT is achieved. Ohno believed the goal for kanbans should be no more than five pieces of inventory with a goal of zero inventory. This would mean the prior process would produce the parts needed for the next process JIT.
The purpose of a kanban system is to control the flow of material by providing inventory as a buffer to synchronize two disconnected processes. Kanban is a visual management tool to help curb overproduction, the number one waste, and for detecting delays in the process or when processes are producing ahead of schedule (a pacemaker to prevent overproduction—i.e., produce only what is ordered, when ordered, and quantity ordered). Kanbans are inventory, thus we must constantly work to minimize the amount of materials. A kanban trigger or signal can be an empty space, an empty bin, a piece of paper, an electronic signal (lights or Electronic Data Interchange (EDI)), or an icon (e.g., rolling golf balls down a tube). The term kanban can initially be very confusing, as the term kanban itself is used in several ways.
Vendor-Managed Inventory (VMI)
This inventory is in the manufacturer’s or customer’s facility but still owned by the supplier or manufacturer, respectively. The difference between this and consigned inventory is this inventory level is physically managed by the supplier.
True Partnering with Suppliers
The goal is to move suppliers from the typical antagonistic environment to one where the supplier becomes a true partner or an extension of your facility. The goal with Lean is to develop and nurture a partnering supply base, which means the supplier literally becomes an extension of your company, similar as any internal manufacturing or transactional area.
True partners share the same systems and update their customer immediately if any problems surface. True partnering is ensuring the suppliers are involved early in the design phase to suggest cost-saving ideas for materials used, labor required, setup time reduction, and standardized tooling requirements. True partnered suppliers do not cut margins but work with their customers to reduce their costs. The goal is to keep your partners as viable sources by maintaining reasonable profit margins.
Partnered suppliers will respond immediately to production problems and work together to secure and maintain the business of the end customer. The test for a true partner supplier is what happens when any supplier in the chain has a catastrophic problem. Do all the other suppliers in the chain help that supplier to overcome their problem? A good example of this was the 2011 earthquake in Japan when Toyota suppliers all came together to help and support each other.
It is surprising how many companies have a totally reactive supply chain. They do not actively manage their suppliers or supply base and switch suppliers to achieve a better price or delivery. Many use auction buying where they constantly compete suppliers against each other. This strategy may yield the lowest price but at the total cost of material might actually be higher.
Stockroom Materials
These materials include raw materials and in many cases pre-built subassemblies. Many stockrooms have carousels that we work to eliminate over time along with the kitting of parts. Carousels (Figure 23.3), while sold as efficiency improvements, reduce efficiency but generally do free up space because all the material is now stored vertically 15 to 20 feet high. Some are even called Lean Lift®.1 The problem with carousels is that there is normally only one operator, it can only be operated from one position, and the software is slow. Our goal is to eliminate carousels and pre-built inventory from the stockroom. This requires a phased-in plan with two components:
Figure 23.3 Carousels. (Source: BIG Archives.)
1. Pre-built subassembly parts must be removed. This means BOMs must be flattened, with the parts now assembled in the cells, in the sequence they are required.
2. Raw materials and components must be moved next to or near the lines where they are used. This way, the team leader or supervisor can visually determine the status of their parts.
This strategy eliminates the constant searching for parts on the floor, having someone assigned to locate the information in the computer to see if they are available in the stockroom, then filling out a stockroom request, having someone remove them, and finally take them to the line. We have found that the size of the stockroom many times will indicate where a company is in terms of their Lean maturity path.
Pros and Cons of Kitting Parts
Kitting is a process where we pull various parts for a sized lot of an assembly or subassembly. The lot size might be based on a work order or an economic order quantity, anywhere from one piece to 1,000 pieces or more, depending on the batch size being built. Kitting is normally, but not always, associated with batching. Most batch companies use some form of kitting.
As companies move down the Lean path, Point of Use (POU) materials and kanbans replace traditional kitting. Some companies may be forced to kit, particularly in aerospace applications where lot traceability and serialization are required. But in many cases, we have been able to work around this with kanban systems (described later in this chapter). The very nature of kanbans and one-piece flow makes kitting and serialization much easier than trying to manage it in an environment where there are three to four turns a year.
For some reason, it is human nature to think that kitting parts is the most efficient way to handle materials. We have even seen Lean companies go down this path. Why does this occur?
■ We want to make sure there are no shortages, and if there are shortages, we put them on order and mark the kit short. Of course, the kit will normally go to the line short where now we build it short and have to put the assembly aside until the parts are received.
