Creating Flow in High- Variety Environments Kevin J. Duggan, President. Copyright 2016 Duggan Associates. dugganinc.com

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Creating Flow in High- Variety Environments Kevin J.

advisory firm Founder, Institute for Operational Excellence, the leading

techniques to achieve Operational Excellence Author of four books: Design for

Model Value Streams: Practical Lean techniques for Building to Demand Operational

2 Kevin J. Duggan, President President, Duggan Associates, an international training & advisory firm Founder, Institute for Operational Excellence, the leading educational center on OpEx Speaker, author, and educator in applying advanced lean techniques to achieve Operational Excellence Author of four books: Design for Operational Excellence: A Breakthrough Strategy for Business Growth Creating Mixed Model Value Streams: Practical Lean techniques for Building to Demand Operational Excellence in Your Office: A Guide to Achieving Autonomous Value Stream Flow With Lean Techniques Beyond the Lean Office: A Novel on Progressing from Lean Tools to Operational Excellence

3 Kevin J. Duggan Kevin has assisted many major corporations worldwide including FMC Technologies, Chromalloy, Aetna, SpaceX, Caterpillar, Pratt & Whitney, Singapore Airlines, Sikorsky, IDEX Corporation and Parker Hannifin Frequent keynote speaker, master of ceremonies, and panelist at international conferences, and has appeared on CNN and the Fox Business Network.

4 Improving Operations

5 Continuous Improvement Companies have done continuous improvement activities for years

6 Continuous Improvement Pareto

7 Continuous Improvement Impact Effort

8 Continuous Improvement

9 The Lean Journey Improve Improve Improve Sustain Sustain Sustain

10 Operational Excellence Level of improvement Mature lean company Time in Years

11 Operational Excellence Level of improvement Operational Excellence Time in Years

12 Operational Excellence Operational Excellence Level of improvement Time in Years

13 Defining Operational Excellence When each and every employee can see the flow of value to the customer, and fix SM that flow before it breaks down. Kevin J. Duggan

14 The Eight Steps to Achieve Operational Excellence Design a lean flow using lean guidelines. Implement a lean flow. Make the lean flow visual. Create standard work for the lean flow. Make abnormal flow visual. Create standard work for the abnormal flow. Teach employees to maintain and improve the flow to the customer. Free management to work on offense.

15 The Eight Steps to Achieve Operational Excellence Design a lean flow using lean guidelines. Implement a lean flow. Make the lean flow visual. Create standard work for the lean flow. Make abnormal flow visual. Create standard work for the abnormal flow. Teach employees to maintain and improve the flow to the customer. Free management to work on offense.

16 Eight Guidelines for End-to-End Value Stream Design Production 6 Week Control Forecast Supplier Weekly XOXO Daily Form Assembly Test Ship FIFO Weekly Orders FIFO Customer Eight VS Guidelines 2 days 1 day 1 day 1 day 5 days 2 sec 20 min 10 min 15 min 45 min

17 Ten Guidelines for the Mixed Model Pacemaker Production 6 Week Control Forecast Supplier Weekly XOXO Pacemaker Weekly Orders Customer Daily Form Assembly Test Ship FIFO 2 days 1 day 1 day 1 day 5 days 2 sec 20 min 10 min 15 min 45 min FIFO Ten MM Guidelines

18 Six Guidelines for Shared Resources Flow Production 6 Week Control Forecast Supplier Weekly Orders Customer Weekly XOXO Daily Shared Resource Shared Resource Form Assembly Test Ship FIFO 2 days 1 day 1 day 1 day 5 days FIFO 2 sec 20 min 10 min 15 min 45 min Six S/R Guidelines

19 Customers Nine Guidelines for Office Flow Request Form P/T=15 min. 1 CSR Create File Sales Database FIFO Design Pkg. Max = 1.5 days days Log File 4 Hrs. Estimating Cell Takt = 60 min. P/T=170 min. PC/T=55 min. Op = 3 17 Min. 170 Min. Post Office Customers 4 Estimates per Day 1.5 Days min 187 min. L/T P/T Nine Office Guidelines

