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TOYOTA PRODUCTION SYSTEM (TPS)

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Readers familiar with Lean Manufacturing know that its origins lie in high volume manufacturing at Toyota manufacturing.
The Toyota Production System (TPS) methodology has a proven track record for improving performance and eliminating waste. The approach was developed in the 1950s, and has evolved, leading many to regard Toyota as the global leader in Lean As currently practiced, Lean incorporates supporting techniques from a variety of other fields, including The Theory of Constraints, Just in Time Inventory Management, and Six Sigma.

HIGH MIX ENVIRONMENTS The bulk of successful Lean implementations are in high volume, repetitive environments like automotive companies. Nevertheless, Lean Manufacturing has grown beyond traditional high volume automotive environments into industries as diverse as pharmaceuticals, chemicals, aircraft manufacturing, electronics, and industrial products. While the TPS techniques work great in high volume, low mix environments because of their simplicity, they have proven difficult to implement in factories that are more complex. In these high mix environments, practitioners have learned to adapt the classic Toyota techniques to work outside the automotive environment. Managing the flow of materials through a high mix environment is different from doing so in a high volume environment. The high mix environment requires adaptations of traditional Lean Manufacturing techniques.
Executive Brief

LEAN FOR HIGH MIX MANUFACTURING Introducing Value Streams for Product Families. Traditional Lean projects start by grouping products into smaller sets of product families, then creating value streams for each family. This approach involves designing cells that have equipment dedicated to the production of a single product family, and then implementing single-piece flow through that cell. This approach is effective in high volume environments (like automotive) with a relatively small number of products and dedicating equipment doesnt pose a resource problem. Complex environments, however, have thousands of products visiting dozens of work centers, using a variety of possible routes. A more general approach to defining value streams is required to (a) accommodate a larger number of product families, and (b) enable equipment sharing among product families.

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Complex environments require a more general classification of product groupings that support the goal of establishing flow, but also allow equipment to be shared across product families. We call this classification a Flow Path. Flow Paths are a concept that supports Lean implementations in complex environments. By grouping products into families that visit similar pieces of equipment, flow paths are a technique for managing hundreds or thousands of products through complex routings without requiring dedicated equipment. Flow paths facilitate the logical division of the plant into multiple flows, each of which can be considered a focused factory, independent of the others. Multiple flow paths can be defined for a plant, but a product can belong to only one flow path. Flow Path Management (FPM) shares several key principles with traditional high volume Lean manufacturing and the Toyota Production System, including the elimination of waste and the application of pull scheduling. While TPS was invented for high volume automotive production, FPM was invented for complex industries such as pharmaceuticals, metals, and electronics. One of the reasons for FPMs success in these industries is that by breaking the process down into flow paths, some of the complexity of the problem is removed - allowing visibility into the plants dynamics on a more manageable scale. FPM is more likely to use advanced inventory optimization methods because high mix environments have more variability.
Executive Brief

ACHIEVING INVENTORY OPTIMIZATION

Inventory can hide waste and mask variability within your plant. Traditional high volume Lean uses simple calculations to determine the best levels of capacity and inventory. Inventory levels are set in most Kanban implementations by using simple, well-known calculations. Kanban card counts are initialing calculated, then, over time, management slowly reduces the card count to lower the inventory level. But in high mix environments, setting optimal inventory levels cannot be accomplished using simple rules of thumb. As variability in demand, product mix, setup times, and process times increase, the calculating the appropriate inventory level requires more advanced calculations. Moreover, these calculations must be refreshed periodically as the product mix changes these advanced approaches provide updateable optimal levels. The same concept holds true for determining the optimal inventory levels for raw material or finished goods inventory buffers. GENERAL OPTIONS FOR DEPLOyING LEAN Companies have several options for software to help with Lean initiatives:

Enterprise Resource Planning (ERP) software systems are ideal as corporate business information systems and as a single data repository. However, they often encourage forecast-driven push methods, which are not Lean by nature. Software specifically built to support Lean manufacturing, such as Invistics MachSix. Lean Manufacturing software is an extension of ERP that captures and communicates performance measurements in real time. This provides visibility into key performance indicators, and accelerates and sustains the adoption of Lean behaviors. With Lean Manufacturing software, manufacturers are able to manage their value streams and optimize their inventory levels, even in high-mix environments. This allows highmix manufacturers to enjoy the benefits of lean - and eliminate waste in materials, labor, and capacity utilization.

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CONCLUSION For more than 40 years, high-volume manufacturers have benefited from Lean methodologies. Unfortunately, those techniques did not always translate well to a complex environment with huge numbers of products and high variability in products. Lean techniques can be adapted to complex environments when the effort is focused on: Using flow path management to develop flexible approaches to defining value streams Using advanced methods to calculate optimal inventory levels.
ABOUT INVISTICS Invistics provides consulting services and supporting software solutions that enable high-mix manufacturers to achieve the right inventory levels for their supply chain through advanced analytics and actionable insights. Based on Six Sigma and Lean principles, Invistics solutions help manufacturing executives improve profitability by reducing cycle times and costs, while increasing throughput and customer satisfaction. www.invistics.com

While many Lean techniques can be manually implemented in high volume environments, processes in complex environments can be more difficult. Manufacturers can benefit from using software solutions for implementing flow path management in a complex environment to better manage inventory and reduce waste. INVISTICS SOLUTION FOR HIGH MIX LEAN MANUFACTURING The Invistics MachSix suite was developed based on proven Lean manufacturing principles and key Six Sigma components. MachSix modules take into account supply and demand variability and provide a true flow-based approach one that aligns your processes around

a value stream. MachSix helps balance relationships among cycle times, throughput, and inventory to achieve better customer service levels, while providing a view into plant floor dynamics. MachSix works with existing systems to provide a complete and robust Lean manufacturing solution. Companies looking to implement Lean manufacturing can use MachSix to eliminate waste and streamline the flow of value through manufacturing.

Executive Brief

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