implementing 'lean' with SAP ERP tools - part 1

Very often lean initiatives, or six sigma projects or agile programs are started in organizations. But is it always clear what needs to be done? And more importantly: what needs to be achieved? I’m currently in a manufacturing plant outside of Shanghai, China and the directive for the production lines was set a year ago: “we need one-piece flow!” the plant manager determined. So one of the lines was used as a model and the six stations on the assembly line identified. Then six workers were trained; one for each station and a heijunka schedule was provided every day. When I was taken on a tour, this line was proudly presented, but the plant manager was not happy. There was WIP piling up in front of some stations and others were starving. “My workers just don’t do what I tell them to do. They assemble batches and don’t adhere to my ‘one-piece-at-a-time’ directive.”

Taking a closer look it was quickly apparent what the problem has been. The line was not balanced. Meaning that the cycle time on station 4 was much longer than the cycle time on station 3. That has the effect that WIP piles up in front of station 4 since the worker on station 3 can produce much more product in an hour than the worker on station 4 can handle. So Mr. 3 has two choices: either he idles for most of the time not doing anything or he produces to the WIP after his station. Even though he was told not to make parts to inventory, he felt even queasier with the option to be seen doing nothing. What I am trying to say here, is that all these initiatives only work if they are thought through top to bottom; left to right.

In the case described here, we should obviously balance the line. SAP ERP 6.0 has great graphical tools to do that. But you will have to use rate routings and the tools of repetitive manufacturing to do so. And who would think that this is a repetitive manufacturing process? It is, isn’t it? We are making product in a repetitive manner; even if there is a mix.

A balanced line simply means that the activities performed on each station take up the same amount of time; approximately. If that is the case you can release orders into the line according to a takt time. With that each worker on each takt can make exactly one piece and hand it off to the next. If variability is low, there will be flow and no wip piling up on any work station. Below is an example of line balancing performed with transaction LDD1

The takt time – the time period after which a new order is released into the line – is 26 minutes and 23 seconds. For product 9004192 we have a takt time violation on station 1A. Meaning that operation 12 or operation 14 should be executed on work station 1B. That way the time to execute material 9004192 on station 1A and on station 1B would be roughly the same and less than the takt time – namely about 25 minutes.

If you have any lean initiatives, whether it would be to achieve one piece flow, reduce waste (the operations that you see in above screen, can all be identified as either value-add or non-value-add activities) or shorten your cycle times, look in SAP repetitive manufacturing (most lean advocates think that an ERP system is counter to any lean principles – and I strongly disagree). The word Repetitive, however, triggers rejection in many people. Have a closer look; it’s worth it