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论老子

道,领导也。领导必需要不断呼唤,教导下属以及以身作则。下属的过和错皆因领导懒惰。

 
 
 

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Chapter 14: Waste of inventory  

2012-06-24 12:16:15|  分类: Buffer Mentality |  标签: |举报 |字号 订阅

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In Harris Semiconductor Malaysia Sdn Bhd, wafers are sawn into individual dies. The dies are bonded to frames and then molded into a complete integrated circuits plastic chip (IC chip). The completed IC chip then goes through a plating process to coat the leads that extend out of the plastic encapsulation with solder.

From the beginning of the saw process right up to the solder dipping process, tens of millions of units of IC chips lie as Work-In-Progress (WIP) inventory. Sometimes the WIP inventories build up because of machine breakdown and at other times, quality problems cropped up and the production lot simply failed the in-process quality sampling tests.

The production planners had a hard time deciding what products to commit to the parent company in the United States. The production lead time was much longer than three weeks and often delivery was missed because of quality issues. Once an IC chip production lot runs into a quality problem, it will be held back and could take weeks before a final disposition is agreed upon to release the lot. That is provided the lot is not going to be scrapped. Meeting 80 percent of the schedule on-time is something that the production planner could only imagine. The target for on-time delivery was set rather low at 70%.

The above operations went on year after year until one fine day the Vice President for Manufacturing from the parent company in United States made a visit to the plant in Kuala Lumpur. While he was touring the plating line, boxes full of IC chips came crashing down right in front of him. There were tens of thousands of IC chips spilled all over.

What happened? Unbelievable, IC chips were raining down from a false ceiling.

He simply couldn’t hold his anger. He abruptly stopped the plant tour and called up the managing director and asked him to explain the incident. A quick investigation pointed out that the plating line had always been giving quality problems. There were so many rejected lots that the production supervisor could not find space to hold them. Moreover, these rejected lots were not supposed to be seen by the Vice President of Manufacturing during his plant tour.  

Later that day, the Vice President for Manufacturing asked to review the company’s performance. To his astonishment, the plant was holding more than nine months’ worth of inventory. Why was there such a humongous level of inventory?

The only feasible reason the managing director gave was this: Since the process quality was not good and machines frequently broke down, there was no choice but to keep buffer inventory in order to keep the operations running smoothly.

The Vice President for Manufacturing said sarcastically, “What do you mean by a smooth operation? Is delivering the promised quantity of finished products called smooth operations?”

He added further, “A smooth operation is one that runs smoothly without much machine downtime and few quality problems. What do you mean by it takes a buffer inventory of nine months’ worth of production to keep an operation running smoothly?

That’s the greatest mess that I have ever heard of.”

A few months later, a consultant from the United States was flown in to conduct a one-day orientation workshop on Just-In-Time manufacturing system. He left the next day. That was in 1985.

Nobody in the plant understood anything about Just-In-Time manufacturing from the consultant. The one-day workshop was too brief and it only touched the surface of what Just-In-Time manufacturing was.

Just-In-Time manufacturing won’t work in a lecture kind of style. Somebody needs to spearhead the whole program. You must either hire a program manager or an external consultant proficient in Just-In-Time manufacturing. As time passed by everybody forgot about Just-In-time manufacturing.

One of my university colleagues bought a book entitled “Toyota Production System” and he passed it to me. I read the book more than five times for two main reasons.

First, it was poorly translated into the English language. I had to make many guesses to get the gist of what was written in the book.

Second, there were so many concepts that were so different from what we learned from operations management textbooks. In most cases, they were opposite to the way things were practiced in the factory. Nevertheless, I was convinced by it.

Why I was convinced?

In selling a Toyota Corolla, a car similar to a Datsun (now Nissan Motor) Sunny in size and performance, Toyota Motor made US$500 more than Datsun. Datsun Sunnys were neck-to-neck in sales volume competing strongly with the Corollas in many countries and both cars were priced very close to one another. Having fetched about the same selling price, Toyota made US$500 more. Where did this extra profit margin come from?

No magic, it must have come from a lower cost of production. In other words, it cost Toyota Motor US$500 less to build a Corolla than Datsun to build a Sunny.

I guess Toyota Motor must be right. Their concepts must be right. Their philosophy must be right. I just digested what I understood of the Toyota Production System and implemented it over in my work area. I discussed it with my fellow production supervisor, Din.

Din and I supervised the wafer saw work center. We did a stock-take and found to our astonishment, we were keeping more than four months’ worth of production in just one work area alone. Sawn wafers and cut dies were stacked up in layers on top of each other because we ran out of cabinet space to hold them. Performing the stock take was a slow and painful exercise. We had to take out the top layer dies first and then the bottom layers.

At the end of the stock take, we realized we didn’t know what we were doing as production supervisors. We had always depended on the production planner who issued a weekly schedule telling us which products to move for the week.

