In almost any batch manufacturing company there will be a mixture of products that are made very frequently, some that appear quite often, some rarely and some very rarely.
I call these
- Runners – made every week
- Repeatersmade – every month
- Strangersmade – every quarter
- Alienslegacy – parts that pop up now and again.
There are some interesting dynamics when you consider the influence of these on overall profitability and the value of work in progress. I am excluding new part development from this discussion. All of the parts in this group you will have made before.
Runners and Repeaters – products made every week or month and in volume
You better make sure you make money out of these! The cycle times on the machines must be really well understood and constantly under review; there may be a case for a focused cell, rather than pushing them through the functional layout. Raw material content should be constantly reviewed and production yields constantly challenged.
If these parts are high volume from a customer schedule which is not very stable take a long view; make your batch size stable and buffer the uncertainty with a bit of finished stock.
This will create a stable repeatable pattern for the cell – perhaps batch size could equal a furnace load or shipping containers worth to minimise handling. This is Lean’s promised land so you must constantly demand reducing cycle times, reductions in waste and inventory.
This stable pattern will mean you could schedule the shop floor around this taking advantage of “follow on” setup reductions such as the same bar size or tool settings.
In this simple example above a fixed pattern of runners and repeaters takes up capacity in a predictable known pattern, strangers and aliens absorb the available to promise capacity that is left. This has the advantage of reducing planning time. With supply kanbans in place everybody knows the pattern to make the same runners every Monday and Tuesday and chosen repeaters on Wednesday and Thursday. The Runners’ batch size can be fixed because you are absorbing the demand uncertainty with a buffer stock.
Strangers and Aliens – products made infrequently or unpredictably
Stranger and Alien margins are more difficult to predict. There may be commercial agreements that mean you have to supply these parts along with the Runners so they are often more about service expectations than profit.
To succeed at Strangers and Aliens in my experience it is all about the effectiveness and efficiency of provisioning.
Provisioning is the process of checking that you have everything you need to make the batch, i.e. material, drawings, tools, programmes and gauges. Good 5S will help here. DO NOT start until you know you can finish, accept that run and setup times will be less predictable but do not allow the work to disrupt the protected Runners time on Monday. It may be a pain but it will be better for the business to take it off and start again rather than risk the more profitable activities of the Runners and Repeaters!
Commercially minimum order charges can help improve the profitability of Strangers and Aliens but in my experience they are a fact of life and I do not encourage businesses to push too hard to discontinue them. Make sure to take advantage if the customer is flexible on order quantities. If it is OK to be a few over or under then that is better than putting the few extra in stock just to meet a fixed supply quantity!
Work hard on the set-up times, optimise yields with order quantities as multiples of bar lengths or similar. Charge the whole material buy costs against the job even if you don’t use it all – margin may be horrible but it still needs to accurate. Try to get standard bar sizes and do not buy special tools to improve cycle times unless there is an overwhelming case for it. If the part was made from a forging when it was high volume there may be an argument for making it from bar – engineering integrity permitting of course.
By understanding your Runners from your Aliens you can maximise profitability and efficiency and reduce work in progress.
Runners and Repeaters can be used to stabilise the workload, generate predictable margins and methods should be continuously improved to eliminate wastes.
Strangers and Aliens can be profitable if improvement effort is focussed on provisioning to ensure you know you can finish before you start and sales order quantities are made to match the optimum yield of the process.