Feb 27 2014
A brief rant about the ABC’s | Bill Waddell
See on Scoop.it – lean manufacturing
“Apparently the folks writing about stratifying inventory into A, B and C items and building calculations of such into ERP packages didn’t get the lean memo.
Wikipedia is typical of such thinkers when they describe the ABC thought process as:
- ‘A’ items – 20% of the items accounts for 70% of the annual consumption value of the items.
- ‘B’ items – 30% of the items accounts for 25% of the annual consumption value of the items.
- ‘C’ items – 50% of the items accounts for 5% of the annual consumption value of the items.
The idea of micromanaging some items and slacking off on others based on purchase price is the very same theory they taught me at the University of Cincinnati back in the days when … ”
I agree with Bill that, from the point of view of manufacturing operations, the purchase price of materials is not the most important parameter. because the lack of a nail can prevent the completion of a product as effectively as the lack of a pump costing 1,000 times more.
It doesn’t mean, however, that classifying items to treat them differently is wrong, but it must be done by frequency of use rather than price, and I prefer to call the categories “Runners,” “Repeaters,” and “Strangers” rather than A, B, and C.
As a function of rank, I then look for the percentage of units actually built that can be fully assembled with only the items of this rank and higher. It starts at 0%, and, as long as it stays at 0%, I consider the items to be Runners, essentially items you can’t build any product without. At the other end of the spectrum, I call Strangers all the items without which you can make 95% of the units. And everything in-between is a Repeater.
Then you may decide, for example, to dedicate an easily accessible storage location to each Runner, and make special arrangements with suppliers. For Repeaters, you may use the Kanban system, with smaller dedicated locations. And you don’t keep any stock of Strangers, but order them as needed and store them, if at all, in dynamically allocated slots.
See on www.idatix.com
Nov 10 2014
Change your production leveling strategy to achieve flow | Ian Glenday | Planet Lean
“…What I came to call Repetitive and Flexible Supply (RFS) is based on the idea of manufacturing the largest products in the same sequence at the same time every week. To many people, this sounds ridiculous and stupid at first.
My analysis consistently showed that, typically, 6% of a company’s products represent 50% of the volume it produces.
I started to see this happen in every factory, hospital, or office I went to. And that’s when it hit me – why not simply focus on stabilizing the plan for that 6% of the products?…”
Ian Glenday’s idea of RFS is fine, but not quite as original as presented in the article. Making it easy to do what you do the most often is the motivation behind the Product-Quantity (P-Q) analysis I learned in Japan in the 1980s.
To use the terminology introduced in the UK by Lucas Industries about that time, it breaks the product mix into Runners, Repeaters, and Strangers. You make each Runner is an dedicated production line, because it has a volume that justifies it.
Then you group Repeaters in families and make them in flexible lines, and you keep a residual job-shop to make the Strangers — the long tail of your demand — products in large numbers but with low and sporadic demand.
This method is described, as prior work, in Lean Assembly as a foundation for assembly line design, and in Lean Logistics for warehouse/supermarket design and for production scheduling, in particular heijunka.
See on Scoop.it – lean manufacturing
By Michel Baudin • Press clippings • 2 • Tags: ABC analysis, Heijunka, JIT, Lean, Product-Quantity Analysis, repeaters, Runner-Repeater-Stranger, runners