Throughput Analysis

Multi-Product Flow

Ardavan Asef-Vaziri
Lean Operations
 Providing greater value for customers
 Eliminating waste and non-value-added activities
 Waste on Flow Units- longer flow time
 Waste on Resources- lost of capacity
 These will lead to cost (efficiency), quality, flow time (quick response
time, days of supply), and flexibility.

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Reduce Variability
 = UpartVpart
 RTi=Ii  RTi= UpartVpart
 Ti= UpartVpart/R
 U=R/Rp  R=URp Uc/Tp
{
𝑈 𝑠𝑞𝑟𝑡 {2 ( 𝑐+ 1 ) }
𝐼 𝑖=
 Ti=(UpartVpart)/(Uc/Tp) ( 1 −𝑈 )
 Ti=UpartVpart  Tp/Uc
 Ti=UpartVpart  Tpart
 Variability increases Inventory and Flow-Time
 Variability also perish Capacity. The resource is available but the flow unit
is not there.

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Reduce Setup Time/Cost
 Large Setup time leads to large batches.
 Large Batches increases Inventory & Flow-time.

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Lean Production
 Produce when needed. Match supply with demand. Deliver products quickly
to the customer without large inventory.
 Reduce Setup Times. Short setup time makes it possible to switch from
one product to the next easily.
 When switching from one product to the next is not time consuming and is
not costly, then instead of large batch sized you can produce in small batch
sizes. Small Q.
 Flexible Cross Trained Workers to be able to handle a variety of tasks
on different parts of the process and on different products.
 Large batch sizes are not good. We produce in large batch sizes because
setup time is high. Large batches  large work-in-progress and finished
goods (WIP&FG) inventories.
 With plenty of WIP to buffer any production delays, defects found on the
shop floor do not generate a sense of urgency to fix the problem, so it does
not
Lean occur A.again.
Operations. Worse,
Asef-Vaziri, Systemsquality problems
& Operations often escape unnoticed until after 5
Management.
Lean Production
 Smooth Flow. Not too many up and downs, level flow, small batch sizes.
 Pull vs. Push System. Pull: Produce only what is needed and when it is
needed, rather than in anticipation of a demand. Push: Produce and add to
inventory.
 Supermarket. Each process is a supermarket for the succeeding process.
Each production station arrayed its diverse output for the downstream
station to pull when needed. Each process would produce to replenish only
the items that the downstream process has consumed.
 Eliminate waste. Eliminate non-value-adding activities and resources.
 Kanban. Limit the inventory of raw material, work-in-progress, and finished
good.
 Kaizen. Continuous improvement –
 Flexibility. Ford had offered his customers cars in only one color to reduce
changeover times. This was due to long changeover times. General Motors
brought
Lean variety
Operations. to stage.
A. Asef-Vaziri, Systems & Operations Management. 6
Lean Production
 The Japanese refused to accept changeover times (Setup Times) as a
constraint. They focused relentlessly on Reducing Setup Times and
Cross Trained Workers. They were enabled to provide variety without
large lots.
 Close Relationship with Supplies. A limited number of suppliers,
certified supplier.
 Operational Information are Transparent and Available to Suppliers.
Suppliers need transparent access to production data to know when the
next o order may arrive. If suppliers are left in the dark about when the
next delivery request would come, they built up finished goods inventory
so as to better respond to requests – this is contradictory to being lean
throughout the supply chain.
 Every step in the supply chain had to work in harmony to produce when a
product is needed, not a single moment before. This philosophy never
intend to have the supplier maintain a stock of finished goods to supply
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Lean Production
 A close relationships with the suppliers is required. Long-term contracts are
needed. Components cannot be sourced from multiple suppliers mainly
based on price.
 Simply adopting tools and techniques piecemeal does not lead to a lasting
lean competitive edge. Without a complete understanding of the core
principles of lean thinking, there is considerable potential for doing more
harm than good.
 We may think when non-value-adding activities are eliminated, the
enterprise will become more efficient through workforce reduction. Nothing
could be further from the truth. When lean is viewed as a cost-cutting
initiative or an opportunity to reduce the workforce, employees will
naturally resist it, leading to eventual migration back to the old way of
doing things.
 On the other hand, if it is made clear that freed-up resources would be
productively deployed elsewhere, implementation efforts would have a
Lean Operations. A. Asef-Vaziri, Systems & Operations Management. 8
Lean Production
 Lean is a growth strategy  uncovering additional capacity  deployed for
further growth  the money that enterprises do not have to spend now.
 Eliminate muda (waste). Eliminate any activity that creates no value
 Lean is a way to do more & more with less & less
 Less effort, less equipment, less time, and less space;
 While coming closer and closer to providing customers exactly what they
want
 Reduce inventory, changeover (setup) time, Waiting line, additional
move & Transport
 Seven Deadly Source of Muda (Waste): Overproduction, Inventories,
Transportation, Delays, Defective products, Processing (when not
needed), Motion (when not needed)
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Enable Flow: River Analogy
A River and Rocks analogy likens the water level
to the inventory level in a facility. A higher water
level hides potential blemishes in the process. As
the water level is lowered, these problems
surface, forcing management to correct. The key
is to resist to reduce the inventory level too
Scrap Capacity quickly. Lower the water level a little, break
Imbalances
apart the exposed rocks (obstacles), and then
lower the water level once again.

