Achieve Lean Inventories Through Feature Wise Levelling (Heijunka)

OVERVIEW

Variability in demand and hence production is a Lean Inventories reality for manufacturers. It can result in loss of throughput, and higher inventories. Legacy scheduling systems are quite inadequate in addressing this problem: either the schedules or not smooth or the quality of their schedule suffers towards the latter part of the horizon. Optessa MLS can create level production schedules, even with a large number of product features, and thus enable lower inventories.

Optessa MLS makes effective use of levelling or Heijunka which is an important concept for maintaining flow and predictability in production. A level schedule ensures that operations throughout the production process are balanced, requiring lower and predictable input material and WIP inventories.. This in turn ensures that suppliers get smooth requirements, which helps them maintain efficient and timely production.

THE PROBLEM

Let’s look at the case of a typical legacy sequence, which had high variability for 4X4 units. Note: “4x4” is a product feature like model, color or customer. Some orders require this feature while others do not.

The legacy schedule above below shows between 0 to 60 4X4 units scheduled per hour, which is highly variable or “unsmooth”. No 4X4 units were scheduled in the first half of the schedule; while the latter part of the schedule shows high 4X4 production. This means that demand for parts required for a 4x4 unit is also variable. Parts inventory will be required to maintain a peak production rate of 60 4x4 units per hour.

Chart showing the uneven distribution of production for one part by legacy system resulting in high inventories

THE SOLUTION

Optessa MLS has intrinsic leveling capabilities. Optessa production schedules thus reduce variability in production and keep inventory costs lower. Moreover, Optessa enables the user to define leveling at an overall schedule level or for a set of features or even a single feature. The production rule to evenly distribute car models with feature ‘4x4’ over a defined horizon is modelled through a constraint called “Distribution Constraint”.

Optessa ensure a level production for 4X4 units, between 28 to 36 4X4 units per hour. Hence, the plant requires parts inventory to support a peak production rate of 36 4x4 units per hour – a reduction of 40% in required parts inventory level as compared to the legacy schedule (which was 60 units per hour).

Chart showing even distribution of production for the same part by Optessa resulting in lean inventories

HOW DOES OPTESSA MLS ACHIEVE THESE RESULTS?

Distribution Constraints are used to evenly distribute feature(s) throughout the schedule (i.e. equal densities within a plus/minus a tolerance) within each time bin (hour/shift/day/week/month) accommodating varying bin capacities so that densities are approximately the same across each bin.

The Distribution Constraint also accommodates capacity limitations from the suppliers and contributes to maintaining lower inventories. Optessa MLS thus enables a lean manufacturing operation with overall and feature wise leveling.