20 Seven Guidelines for Supply Chain Flow Seven SC Guidelines

21 The Mixed Model Pacemaker Production 6 Week Control Forecast Supplier Weekly XOXO Pacemaker Weekly Orders Customer Daily Form Assembly Test Ship FIFO 2 days 1 day 1 day 1 day 5 days FIFO 2 sec 20 min 10 min 15 min 45 min Ten MM Guidelines

22 Value Streams are Often Complex Lot s of tailoring for customers Shared resources Many product variations Work floor spaghetti Optimization of resources Uncertain demand from day to day No visual timeframe

23 Mix of Products Flow through the Same Value Stream Pistons: units Brackets: units Arms: units Stamp How will we run all these products through the same value stream when demand changes each day? Collars: units Diverters: units Detectors: units Lifters: units Levers: units Cranks: units Paint FIFO Assemble Ship max 50

24 Number of Products Which Type of Value Stream is this? Discrete Mfg. 2 Discrete manufacturer High mix 1 Discrete manufacturer Degree of customization required Make to Order Mfg. 3 Job shop Very high mix High customization 4 Low mix High customization

25 EMC Current State I Aspen Plastics 2x Month I 7 Days (Coils) 7d 1 x Week Stamping Molding Stanley Steel C/T=1s C/O=45min UP = 90% Monthly Fax I 260 S 12 Days (Containers) C/T=30s 760 S 530 L C/O=60min 420 M UP = 80% 12d 5.7d I Welding 12-wk Forecast 6-wk Forecast Wkly Fax I 350 S 200 L 170 M C/T=60s C/O=5min 275 L 160 M UP = 85% 2.1d 2.6d 1 s 60 s Mechanical C/T=165s C/O= 0 UP =100% EMC Current State I 460 S 255 L 235 M Production Control MRP Weekly Schedule Electrical C/T=210s C/O= 0 UP =100% I 380 S 265 L 140 M Final C/T=135s C/O= 0 UP =100% 6-wk Forecast Daily Firm Order Daily Ship Schedule I 460 S 325 L 270 M Testing C/T=150s C/O= 0 UP = 95% 30 s 165 s 210 s 135 s 150 s ABC Industrial I 720 S 464 L 285 M Supply 6,000 pcs/mo 2,600 Sensor 2,050 Laser 1,350 Manual 2 Shifts 10 Arms/Ctn. 10 Ctns./Pallet 1 x Daily Shipping 25.9 d L/T S 3.2d 2.6d 3.5d 4.9d 31.9 d L/T M 690 s P/T M 721 s P/T S

26 EMC Future State 3x Week Aspen Plastics 3 Days (Containers) 1 x Daily Stamp C/O Stanley 1.5 Days (Coils) 1.5 days Steel Molding C/T=30s C/O=60min UP = 80% Daily Fax Stamping C/T=1s C/O=45min UP = 90% 1 sec Mold C/O Mold Uptime 2 Days 2 days 2 Days 3 days 2 days 12-wk Forecast 6-wk Forecast Daily Fax Production Control MRP Takt = 180 sec P C/T= 170 sec P/T = 660 sec. Op = 4 30 sec 660 sec Stamp Uptime Weld Uptime Weld, Assembly & Test Cell Pitch=30 min. SLM,SLM, XOXO 6-wk Forecast Daily Firm Order Takt=180 sec Daily Ship Schedule 30 Weld C/O 2 Days Work Balancing 2 days 30 Cartons ABC Industrial Supply 6,000 pcs/mo 2,600 Sensor 2,050 Laser 1,350 Manual 2 Shifts 10 Arms/Carton. 10 Cartons./Pallet 1 x Daily Shipping 5.5 d L/T S 7 d L/T M 690 s P/T M 661 d L/T S

27 Welcome to EMC Supply Co. In today s class we will visit the Electro-Motion Control (EMC) Supply Co. EMC Supply Co. builds a wide variety of products for the motion control and electronics industries. They supply distributors and end users. They also build custom products to order. The management at EMC Supply Co. have stated that want to achieve self-healing value stream flow in their high mix environment.

