INTRODUCTION
Toyota, through the development of the Toyota Production System, has gathered valuable experience in process improvement and flow improvement, along the last six decades. One of the concepts developed in this context was Just-In-Time, which can be briefly described as the ability to produce goods, at the right time, and in the exact quantity, according to what the customer wants. This concept emerged to overcome the limitations of traditional planning systems, explored and demonstrated by the studies of Jay Forrester who, in his publications, applies the term "Bullwhip Effect", also known as the Forrester Effect.
Organising operations according to the Just-In-Time concept, in a pull flow, is based on applying the principle of leveling (heijunka, in Japanese) as a way of protecting production operations from variations in demand.
The application of these concepts and principles is often counterintuitive, especially given that they are the result of decades of development and practice by Toyota and other companies in the automotive industry. When other organisations and industries met these concepts, they became aware of the final version, already applied. Without knowing the process that led to this solution, most organisations don't see how to achieve level production considering market demands and process limitations and constraints.
These difficulties led Ian Glenday to develop the Repetitive Flexible Supply (RFS) methodology to implement levelled production, particularly in sectors where its application may seem impossible from the outset, such as the process industry.
REPETITIVE FLEXIBLE SUPPLY
The aim of levelled production is to give stability to production operations. This stability contrasts with the constant changes in planning that can be observed in many organisations. Much of this variation is induced by the processes themselves and undermines many continuous improvement efforts.
The RFS approach is designed to build this stability, based on the idea of producing the products that account for the largest proportion of sales in the same sequence, in the same quantity, at the same time each week. This idea may initially seem nonsensical and meaningless. But in fact, Ian Glenday's analysis shows us that, in many cases, around 6% of products account for 50% of the volume produced. Hence the idea of stabilising the plan for 6% of products, which is certainly less complex than doing it for all products.
DATA ANALYSIS
The implementation of this methodology starts by analysing sales data in order to identify which flows/product families to start this approach on.
An example of this analysis can be seen in the following table. Each category is assigned a colour, which corresponds to a type of action, as we'll see later.
The articles concerning to the last percentage point of sales and, in this example, the remaining percentage of references (31%), are classified with the colour red:
These percentage ranges are indicative and are a guide to the actions that will be described next.
This analysis may seem similar to ABC analysis, but there are substantial differences, both in the logic of the analysis and in the treatment of each product category.
ACTIONS
Therefore, the Repetitive Flexible Supply approach defines different actions for each product category, described below.
Green Category
Products that fall into the green category are most likely already produced quite frequently. As such, they are strong candidates to be included in a fixed production sequence.
On one hand, it shouldn't be too difficult to fix a sequence for a small percentage of products (approximately 6 per cent), but on the other hand, it will always be necessary to check the value stream of these products. This way you can identify waste and obstacles to creating the sequence, for example, limitations in terms of production equipment.
After this definition, the challenge will be to maintain the sequence for these products, without interruptions or disturbances, to create the first basis for stability.
Yellow Category
Typically, this category includes products whose production faces restrictions such as high setup times, batch sizes and high losses in equipment efficiency. They may also have minor differences from some products in the Green category, so with some modification they can be incorporated into it.
Products in this category should be the focus of improvement activities such as standardisation, SMED or Kobetsu (loss elimination). To correctly assess the impact of these improvements, it is important to have a robust OEE (Overall Equipment Efficiency) measurement in place.
Blue Category
In many real cases, products in this category are more complex, in terms of process or product structure. This added complexity does not necessarily translate into greater value for the customer. Examples of this type of complexity could be raw materials that are like others that are more widely used, functionalities that are not valued by customers, differences in packaging, among others.
With such characteristics, these products are strong candidates for simplification and integration into the categories cited above. Basically, it's a question of analysing how different these products should really be, from the customer's point of view. It is often possible to use common raw materials/components without jeopardising the customer experience.
Red Category
These products, which represent the last percentage point of sales, typically account for 20-30% of all products. The following possibilities for action can be identified in this category:
After checking the added value for customers, the most drastic could be to stop selling these products.
Checking the added value for the organisation, ask yourself: what is the overall cost, what is the management effort? Are customers willing to pay more for these products?
If Red products are really valued by customers, this could mean that there are two distinct value streams in the organisation, Green products and Red products. They can therefore be organised differently, as if they were two different businesses.
Based on the analysis described above, an implementation strategy has to be defined, which will inevitably be different for each organisation. Nevertheless, we can identify some key steps
Calculate and develop the sequences:
Allocate references to equipment;
Define the period of the fixed sequence;
Define the criteria for defining the sequence, for example: group references to minimise setups, group by type of raw material, group by type of packaging;
Identify the references that are not in the green category but can easily be integrated into the defined sequence;
Validate the capacity used by the fixed sequence.
Calculate finished product stocks to absorb variation during the sequence period (e.g. 1 week), for each set of resources (machines, lines).
Define the sequence implementation plan.
Define the process for analysing data, checking stocks and adjusting sequences.
Communicate changes to employees and define how to act in the event of a problem.
Measure the results and improve the process.
In order to carry out this process, it is essential to know the customer's real demand, so as to eliminate any noise that may be caused by distortions in demand along the value stream. Another key factor is discipline in complying with the sequence. If the sequence is altered, it won't be possible to confirm its benefits. On the other hand, the pressure to produce other products or change the production sequence can be great. To avoid this situation and protect the sequence, a process needs to be put in place to identify and make visible all the problems that are occurring, as well as defining solutions for each one. A portion of production capacity can also be set aside to deal with unforeseen events or, alternatively, finished product stock or extra time can be used. In several practical cases, efficiency improvements of between 20 and 30 per cent have been achieved.
SUMMARY
There is often the perception that there is a great deal of variety and variation in work. We don't "see" the few products that account for 50% of the volume, but rather all the problems and variation in the 90% (or more) of products that account for the remaining 50% of the volume. On the other hand, it may take several analyses (from different points of view) before patterns are identified. The way work is organised and planned will have to change, which may initially cause resistance.
Changing habits takes effort, but the first advantage of the RFS is related to repetition. The more you practise, the better your performance, just like when you learn to play a musical instrument. Repetition also helps to standardize and stabilise processes. But this is not the end of the journey, as sequences are implemented and the flow is improved, new opportunities for improvement arise and must be seized.
The effort associated with this approach can be greatly reduced if IT tools are implemented to support the analysis and definition of sequences, so that they can be done more frequently and with less time commitment.
Finally, other positive consequences of implementing the RFS are improved employee commitment, positive competition and improved relations with suppliers, resulting from the reduction in changes to the plan and the "putting out fires" environment this causes. Although these advantages are less quantifiable, they are sometimes of great importance to organisations.
REFERENCES
Ian Glenday
"Breaking Through to Flow"
Lean Enterprise Academy, 2007
ISBN 0-9551473-0-1
ISBN 978-0-955173-0-2
Jeffrey K. Liker and David Meier
“The Toyota Way Fieldbook”
McGraw-Hill, 2006
ISBN 0-07-144893-4
Toyota Motor Corporation
“Toyota Production System”
Toyota Motor Corporation, 1984