WIP Inventories are great Flow Efficiency enablers in Lean Production

This blog post will dig into Lean/Toyota Production and its way of working to handle the variability, with the help of various buffers, one of them called WIP Inventories. And once again we will do it with the help from the Cynefinframework, so we understand the context and the context switches, since we need to know in what domain we currently are in; Complex, Complicated or Obvious.

Before we go into any details, the Toyota Product System can be considered to be using three different kinds of pull and push approaches: 1) push; when from current monthly demand calculating the takt time in the plant, 2) pull; when using the Kanban system, derived from the supermarket model, for pulling in the needed parts to the split lines and 3) Just-In-Time (JIT); for the split lines, using the calculated takt time and also buffers within (under-utilization) and between (for example WIP Inventories) the processes to be able to directly take care of production problems, in order to achieve highest possible quality that Toyota is aiming for.

Aggregated work can be 100% in parallel, with for example aggregating of many cars att the same time at parallel assembly lines, since it is actually no dependencies between the respective assembly lines. But, the biggest problem with this is that the each of the processes need to be duplicated, which is very wasteful. Another problem with this is that the variability for sure will make many cars to be finished at the same time, which can be a problem for next process in line that takes care of the produced cars. There is also a big risk to not take care about quality issues directly, so the risk is that material, unfinished sub-products, faulty products etc. will clog the plant. Toyota’s focus has always been on the quality and is so today and will be so also tomorrow.

So, the problems with parallel assembly lines have been taken care about in Lean Production, which has been brought up in details in an earlier blog posts discussing Sequential or Parallel work – which is best?. Toyota Production can be seen as sequential work done in parallel with several hundreds of different tightly connected processes, which we already have referred to as Overlapping Concurrent Disciplines in the above mentioned blog post. It looks like this.


The different colours represent an I-competence or an process/expert, which is only used one time for every takt time. After each process* in the line there is a WIP inventory number x (buffer) of parts from process X, which depends on many things, but mostly how frequent the process has internal problems.
Note! Since takt time** is used on the split lines, these processes are refining their respective part simultaneously. This means that each WIP inventory buffer x (can be considered as a FIFO queue) is constant; when process A has made its refinement to be continued by Process B, Process B at the same time takes the next part in the FIFO queue of refined parts from process A, meaning one in and one out at the same time in all the different FIFO queues between the processes. All this together shows that the Toyota Production System is a push system to set the takt time and then a pull system with just-in-time due to the takt time in the split lines. Deliveries of parts to the split lines are done with the Kanban system, invented by Taiichi Ohno, and is built on the “supermarket model”.

But, how about the variability? Variability will of course always be present, even if the work is repetitive and Toyota Production has the following solution to this, to achieve high Flow Efficiency [1] regardless the domain; Obvious, Complicated or Complex:

  1. We have the standard deviation to the normal process time to consider. This means that our aggregating work in the Obvious domain will sometimes take longer time than normal. This is solved with under-utilisation of the resources, or in detail; the cycle time of the processes are set to maximum 90% of the takt time. So, here we have a 10% time buffer, which is about 20 seconds out of a 3,5 minutes takt time. Only minutes of takt time means a very short time box for refinement of the part, and in the normal case only one product has been refined in every process and sent to the subsequent process. Another important aspect asides high quality, is also to give the workers a very short break to be able to relax, which decrease strain in muscles, fingers and back.
  2. But, of course there is not only the standard operation that have variability. The sub-products (parts) will of course also have variability, sometimes a sub-product is outside the many different interface limits, it is a defected sub-product, or the refinement was erroneous. But, because there are many parameters in the interface between sub-products, it sometimes does not work, even though the sub-products are within the limits. If these problems occur, we are no longer in the Obvious domain, instead we are in the Complicated domain and we need help from an expert to judge. In Toyota Production that is usually the manager, that comes directly at these occasions, when the Andon string has been pulled by the worker.
    But, the time buffer in 1. above, will not help us here, because problems that are not in the Obvious domain take much longer time to fix. And to increase the time buffer in 1. above, would slow down the plant tremendously, since in every takt time, many processes will have problems indicated by the Andon system. Therefore Toyota has introduced two different buffers for these problems; a WIP*** (Work-In-Process) inventory, that is a “buffer” of on-going processed parts  within the different processes, or/and a buffer of ready parts between two consecutive processes**** and; There is also WIP inventories between different split lines in the plant, a buffer needed to not stop all other split lines in the plant, when one split line has problem****. And these buffers (Inventories) will give some extra time when problems occur*****. So at the same time as Toyota Production tries to minimise the variability and achieve highest possible quality, they are at the same time tolerating and handling the permanent presence of variability, by using underutilisation and WIP Inventories. A common misunderstanding is that Lean Production is only constraining variability, when it is actually also tolerating great differences in variability within processes and between different parts in a very sophisticated way.This makes it possible to sort out also Complicated problems and with the help of the manager, the expert, judge what the problem is and solve it. Sometimes as described above, the problem is complex with many parts’ interfaces involved, and the manager and the employee can only make a temporary, but good enough solution. The root cause to the problem will be taken for further discussions in cross-functional teams with participants also from product development, among others, and these rare cases can end up in the Complex domain to be able to find a solution.