Large Setup Unreliable

Times Suppliers

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The Lean System
 As attempts are made to reduce inventory levels, other major elements
that should be in place are: Setup Time Reduction, Cross-Trained Workers
 Reliable Processes, Preventive Maintenance Systems, Reliable Suppliers.
 Partnership With Supplies, Production (Operation) Schedule Visibility
 For the boat to move faster, all the oars should be in the water
at the same time.
 Balance the flow across the supply chain
 Have all processes working at the same rate

 Having some resources working faster than others will pile up

inventory. Making sure all resources respond to pull signals
ensures a smooth flow of products across the enterprise, or the
supply chain.
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The Read Cost of Inventory
 Has cost
Physical carrying costs – we need storage and human resources.
–
– Financial costs (Opportunity Cost) – We could have invested our capital
elsewhere and benefit from it. In the LFT Game financial cost is 10% of
the cost of goods.
 Has risk of obsolescence
– Due to change in customer preferences, and due to technological
changes.
 Hides problems
– Even if we produce low quality product, there is enough inventory
downstream.
– Untrustworthy suppliers, machine breakdowns, long changeover times,
too much scrap do not show up.
– Long flow time, Feedback loop is long. not-uniform operations.
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Identify Value & Non-Value Added Activities
Value added; An activity that adds value to the product in the eyes of the
customer. Non-Value added: any thing else.
Identifying and reducing NVA activities is key to streamlining a process.
 The Value Added ratio. Total VA time divided by the total process time.
While the it depends on the industry, a ratio of 10% is suggested. It is 1.8%
in the next flow chart. It indicates the amount of waste and opportunities
for lean efforts to remove waste.

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Process Flow Chart and Spaghetti Diagram

Spaghetti Diagram  depicts the

Process Flow Chart  captures the physical movement of products 
logical sequence of activities  to the extent of travel, and back-
eliminate NVA activities. tracking. To come out with a
better layout.
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Mixed-Model Scheduling and Small Batch Production
 In a perfect world, when the customer pulls a product from the
final station, a signal is generated on each upstream resource to
produce exactly what is pulled.
 In the real world, changeover time, material availability, or
operator availability motivates large batch production.
 When inventory goes up, flow time goes up.
 Produce products at the same rate at which customer demands
are made.
 In a lean system, products flow smoothly through the enterprise
with no delays

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Mixed-Model Scheduling and Small Batch
Production
 Mixed-model scheduling
 Evenly distributing the production of different products over a
period of time
 Changeover or setup times must be small
 Small batching in the presence of setup times
 Cross Trained Workers for Flexibility

 Demand per hour A(3), B(2), and C(1).

 10 min/part assembly time. 10 hrs/day, 5d/week.
 Batch size is one week of demand; A(150), B(100), C(50).
 Instead of receiving products every hour, the customer will
receive them once a week. The average inventory is 75 As, 50
Bs, and 25 Cs.
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Mixed Model Scheduling Example
 If production per hour was A(3), B(2), C(1), the finished goods inventory
would be negligible because production would match hourly demand.
 A pattern of AAABBC is a good hourly schedule, it could be more finely
sequenced as follows: ABACAB.
 Production in large batches
 uneven workload
 uneven demand for output of the previous station
 production is not synchronized with demand.
 Mixed-model production:
 smooth work-load
 smooth demand for output of the previous station
 Allows production to match customer demand.

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Cellular Layout

Standard Work
Operator Tasks
1 1
8
1 7
8

2 2 7 Flow-through racks
6 2 for materials

3
3 4 6
5
3

4 5

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Cellular Layout
 A mixture of job shop and flow shop for producing a family of
product with somehow similar set of required operations.
 Reduces movement and facilitates 1 piece flow
 Improves visibility, operators can see each others
 Motivates team work.
 Creates cross-functional work force.
 Flexible as takt time changes, allows add/subtract work force,
allows combing duties.
 U shape most common, also T, Z, L shape, and loop.

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