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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 11: Level production is a mirage  

2012-06-24 12:22:37|  分类: Buffer Mentality |  标签: |举报 |字号 订阅

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“John, we haven’t finished discussion the topic, takt time yet. Why do you think, Toyota uses takt time and the takt time is constant throughout a long period of time,” I asked.

John replied, “When Toyota build a factory it had already determine the capacity of the assembly line. Therefore, it is easy for it to keep to a constant takt time.”

“Do you think so?” I prodded him to think harder.

John thought hard for several minutes. He softly replied, “When every single piece of equipment that is required to go into the assembly line is optimized right from the on-set where the assembly line capacity was designed for a particular model or several similar models, the takt time must be optimized. Therefore, an increased in the takt time means a reduction in the production capacity. This is unfavorable. On the other hand, it is not possible to reduce the takt time for the assembly line was not designed for a much shorter takt time.”

“John, if I hear you correctly, you mentioned, to achieve optimum production, the takt time must be maintained at its designed output rate. But really, do you think the actual demand for cars is a constant?” I asked.

“Of course, nobody would want to believe the demand for car is a constant. Especially, you can’t say so for a particular model. Nobody can ever make a forecast of the actual demand and it stays constant throughout a considerable period of time. There should be a seasonal fluctuation in demand, at least”

“How do they take care of that fluctuation?” I asked.

“Well, Ford Motors and General Motors usually dangle a big discount if a particular model does not move out of the car show room fast enough. But somewhat I have never seen Toyota or Honda give any price discount in the United States of America,” replied John.

“Assume the demand is always higher than the forecasted sales demand for Toyota or Honda and therefore, they do not offer price discount. On the other hand, how do they take care of a slight increase in demand,” I asked.

John thought for a long while and replied, “No. I really can’t think of an answer to your question.”

I said, “Let go down to Toyota showroom. Pick a model and a particular color that is not available for immediate delivery. Ask the salesman how long you have to wait before you can get hold to the keys of the car of the color of your choice.”

John replied, “I remember something like 3 to 6 weeks.”

“Why it takes 3 to 6 weeks to deliver the car to you?” I pursued.

“Well, it needs time to schedule in the color that I ordered. It takes time for the ship or land transport to bring the car over, replied John.

“May I asked what is the order-to-delivery lead time in this case?” I asked.

“It ranges from 3 to 6 weeks. So, let’s assume 6 weeks,” said John.

“Did I hear you correctly the order-to-deliver lead time is 6 weeks?” I asked a closed-end question.

“Yes,” replied John.

“Back to our factory, what is the order-to-deliver lead time?” I asked John.

“At least a month and often it is several months. For most of the products, the order-to-delivery lead time is 3 months,” replied John.

“John, would you believe in me? I set up a rebar cut-and-bend factory[1] where the order-to-delivery lead time is only one day,” humbly, I asked.

“I trust your words. That kind of order-to-delivery lead time is truly fantastic. You have beaten Toyota flat. That is about 40 times better than Toyota,” exclaimed John.

“Do you want to know the miraculous answer to how this factory can achieve one-day order-to-delivery lead time?” I asked.

“Of course, I want to know,” urged John.

I explained, “There is really no magic. Design a factory with a large swing[2] in production capacity ranging form 46% to 85% of total available time. The orders placed by the main constructors swing wildly because the demand is heavily influenced by the weather. Fine weather means the building rate of most of the construction sites are at full speed. A heavy rain in a single afternoon will bring the speed of the construction sites to a halt leading to zero orders.

Therefore, I designed the factory with a large swing in production capacity.”

John interrupted, “I fully agreed with you. Nobody ever had questioned the weaknesses of the Toyota Production System. In fact none of us ever had suspected it has a weakness. And right here, you pointed out exactly at its weakness point. You are very smart, indeed.”

“Thank you, John for your commendation. Let’s come back to our discussion. What do you think the order-to-delivery lead time of most companies is? What is the amount of swing or so-called planned excess capacity?” I asked.

“It varies. Short order-to-delivery lead time means much higher level of swing capacity. Longer order-to-delivery lead time means lower level of swing capacity,” explained John.

I explained, “In Archive Singapore, I designed the factory to achieve a 4-day order-to-delivery lead time for orders placed any where in the world. Everyday by 4 pm, the orders received for the day was loaded into tomorrow’ production schedule.

The units were assembled, tested and go through a 24-hour burn-in process. The second day, the units are packed and logistic vendor comes in to pick the finished goods up, push them through Changi airport and off the cargoes fly to the destinations in two and a half days before reaching the door of the customers. The on-time delivery was consistently meet 100% measured on a per order basis,”

John interrupted again, “Eric. That is truly a world-class excellence company. You have beaten Toyota flat a second time. And this time, it is global delivery.”

Humbly I explained, “John, the most important thing is you must understand that customer orders are unpredictable. It is never smooth. It can gyrate wildly. What Toyota taught as Heijunka or leveled production technique is useful to Toyota because the customers for decades has quietly waited for the arrival of the car despite its delivery lead time is 3 weeks, 6 weeks or 3 months.

But to most of us, our customers who are industrial users are not that kind to us. The lead time they asked for is certainly much shorter. That means, we must design our factory with a substantial amount of swing capacity and most important of all, the production planning and control system must be most responsive.”

“Thank you Eric. Now I understand why Honeywell though has lots of swing capacity and yet our on-time delivery is a low 60% or even lower. The root cause can be attributed to our poor production planning system[3].”

“John, you are dead right,” I said.

 



[1] Please read chapter 16, ‘Waste of motion’ and chapter 18, ‘Waste of processing’. These two chapters refer to Eastern Steel Services a rebar cut-and-bend factory that raised its output from 3,000 tons per month to 37,000 tons per month. This company proudly replicate itself by building 6 similar factories in Australia, 1 in Thailand and Tata Steel is planning to build >20 similar factories across the length and breath of the Indian continent. 

[2] Please read chapter 20, ‘Capacity utilization’ in section 4.

[3] Please go back to read chapter 2, ‘Production planning window’.

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