■ We make sure the parts are the right quality and meet the specs.
■ It is now easier for the operator to obtain parts since they are all right there in the kit. But what about when the kit is on several pallets or a small kit is all mixed up in a bin, or the parts are mixed up on the tray or the wrong parts are pulled?
■ By having the kit ready, the operator can assemble right away. However, the parts are normally still in their original packaging, and the operator must stop to remove and trash the packaging, which is waste.
■ Very seldom are kit counts accurate. Why? Because we have humans counting them for the kits and humans taking the parts off the kits.
If we negotiate with the supplier to deliver parts to the POU, all the expense and problems associated with kitting can be eliminated. In many cases, the suppliers (vendors) will manage the inventory as part of a vendor-managed inventory (VMI) system. The VMI system allows parts to be brought to the line, in the order needed, which provides immediate visibility to shortages.
Supplier Kitting
Supplier kitting sounds good at first glance but takes a tremendous amount of work to make it successful. It is an easy sell to the customer because they no longer need to pick their own kits or carry the inventory; but the costs and systemic problems associated with kitting are still in the value stream regardless of who is doing the kitting. The first problem companies find is the transfer of the BOMs and all the errors as well to their suppliers.
PFEP
PFEP is an acronym for plan for every part. For an example of PFEP, see Figure 23.4. This term was first coined in 2003 in the book Making Materials Flow.2 The basic idea is to literally plan each part in terms of usage, locations, replenishment quantities, container sizes, and supplier information, and in many companies we add how the part is planned if it is in MRP. We only utilize the data necessary for the implementation. The vision for the PFEP is to create a pull system from the customer through the supply chain where we have the following:
Figure 23.4 PFEP example. (Source: Making Materials Flow, Rick Harris, Chris Harris, Earl Wilson LEI, © 2003.)
■ Level-loaded demand
■ All parts vendor managed and at POU
■ Shop floor control system removed from MRP
■ All material triggers come from kanban
There will always be some parts which do not fit this vision and still have to be managed by MRP. We are literally reviewing each part to determine the triggering strategy, whether it be: kanban, MRP, Min max, or other. It is a tool that gets all the information about each part in one spreadsheet on one row. In the past, a multitude of screens or reports had to be run to glean the same data we now have in one row on the PFEP.
PFEP provides a mechanism to track and determine the parts needed, the current demand, and the current state inventory information. We need to know where they are located, how many will be replenished, and a buffer plan to ensure that supplies will be available to meet peak demand. Peak demand is extremely important to consider, especially if your sales teams have promotions or large lot discounts, etc.—all the things that get in the way of level loading. Our experience is it is better to err on the side of too much inventory in the beginning and then to wean yourself off it rather than trying to cut the turns so low that you run out. If the kanban runs out, skeptics will surface and the effort may fail. Until you can get rid of the peaks, you must consider them in the demand and kanban sizing. We generally add a small buffer of supplies called safety stock to cover this risk (Figure 23.5).
Figure 23.5 Buffer and safety stock. (Source: BIG Archives.)
PFEP is very time-consuming but so worth the effort. One can have IT set it up to feed monthly or more frequently by MRP system. We utilize the PFEP to integrate the kanban information for each line as well as highlighting where adjustments are required due to changes at the master schedule level or customer demand. It is important to have an owner assigned to the PFEP updating process to ensure the kanban sizes are adjusted based on changes in mix or demand.
The goals/benefits of the PFEP are to:
■ Decrease lead times by 80% or more
■ Setup up pull-type production ordering kanban systems for finished goods
■ Decrease inventory throughout the plant and increase turns
■ Free up warehouse space and cash, but can impact short-term profitability
Work Orders, Which Are Short Material, Will Shut Down the Line
Once you have a Lean line, it no longer makes sense to start a job (work order) that is short parts. Companies continue to violate this rule because they think it will help them; however, when a sub assembly or assembly is built short, the people working after the shortage will be idle until the next unit reaches them. Another disadvantage is that production control needs to find a place to store the half-built part(s), which requires space and a label to identify what is missing. Then production control and shop-floor control teams must meet every day to determine when we (manufacturing) can finish the job, which requires the supervisor to pull someone off the line to finish it. What a mess! These problems are all system induced and are a result of kitting. Clearly, a Lean management system that utilizes a VMI process will provide significant benefits to the manufacturing and operations teams.
