Wasting productivity in step with the customer

We know from lean management and value stream design that you should always manufacture in step with the customer. Are you a series manufacturer and supply your products to industry? Then surely you manufacture to the beat of your customers, right?

A production manager once said to me: “I would be happy to produce to my customer’s beat if they had a beat!” This brings us to the first problem: Many companies – even in the series production sector – do not show a cycle in their orders. And this is not meant metaphorically, but in terms of materials management. A cycle mechanism exists when approximately equal quantities are ordered at approximately equal intervals. In series production, the rhythm of orders – e.g. daily or weekly – occasionally works very well; it is only the consistency of the order quantities that is a problem.

This is where the problem lies: in order to be able to manufacture economically, certain batch sizes are required and sometimes certain production technologies also require certain production batch sizes in order to work reliably. If the customer’s order lot sizes are smaller than your own reasonable production lot sizes, then production in the customer’s cycle time is uneconomical because the set-up time and / or set-up costs are too high in relation to the production time. As a consequence, you deviate from the customer cycle and compensate for the difference between the production rhythm and the rhythm of customer demand with temporary stocks. In lean terms, the waste caused by inventory is less than the waste caused by inadequate production capacity.

But you don’t always have to manufacture to stock, because there is also a lean herb that can be used to combat excessively large and therefore inflexible production batch sizes: reducing set-up times. Unfortunately, however, the costs of reducing set-up times are developing exponentially: although the first steps can often still be achieved cost-effectively, at some point it becomes extremely expensive to reduce the economic batch size of a production unit further. There is also an economic limit to the reduction in set-up time.

But let’s take a bold leap forward and pretend we’ve conquered set-up costs and times! Now nothing stands in the way of our production in customer cycles, right?

If your production line only manufactures one product for one customer, the cycle can now actually start. But what if the production line has to manufacture for several customers and/or different parts? What if your customers change their cycles over time?

As long as you do not waste through overcapacity, you will always come up against capacity limits and have to distribute production differently in terms of time. Even if you level the production or assembly line for this, you will hardly be able to keep to your customers’ cycles.

We see: Manufacturing in step with the customer is good as a vision, but bad as an ideology. Manufacturing at the customer’s pace often wastes a considerable amount of productivity. Buffer stocks are sometimes more favorable than productivity losses.

Picture of Prof. Dr. Andreas Kemmner

Prof. Dr. Andreas Kemmner

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