Plant Systems Improvements

Functional Area Conventional Manufacturing Lean Manufacturing Value Added
 
Production Operations
  • Focused on machine capacity
  • Focused on process capacity
  • Focused on indirect interfaces
  • Cheaper machines required
  • Indirect costs reduced
 
  • Production status obscure
  • Production status visible
  • Progress indicators visual
  • Process on Autopilot
   
Inventory
  • Work-in-progress not controlled
  • WIP capped
  • Lower inventory costs
 
  • WIP encouraged
  • WIP discouraged
  • Prevents Batches of defects
 
  • WIP added as necessary
  • WIP reduction as a goal
  • Reduces space requirements
   
Sales Activities
  • Sell everything you can
  • Sell what makes sense to produce
  • Lower product costs
  • Higher customer satisfaction
 
  • On-time delivery irregular
  • On-time delivery assured
  • Higher customer confidence
   
Marketing Activities
  • Planned mass production
  • High variety / Low volumes
  • Produce exactly what you sell
 
  • High prodcut variability
  • Reduced product variability
  • Reduced variability = fewer set-ups & change-overs
 
  • Long unpredictable lead times
  • Short predictable lead times
  • Less finished product inventories
   
Marketing Actvities
  • Planned mass production
  • High variety / Low volumes
  • Produce exactly what you sell
 
  • High product variability
  • Reduced product variability
  • Reduced variability = fewer set-ups & change-overs
 
  • Long unpredictable lead times
  • Short predictable lead times
  • Less finished product
   
Management Focus
  • Functional expertise and department responsibilities
  • Product & system perspectives and responsibilities
  • Broader management perspective
  • Entire product responsibility
  • Flatter organizational structures
 
  • Added on due to structure
  • Built in due to delegation of responsibilities
  • Much less production control requirements
   
Product Variety
  • Product similarities rarely considered
  • Products grouped into families
  • Reduced set-up & change-overs
  • Increased production flexibility
 
  • High product variability
  • Reduced product variability
  • Reduced parts & WIP inventories
   
Lead Times
  • Weeks or months
  • Hours or days
  • Increased throughput & flow
 
  • Low throughput rate
  • High throughput rate
  • Reliable period production
   
Factory Layout
  • By functional machine type
  • By process flow in lines or cells
  • Much less material handling
  • Much less inventory
 
  • Stand-alone departments
  • Stand-alone product factories or cells
  • Can easily turn on & off to match demand
   
Inventory
  • Considered as an asset
  • Considered as a liability
  • Inventory costs reduced
 
  • WIP & parts queued at each operation
  • WIP & Parts capped throughout processes
  • Prevents overproduction
   
Push-Pull
  • Shop orders & materials pushed by MRP/ERP
  • Pulled from previous process only as required
  • Prevents overproduction
 
  • Shop orders not synchronized
  • Shop orders only to the pacing process
  • Simplifies production control
   
Equipment Availability
  • Not critical to success [compensate with larger inventories]
  • Critical to success [Failures will halt processes]
  • Forces effective preventative maintenance (PM)