PRODUCT WHEELS - APICS · 10/21/2013 6 Product wheels support a pull replenishment system Each...

10/21/2013

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PRODUCT WHEELS Balancing Production Flow in

Complex Environments

Peter L. King, CSCPLean Dynamics, LLCSeptember 2013

� BS Electrical Engineering – Virginia Tech

� DuPont Company – 42 years� R & D – 9 years

� Project management – 15 years

� Lean manufacturing & supply chain consulting – 18 years

� Lean Dynamics – 2007� Consult with companies in process industries

� Lean for the Process Industries – Productivity Press, 2009

� Frequent speaker at technical society meetings

Peter L King

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1. Operations management challenges

2. The product wheel concept

3. Product wheel design

4. Examples of wheel application

� BG Products, Inc.� Appleton

� Dow Chemical

� DuPont

5. Benefits

AGENDA

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� Lean tells us to produce to takt (customer demand)

� Customer demand can be variable

� Lean also says to level production

CHALLENGE # 1

� Solution: integrate takt over some reasonable period of time to smooth out variation

� Product Wheels can find the most reasonable period

“On a production line, fluctuations in product flow increase waste. This because the equipment, workers, inventory, and other elements required for production must always be prepared for peak production.”

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Ohno, Taiichi. Toyota Production System: Beyond Large-Scale Production. New York: Productivity Press, 1988.

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� Many of our production lines must produce several product types, part numbers, SKUs

CHALLENGE # 2

� What should we make next?

� Should we run a regular campaign cycle?

� How long should the overall campaign be?

� How much of each material should we make on each cycle?

� Product wheel design can answer all of these questions

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If we’re making several materials on a regular cycle, is there an optimum sequence?

Sometimes this is obvious ……

But some times not

CHALLENGE # 3

PRODUCTSHEET

WIDTH

BASIS

WEIGHT

POLYMER

TYPE

423 J 12 3 J

403 L 10 3 L

403 J 10 3 J

423 L 12 3 L

426 J 12 6 J

406 R 10 6 R

406 L 10 6 L

426 R 12 6 R

406 J 10 6 J

409 L 10 9 L

409 J 10 9 J

489 J 8 9 J

429 L 12 9 L

489 R 8 9 R

489 L 8 9 L

429 R 12 9 R

Again – product wheel design has tools for determining this.

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DETAILED PRODUCT WHEEL CONCEPT

A

C

B

D

EFG

H

I

JK

PRODUCTS (SPOKES)

CHANGE-OVERS

� A regularly repeating

sequence of the production

of the various products

� The sequence is fixed

� The overall cycle time is

fixed

� Spokes can have different

lengths, based on the Takt for

each product

� The amount actually

produced can vary from cycle

to cycle, based on actual

consumption

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PRODUCT WHEEL ATTRIBUTES

A

C

B

D

EFG

H

I

JK

Products (Spokes)

Change-overs

� The sequence is optimized

for minimum changeover loss

� The cycle time is optimized

based on business priorities

� Some low-volume products

may not be made every cycle

� When they are made, it’s

always at the same point in

the sequence

� Make-to-order and Make-

to-stock products can be

intermixed on a wheel

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PRODUCT WHEEL CONCEPT

9

C

10

PRODUCT WHEEL CONCEPT

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� Product wheels support a pull replenishment system

� Each spoke is designed based on average historical demand

� What is actually produced on any spoke is just enough to replenish what has been consumed from inventory

� Product wheels can be employed in a make-to-stock (MTS) or a make-to-order (MTO) environment

� MTS and MTO products can be made on the same wheel

PRODUCT WHEEL APPLICABILITY

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PRODUCT WHEEL

DESIGN

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�� = � 2 ∗ ��∗ ��∗ ��∗ (1 − �� )

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1. Decide where to put wheels

2. Analyze product demand variability – consider MTO vs MTS

3. Determine the optimum sequence

4. Calculate the shortest wheel time possible

5. Calculate the most economic wheel time

6. Decide the wheel time – consider all factors

7. Calculate inventory levels required

8. Review with stakeholders - fine tune the design

9. Revise scheduling processes

10.Create visual displays

PRODUCT WHEEL DESIGN

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Step 1 - Decide which assets would benefit

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PAPER MANUFACTURING EQUIPMENT CONFIGURATION

Packaging

Roll Forming Machine 1




Roll Bonder 1

Roll Slitting Machine 1

Roll Bonder 2 Roll Bonder 3 Roll Bonder 4



Chopper 1

Chopper 2

Chopper 3

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SHEET FORMING VIRTUAL CELL GROUPING