28 Mixed Model Value Streams Pistons: units Brackets: units Arms: units Stamp Collars: units Diverters: units Detectors: units To produce a variety or mix of products or product variations through the same value stream AT THE PULL OF THE CUSTOMER. Lifters: units Levers: units Cranks: units Paint FIFO Assemble Ship max 50

29 Mixed Model Value Streams EMC Product Family

30 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

31 Product Family Matrix

32 Product Family Matrix P/N Name Injection Molding XS2 Servo Motor X X X X X X X Sensor-Activated Arm X X X A X X X X X X X Photoelectric Detector X X X X Ionization Detector X X X X X Laser-Activated Arm X X X X X X X X X X Manual Servo Motor X X X X X X X Manual Servo Motor II X X X X X X X Manually-Activated Arm X X X A X X X X X X X Fiber Optic Visual Sensor X X X X X X XS3 Servo Motor X X X X X X X Radon Detecter X X X X Bar Code Divertor Piston X X X A X X X X X X X Bar Code Diverter Arm X X X A X X X X X X X Sensor-Activated Piston X X X A X X X X X X X Laser Diverter X X X X X X X X X X XS4 Servo Motor X X X X X X X Carbon Monoxide Detector X X X X X Auto Servo Motor X X X X X X X Laser-Activated Piston X X X X X X X X X X Manually-Activated Piston X X X A X X X X X X X Motion Detector X X X X Stamp Deburr Hand Deburr Paint Welding Mechanical Assy Electrical Assy Final Assy Configure & Test Ship

33 Three Potential Families P/N Name Sensor-Activated Arm A X X X X X X X A Laser-Activated Arm X X X X X X X X A Manually-Activated Arm A X X X X X X X A Bar Code Divertor Piston A X X X X X X X A Bar Code Divertor Arm A X X X X X X X A Sensor-Activated Piston A X X X X X X X A Laser Divertor X X X X X X X X A Laser-Activated Piston X X X X X X X X A Manually-Activated Piston A X X X X X X X A XS2 Servo Motor X X X X B Manual Servo Motor X X X X B Manual Servo Motor II X X X X B XS3 Servo Motor X X X X B XS4 Servo Motor X X X X B Auto Servo Motor X X X X B Photoelectric Detector X X X X C Ionization Detector X X X X X C Fiber Optic Visual Sensor X X X X X X C Radon Detector X X X X C Carbon Monoxide Detector X X X X X C Motion Detector X X X X C Hand Debur Paint Welding Mechanical Assy Electrical Assy Final Assy Configure & Test Ship FAMILY A B C

34 Refine by Work Content Name Hand Debur Paint Welding Mechanical Assy Electrical Assy Final Assy Configure & Test Ship TOTAL A Sensor-Activated Arm X 605 B Laser-Activated Arm X 530 C Manually-Activated Arm X 605 D Bar Code Diverter Piston X 645 E Bar Code Diverter Arm X 655 F Sensor-Activated Piston X 500 G Laser-Activated Piston X 745 H Manually-Activated Piston X 550 I Laser Diverter X 990 X Custom Orders X 615

35 Refine by Work Content Name Hand Debur Paint Welding Mechanical Assy Electrical Assy Final Assy Configure & Test Ship TOTAL A Sensor-Activated Arm X 605 B Laser-Activated Arm X 530 C Manually-Activated Arm X 605 D Bar Code Diverter Piston X 645 E Bar Code Diverter Arm X 655 F Sensor-Activated Piston X 500 G Laser-Activated Piston X 745 H Manually-Activated Piston X 550 I Laser Diverter X 990 X Custom Orders X 615

36 Current State Map

37 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

38 Takt Time for the Mix Takt time = customer demand rate for the entire family. Need to select time period and understand limits of the mix

