Lean system flow starts with effective planning, and scheduling. That align resources, capacity, and customer demand, to ensure continuous value delivery.
The five Lean Principles have been with us for a few years now. For many, they have been a useful if somewhat abstract guide to how to apply lean in their environment. However, we’ve seen many more businesses struggle to move beyond the application of tools and techniques, and create a lean enterprise.
We’ve also seen a breakthrough in organizational performance. When these businesses start to apply lean at a system level. This cause us to reflect on the wording of the Lean Principles. To consider whether they could be reinterpreted to help more organizations achieve better results faster in their lean implementations.
Value and value stream are a good start.
Generally speaking, no-one has trouble recognizing the requirement to deliver value to the customer. We’ve all had enough experience of failure at the boundary of one silo and another to accept that true improvement must consider the end-to-end process to serve the customer.
Then we have flow.
This is easy to imagine:
keep value flowing smoothly from one process to another.
It’s also easy to achieve if we think of examples like co-locating all the stages of production in one manufacturing cell and working to one-piece flow.
Flow has been improved by removing travel and delay between successive stages of value-adding work.
In environments with shared resources and more complexity, flow might be attractive to aspire to but harder to achieve.
It’s easier to spot where the flow stops because that’s where the waste becomes obvious:
inventory, delays, over-processing. And that’s where lean practitioners often fall into the trap of applying tools to attempt local waste reduction rather than redesigning a lean system to eliminate the cause of the waste.
Because the failure to flow means that the necessary resources or materials are not available to keep the value-adding work going:
either the resources don’t have the capacity or they are already occupied on other activities. The flow stops and we see waste.
Continuous flow of value
If we want a continuous flow of value.
We have to ensure that the resources have the capacity to accommodate the demand for value-adding activity:
Where parts, people or materials are needed, we need to ensure their availability.
This process is called planning and is the creator of flow. In a lean system. We need planning processes that ensure that we can commit our capacity and materials in line with the customer’s requirement for value. Then we get flow.
The next principle tells us we need to pull by creating value at the rate which the customer wants, not how it suits us to deliver.
Again, this is easily illustrated by tools such as kanban, but is harder to translate to environments where value is created through a complex sequence of processes or multiple resources are required and we need to ensure that their availability is synchronized.
Here we need to know when to start the value-adding work and what to do to ensure we deliver value to the customer on time.
This process is called scheduling and is the executor of flow.
In a lean system, we need scheduling processes that inform resources what to do to keep value flowing:
The more self-regulating these processes are, the more responsive we will be to changes in real customer demands.
PLANNING AS THE CREATOR OF FLOW
Every organization plans and schedules and we all do it in our personal lives.
The distinctive differences between the two are the time buckets involved and the fact that scheduling is characterized a sequence of events.
Most people can see why there is a need for planning. Demand is a mercurial thing and putting resources in place takes time.
In order to recruit the right number of resources some sort of estimation of the future is necessary.
This is tricky business: there is even a saying, “If you want to give God a laugh tells him your plans”.
However, in the absence of divine intervention we must commit to capacity before we build or recruit it and to get it right requires a guess about future demand.
This is called risk and for those individuals prepared to take it the rewards are large.
To enjoy the reward the capacity must be installed at an acceptable cost considering the revenue customers are willing to pay.
Generally speaking, the higher up the organization you go the more likely those individuals are to be involved with planning.
For instance, the main board of a manufacturing PLC are likely to be involved in planning what new markets to be in, what new product features will be required to satisfy them and maybe acquisitions or investments needed.
The time buckets for these activities tend to be years.
It is not unusual for companies to produce five-year plans and update them annually. If you have ever been involved in constructing a budget for your business or department you will appreciate it is an annual event often broken down into monthly buckets of time.
COMPLEXITY AND SYNCHRONISATION
A lot has been written on lean around the lessons learnt in assembly environments where the primary capacity was people.