Roll Bonder 1

Chopper 1




Roll Bonder 2 Roll Bonder 3 Roll Bonder 4



Chopper 2

Chopper3

Packaging

CELL 1CELL 2

CELL 3

CELL 4


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ASSETS TO BE SCHEDULED BY PRODUCT WHEELS

F I F O

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Step 2 - Analyze product demand variability – consider MTO vs MTS


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ANALYSIS OF DEMAND VAIABILITY– PRODUCTS ON FORMING 1

PRODUCT

WEEKLY

DEMAND

D (Rolls)

σσσσD

(Rolls)

COEFFICIENT of

VARIATION CV

= σσσσD/D

A 150 30 0.20

B 120 20 0.17

C 75 24 0.32

D 15 6 0.40

E 14 6 0.43

F 12 5 0.42

G 8 6 0.75

H 6 3.6 0.60

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AVERAGE DEMAND

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VARIATION IN DEMAND

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DECISION MATRIX– VOLUME VS DEMAND VARIABILITY

B

A

C

G

D

E

H

F

MAKE TO ORDER (MTO) MTO? MTS?

MAKE TO STOCK (MTS)

MTO? MTS?

PRODUCT DEMAND

PR

OD

UC

T V

AR

IAB

ILIT

Y

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PRODUCTSHEET

WIDTH

BASIS

WEIGHT

POLYMER

TYPE

423 J 12 3 J

403 L 10 3 L

403 J 10 3 J

423 L 12 3 L

426 J 12 6 J

406 R 10 6 R

406 L 10 6 L

426 R 12 6 R

406 J 10 6 J

409 L 10 9 L

409 J 10 9 J

489 J 8 9 J

429 L 12 9 L

489 R 8 9 R

489 L 8 9 L

429 R 12 9 R

PRODUCTPOLYMER

TYPE

SHEET

WIDTH

BASIS

WEIGHT

489 J J 8 9

403 J J 10 3

406 J J 10 6

409 J J 10 9

423 J J 12 3

426 J J 12 6

489 L L 8 9

403 L L 10 3

406 L L 10 6

409 L L 10 9

423 L L 12 3

429 L L 12 9

489 R R 8 9

406 R R 10 6

426 R R 12 6

429 R R 12 9

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Determine the overall wheel time

4. Determine the shortest wheel time possible

5. Determine the most economical wheel possible

6. Make the decision


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AVAILABLE TIME ANALYSIS – FORMING MACHINE 1

8 8 8 8

TOTAL TIME AVAILABLE = 168 HOURS (Planning Cycle = 1 week)

TIME REQUIRED FOR PRODUCTION (For one week)TIME AVAILABLE FOR

CHANGE-OVERS

= 136 HOURS = 32 HOURS

TIME REQUIRED FOR ONE CYCLEOF CHANGEOVERSONE WHEEL

CYCLE

THERE IS TIME AVAILABLE FOR FOUR COMPLETE SETS OF CHANGEOVERS WITHIN THE WEEK. SO FOUR

COMPLETE PRODUCT WHEEL CYCLES COULD BE RUN PER WEEK

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Step 5 - Calculate the most economic wheel time

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Step 5 - Calculate the most economic wheel batch size


�� = � 2 ∗ ��∗ ��∗ ��∗ (1 − �� )

Where � COC = Changeover Cost � D = Demand per time period � V = Unit cost of the material � r = % carrying cost of inventory per time period � PR = Production rate in units per time period.

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0

2000

4000

6000

8000

10000

12000

14000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

TOTAL COST

CHANGE-OVER COST

INVENTORY COST

CAMPAIGN LENGTH = WHEEL TIME

CO

ST

ECONOMIC ORDER QUANTITY – EOQ - CONCEPT

ECONOMIC ORDER

QUANTITY

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EOQ ANALYSIS – FORMING MACHINE 1

PRODUCT

WEEKLY

DEMAND

D (Rolls)

COST PER

ROLL

CHANGE

OVER

COST

INVENTORY

CARRYING

COST

EOQ

OPTIMUM

FREQUENCY

(Days)