39 Takt Time Example Name DEMAND Sensor-Activated Arm 65 Laser-Activated Arm 85 Manually-Activated Arm 35 Bar Code Diverter Piston 70 Bar Code Diverter Arm 50 TAKT = Sensor-Activated Piston 55 Laser-Activated Piston 20 Manually-Activated Piston 25 Custom Orders 45 Total Demand 450 Effective Time = 900 min. * * 2 shifts x ( 8 hrs -.5 hrs) Effective Time = 2 min. Total Demand

40 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

41 Determining Equipment Needs Name A Sensor-Activated Arm B C D E F G H X Laser-Activated Arm Manually-Activated Arm Bar Code Diverter Piston Bar Code Diverter Arm Sensor-Activated Piston Laser-Activated Piston Manually-Activated Piston Custom Orders Configure & Test C/T DEMAND TIME NEEDED Effective Working Time Machines Required Configure & Test Total Time Sum

42 Equipment Loading for the Family Available Time = 54,000 sec Available Time = 54,000 sec 96% 91% Uptime = 95% C/T X Demand = 49,350 sec C/T X Demand = 49,350 sec Machine Loading = 91% Machine Loading with Uptime = 96% 1 2

43 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

44 Interval for the Mix In a mix environment we must define the Interval in which the pacemaker will run the mix of products. The concept of the interval must be clearly understood. You may have hear the term EPEI which stands for Every Product Every Interval.

45 The Interval

46 The Interval 1 Week

47 The Interval 1 Day

48 The Interval The smaller the interval, the better. So where do we start? How often do we ship to customers? How often do we cycle through our finished products?

49 Is there Enough Time for Changeovers? We would compare the total time needed to the effective working time per interval. Any left over time can be used for changeovers. Time left for changeovers Time Machine station Effective working time per interval Total time needed per interval

50 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

51 How will we Flow Work through the Pacemaker?

52 Balance Charts Current State Future State Common Tools

53 Takt = 120 sec. Takt = 120 sec. Current State Operator Balance Chart - Part B (Laser-Activated Arm) 140 sec. 110 sec. 100 sec. Elect. Assembly Final 60 sec. Assembly Config & Test Mech. 30 sec. Assembly Welding Operator Balance Chart - Part A (Sensor-Activated Arm) Mech. 45 sec. Assembly Welding 140 sec. 90 sec. Elect. Assembly 130 sec. Final Assembly 110 sec. Config & Test Takt = 120 sec. Takt = 120 sec. Future State Operator Balance Chart - Part B (Laser-Activated Arm) 110 sec. 110 sec. 110 sec. Elect. Assembly Final Assembly 65 sec. Mech. Config. Assembly Elect. & Test Assembly Final Assembly Welding Operator Balance Chart - Part A (Sensor-Activated Arm) 110 sec. 110 sec. 110 sec. 100 sec. Mech. Elect. Final Assembly Assembly Assembly Eliminate Walking Welding Config. & Test Common Tools

54 Machine Cycle Times Products with a high cycle time at a station may exceed mix takt time. Bottleneck 200 sec. Testing Takt Time = 120 sec.

55 Machine Cycle Times Some products have a higher Test cycle time than takt time A small FIFO lane absorbs the mix difference in machine times FIFO Lane sized to the interval Pacemaker seconds FIFO Test seconds

56 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

57 Balancing Flow for the Mix Since the labor content varies and not all products can be balanced to takt time, we must decide the best way to balance the products based on our business. Let s look at balancing options

58 Balancing Examples Option # 1: Discrete Parts Low Demand Variation High Volume # Operators always constant Output varies based on work content Level mix, sequence orders based on work content and pull signals Pacemaker seconds Level the schedule and keep labor constant, build products in order: A C B A C B A C B FIFO Test seconds Ship

Balancing Examples Option # 2: Discrete Parts Custom Parts High Demand Variation Short Lead Times Build to demand as much as possible Output constant, labor varies A C B C C B Pacemaker 110 seconds

59 Balancing Examples Option # 2: Discrete Parts Custom Parts High Demand Variation Short Lead Times Build to demand as much as possible Output constant, labor varies A C B C C B Pacemaker 110 seconds Balance to the takt time and add labor when a product exceeds the takt time. Try to build products to demand. FIFO Prod Control Test s AWCT=110s FIFO Ship Customer demand Small overflow of main products when mix is exceeded

