Page 133 - How To Implement Lean Manufacturing

112 Cha pte r Se v e n

Eliminating the Wastes
The goal is to apply the four strategies using the five diagnostic tools to eliminate the
seven wastes, which are (remember TWO DIME):

• Transportation
• Waiting
• Overproduction
• Defects
• Inventory
• Movement
• Excess processing

Implementing Lean Strategies on the Production Line

Strategy 1, Synchronize Supply to Customer, Externally

Conceptual Discussion
To synchronize externally is to supply the product to our customer at their needed
demand rate, normalized to our production schedule. We want to supply all of the cus-
tomer needs but we do not want to overproduce and create excess inventory. These
tools allow this balance to be achieved.
In order to properly synchronize to the customer we need to meet the contractual
volume demand and, in addition, we will need to handle the normal variations in
both supply and demand. In a mature make-to-stock production system, with good
raw materials supply, reliable production equipment, stable cycle times, and high
quality yields, our supply variation should be low. However, we will still have sup-
ply variations, therefore we will need a safety stock inventory to compensate for
these variations. In addition, there will be demand variations to contend with if we
wish to be synchronized to the customer. This variation will require buffer stock
inventory.

Tools Used
• The Takt Calculation will allow us to understand at what rate the customer
will normally wish to have product supplied. This is the basic starting point
for all production rate calculations. This is often referred to as rate-leveling.
We want to avoid the ups and downs of normal production and rather stabilize
the rate.
• Cycle, Buffer, and Safety Stocks are inventories, but they are the definition of
necessary inventories. Cycle stock is necessary to assure normal pickup deliveries
are in place, buffer stocks will handle the demand variations, and safety stocks
will take care of internal supply variations. In this way, we will assure we meet
demand, but have the minimum inventory on hand. These inventories are
designed to handle normal variations in both supply and demand and therefore