DEMAND FLOW TECHNOLOGY Tom R. North IEM 5303 Advanced Manufacturing Systems Design

Overview Toyota Production System Demand-Based Flow Manufacturing Kanbans Cellular Manufacturing Potential Drawbacks Future Areas of Research Concluding Remarks

Toyota Production System (1) President of Toyota challenged employees. Taiichi Ohno - vice president of engineering. TPS differentiated Toyota from their competitors: Reduced lot sizes which increased production flexibility. Parts were provided at the desired time and place for a specific task. Equipment layout was optimized based on the order that the product was built to minimize the travel between cells.

Toyota Production System (2) Fundamental basis: elimination of non-value-added work. Three Principles of the TPS. Operational flow of parts Just-In-Time (JIT) Autonomation Group technology Method for determining profit margins “Five Whys”

Toyota Production System (3) JIT - later process refers back to an earlier process. Autonomation - quality control checkpoints. Group technology - grouping of machines based on flow of production to minimize travel of the parts. Profit margin Americans - selling price = sum of actual cost to build the car and the profit. TPS - profit = difference between the selling price and actual cost. “five whys”.

Toyota Production System (4) Kanbans Control the JIT processing method Number of parts to transfer from point A to point B. Number of parts to pick up. Which parts to assemble. Kanbans prevent overproduction Which results in excessive inventories. In periods of low growth, can lead to layoffs.

Toyota Production System (5) Advantages Higher quality, lower inventory levels, minimized non- value-added activities, and lower prices for the customers. Goals Acceptable for machines to be idle because they only need to produce enough parts based on customer demand. Unacceptable for people to be idle. Disrupt flow of parts. Reduce the timeline from initial customer order to collecting the money.

Demand-Based Flow Manufacturing (1) TPS a.k.a. theory of constraints, synchronous manufacturing, demand flow technology, and supply chain management. Output is still the same, “mass customization”. TPS recognized as demand based flow manufacturing or demand flow technology (DFT). Focusing on the customer is the main purpose.

Demand-Based Flow Manufacturing (2) Pull System of Manufacturing Products are built and then companies look for buyers. Large lot runs to minimize on tooling set-up times. Results in long lead times to the customers. Push System of Manufacturing Products are built as needed. Materials flow in the same direction. Info opposite. Major difference: short-term scheduling and production control. Both long-term and midterm planning are essentially the same for both systems.

Demand-Based Flow Manufacturing (3) Advantages Focuses on flexibility and throughput to reduce total cycle time from initial customer order to delivery time. Reduces costs as a result of unbalanced production schedules (MPS). Tool set-up times are reduced, which yields a better flow and balance of material through the entire assembly process. Advanced ERP systems or any software for that matter are not required to implement/execute DFT.

Demand-Based Flow Manufacturing (4) Goals Improve revenue, growth of company, competition, and eventually increase the market share. Information and material must be high quality and flowing at a high velocity. Ultimate goal for DFT will be mixed-modeling.

Kanbans (1) DFT is the actual production method. Kanbans are used to manage the flow processes in DFT. Kanbans are pieces of paper that contain the required information to control the production, quantities to produce, and the sequencing that the products must go through to be built. There are different kinds of Kanbans.

Kanbans (2) Withdrawal Kanban. Production Kanban. Authorize movement of parts. Remain at work center until all parts are gone. Information on Kanban. Production Kanban. Authorize the release to a preceding process to build the specified number of parts listed on the Kanban.

Kanbans (3) Features & Advantages One feature is that they can be used repeatedly. The number of Kanbans used is restricted. By reducing the number of Kanbans, the flow of production is limited, which minimizes waste and inventory. Kanbans are simple, provide precise information, minimal cost for transferring information, minimizes waste, and prevents overproduction. Thus, all of this improves the quality of the product, which in turn improves the relationship between the customer and the company.

Cellular Manufacturing (1) Facilitates the flow of materials. Travel between work centers is reduced. Biggest area of non-value-adding costs = travel. Objective - group machines according to parts with similar features.

Cellular Manufacturing (2) Advantages By grouping machines based on similar part features, setup times are reduced due to similar tools and part sequencing. Reduced in-process inventories. Reduction in flow times as well as WIP. Improved product quality and reduced tool requirements. Common goal, shorter customer response time. Creates more of a conducive environment that results in teamwork. Teamwork is one of the fundamental goals of the original Toyota Production System.

Cellular Manufacturing (3) Cell design is a function that involves both system structure and operation. Structural issues are based on: Part families and the grouping of part families. Identifying the proper machines and group them accordingly. Identifying the right combination of tools, fixtures, and pallets. Identify the material handling equipment and layout of the equipment.

Cellular Manufacturing (4) Goals Final piece of the puzzle to insure success in implementing DFT. Number of factors to insure success: Reduced batch sizes, organized work stations, Kanbans and inventory control, group technology, preventative maintenance, and employees willing to take initiative. This whole method of DFT focuses on employee interaction and their involvement in the processes. Their input is extremely important for DFT to succeed.

Potential Drawbacks Negative aspects of DFT Geographical locations of the parts suppliers w.r.t. major corporation to minimize transportation costs and lead-times. Limited applications with smaller firms due to limited products. Not economical for suppliers on a daily basis. Cultural differences may affect the implementation of DFT. People for the most part are uncomfortable with change. Imitating DFT. The organization must have upper. management’s complete support to implement DFT in order for it to be a success.

Future Areas of Research Optimize between flexibility, quality, and cost. Compromises must be made to satisfy the customer requirements to their fullest. Look at the reliability of machine and cutting tools. This has implications in minimizing the number of setups due to tooling breakdowns. Artificial intelligence. The impact of this is to minimize the number of routine human errors that might be a result tedious tasks.

Concluding Remarks 100% centered on the elimination of wastes. Overproduction, delays, transporting, processing, inventory, and wasted motion. Build only what is needed, excess manpower can be utilized in other areas. This prevents excessive hiring during high demands and massive layoffs during low growth periods. Not the absolute cure-all for continuous flow. It took Toyota over 10 years to really justify switching to DFT. Even after that they are still trying to improve upon the system.