60 Which Type of Value Stream is this? Number of Products Discrete Mfg. 2 Discrete manufacturer High mix 1 Discrete manufacturer Degree of customization required Make to Order Mfg. 3 Job shop Very high mix High customization 4 Low mix High customization

61 Re-Balancing for Building to Demand

62 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

63 Creating Standard Work By Standard Work we mean that any operator following a prescribed method, with a proper workstation, and proper tools, should be able to perform the amount of work required in the same amount of time, without risk to health or safety.

64 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

65 Establishing Pitch Pitch is targeted to be: Takt time x something (ex. Pack size) How can we create pitch when the pack size is different for each product?

66 Creating the Schedule Box Name Sensor-Activated Arm min 12 Laser-Activated Arm min 12 Manually-Activated Arm min 12 Bar Code Diverter Piston min 24 Bar Code Diverter Arm min 24 Sensor-Activated Piston min 24 Laser-Activated Piston min 6 Manually-Activated Piston min 6 Custom Orders min 6 # Operators Pack Qty Takt time Min per Case Max = 24 minutes Min = 6 minutes Pitch = 24 minutes 4 slots needed per pitch increment

67 What is Pitch? Pitch = paced withdrawal at the pacemaker. Pitch = visual timeframe. I withdraw parts from the pacemaker every twenty four minutes

68 Setting up the Schedule Box Slot = 6 minutes Pitch increments or Buckets of capacity Shift 1 6:00 Shift 2 3:30 G Sensor-Activated Arm G 6:24 6:48 3:54 4:18 Max = 24 minutes Min = 6 minutes Pitch = 24 minutes 4 slots needed Laser-Activated Piston G A per pitch increment Bar Code Diverter G D A

69 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

70 Scheduling Products with Various Work Contents Mix Analysis Product Pacemaker Takt Time Testing Cycle Anticipated Mix Time A sec 65 B sec 85 C sec 35 D sec 70 E sec 50 F sec 55 G sec 20 H sec 25 X sec 45

71 Logic Chart

72 Loading the Schedule Box Shift 1 6:00 6:24 6:48 7:12 7:36 8:00 8:39 9:03 9:27 9:51 10:15 10:39 11:33 11:57 12:21 12:45 1:24 1:48 2:12 6:24 6:48 7:12 7:36 8:00 8:24 9:03 9:27 9:51 10:15 10:39 11:03 11:57 12:21 12:45 1:09 1:48 2:12 2:30 G D D D D H H X E E E F C A A A B B B G H H X G H X X C A A B B B B G H X X 4 operators 3 operators

73 Future State Map

74 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

75 Finished Goods Level We can establish preset levels of the supermarket based on the flexibility and performance of the value stream LEVEL 1 LEVEL 2 LEVEL 3 CUSTOMER

76 Flexible Supermarkets Supermarket limits Total demand for the product family Lead time intervals

77 Key Questions and Our Agenda 1. Do you have the right product families? 2. What is the takt time at the pacemaker? 3. Can the equipment support takt time? 4. What is the interval? 5. What are the balance charts for the products? 6. How will we balance flow for the mix? 7. How will we create standard work for the mix? 8. How will we create pitch at the pacemaker? 9. How do we schedule the mix at the pacemaker? 10.How do we deal with changes in customer demand?

78 Free Webinar Join us for a free webinar on Creating Flow through Shared Resources on Tuesday, November 15 th. To register, please visit

79 Live Training Events Each year the Institute for Operational Excellence produces training events throughout the U.S. and Europe. Orlando, FL February 13-15, 2017 Orlando, FL February 16, 2017 For more information, including a complete list of 2017 locations and dates for these events, please visit

Creating Mixed Model Value Streams

Creating Mixed Model Value Streams Abe Dabdoub Senior Faculty Member Abe Dabdoub, EEng, MBA Senior Faculty Member, Institute for Operational Excellence Clients United Technologies Corporation FMC Technologies