Wednesday, May 9, 2012

Lean SAP for the process industry

If your company is a process manufacturer, you most likely mix, blend, cure or otherwise process your products on a production line. One of the characteristics of processed products is that you can't disassemble them. An automobile you can usually 'unscrew' and put the components back in inventory (even though that is not true 100%, it is an approximation to generalize the difference between process and discrete manufacturing). 

Also, in process manufacturing you may have by- and co-products; unfinished yield that may be re-introduced into the process. And you often can't predict what exactly comes out of the process. So you have to work with ranges (of specifications) and chemical formulas. All of that is provided with recipes and process orders in PP-PI.

As "lean manufacturing" came primarily from the automotive industry, process manufacturers always asked the question if they can reduce waste as well. Why not? You can not introduce 'one piece flow' but that's not the only lean principle. Why not heijunka level a production program or make every product every interval (EPEI)?

Peter L. King has written a book, Lean for the Process Industries. Dealing with Complexity, which beautifully translates all the 'automotive lean principles' to process manufacturing. 

One of the most interesting ideas is the 'product wheel'. It represents the heijunka for processed products. 
Products wheels allow you to schedule, capacity level and sequence your production program all at the same time. It is a mixed model scheduling concept which allows you to automatically fill a processing line to it's capacity, in a setup-optimized sequence, ensuring that the smallest possible lot size is processed as many times as possible within a planning cycle. 


Within this concept the circle represents the lengths of the planning cycle, each spoke is a batch size (the lengths in time to produce it) of a specific product and the gap in between represents the time it takes to setup, clean or prep the line for the next product. Note that there are spokes for MTO and spokes for MTS. The MTS spokes are planned based on a forecast, whereas the MTO spokes are reserved time / capacity which can be filled by customer requests which are made to order. 



A planner will first identify how much time is available during a planning cycle, to get around the wheel. If that time span is one week we simply sequence the total forecasted quantity for all products on that line and for the week around the wheel. If, with that, we get 2/3rds around the wheel, then there is 1/3 available for MTO capacity and setup time. So now you take up some space for MTO and 1/4 of the cycle is available for setup.



...and here is an interesting concept playing into one of the lean principles: avoid waste of overproduction!



If you have 1/4 of your line capacity left over after you planned for MTS and MTO, don't fill the line up to just make something! But rather use that capacity for more setup, so that you can produce in smaller batches. Smaller batches means more setup but also means more flexibility. If I make the entire batch of product A required in the week on Monday and Tuesday morning, I have no way to react, should the customers pick up less than what was forecasted. But If I make some on Monday, some on Wednesday and some on Friday, I have a much better chance to switch over Fridays production of A to make more of B.



And if my demand calls for only 3/4 of my capacity, I am really NOT better off reducing setup time and making more product - product that most likely goes to waste. And since most process manufacturers have shelf lives for their product, this concept becomes much more important here than in the automotive industry.



...so how do you setup the product wheel concept in SAP? There are two ways to do that: either you use capacity dispatching of process orders, graphically in CM25 or you employ the tools of repetitive manufacturing (i'm getting excited now :-) and most of you think I'm out of my mind! Yes, you can use ManRep with recipes as well!)



If you use CM25, you can setup a product wheel strategy to sequence and capacity level your plan which will look something like this:



Should you go my preferred route and use LAS2 in repetitive manufacturing, you will have a heijunka-like procedure profile, you will be able to set the capacity limit for scheduling purposes and you don't have to convert any planned orders into process orders. the weekly sequence looks like this:





The moral of the story (if there is one) in either case is that there are possibilities with no end in the SAP system. Learn about them! Make them your own! Use them to advance your company's operations! And what is really exviting is that all this stuff works!