A 150 $1,800 $450 25% 158.0 7.37

B 120 $1,800 $450 25% 133.5 7.79

C 75 $2,000 $500 25% 98.0 9.14

D 15 $2,000 $500 25% 40.3 18.79

E 14 $2,000 $500 25% 38.8 19.42

F 12 $2,400 $600 25% 35.9 20.92

G 8 $2,400 $600 25% 29.1 25.50

H 6 $2,400 $600 25% 25.2 29.36

� The high volume products suggest a ~ 7 day wheel

� Low volume products could be made on alternating cycles

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DETERMINATION OF WHEEL TIME

PRODUCT

WEEKLY

DEMAND

D (Rolls)

EOQ

OPTIMUM

FREQUENCY

(Days)

RECOMD'N

(days)

CYCLE 1

(7 DAYS)

CYCLE 2

(7 DAYS)

CYCLE 3

(7 DAYS)

A 150 158.0 7.4 7 150 150 150

B 120 133.5 7.8 7 120 120 120

C 75 98.0 9.1 7 75 75 75

D 15 40.3 18.8 21 45

E 14 38.8 19.4 21 42

F 12 35.9 20.9 21 36

G 8 29.1 25.5 MTO 25

H 6 25.2 29.4 MTO 20

TOTALS 390 407 406

� We choose 7 days as the basic wheel time – high volume products are made every 7 days

� Lower volume products (D, E, F) are made every third wheel

� Low volume, unpredictable products are MTO

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OTHER FACTORS ….

�Shelf life

�Demand variability(short term)

�Minimum lot size

Step 6 - Decide the wheel time

� The Available Time model suggested 4 complete wheels per week

� Wheel time = 42 hrs

� The EOQ model suggested a 7 day wheel time

� We choose the 7 day alternative

� It is more cost effective

� It is still reasonably short, with reasonably small campaigns

� Provides “process improvement time” each cycle

� It is more convenient for operations to plan


1 3 5 7 9 11 13 15 17 19

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FINAL PRODUCT WHEEL DESIGN

CYCLE 1(7 DAYS)

A

DB

C * Empty spokes are positioned on cycles 2 & 3 to allow H and G

to be made if ordered

CYCLE 2(7 DAYS)

A

EB

C

H*

CYCLE 3(7 DAYS)(Then return to Cycle 1)

A

B

CF

G*

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1. Decide which assets would benefit

2. Analyze product demand variability – consider MTO vs MTS


4. Calculate the shortest wheel time possible

5. Calculate the most economic wheel time

6. Decide the wheel time

7. Calculate inventory levels required

8. Fine tune the design

9. Revise scheduling processes

10. Create visual displays


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KAIZEN EVENT

� It is very helpful to get perspectives of all involved

� Production schedulers

� Operators

� Mechanics

� Supervisors

� Managers

� Lab technicians

� Makes a very good scope for a kaizen event

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SUCCESSFUL PRODUCT WHEEL USERS

1) BG Products, Inc.

2) Appleton Papers, Inc.

3) Dow Chemical

4) DuPont Fluoropolymers

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EXAMPLES OF PRODUCT WHEEL IMPLEMENTATION

� BG Products, Inc.

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BG PRODUCTS, INC.

Manufactures high quality automotive fluids

� One manufacturing site – Wichita, KS

� Eight fluid manufacturing processes

� Eleven packaging lines

Scope of program

� Value Stream map entire plant

� Investigate flow improvements

� Product Wheels on four packaging lines

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10/21/2013

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BG PRODUCTS, INC.

Value Stream Map - Rotary Filling Line

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BG PRODUCTS, INC.

Key features

�Volume & variability analysis

� 130 products suggested for Make-to-Order

�Products re-allocated among pkgg lines

� Reduced changeover combinations

�Sequence optimized on $$, not time

�Visual management – takt boards

�SMED to reduce changeover time

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Rotary filling line - Takt board design concept

BG PRODUCTS, INC.

DAYTIME 6 AM 8 AM 10 AM 12 PM 6 AM 8 AM 10 AM 12 PM 6 AM 8 AM 10 AM 12 PM 6 AM 8 AM 10 AM 12 PM 6 AM 8 AM 10 AM 12 PM

PRODUCTTAKT (SKIDS) 8 7 6 3 0 7 6 7 0 7 0 7 0 0 0 0 0 0 0 0

PRODUCED (SKIDS) 8 7 6 3 0 4 7 9

EVEN WITH TAKT x x x x x x

xx

Changeover went long

catching up

Staggered lunch to catch up

AHEAD OF TAKT

BEHIND TAKT

REASONS

ABC 55 XYZ66 XYZ77 XYZ94 5S - Sort, Set Preventive Maint

PRODUCTION SCHEDULE – ROTARY FILL LINEMONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY

Chart used to trackchangeover progress

BG PRODUCTS, INC.