How much stock did we have? No idea. Only the production planner knew how much stock was with us. Anyway, it was the production planner’s job anyway to figure out which products among the Work-In-Progress to move, which products the production line should keep as stock and which products to be prioritized for the week in my work area.

Keen to make improvements to our production lines, we changed the division of jobs by machine types and re-aligned the machines into five group-cells. The production operators were re-assigned into the five group-cells. We changed the production strategy.

We did away with the practice of the ‘push system’ where we issued instructions to push output from the upstream process to the downstream process. The push system aim is to build up a huge inventory of WIP being staged in front of the downstream process and used this inventory to build up the pressure for the downstream process to run at full steam.

In place of the push system, we implemented the ‘pull system’ instead. This was done by dedicating a fixed number of Kanbans in-between two processes.

For example, between the wafer saw operation and the Pick-and-Place machine, which picks and places the sawn die into plastic trays with cavities to hold the die in position, we used a wafer carrier as the Kanban. For each group-cell we set the instructions that at any one time the number of sawn wafer could not exceed two pieces.

Of course, if the number of sawn wafers was zero it meant that the Kanban was empty. The saw operator had to immediately resume the sawing of the next piece of wafer to quickly replenish the empty Kanban.

Between the Pick-and-Place machine and the inspectors, the number of Kanban cannot exceed four trays of dies. That is less than four hundred pieces of dies. What was the immediate benefit of this ‘pull system’?

The Pick-and-Place operator was given an additional role to inspect the quality of the saw operations. She had to see under the microscope and tell if the scribed lines were within the scribe channels. If the scribed lines were found to be very near to the edge of the scribe channel or had crossed over the scribe channel, she had to feedback to the saw operator immediately of her findings.

Likewise, if the inspectors saw that there were scratches on the surface of the die, she had to give feedback to the Pick-and-Place operator immediately. In the past, such additional roles to assure quality were not part of the responsibilities of the production operators but rested solely on the quality control inspectors.

 

Figure 14-1: Kanban system for a short production loop from wafer saw, pick-and-place and inspection

With the creation of this feedback loop, the maximum amount of WIP at risk due to situations where the upstream processes causing defects was the Kanban size. These were extremely small: Two pieces of wafers and four trays of dies.

This was a far cry from the push system where there could be hundreds of thousands of dies at risk at any given time. With less WIP at risk, the quality automatically crept up. The defect rates decreased from 15,000 parts per million to less than 3,000 parts per million.

The best part of the story is not the improvement in quality alone. WIP inventory was reduced from more than four months’ worth to less than one day. That was more than 120 times reduction in the WIP level.

Production planning was a breeze. In fact, the production planner merely looked up upon the sales order requirements received from the United States and started lining up the products to be built by the day (the products that should be built during the week starting from Monday to Saturday). There wasn’t a need at all to look into what the production lines had in WIP. They also did not fear the products wouldn’t get out of each work area.

Why?

If a production lot (or a batch of WIP) were to face with any quality issues, the production operator would hold back the lot from subsequent processing. The process engineer would be informed immediately and he had to attend to it promptly. He had to make a disposition telling the production people exactly what to do with the lot or tell the production planner to issue a new lot to replace the lot on hold.

In the past, the lot simply got stuck as an on-hold lot and the engineer might take weeks to dispose the lot. The production planner would be forced to cancel this lot from the production schedule and make a replacement. But replacement units cannot be processed fast enough to make up for the lost processing time. It usually ended up as a missed schedule.

Our story in implementing the Kanban system was hailed as a huge success. The production manager gave an order that every work center must implement the Kanban system. In a matter of three months all the work centers were practicing the Kanban system.

The total WIP for the entire factory went down from nine months’ worth to less than two weeks’. That was eighteen times reduction in the WIP level. That was eighteen times less WIP at risk of poor quality process, eighteen times less cost of holding inventory and 99 percent on-time delivery every week. That is an amazing 26 turns a year.

Implementing a Kanban system is the fastest and surest way to achieve tremendous improvement in a factory. The change made in Harris Semiconductor Malaysia can happen to any company.

The idea of keeping buffer inventory does not help in smoothing out the production. It does not remove anxiety either. It is the number two killer (after over-production) of productivity. In fact, it camouflages all kinds of problems that the line faces with buffer inventory. No one felt that is an urgency to face the problems that are happening. Product quality languishes and on-time delivery was constantly missed.

You should know by now the greatest advantage of introducing a Kanban system is that it forces a change of the mindset away from “keep buffer to smoothen out production” mentality. It forces people to face the day-to-day problems.

No! It is not only the process engineers that are required to attend to the quality issues promptly. The entire production workforce has to be mobilized to assure the quality of the upstream process. This is what we call built-in quality and not inspect-for-quality.

Doubtlessly, if the workforce is not building quality into the product, no amount of inspection can improve the production quality. The Kanban system can achieve that precisely.


 

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