6C – RFS - Refining Leveling

Ian Glenday

Shingo Prize 2010 Shingo Prize 2014

 Microbiologist

First factory in 1976

Industrial enzymes from deep culture
fermentation of bacteria
 Conventional wisdom
is often shown to be wrong

 High jump

 Stomach ulcers

 Could current supply chain logic be wrong?

3
 Batch or EOQ logic

Causes peaks & troughs

= bull whip effect

Retailer’s orders to manufacturer
7209 VSPN 24x200g
-orders in cases

5000
4500
4000
3500
3000
2500 Actual sales
2000
1500
1000
500
0
 EPOS data for same item
- actual consumer demand

7209 VSPN 200G

- sales in units
150000

100000

50000 UNITS

0
1

11
16

21

26
31

36

41

46
51
6
 Current Supply Chain
Logic Issues

7
 Current Supply Chain
Logic Issues
Result:

 A different plan every time

Why?

8
9
 Supply Chain Logic Issue

Do your business ever

make short term plan changes?

Who’s blamed?

10
 Alternative logic of FLOW
Buffer Tank

11
 PARADIGM SHIFT
What today seems impossible to do

but

if it could be done

would fundamentally change what you do.

12
 PARADIGM SHIFT

BATCH TO FLOW

13
 What is LEAN ?

14
 LEAN =

 Creating flow in the value stream

 Eliminating waste (=muda)

15
 Toyota Lean Model

16
 Leveled Production
- Heijunka

mixed sequence
one piece flow
matched to
market pull
= perfect flow
through
TAKT time

17
 Leveled Production
- Heijunka
one piece flow = seems IMPOSSIBLE
Easier to focus on
 eliminating waste
 Lean tools e.g. SMED, VSM, TPM etc

18
 Production Leveling or
Heijunka
= Foundation of Lean
Therefore essential to being
a truly Lean Enterprise

BUT
what is it?

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 Steps for implementing levelling

- starting point
batch Production

• One batch per

month per product
• Min. change overs
• Max. batch sizes
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 Steps for implementing levelling

- step 1 Twice Monthly Production

• Halve batch sizes

• Identical sequence
• Two cycles

Every Product Every Cycle

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 Steps for implementing levelling

- step 2 Weekly Production

• Halve batch sizes
• Identical sequence
• Same ratios

22 Every Product Every week

 Steps for implementing levelling

- step 3 Daily Production

• One batch per day

• Identical sequence
• Same ratios

23
Every Product Every day
 Steps for implementing levelling

- step 4 Fixed Volume Production

• Daily multiple
batches of same
product at a fixed
size
• Fixed sequence
broken
24
 Steps for implementing levelling

- step 5 Synchronised Production

• Batch sizes of one =

One piece flow
synchronised to
market pull

Final result
25 not how it was achieved
 Flow Logic
- initial steps
 Objective is a fixed “drumbeat” leading to stability &
standardised work

 Counter-intuitive as demand seen as variable

 A rigid disciplined PUSH process
 Opposite of the final objective = flexible responsive
PULL process
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 ECONOMIES

OF

REPETITION

Making the apparently impossible

POSSIBLE !
 Economies of Repetition

 Learning Curve
 Recognised phenomenon
 Natural continuous improvement
 Can’t be turned off

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 Economies of Repetition
 Learning Curve
 Routines
 Different to learning curve
 Provides security
 Less supervision
 More responsible & empowered

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 Economies of Repetition
 Learning Curve
 Routines
 Stability
 Foundation for continuous improvement
 Helps root cause identification & resolution
 Encourages standardisation

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 Economies of Repetition
fine in theory, but………

can’t do Every Product Every Cycle

with current systems & equipment, therefore…….

won’t get Economies of Repetition !

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 Flow Logic

and

Every Product Every Cycle

How to start
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 The Glenday Sieve
- first analysis

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 The Glenday Sieve
- first analysis

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 Green Products

 High volume/small number of SKUs

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 Create a fixed plan for these products
 Yellow Products

 Work on reasons stopping yellows going into

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green stream e.g. changeovers & batch sizes
 Red Products

1% of Sales
30% of the SKUs
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Look to de-list !
 But what about sales
variability?

