I made short presentation about what is logistics and how does it affect on your business and it’s finances.
As I wrote earlier the magic of pull is based on the WIP regulation. In order to have optimal production we should set the correct WIP level. If it’s too close to critical WIP, throughput will suffer. If it’s too big, cycle time increases.
Even though robotics has been developed a lot it’s not going to replace workers yet.
Activity Based Costing (ABC) or Cost Accounting is a way to divide organization’s fixed costs for products.
Earlier I wrote about MRP as an push production and JIT as an pull production. In reality they seldom are this black and white but it is some kind of mix of these push and pull production.
Production time at workstation can be divided into following categories: Transfer time Queue time Setup time Process time Wait-to-bath time Wait-in-batch time Wait-to-match time
Regarding to variability and its control we will go through some “laws” that will affect production flow.
Lean is based on the thought that excess work (muda) needs to be removed. So we can lead this into the variation removing. We must still remember that variation can also be good if it’s our strategic decision.
Variability can be controlled with different kind of combinations. Example if machine receives its raw material from multiple sources the variability of this combined feed will be close to value CV = 1. Despite if sources are LV or HV machines, their summarized feed tend to be medium variable.
According to the Little’s law (TH = WIP/CT) same production can be achieved with long cycle time and large WIP or short cycle time and small WIP. I think that later option is better choice for everyone.
EOQ – Economical Order Quantity
EOQ-function was first created for manufacturing industry. It was originally founded by Ford. W. Harris in 1913. He discovered that when manufacturing line was set from one product to another there will always be condemned production and time is spent to make new settings. On the other hand bigger manufacturing batches need more capital and storage room.
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