What will you do with your extra 20-30 percent throughput?
- Answer #1: Become a competitor in the global market.
- Answer #2: Invest in new equipment.
- Answer #3: Reward investors and owners.
Increased Throughput Means Increased Labor Efficiency and Machine Utilization
20 Percent Increase in Labor Efficiency
Most factories are planned, operated and measured using a "Part Focus." These "work order" based operations yield about 50% of the paid labor hours as value added time and utilize about 55% of machine capacity. These levels of use are a result of the production system and not a reflection of labor organization or effort. Using the software and engineering techniques offered by CMS, factory operations are converted to a "Product Focus" type operation which yields over 70% of the paid labor hours as value added time and utilizes about 75% of machine capacity. The first step to get to 75% labor efficiency is to plan for it.
30 Percent Increase in Machine Utilization
Most flexible machining systems operate at 55% of machine utilization. That is, the spindle of the machine is cutting chips about 55% of the time the system is operated. This level of use is a result of a "low inventory - high variety" environment that these machine systems operate in. With the software and engineering techniques offered by CMS, these automated machining systems yield machine use over 85% of the operation time.
Additional Information and References are available for each case study by contacting CMS Research
Project A: Performance Management Brings Machine Cell On-line at 85% Utilization
A southern corporation started operation of a new machine cell with 4 machines and a rail car. Twenty part numbers were transferred from stand-alone machines to the 4-machine system. In the stand-alone machine process, typical production rates were 50-70 parts completed per man per shift.
During the three-month transition, SAIL was used to generate a shift-by-shift schedule for each machine using the Lean MAST simulation engine. SAIL was interfaced with the cell control computer to monitor actual production and other performance measures of the machine system operation. Even when only one machine was qualified, SAIL generated target production amounts for the single shift operation. Operators completed the planned production and became confident in the realistic schedule and planned production amounts.
At the end of the transition period, the machine cell maintained a two-shift operation at over 85% machine use. Operators who were used to completing 50 parts per shift now were loading over 400 parts per shift in the machine cell. Minimal overtime was used to bring the machine cell to its engineered planned operation.
These increases in productivity are achieved through three basic features. First, a realistic daily plan is generated via simulation, which accounts for production mix, number of pallets, machine assignments, load station conflicts, raw material availability, and due dates. Second, on-line monitoring records actual system performance every 5 minutes and broadcasts this information factory wide. Third, these performance measures point to specific problem areas (such as machine repair time, load station times, vehicle traffic, routing variations, tooling conflicts, shift changes), which can be addressed in a continuous improvement manner.
Project B: Performance Management System Increases Machine Cell Productivity
A northern company was using machine cells with rail cars for the past 4 years. These systems produced quality products with just-in-time delivery to customers. However, the overall machine utilization was below 60% of capacity.
SAIL software system from CMS Research was installed to provide daily scheduling and performance measurement of the machine cell. SAIL uses the MAST simulation engine with weekly production orders to generate a shift-by-shift schedule for each machine in the system. SAIL, through its interface with the cell control computer, records actual production and other performance characteristics. Monitor screens display progress in the shift production towards the plan and actual machine usage. Notices of these plans and performance are broadcast via an internal network to operations, scheduling, and engineering.
Three months later, the machine cell has maintained an average machine use near 80%. A better way to compare system performance before SAIL and after SAIL is using the machine hours per man per year measurement. Before March, the machine hours per man per year for the machine cell were approximately 1200 hours. Since March, the machine hours per man per year are on a pace of 2200 hours. This is an 80% increase in throughput. Plans are ongoing to increase the machine hours per man per year to 2800 hours.
These increases in productivity are achieved through three basic features. First, a realistic daily plan is generated via simulation, which accounts for production mix, number of pallets, machine assignments, load station conflicts, raw material availability, and due dates. Second, on-line monitoring records actual system performance every 5 minutes and broadcasts this information factory wide. Third, these performance measures point to specific problem areas (such as machine repair time, load station times, vehicle traffic, routing variations, tooling conflicts, shift changes), which can be addressed in a continuous improvement manner.
Project C: Product Focus Operation Reduces the Number of Paid Hours to Build a Product from 90 to 60.
A Midwest manufacturer produced a variety of products using a traditional MRP - work order based operation. All products shared the same labor and machines, and work orders provided the daily instructions for the operation. This classic method of operation focused exclusively on parts.
One of the products in the factory accounted for about 15% of all labor hours. This product required about 45 standard hours per unit, and using the work order system, over 90 hours of paid labor was required for a 50% efficiency of labor.
A Lean MAST project was undertaken to design, justify, and implement a product focused for this product. Models of alternative operations, degrees of automation, and capital equipment were investigated. The least cost solution was to use current machines with lean manufacturing practices. These were implemented, and today this product is produced with 60 hours of paid labor, for 75% labor efficiency. The manufacturer has expanded Lean MAST projects to all of its other product families.
These increases in productivity are achieved through three basic features. First, a single unified operations plan was decided and accepted by engineering and operations after considerating and modeling many alternatives. Second, the operations plan included a "playbook" for a variety of daily demand and product mixes. Each of these plays was engineered to a planned level of labor efficiency. Third, the day to day operation focused on hitting the number of complete products per day. By hitting the number, the manufacturer delivers its planned production for the day and maintains labor efficiency at planned levels.
