Lean methodology likes numbers. 5S. 6 losses. 7 wastes - well 8 if you count loss of human potential, or 9 if you include customer complaints.
In terms of manufacturing flows, the number is also 7:
- Raw materials
- WIP optimised
- Finished goods
For your factory to be Lean, all of these flows need to be considered and optimised. Typically, you cannot deal with one flow in isolation and fix another one later. As soon as you start tinkering with one flow, you will see the links to and dependencies on the other flows and a multitude of operational and business processes.
You can make your material flow as simple or as complicated as you like or as is necessary using anything from common sense to sophisticated bits of software. However, to benefit from sophisticated management of your material flow, you first need to get the basics right. If we stay with the numbers theme a little longer – get your material flow wrong and you will suffer 3 big wastes: Waste of money, waste of time, and waste of effort.
A case study:
This organisation uses polystyrene for injection moulding. At regular intervals every week a tanker delivers polystyrene to the on-site storage silos from where the material is fed through pipes to the injection moulding machines.
Figured 1: Normal flow
At some point, a decision was made to buy 165 tonnes of polystyrene at a cheaper price per tonne than the normal consignment stock agreement. Unfortunately the 165 tonnes came on 120 pallets each loaded with 25kg sacks. There was no space on site for these 120 pallets so they were put into external storage 50 km away from the site. Over two years later, during a cost saving exercise to empty external storage facilities, the pallets of polystyrene were discovered. At this point there was no great enthusiasm to bring the pallets back on site as using the material would require operators to manually empty each sack into a hopper at the top of the injection moulding machines. Figure 2 shows what happened.
Figured 2: Wrong and costly flow
So, a great idea to save money ended up achieving the exact opposite with the 3 big losses as a consequence:
Furthermore, overproduction resulted in additional financial losses from buying material that was not needed and running machines to make products without a sales demand.
Get the basics right and the number of benefits could be 9...
As you can see getting materials to flow starts outside the organisation at the customer. What the customer wants decides the type and quantity of materials you need to buy. Internally, you need to make the materials flow easily from goods in, silos, or warehouse to the machines. If the material flow is obstructed, machines and operators stand idle. If, on the other hand the flow is too great other flows on the shop floor may be hampered through random storage of overstocked materials. So a good factory design also includes the flow of materials, not just WIP, people and finished goods.
Your material flow must be designed to best suit your specific production, conditions and constraints.
Good material flow involves Sales/Customer Services, Purchasing, Production Planning, and Inventory Management/Control. And don’t forget Product Development. New offerings may require different materials.
To find out how WBS Group Consultants can assist you in optimising your material flow contact us for an initial FREE no obligation consultation.
You can also read more about WBS Group Manufacturing and Operations Assessment on our website here.