Written by Steve Knight, Associate Director of leading cost and efficiency improvement specialist Newton Europe
Toyota pioneered modern lean manufacturing and created a highly efficient and reliable manufacturing system that the rest of the world sought to adopt with huge variations in success.
The same philosophy suggests that we should only allow room for value adding steps – in terms of value perceived by the customer – as this drives up efficiency and enables us to manufacture simpler and faster.
It is said that accumulating work-in-progress through the process ties-up resources and can obscure problems and is therefore deemed to not add value, so conventional Lean thinking is to eliminate this wasteful step.
With this thinking comes a generally held view that Lean manufacturing and Accumulation cannot coexist.
At Newton, we take a different view. Almost without exception every production line, business process or work activity will benefit from correct understanding and implementation of Accumulation.
The goal of any Accumulation should be to increase the average output and net profit generated by a series of processes. This increase in performance should, and typically does, massively outweigh the increased cost associated with the accumulation.
How does Accumulation work?
Fundamentally the bottleneck process of the line determines the maximum throughput that line can achieve, ever. Accumulation adds value by protecting this bottleneck process from the myriad of problems that may be happening on other processes.
The common response to this problem is ‘well we should fix all those other problems then!’
Well, let’s discuss that when there is a manufacturing plant that exists that doesn’t have enough problems to solve already. We can then talk about fixing ones that add no net benefit to the bottom line!
Additionally this does not make financial sense. We want to maximise our return on investment (ROI) and hence the bottleneck of a process should be the most expensive piece of equipment. By removing all accumulation and running all processes at the same speed you are coupling the expensive equipment to the performance of the cheapest processes, for instance a palletiser.
Accumulation is needed before bottleneck operations in order to make sure that bottlenecks don’t stop through having insufficient materials. And Accumulation –or at least ample space for it –is a good idea after bottlenecks as well, in order to ensure that the bottleneck doesn’t stop through having nowhere to store its output.
How did we get to the situation where so many Lean advocates believe Accumulation to be bad?
There is the initial factor that most lines are made up of different equipment, all designed to run with different speeds and availabilities. This is completely normal and if designed properly the bottleneck will almost always be the most expensive piece of equipment. By definition the line is unbalanced and therefore requires Accumulation in order to run efficiently.
Another objection is that manufacturers want to achieve single piece flow. To achieve that in a factory making 700 products you may as well shut the doors as all you would do is changeover and never make anything.
There is also the belief that there is a significant cost of Accumulation, however the solution to this is work out the co
st of holding stock and any additional equipment required and you may find it is next to nothing compared to the benefit of the increased throughput.
The only way to maximise the efficiency of the processes is to embed Accumulation. It is said that four key elements have to be addressed to allow lean manufacturing and Accumulation to coexist - location, size, training, and consolidation.
The desired result will not be delivered if one or more of these areas are neglected.
Where to have Accumulation, along with what its capacity, should be determined by the length and frequency of downtime on surrounding processes.
Location of the Accumulation should be determined by the optimum place to prevent downtime on the line’s bottleneck operation. It should effectively be placed to enable a constant flow of material to the bottleneck or be ready to accept finished product from the bottleneck.
Determining the size of Accumulation is the next question
Too much wastes resources and/or floor space and too little causes downtime – so what is the right balance or size? The correct size is dependent on the nature of the downtime the line experiences.
For instance if the average downtime in a process was two minutes and there was an accumulation of one minute then this would be insufficient to allow the bottleneck process to keep running. Whereas if it were ten minutes, then this may represent a waste of space and resources.
Then there is training. Every operator needs to understand how Accumulation fits into the production goals and be able to bring Accumulation back to its normal state- i.e. full or empty.
It all sounds very theoretical, but when put into practice, it can deliver significant performance improvement.
A project undertaken on behalf of a large UK ice-cream manufacturer delivered a 30 percent increase in manufacturing efficiency.
The manufacturer had invested £10millionin a new production facility and Newton was appointed to work with the shop floor teams to create a sustainable system of performance improvement.
A major challenge facing the team was increasing output on a choc-ice line. A particular problem was the case packing machine, which determined the overall efficiency of the line, and would stop up to 20 times an hour.
Developing Accumulation before the case packer decoupled this part of the line and increased efficiency. Installing the Accumulation meant that issues associated with upstream machines didn’t need to be methodically studied, and avoided the need to make upwards of 50 permanent changes to improve performance.
The result was that packaging lines’ overall efficiency increased by 22 percent.
And these results reflect a powerful and analytical approach to identifying ways to increase capacity, and that Lean and Accumulation can coexist and work together to drive efficiencies.