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BG PRODUCTS, INC.

Rotary filling line

29 products

Two week wheel

� Ten products made every cycle

� Eight on every second cycle – every four weeks

� Eleven made at lower frequency

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BG PRODUCTS, INC.

Benefits

� Reduced inventory

� Several hundred thousand $$

� Better performance understanding

� Faster changeovers – more effective capacity

� More predictability - less churn

The Team

� James Overheul

� Lisette walker

� Matt Peterson

� Gregg McCabe

� Dustin Mullen

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EXAMPLES OF PRODUCT WHEEL IMPLEMENTATION

� Appleton Papers, Inc.

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APPLETON

� A specialty coating, formulation, and microencapsulation company

� Thermal papers

� Carbonless paper

� Security paper

� Microencapsulation technology.

� Headquartered in Appleton, WI

� Four manufacturing sites

� Began exploring wheel usage 10 years ago

� Became “a way of running the business” in 2008

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APPLETON

Key features

� Product segmentation by volume and variability

� Q1 = Runners

� Q2 = Kanban

� Q3 = Make to order

� Q4 = Seasonal items

� Pull replenishment

� Wheel design by kaizen event

� Wheels rebalanced as needed – at least annually

MAKE TO ORDER (MTO)MTO? MTS?

MAKE TO STOCK (MTS)MTO? MTS?

PRODUCT DEMAND

PR

OD

UC

T V

AR

IAB

ILIT

Y Q4

Q1Q2

Q3

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APPLETON

� Began with two (2) carbonless coating machines

� Extended to two sheeters

� Dedicated each product family to a sheeter

→ Reduced changeover time

� Added wheels to three (3) coaters in 2009

� Now have eleven (11) machines on wheels

� Now extending across supply chain to include customers

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Benefits

� $20 million to $30 million annual savings

� Total inventory reduced by 21%

� Cash conversion days reduced by 17%.

� Leveled production

– eliminated peaks and valleys

� Reduced overtime

� Created better flow

� Increased predictability

� Reduced BSPs (broken service promises)

APPLETON

This information courtesy of Ryan Scherer, Lean Six Sigma Strategy & Deployment Manager, Appleton

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DOW CHEMICAL

Focus of Continuous Improvements� 5S

� Product wheels

� Demand driven pull

Applied to� Upstream continuous chemical reactions

� Downstream batch conversion operations

Current status� 15% -> 20% of all production facilities on

product wheels and pull

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DOW CHEMICAL

Typical benefits

� 10% - 20% lower inventories

� 30% - 40% shorter lead times

� Greater stability

� Greater predictability

� 10% - 25% higher fill rates

This information courtesy of Martin Fernandes, Director of Supply Chain Innovation, Dow chemical Company

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DuPont FLUOROPOLYMERS

Problems & issues at one plant� Production based on forecasts

� Too much inventory on some products

� Stock-outs on others

� Constant schedule changes

� No spare capacity to accommodate changes

Solution� Design and implement a wheel very quickly

� “Don’t let the perfect be the enemy of the good!”

� Implemented within a few days

� Replenish based on pull signals, not forecasts

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DuPont FLUOROPOLYMERS

Results

� Stock-outs disappeared

� The schedule became stable

� The only unplanned changes were in package type

� Asset productivity was improved

• Capacity utilization dropped from ~ 100% to 85%

Thanks to Rob Pinchot, Lean Master Black Belt and Steve Pebly, Supply Chain Manager, for providing background on this example

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OTHER PRODUCT WHEEL USERS

� Exxon Mobil

FSVV

Fixed sequence variable volume

� Pharmaceutical companies

“Rhythm wheels”

� Paint producers

”Color wheels”

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BENEFITS OF PRODUCT WHEELS

1. Levels production

2. Optimizes sequences

3. Optimizes campaign lengths

4. Enables inventory target setting

5. Reduces inventory

6. Improves delivery performance

7. Bring order to chaos – stop the insanity!

Brings order and structure to complex scheduling decisions

8. Provides a mathematical basis to support decision making

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TO LEARN MORE …..

Productivity Press

May 2009

Productivity Press April 2013

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Questions?

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[email protected](302) 239-1667(302) 528-2700

PRODUCT WHEELS - APICS · 10/21/2013 6 Product wheels support a pull replenishment system Each...

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