What are the benefits of having a superior Work in Process (WIP) throughput speed?
Whenever I mention improving throughput speed in a manufacturing environment, business owners often show concern and tell me they cannot afford to go too fast and impact quality. When I explain that I’m not suggesting increasing machining speeds or rushing the assembly process, they calm down and start to listen.
I am looking for reduced inventory in WIP.
I am looking for reduced total labor costs.
Both achieved from level loading the process.
Level Loading can be achieved from improvement in throughput speed
Now I could get into the nuances of TAKT Time and flexible/varying business levels but I don’t like the answer many lean pundits offer:-
“Use Finished Goods Inventory to buffer the varying business levels”.
In my quest, a reduction of cash used in the business and an increase in profitability is the primary driver in achieving level loading.
If I can find a way to produce product in a day quicker than I was previously doing I will reduce the WIP inventory value I am carrying, hence releasing cash.
In the process of improving throughput speed I will be concentrating on setup times, on non-value activities and NOT necessarily on trying to increase machine speed or rushing processes, rather I will be actively removing those activities that don’t add value.
Another important point to being able to improve WIP speed is to be able to manage fluctuating customer demands and doing so without using expensive overtime pay (or at least reducing overtime work).
If I know how to implement an earlier start than I actually need in times of increasing business, then I have a chance to reduce the amount of overtime, usually paid with a 50% premium, again, another way to keep my costs down.
Why extend your customer’s wait time as demand increases when you could be holding lead-times steady and delighting your customers.
© 2017 By Steve Wardleworth (Wardleworth Consulting LLC) All rights reserved