Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

6.2.3 Standardizing the Production Infrastructure, Flexible Capacities, Structuring Assembly Processes, Complete Processing, Point-of-Use Inventory, Point-of-Use Delivery — Further Concepts of Lead Time Reduction

Intended learning outcomes: Disclose the effect of standardizing the production infrastructure and of flexible capacity. Describe structuring assembly processes and complete processing. Identify point-of-use inventory and point-of-use delivery.

The following approaches also require adaptation of the production infrastructure. The first  approach reduce wait times, the second approach reduces operation time, the third reduces lead time for several operations, and the fourth reduces transport time.

1. Standardizing the production infrastructure, flexible capability (of the production equipment) and flexible workforce, as well as flexible capacity:

Close-to-maximum capacity utilization results in a strong increase in wait time.[note 609] Over­capacity brings load variation under control and allows short lead times. If capacity is costly, however, over­capacity must be carefully reviewed.[note 610] First, the following measures should be examined:

  • Can we standardize the machinery, tools, and devices — either through greater ver­satility or by means of standardizing operations? This would allow broader imple­mentation of personnel, which would result in fewer workstations and simpler plan­ning. Airlines, for example, strive toward identical cockpits in their fleets of planes.
  • Can the flexible workforce be increased through training and broader qualifications? If so, employees can be implemented in a more balanced fashion along the time axis, because if there is underload at their own work centers, they can be moved to overloaded work centers.
  • Can we increase the availability of production facilities, particularly tools? The employees at a work center can also be trained to do their own repairs and maintenance jobs, as the necessity arises.

2. Structuring assembly processes:

In the assembly process, staggered supply of components reduces lead times, as shown in Figure This is a well-known measure, especially in connection with customer order production.

The inbound deliveries in Figure may be preassemblies or assemblies. Preassembly made parallel to assembly reduces the number of storage levels. If quality control is integrated into assembly, lead time can be reduced even further.

Fig.        Assembly-oriented providing of components.

3. Complete processing:

Complete processing is the execution of several different operations at a stretch — if possible, all the way up to completion of the product.

The newer tool machines often allow complete processing. With computer numerical control (CNC, DNC), they are versatile in implementation. Moreover, they are more independent in terms of cost as well as output and quality of employee performance.

There are fewer stations to run through with complete processing, so that there are no inter­operation times. Reduced lead times should result. But for this to have a true advantage over the segmentation in approaches 1 and 2, the complete processing duration must be significantly shorter than the sum of operation times with a sequence of machines. Other­wise, the result would be simply that several shorter wait times would be replaced with one single wait time. This time would be just as long as the sum of the shorter times, however.

For complex workpieces, a firm could investigate the possibilities of automation of produc­tion with flexible manufacturing systems (FMS) and automation of transport and handling. Modern technological machines are designed to reduce setup time and achieve greater variant flexibility. Automated processes also reduce the problems of 24-hour shift work.

4. Organizing supply and buffer storage to support the flow of goods:

The point of use is in the focus of delivery and storage.

  • Point-of-use inventory: Buffer storage is placed directly at the spot where the components will be used (inbound stockpoint). