VSM? No! - Synchronization And Pace!

As I discussed in a previous post, the VSM points to symptoms associated w/ push systems. Addressing these issues w/out addressing the operating method doesn't work because the tools/methods/concepts Toyota uses were developed over time as countermeasures to problems encountered using the pull method. Kanban in a push system creates problems. In order to enjoy Toyota-like benefits the operating system must change from push to pull.

I’ve been told that before transitioning from push to pull the inventory accuracy must be at least 85-90%. That might help but is that likely to achieve in the current push system? Actually, the push system is the primary cause of this problem. Excess inventory is one hallmark of push systems which results in widespread inaccuracies that are more pronounced.

At Toyota, I coordinated the physical inventory process for Body Weld. TMMK performed physical inventory for the entire plant (Assembly, Paint, Body, Stamping, Plastics, Production Control, and Power Train) in less than 2.5 hrs. between shifts! And with very few mistakes.

Contrast this with a push system inventory. I’ve witnessed this taking 3 FULL DAYS. That's 3 days with no production. Assuming a $450M yearly revenue plant, physical inventory could cost about $6M in lost revenue! In addition, no telling how inaccurate the actual vs. book value could be? The point is that waiting for 90% inventory accuracy to implement a pull system will assure it won’t happen. In order to realize the benefits of the Toyota Template a pull system must be implemented that is grown into a Just-In-Time system over time. How is this accomplished?

Parts and sub-assemblies are either made one-at-time or in batches. For batch-build parts, performing SMED activities on machines are first. Next, use the Triangle Kanban to connect batch building to one-piece flow by building to a store using this signal kanban. This eliminates schedules for batch-built parts. Low-runners and one-offs are handled differently but must be fit into the kanban system. This process would vary based on the local environment.

Sub-assemblies (S/As) are built on schedules in push systems, usually by due dates. For example, let’s take cars. Though cars are made repetitively (the same way) there are thousands of option combinations like color, engine type, interior, etc. How can we assure that the correct engine is complete and arrives at the install process at the right time? In other words, how do we synchronize and pace production?

To synchronize, S/As must be built in sequential order. One way to accomplish this is to assign a sequence # to each S/A for a specific car. Every S/A for that specific car would have the same sequence #. Then build the cars in sequential order by pulling from downstream. The appropriate buffers between S/A processes and their customers must be established. Only build the next piece when there’s a place (signal) in the buffer. This limits overproduction throughout the plant for one-piece-flow pieces. And, it's ok to keep the MRP system. The schedule determines what needs to be built, but not the order. S/As are pulled in sequential order through the plant. Pulling sub-assemblies, in sequence, synchronizes and paces production.

When this is done, problems will be highlighted that weren't apparent before. WIP will disappear. Disparities in cycle times between processes will become evident. Bottlenecks and pacesetters will become obvious. Some areas will have too much labor while others will not have enough. Material shortages and excesses will become evident as well. Real problems surface that are associated w/ the change from push to pull.

Additionally, TAKT is considered. Is demand being met or has the speed increased beyond demand? Constant observation and reassessment are critical. Good problem-solving skills are necessary, especially in regards to experience with a pull system. There will be plenty to work on, especially with regard to pace.

Remember what Fujio Cho said, " Many good companies have respect for individuals, and practice kaizen and other TPS tools....But what is important is having all the elements together as a system. It must be practiced every day in a very consistent manner, not in spurts."

Unlike using a VSM that targets areas for improvement based on current and future maps, then implementing elements (tools/methods/concepts) in a push system for improvement, when a true pull system is implemented these elements will work. Ultimately, over time, develop the pull method into a Just-In-Time system.