This is not always the case and the product process characteristics play an important role in determining the success of your system intervention.
Consider the following types of manufacturing resources:
Lean principles still apply but we have to be wary of doling out solutions more appropriate to lightweight assembly operations.
SCHEDULING AS THE EXECUTOR OF FLOW
The scheduling tends to be undertaken lower down in the organization. At the operational level and there is a plethora of often expensive tools to assist. A scheduling of resources whether they are processes, machines or people tends to be done over much shorter horizons of time. So you might receive a schedule for the week and there will be a sequence to it.
You could expect or hope that having done your planning well, incorporating demand and capacity management. The scheduling would be easy? It is not easy and you can often judge the quality of the scheduling by how frequently the schedule is changed.
Being able to hold to a schedule for, say, five days is a quantitative indicator that planning and scheduling are being done well.
The more frequently the schedule changes the more likely it is that something is remiss in either the planning or scheduling phases or sometimes both.
So, what is the problem? In a word, sequencing.
A glib response to flow problems is to suggest you simply have to follow the due date sequence of the customer orders or conceivably the works order sequence derived from them.
But this ignores the complicating conditions of scheduling which can derail this primary consideration:
- Differing lead times from the capacity constrained resource to the due dates;
- Changeover on the constraining resource and perhaps dependency of changeover;
- Where a constraining resource produces more than one part and both are required by a product;
- Where a constraint resource feeds another constraint resource, or one close to being constrained.
FROM A SCHEDULE TO PULL AND SYNCHRONISATION
Unfortunately, “pull” in lean circles almost always gives rise to the tool called kanban. This is but one pull mechanism and good though it is in some circumstances it does not fit well in some environments.
It is fair to say you can never know enough about your demand and as the customer is the final arbiter of performance a good place to start is with the demand profile. Here we must note that not all customers will have the same service requirements. Some may want instant order fulfilment whilst others are perfectly happy with the lead time response from your system.
This helps define make-to-stock as opposed to make-to-order segments of your business; you are likely to experience both.
Runners’ repeaters and strangers (RRS) is a popular lean methodology. But if this is your only mechanism for demand analysis you are going to condemn your organization to make to stock. Why? Well, because demand is never going to arrive in patterns conducive to the RRS order of producing it.
Better to analyses the demand frequency pattern, break up the bill of material to look for component commonality or lack of it and understand the product process characteristics before committing to which pull system(s) is the best fit for your business.
VAT analysis is also an important consideration. This is a constraint-based mechanism to determine the dominant flow characteristics of the business.
Drum buffer rope and Constant Work in Progress and variations on these themes offer more robust mechanisms for pull in more complex environments.
SELF REGULATION
If the above suggests that sections of the lean movement appear. To have turn their backs on sound planning and scheduling principles it begs the question “why?”
We would speculate that these misgivings have come about through the frustrations. That developed because of expectations that computing power was going to solve scheduling complexity.
This seductive idea has been around since the 1970s. Many of today’s ERP implementations are still built around the promise of reduce inventories and higher levels of customer service.
Failure to live up to the expectations set is beyond the scope of this short article. But suffice to say clever IT is “necessary but not sufficient”. The solution lies in the sub-title “self-regulation”.
Recognize the shortcomings of computer-based scheduling. Get people who are responsible for planning and production really engaged in the design of their system. They will respond faster to issues with flow than even the latest real time data capture system.
The transformation is often breathtaking and our experience is that by applying intelligent planning and scheduling. To organizations attempting a step up from tool-based thinking to system intervention, the bottom-line impact is in the region of 5% to 25%.
TO CONCLUDE
We believe that it is the failure of many practitioners to relate the Lean Principles of flow. The pull to the traditional disciplines of planning and scheduling. That prevents them from making the step from applying lean tools, to creating a lean system. With the attendant failure to achieve real business results.
Planning and scheduling are essential functions in all complex enterprises. We do damage the reputation of lean if we fail to incorporate them in a lean transformation.