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Lean in Process Manufacturing – Measuring Customer Demand

Lean enterprise was developed in the automotive industry and most case studies or examples come from discrete manufacturing such as automobiles or cars. However when you want to implement lean in process manufacturing many challenges arise.

A paint batch being mixed. Measuring output in "units" at this point of the process would be meaningless.

The first difficultly is how to measure the rate of customer demand or takt time. In discrete manufacturing this is easy, – take a stop watch and time the cycle, count the number of units (one car, two cars, three cars ….). In discrete manufacturing this is not possible. The product may be sold in a metric such as litres or kilograms and the unit of output might change through the process. For example in making a batch of paint, the manufacturer might start with five tonnes of raw materials, add solvents and resins and process the blend to make 3000 litres of paint. This finished product might then be filled in to different pack sizes, so the number of units could vary wildly from 3000 one litre packs to 150 twenty litre packs or, more likely, a mixture of pack sizes. In fact, if you are focused on productivity, the key driver of labour cost is the number of batches and usually this is the best unit of measure. Therefore for this one value stream (making paint), customer demand can be measured in at least four different ways. In the corrugated box business paper is purchased in tonnes, corrugated in lineal metres or square metres, printed in sheets and glued in units. However to achieve product flow, we have found the simplest and most effective metrics are number of jobs or number of pallets.

So how do you choose the best measure?

  • The first tip is to keep it simple. Avoid complex formulae and measures that you team will not be able to relate directly to the process or the product. The metric also needs to be measured in real time or close to real time. An output metric that you need to wait for a daily report to see is not going to be effective in driving level production and problem solving.
  • Secondly, select the metric that drives the improvement you need. In our paint example, the best measure to drive product flow is batches. Often output is measured in litres, but this has a tendency to encourage big batches. In corrugated boxes, counting the number of pallets can be a very good way to control WIP and balance processes (even though it is a very crude unit of measure).
  • For takt time often a rate make more sense. Usually we measure takt time in discrete manufacturing in terms of elapsed time per unit, ie second or minutes to make one unit. In lean process manufacturing this often makes no sense since the takt time may be less than one second to complete on unit. Therefore using a rate is often more effective such as metres per hour, jobs per hour or sheets per minute. For example for a flexible packaging customer we use metres per minute to measure takt.
  • There is no perfect answer. You may find that you need more than one unit of measure or that a single unit of measure is not effective to measure customer demand in all situation.
  • Product mix variation can make managing the flow very difficult. For example if some products run very fast and others very slow. The answer to this last issue is to level the mix using every part every interval scheduling. However that is a topic for another article.