Page 174 - The Toyota Way Fieldbook

150 THE TOYOTA WAY FIELDBOOK

during the pitch(see “Learning to See” for a description of pitch time). This is a
mechanism that supports the leveling process. The pacesetter has a clear under-
standing throughout the day whether he or she is ahead or behind.
If the value stream pacesetter follows this schedule, what happens? The
pacesetter will consume the components necessary to complete the task and
“withdraw” them from the supermarket upstream. Since the pacesetter is leveled,
this withdrawal will also be leveled. For example, say there are three different
components used for assembly at the pacesetter—call them A, B, and C—and
each is used for a different end product. If the assembly of end products is leveled,
the consumption of A, B, and C will be leveled. That is, there will be a smooth
rotation among the consumption of A, B, and C. This allows for keeping the
minimum amount of inventory of A, B, and C in the supermarket. In contrast, if
the assemblers suddenly spend an entire day just using part A and the supplier
had put just a part of the day’s worth of part A in the supermarket, the assembly
would run out of A and shut down. So once the system is set up to be leveled,
it’s critical that the leveling process is actually followed, or you will run out of
parts. When production is initiated to replenish the component supermarket,
the process withdraws raw materials from the supermarket, which signals the
supplier of the need for replenishment. Again, if the pacesetter is leveled, then
the signals to the supplier will also be leveled, mitigating the infamous bullwhip
effect in which the customer plant makes changes in schedules for its convenience
only to jerk around suppliers in violent waves. With leveling, suppliers will have
a good idea of what is expected of them and be able to plan with confidence.
They can now balance resources to a known takt and get lean by improving
quality and operating at lower cost.
We often hear companies say we cannot be level because our customers are
not level. The leveled “schedule” for the first flow loop is created by production
control even when the customer is not level. Note that production control has
two sources of information to create the leveled schedule. There is a direct arrow
from the customer—the build-to-order signal—and a second arrow from the
finished goods supermarket—the build-to-stock signal. In lean systems this is a
common way to handle high-variety product mixes. The relatively high-volume
products that you know customers will buy are built to stock—kept in the super-
market and replenished as they are shipped to the customer using a kanban-
type system. The lower-variety, less predictable products are built to customer
order. Production control sees the stream of real customer orders coming in and
the kanban orders from the supermarket. Typically there is a third stream of safety
buffer stock that can be replenished if there are not enough real or kanban orders
to fulfill in a day. Through this combination of orders, production control has
the tools to create a leveled schedule.