Scrap, Excess, and Obsolete
What is the value of your E&O? Do you wonder how we seem to always end up with so much? There are several root causes of E&O. The list is large and can almost always be summed up as the result of violating our number one waste—OVERPRODUCTION. Plans should be in place; independent of the system you utilize, to avoid excess inventory and obsolescence.
Recycling Containers
There are various categories for containers. They are Recycle (grind up and reuse), Reusable (use the same container repeatedly), Re-Purpose (figure out how to use the container in a totally different way or application).
Recyclable containers make sense (Figure 23.6) and are friendly to the environment as the reusable containers eliminate all the packaging, which used to come with the parts. Think of how much time and money is wasted each year, packaging up parts in bags, then small boxes, and then larger final shipping boxes. The receiving company also wastes time unpackaging the parts. Many times, the parts end up on the line in the plastic bags in which they were shipped. What does this do to efficiency? The first thing the operator must do is remove the parts from the bag and dispose of the bag. They will normally batch this task versus doing it in a one-piece flow, so the line shuts down. There are companies that now have zero landfill waste. Lean is Green!
Figure 23.6 Reusable containers—no packaging to remove—Lean has always been “Green”. There are three types of containers: Reusable, Recycle, Repurpose. (Source: BIG Archives.)
ABC Classification
Parts can be classified into various types, which is called ABC stratification. Companies have different definitions for ABC classifications. Experience has proven over and again that the Pareto rule applies to parts classification. We have found that typically 20% of parts account for 80% of inventory dollars, usage, and suppliers. By examining and understanding this distribution, we can implement phased-in strategies to manage and lower our inventory costs. ABC analysis can be performed using either dollars or usage as a criterion or a combination. We normally build both usage and dollar analysis into the PFEP. Parts are generally classified in two ways: either by individual part dollar value or overall part usage by volume or by total dollar value.
We start out managing “A” parts down to the week with a goal to manage them down to the day or hour. This is easy to do as it is relatively few parts and suppliers. We start managing “B” parts to two weeks with a goal to move toward one week and then days (and eventually hours). We like to look at “C” parts as parts initially at the one-month level and move toward weeks, and then days. We then work toward moving the “C” parts from capital to expense, which removes the “C” parts from MRP pick lists and treats them as floor stock or expense parts. The parts still appear on the Router. The “C” parts are normally screws, fasteners, wire connectors, etc., and are prime candidates for breadman and later material warehouse or lineside VMI.
Shift to Strategic Focus
In Lean, we recommend that materials organizations shift to a strategic material focus (Figure 23.7). This requires the materials or operations organization to create a position that will review the overall materials plan by commodity by program. A review is made of all materials, utilizing the plan for every part tool (PFEP), across all programs or product lines in the site or sites.
Figure 23.7 Lean manufacturing—Materials management strategies. (Source: BIG Archives.)
The strategic materials area manages the A and B items by commodity by program/product line. Annual or multiyear requirements are packaged, quoted, and negotiated with suppliers. If necessary, company-owned tooling may be moved to a new supplier. Pricing is negotiated with any tooling amortized into the individual unit price. Each supplier and site is provided a list of what parts were negotiated at what price with each supplier. These suppliers eventually become partnering suppliers. The strategic materials group is responsible and accountable for managing the partnered suppliers. The strategic group is responsible to send the suppliers one-, three-, and six-month forecasts of upcoming requirements and negotiate flex fences to cover surges or decreases in demand.
One of the main goals is to reduce and localize the supply base. It is much easier to manage a small number of high-quality and value-oriented suppliers than many mediocre suppliers. The closer the supplier facilities are to the plants, the easier it is to set up milk runs. Milk runs are named after the old-style milk delivery trucks where each truck has a route with designated number of stops within a certain time, which is like school buses today except they are dropping off empties and picking up full containers of parts versus school children.
Buyers Assigned by Commodity versus Program Strategies
Those with material backgrounds know there has always been a struggle between commodity and program (value stream) buying. When buying commodities, the buyer gains a certain amount of expertise within the industry main sources, brokers, delivery expectations, and amount of negotiation possible. The other advantage is only one representative of the company contacts each supplier. However, if a buyer is behind in placing requisitions, the buyer can negatively affect every program in production. They become a “specialist”, where they tend to get pigeon-holed in that commodity and it is difficult to get cross-trained on other commodities.