As you already understand, when buffers become empty between two processes, or between two split lines, the subsequent process or split line will stop. And because the Andon system is activated more than a half million times per year in a big Toyota plant, the buffers in the split line will go empty several times per day. But, despite the delays the small buffers cause, it is very important that the buffers are small, since small buffers reveal quality issues fast and will in the end also secure Flow Efficiency, both are tightly connected. And to decrease the WIP Inventory to create a very tough situation in order to motivate people, was also Mr Taiichi Ohno’s aim.

Now we know a great deal about WIP inventories in Toyota Production. In the second next blog post, we will look into Agile development, where the use of WIP Limits is very different from WIP Inventories in Toyota Production. Unfortunately so different and instead used for trying to cure a symptom, which means that WIP Limits actually are sub-optimising the organisation.

But, come so far with our System Collaboration understanding, we already have the knowledge that we need to ask why first, sometimes multiple times, to be able to find the root causes in our Prefilled Root Cause Analysis Map, our root causes that are our negated principles for a flourishing organisation. And when we have found a root cause, we already know the solution. And that is what tomorrow’s blog post will be about, and we of course take help from our Prefilled Root Cause Analysis Map.

C u soon.

 

*there are also processes that are connected to the different processes on the different split lines, and these processes uses the Kanban system, which means that at certain intervals the processes on the split lines withdraw a certain amount of parts from the processes outside the split lines; all in a Just-In-Time (JIT) manner. See [1], p 8-9, “the people involved in a certain process go to the preceding process to withdraw the necessary units in the necessary quantities in the necessary time. The preceding process produces only enough units to replace these that have been withdrawn.”

**at p 15 in [1], “The necessary output per month is predetermined from market demand.”. At page 16 in [1] “Late each month the central planning office conveys to all production departments the required quantity per day and the takt time for the following month. This process is characteristic of the push system.”.

***the WIP (Work-In-process) Inventory is needed depending on three items; defective products, setup time of a machine, and machinery break down. This means that the Toyota Production System is a One Piece Flow with buffers (Inventories) within (in process) the processes or/and between the processes and also between the split-lines**.

****from [1], ch. 28, p.463-464
“The Toyota Production System has never been a non-stock, zero inventory, or stockless system, although some writers erroneously characterize it as such. The information provided in this chapter clearly illustrates this point. The Kanban system requires a specified amount of inventory at each preceding process store so that subsequent process carriers may take the parts with their withdrawal Kanban and empty parts boxes.
At Toyota…… Since buffer stocks kept in the storage points between split-lines prevent the entire assembly plant from stopping, they are quite necessary and are not considered waste.”

*****but also the possibility to easier change the number of workers within a process by re-allocation, when the production demand goes up or down, see [1] p 16, “… the manager of each process will determine how many workers are necessary for his process to produce one unit of output in a takt time. The workers of the whole factory then must be repositioned so that each process will be operated by a minimum number of workers”. This is very important to be able to achieve full-time workers and avoid idle time, which Toyota regards as the worst waste, and the first to look into, see [1], page 5. And to achieve full-time workers the workers need to have multi-I-competentce, so that they can be exchanged within and between the different processes and split lines. Multi-I-competence is also one of Toyota Productions different career paths.

References:

[1] Monden, Yasuhiro. 2012. Toyota Production System: an integrated approach to just-in-time, Fourth Edition, CRC Press, Boca Raton, Florida, USA.

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