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 Facial Tissue Sales
FORECASTS PER WEEK

Code 28200 Code 28201 Code 28100 Code 28112 Code 32905
200 Ct Case 184 Assorted 100 Ct Case AV 112 Ct Case Walgreens 100 Ct
16,133 9320 5949 2038 120

Actual Demand Actual Demand Actual Demand Actual Demand Actual Demand
Wk of 5/30 15,386 8936 8743 4218 15
6-Jun 14,355 8413 4548 1874 15
13-Jun 17,695 9564 6572 3153 233
20-Jun
Green
27-Jun
14,536
14,513
9242
8048
5337
5363
Red
1011
1065
66
87
4-Jul
Code
11-Jul
14,668
16,931
8246
8948
5581
6043 Code
2002
1280
117
260
18-Jul 16,632 9699 5367 1781 66
25-Jul 17,777 10294 5200 1327 277

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Average 15,833 9043 5862 1968 126
 Facial Tissue Sales
FORECASTS PER WEEK

Code 28200 Code 28201 Code 28100 Code 28112 Code 32905
200 Ct Case 184 Assorted 100 Ct Case AV 112 Ct Case Walgreens 100 Ct
16,133 9320 5949 2038 120

Actual Demand Actual Demand Actual Demand Actual Demand Actual Demand
Wk of 5/30 15,386 8936 8743 4218 15
6-Jun 14,355 8413 4548 1874 15
13-Jun 17,695 14355
9564 6572 3153 233
20-Jun 14,536 To
9242 5337 1011 66
27-Jun 14,513 8048
17777 5363 1065 87
4-Jul 14,668 8246 5581 2002 117
11-Jul 16,931 Variability!!
8948 6043 1280 260
18-Jul 16,632 9699 5367 1781 66
25-Jul 17,777 10294 5200 1327 277

Average 15,833 9043 5862 1968 126

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 Sales Forecast Accuracy at Weekly Level
WEEKLY FORECAST ACCURACY DATA

Week 1 2 3 4 5 6 7 8 9 Forecast
28200 Sales 15,386 14,355 17,695 14,536 14,513 14,668 16,931 16,632 17,777 16,133
F/C Acc. 95% 89% 110% 90% 90% 91% 105% 103% 110%

28201 Sales 8936 8413 9564 9242 8048 8246 8949 9699 10294 9320
F/C Acc. 96% 90% 103% 99% 86% 88% 96% 104% 110%

28100 Sales 8743 4548 6572 5337 5363 5581 6043 5367 5200 5949
F/C Acc. 147% 76% 110% 90% 90% 94% 102% 90% 87%

28112 Sales 4218 1874 3153 1011 1065 2002 1280 1781 1327 2038
F/C Acc. 207% 92% 155% 50% 52% 98% 63% 87% 65%

32905 Sales 15 15 233 66 87 117 260 66 277 120

F/C Acc. 13% 13% 194% 55% 73% 98% 217% 55% 231%

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 Sales Forecast Accuracy
at a Weekly Level
Lowest % Highest %
28200 89% to 110%
Relatively low variability for the Greens
28201 86% to 110%

28100 76% to 147%

28112 50%variability
High to for the Reds207%

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32905 13% to 231%
 How big of a buffer tank is needed to support
variability in “green” demand
250%

200%
28200
150% 28201
28100
100% 28112
32905
50%

0%
1 2 3 4 5 6 7 8 9
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 What about
Sales Variability?

Generally bigger sellers have less

percent variability
therefore greater predictability

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 Plan stability

 Before and after RfS

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RfS Line 7/8

Changes in production plan

…and performance goes up !
 Maumelle
Kimberly-Clark
A Lean/RFS
Journey

beyond what was thought possible

Rfs schedule
2 weeks
to
1 week
to
3.5 DAYS
 Change overs vs output rates

 2006 averaged 55 c/overs per month

 2009 averaged 128 c/overs per month

 2011 averaged 400 c/overs per month

 Some SKU’s at daily production

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 Improvements don’t stop

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Changing the logic from

Batch to Flow
Toyota Lean Model
Production Levelling or
Heijunka

= Foundation of Lean

Therefore essential to being

a truly Lean Enterprise
 Stability, standardisation &
elimination of waste
are a

CONSEQUENCE

of levelled (patterned) production

 TPS & RfS
TPS = Toyota Production System

 Levelled production = heijunka = RfS = FLOW

 It is the foundation of TPS

 It is the piece missing from most lean journeys

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 PARADIGM SHIFT

BATCH TO FLOW
 Thank you
ian@RepetitiveFlexibleSupply.com