When materials are changed to a program or product line focus, each buyer places all the orders for their program or is assigned to a product line or value stream. The buyer gains expertise in the buying requirements for the entire program. The buyer is forced to learn about each commodity as they proceed, so they become cross-trained. The buyer is held to a budget for the overall program and can play a purchasing program-management–type role as to the delivery of the material. The buyer becomes an expert in the needs of the program, is many times then co-located with that program, and can make suggestions that can save the program money. This type of organization is more aligned with Lean or value-stream thinking. The Lean organization is aligned by customer and can react to customer suggestions or complaints much quicker. Now when the floor has any materials related problem, they now know who to call. This sets the stage for product teams within a company (Figure 23.8).
Figure 23.8 Materials roles and responsibilities matrix. (Source: BIG Archives.)
Strategic buyers review the total cost of material throughout the value stream, not just price variance or history. Total cost includes the cost of the raw material, operator labor, setup times, supplier inventory on hand, replenishment frequency, nonrecurring, ownership of tooling, overhead elimination, cost of receiving and inspection, defects and scrap in manufacturing, response time to engineering, recurring and nonrecurring tooling, shelf life, warranty, and the requirements imposed on the supplier’s vendor. Strategic buyers or corporate commodity teams must remember the same part at one site may require additional selection (sorting) or testing criteria at another site.
Annual or Multiple-Year Contracts, Long‑Term Agreements
Use of Commodity Teams
Commodity teams is a strategy that may be utilized in larger companies to consolidate the individual plant’s purchasing requirements to obtain better pricing and supplier partnering. The commodity teams are responsible to manage their suppliers and work to value engineer (VE) their parts and help their suppliers with their Lean journey. Some companies have incorporated this approach into an overarching logistics strategy to purchase for other organizations.
The traditional buyers move to the floor and become buyer/planner/schedulers, which are now responsible for the PFEP input for their programs and ensuring the parts supply JIT. Any major quality problems are handed off to either the commodity team or strategic material group (SMG), depending on whether it is a local or corporate long-term agreement (LTA) supplier. The strategic materials group (or commodity team(s)) is responsible to notify the supplier and campus of the awards made to each supplier.
Long-Term Agreements
LTAs are annual or multiple-year contracts with suppliers. The goal is to lock in the best pricing with a long-term quantity and quality commitment but only take material as it is needed. LTA may have any of the following components:
■ Can range from a year to five years.
■ A fixed price is the norm; however, time and material contracts can work for some services but is a last resort.
■ Some escalation factor built in, that is, price of precious metals pegged to an index, with rebates if certain thresholds are met and options for pricing for additional years.
■ Continuous improvement requirements.
■ Lean assessment components.
■ Flex fences.
■ EDI and Logistics terms.
LTAs should have built-in quality requirements with the goal of zero defects. Suppliers should have ongoing requirements/challenges to reduce the cost of the product whether it is through design or taking waste out of their processes. It is important to make sure your suppliers are financially viable. Electronic data interchange (EDI) refers to the ability of supplier and customer computer systems to talk to each other. It eliminates the need for paper purchase orders or other paper-based transactions. EDI systems will allow the supplier to see the customer’s part usage. There are also electronic and internet-based kanban systems available in the market today.
Flex Fences
Flex fences is a concept that provides flexibility to an LTA. Flex fences examine the overall horizon of the agreement and build in risk mitigation plans in the event the projected volume was to increase by 10%–30% or reduce by 10%–30%. For example, we may pay the supplier to keep extra raw materials on hand so we can increase our volume by 30% over a specified period of time. We may arrange with our supplier to have 10% of the material just about completed all the time in case our volume increases rapidly (see Figure 23.9).
Figure 23.9 Flex fences. (Source: BIG Archives.)
Forecasts
Forecasts are a necessary component of any materials system. However, we always say an accurate forecast is an oxymoron. The problem with forecasts is the longer the forecast horizon, the less accurate it usually is. The goal of just in time (JIT) is to reduce the cycle time to allow a forecast in days or weeks versus months.
Early Supplier Involvement (ESI)
Engaging suppliers early in any of your Lean initiatives, with the goal to decrease inventory, can save significant dollars and should be a part of the overall materials cost-reduction strategies. Once suppliers are engaged and partnering with your facility, they should receive feedback (sometimes in the form of report cards) on their progress for quality, cost, delivery, and service (QCDS) improvements. Early supplier involvement (ESI) is also tied into 3P. This process involves the supplier very early on but generally after the concept phase. These suppliers are true partners working with design-to criteria with cost and value engineering targets set by their customer.
Supply Sequencing
Part of LTAs may involve sequencing of parts to fit the supplier’s assembly line. This typically involves loading the parts in reverse order, so when they are offloaded they are in the correct order. Supplier sequencing is generally supplying to the automotive industry where delivery is measured to the hour.
