Monday, March 24, 2014

why setup optimization is NOT the only thing you need to worry about

I don't get it! For some reason, wherever I go, people want 'setup optimization'. Consultants use that term in every capacity - literally! - and lead their customers down the path of 'manufacture your products to the best possible sequence of setups !' Is that really what production sequencing is all about? What happened to demand driven scheduling? or lean processes that reduce the waste of overproduction?

One particular consultant once stated: "Optimize your setups so that you spend less time setting up and more time producing."

That is not what I would recommend to my customers. ...more time producing what? Product that lies around in inventory because no one cares for it? Shouldn't we rather figure out how to produce as close to what the customer is demanding, rather than freeing up capacity without thinking about what that free capacity will be used for?

Yes, setup optimization frees up valuable capacity, but it does so building huge batches or lots of 'like' products. It is directly counter to the lean principle of small lot sizes. I am not promoting 'batch size of One' here, but I do want to warn of the 'quick fix' for your capacity scheduling problem that so many people present in your SAP optimization program.

Have 'setup optimization' in your toolbox. there are situations when it makes sense and in combination with other strategies it can be very effective. But do not work with it in an isolated fashion as the 'fix it all', just because that's all your adviser knows about effectively scheduling a line.