Fast Cycle Production

In manufacturing, few things remain constant and true. Little’s Law is one exception. The equation: Cycle time in days is equal to amount of Work In Process (WIP) in units, divided by the daily output in units is always true and meaningful. If, for example, you have a total of 1000 units throughout the work areas either being worked on, or sitting around, and your output is 100 units per day, your unit cycle time is 10 days long. It is also true, although the equation itself does not specifically point this out, that if you take action that results in a buildup of WIP, and that buildup results in increased cycle time, you have probably made a mistake in judgment.

Continuing on, it is also true that if your WIP remains constant and your output is decreased, your cycle time will go up. If manufacturing could maintain close control over the cycle time of its product, from the time it leaves the release point until it has completely finished, it could safely predict to customers what they could expect in terms of delivery. If the process were completely under control, and nothing bad ever happened, there would be no problem in meeting requirements, if those requirements were within manufacturing’s capabilities. Companies that are able to control their cycle time and meet their requirements are usually very successful manufacturers. They may not be successful in other critical areas, such as sales and planning, however. Sales, production control and executive management can make the best manufacturing processes inept, simply because they often have the power to do so, and just don’t operate from the proper production value set. They make decisions and promises that are destructive to their production processes in order to make their own measurements look favorable. Then, when manufacturing can’t make the promises come true, it is blamed for the failure.

Realistically, most companies have unpredictable manufacturing processes. Problems occur every day and some of those problems may have lasting negative effects. People don’t show up for work, machines break, vendor problems and an assortment of other problems, are all designed to lower the output capability of the factory. When the output capability goes down, and the WIP remains at constant or at increasing levels, the cycle time of the product goes up. When cycle time goes up, and product doesn’t get out of the door on time, the prognosis for success goes down dramatically. When manufacturing runs into problems and the demand still exceed its capabilities, it is sometimes possible to make up the delta through overtime or by bringing in extra workers. When this fails, and it often does, chaos reigns supreme! If a company is running very close to its maximum capabilities, and troubles hit, pushing it beyond its capability, the probability for disaster is high. When troubles start, it is very likely that questionable business decisions will be made that will make the problems worse.

The reason is that management starts using values that are designed to make things worse under the guise of customer service. Prioritize this order, push that order through, and release extra WIP to make up the difference. If they really knew what they were doing, they wouldn’t react that way. Little’s Law gives us a set of manufacturing values that always work. Built within the simple equation are rules that should never be broken. These are values, and as such, they guide us, no matter how tough it gets. In a business that relies on the happiness of its customers, which is probably true for a majority of businesses, the reliability of the product, and the timely delivery of that product, is essential, not only to success, but basic survival. In manufacturing management, it is important that you be consistent and predictable under a variety of conditions. Always fall back to those basic values and you will prevail. Take the short-term loss and fix the problems by addressing your detractors. Meanwhile, stick to the values contained within Little’s Law.

There are a number of ways that a company can react to production problems. The most common way is to go directly to the problem area and try to fix it as quickly as possible. That approach is just fine, except for the fact that the problem is probably limited to one or two departments, while the rest of manufacturing conducts business as usual. Consider this scenario: Department C has problems that have reduced its output rate by a third. Every other department has normal output capability. Engineering and maintenance are working feverishly to fix the problem, but the situation remains the same for a week. In the meantime, product is released to manufacturing at normal levels. Customers are unaware that problems exist that would threaten their delivery dates. Department A and B produce at their normal levels, but WIP is building up at Department C. The WIP that has ac*****ulated has gone beyond the delivery due dates. The customers are not notified of a problem until their product has met or exceeded the due dates. It could have been predicted that the product would bunch up at Department C. Little’s Law is clear on that point. If the input is the same, and the output goes down, WIP will most definitely build up at the bottleneck. It was known up front that C could not keep up the pace until their problem was fixed. That identifies them as the bottleneck. If that were known, why would you want to send them more than they could handle?