Certified Supplier Program
Certified suppliers generally have met the quality, production, and financial criteria necessary to support bypassing receiving and incoming inspection and can deliver directly to the floor using a breadman stock, kanban warehouses, or lineside material process.
Risk Mitigation Plans
These plans are paramount in the event there is an unforeseen problem with a supplier’s order. This is especially true at a strategic team, commodity team, or LTA level. The supplier should have this as part of their agreement. Another term for this is developing a failure modes and effects analysis (FMEA). This tool looks at all the things that could go wrong and the likelihood of it going wrong and the severity or impact if it does go wrong, and what corrective actions can be put in place in the event the unexpected happens.
Kanban Replenishment: Constant Time or Constant Quantity
Kanbans can be replenished in two ways:
1. Constant time means they are replenished the same time each day or several times a day. This is referred to as breadman-type replenishment, which is similar to grocery store shelves being restocked each night.
2. Constant quantity is like the two-bin system. It may empty out at any time, and we refill it with the same quantity every time.
There are several types of kanbans, as explained in the first six chapters of the book entitled The Toyota Production System.3 The main types are withdrawal (Toyota refers to this as retrieval) and production (Toyota refers to this as informative)4 kanban.
The simplest type of kanban is called a two-bin system (see Figure 23.10). A two-bin system is composed of two separate bins containing the same parts, with one bin placed behind the other. When the first bin empties, the next full bin slides down. The empty bin becomes the kanban signal or trigger visually indicating that the bin needs to be replenished. The empty bins are then collected, taken to the stock room (or sent back to the supplier), and refilled. The new bin of materials is then returned to the original location in the area. This is called a withdrawal kanban system. Kanban systems regulate the inventory in a production system as the volume or rate of the process changes.
Figure 23.10 Two-bin system. (Source: BIG Archives.)
The kanban system can be a one-bin system as well if the parts are replenished every day. Normally in a one-bin system, the bins are refilled to the top or a water level, as one might refill bread in a store. In some areas, parts are scanned into a bar code terminal as the quantity of supplies is taken. This information is passed immediately to the stock room or supplier as data for replenishment. This is called a point-of-sale system.
Kanban systems can also utilize card systems. Kanban cards are normally paper-based cards in clear vinyl envelopes or placed in a kanban post (see Figure 23.11). They are used to disseminate three types of information.
Figure 23.11 Kanban post at Bendix Communications plant, Towson, MD. (Source: BIG Archives.)
1. Pickup information
2. Transfer directive information
3. Production directive information
This is the same when using bins. The back of the bins show the pickup information, the front of the bins show the production information.
In this system, the card is taken from the empty bin and placed in a holder (to be ordered). This is called a kanban post. At certain frequencies during the day, the team leader, material handler, or water spider comes and collects the cards in the post. The cards are used to reorder the parts from the supplier. Once the material is ordered, the card is placed back in the kanban post in the ordered slot. When the new bin of materials arrives, the card from the reordered slot is placed on the arriving bin of materials. The new bin of materials is returned to the original location in the area. This is called a withdrawal kanban system. Some jobs have non-common parts. For these jobs, we must create a special order kanban card. These cards are typically generated once for a work order.
Kanban systems have two major failure modes:
1. First, the kanban system was originally designed in the plan for every part (PFEP) to support a certain maximum volume or customer demand. If this volume is exceeded, there will be parts shortages.
2. Second, if kanban cards are lost, inventory will not be replaced. If there are too many cards in the system to begin with, it will create excess inventory.
Every book has a different formula for calculating the size and number of kanban (see Figure 23.12). The simplest way to consider sizing a kanban is to think about a two-bin system. When the first bin empties out, the second one slides down to replace it. How much material do we need in the second bin? The answer is as much material as it takes to replenish the first bin and place it back behind the second bin. In addition, we need a small buffer of material to cover us in the event something goes wrong and the bin does not get replenished right away, which we define as buffer stock. We also carry some extra in case there are quality issues with the part of the process in which the part is used, which is called safety stock. It is normal to carry a small percentage of the overall quantity (up to 10%) to cover safety and buffer stock.
Figure 23.12 Sizing Kanbans—Kanban calculations. (Source: BIG Archives.)
Kanban Formula
The goal of initial kanban systems should be 12–20 inventory turns the first year and 40–60 by the third year.
How Do You Know If It Should Be a Kanban Part?
