Is It Time To Redesign
Does this sound familiar? Your production facility is no longer meeting the needs of your business. Customer service levels have become stagnant or reduced, inventory levels are not where they should be or even out of control, productivity is at its lowest for years and lead times are longer than ever and without any level of consistency.
We hear this quite often and until recently this didn’t normally surprise me. Typically we hear these statements from companies who have not made the DFT journey. However, on this occasion, I was talking to a company that had implemented DFT around five years ago.
Back in 2010, the customer service levels at this particular company were spiraling out of control, productivity was low, production lead times were becoming longer and longer and inventory was turning a little over once per year. Following a DFT implementation through their entire manufacturing facility, they achieved significant returns; production lead times dropped by over 60%, productivity increased by 20%, WIP inventories dropped by 35% whilst achieving a 15% improvement in customer service levels.
So you can imagine my surprise when in a recent call they told me that they were no longer able to meet the needs of their customers and the Demand Driven strategies that they had deployed had all but disappeared. In fact, it was like they had gone back in time.
So what happened? Well, there was a number of reasons that this company had gone backward. However, I would say the biggest fundamental issue is that they failed to maintain and update the design for their DFT environment. The 5th principle of Lean, as identified by Womack and Jones, is the pursuit of perfection, continuous improvement. This is something that this company just simply forgot. For several years they were enjoying the fruits of their success, market share was increasing and significant financial savings being achieved. At the time they saw DFT as an answer to all their problems but failed to remember and understand that a DFT design is not good for “life”, it is only good for as long as it meets the needs of the business.
One of the first things I tell companies I work with is that the DFT environment must evolve, adapt and align to the requirements of the business now and into the future. No single design is going to accomplish this forever. Therefore, any new DFT environment must change through the life of the organization to sustain performance and to enable business growth to take place. It’s going to take more than just the odd tweak here and there to ensure that your DFT lines are achieving their maximum potential. Remember, you are designing the flow in your factory to achieve a particular level of daily demand for a particular mix of products. When we implement a new DFT Line, it will have been designed to have the capability to produce a particular demand mix over a one to two year period, assuming that that demand mix is maintained over that period. In my 13 years of implementing DFT around the world, I have never worked with a single company where a new line is expected to have a lifespan longer than 18 to 24 months.
To evolve, Demand Driven organizations need to constantly think back to their original DFT design process and the first principles of this Business Strategy. We go through a series of well-documented steps to collect data that will enable sustainable flow designs to be established. Product Synchronizations are generated documenting the product flow from process to process. Sequence of Events (SOEs) are written to understand what tasks and Actual Time are required to produce the product in every process. Various business functions work together to understand the needs of the customer; what level of response time they require, what products are required and in what quantities. Everyone signs off on this and then we can then start to understand how many operations are required, how many machines and how many people the design will require at capacity. Operations are balanced and IPK logic is defined ensuring that the entire environment is balanced and aligned, allowing products to flow effortlessly. Material requirements driven from the demand specification are calculated to ensure that the Material Replenishment System can sustain the daily demand for parts on the production lines. Once the entire operations team have been trained to work in the new environment, then and only then are we able to start producing products from the new DFT lines.
As time goes by, process improvements are made, equipment and machines change, customer requirements change, materials change, suppliers change, products reach their end-of-life, new products are introduced, and of course we see different people becoming involved in running the DFT environment. The list goes on but there is one common factor, change has to be tied back to the DFT design process.
What must you do is ensure that old habits do not surface? Well, generally speaking, I would recommend that key design parameters such as demand and product mix are reviewed at least every 12 months. In some businesses, demand needs to be reviewed every six months. This demand review would then lead to a review of the validity of flow design based on any changes in these conditions. Supervision and engineers need to continually work together to ensure that the DFT design model is always kept up to date and make minor changes to line configuration as required. With up to date design models and an understanding of demand and mix, monitoring the overall validity of the line becomes a relatively simple task. The result of such a validity review will provide detailed information as to the extent to which you need to adapt or convert the design of your flow line to meet the new requirements of your business.
I can’t stress enough how important it is to remember that when a DFT line is in need of rebalancing, resource requirements have changed, alternative material requirements are required then a redesign must be executed. Failure to do so will result in a DFT environment becoming less efficient and unable to meet the needs of the business. We would never implement a new DFT line with the capability to produce up to 200 units a day when in fact the sales data tells us we need to produce 250 a day. So why wouldn’t we change our design after 18 months when demand and mix have outgrown the DFT design?
A DFT environments will never remain constant. In fact, when we return to companies that we have worked with over the years we expect changes and improvements to have been made to their original flow designs and we expect further benefits to have been attained. Growth and improvements are enabled through the organization with series of defined processes across all business functions that will recognize the need for change and make adjustments to the design to ensure the future needs of the business are met.
So, is it time to redesign? Align your facility to the needs of tomorrow’s customer, not yesterday’s. Start today and achieve the maximum potential that your facility has to offer.
Contact one of our industry experts today to discuss your redesign further.