There are a lot of formulas one can use to figure out if a part should be kanbaned. We find many of these can be misleading and result in extra inventory. The simplest way is to consider any part for kanban, which has a consistent demand over a user-defined period. This may be daily, weekly, monthly, or sometimes even quarterly. Parts that are considered special orders or ordered only once a year are not good candidates. Parts specially ordered or ordered once a year are normally not good candidates.
Transition to Lineside Materials and Material Warehouse on Shop Floor
Lineside materials are generally in two-bin containers or in slotted sequence to the line. In an office, this includes any tools needed to do the job at that station such as a stapler, a three-hole punch, or a two-bin stack of blank paper. Lineside inventory can be sized differently for different applications, but the normal rule of thumb is to start out with a day’s worth of product in each lineside bin. For large or bulky parts, this may require replenishing every hour or sometimes even every cycle (assuming longer cycle times). For mixed model lines, we may have parts for each model on a different row of shelves, or we may have shelves that role up to the line and determine what will work best for your situation. The goal is to make the operator’s job easy.
The material warehouse or supermarket on the shop floor is composed of parts kept next to or near the line, which are utilized to feed the lineside materials. The end goal is to eliminate these parts and have the vendor supply right to the line (vendor-managed products). Ideally, these would be flowed-thru racks like the lineside racks, but this is not always possible.
There are two main strategies for the warehouse. It can be next to the line or in a centralized area off the line. Each strategy has pros and cons. If the warehouse is next to the line, it is easier for the team leader or group leader to see all their materials. The disadvantage is that it does add space to the cells, in that each cell has a space for the warehouse in between the lines. If the warehouse is centralized, it allows the cells to be placed closer together, but it is a longer walk for the water spider and team leader or group leader to check on their parts.
Our next step during implementation is to set up and label the warehouse materials. Labeling of supplies and where they are placed, such as shelves and bins, is important because our goal is never to have to search for a part or tool. Labeling shelves should include a designation for the rack, shelf row, and position on the shelf row. In the example in Figure 23.13, the location for the top left box is A1A, that is, rack A shelf, row 1, in position A on the shelf. Labeling the bins is important. The front bin location should match the shelf location. This is true whether they are for the material warehouse or the lineside materials.
Figure 23.13 Material warehouse rack labeling (racks can be labeled from the top or the bottom). (Source: BIG Archives.)
The back of the bin tells how or where the bin is resupplied. Labeling is an important part of visual controls and is a critical component when implementing Lean initiatives to help eliminate the waste of searching. Some racks are not conducive to lineside inventory. This type of hanging racks cannot be easily replenished from behind, which requires us to interrupt the operators to replenish the materials. Mistake-proofing elements can also be incorporated into bin labeling, for example, highlight metric versus English measurement systems or color code (labels or bins or both) with geometric shapes (for color blindness) for common parts, or different model types.
Water Spider Process
A nonstarter in manufacturing is to use your assemblers or machinists to get their own parts or tools. We must keep operators operating, thus we add material handlers or water spiders. The water spiders replenish the parts when the bin is empty or when triggered by a kanban card. This means the operators can continue to work on the product and not have to worry about replenishing their own stock. Some hospitals, such as ACMH in Kittanning, Pennsylvania, use friendly, constantly monitored AGV (automatic guided vehicles) robots see Figure 23.14 as water spiders to make deliveries. The goal is to enable staff members not to be interrupted or inconvenienced by having to search for supplies; this increases productivity and efficiency in the area. Toyota uses AGVs to automatically load and unload lineside racks. This is part of their SPS system established several years ago. We have seen this system in operation at Toyota in Japan.
Figure 23.14 Dusty the AGV at ACMH hospital in Kittanning, PA. (Source: BIG Archives.)
In assembly, the water spider is used to replenish lineside materials from the materials warehouse. They are also used to sometimes perform offline tasks or to relieve for restroom breaks. They can be used to print out labels for orders and used to help with changeovers on assembly lines. They can also be used to make sure incoming jobs (kits) have all the proper parts and quantities and stage those parts on the line where required. Water spiders can be a skilled or unskilled position.
Notes
1. http://www.cisco-eagle.com/material-handling-systems/industrial-carousels/vertical_lift_modules.
2. Making Materials Flow, published in 2003 by Lean Enterprise Institute, Inc.
3. Monden, Y. The Toyota Production System. (Boca Raton, FL: CRC Press.), 2012.
4. http://www.toyota-global.com/company/vision_philosophy/toyota_production_system/just-in-time.html.
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* SAP now has a kanban system which will trigger off of the empty bins. The only draw back is that it takes a full time person to keep the system updated.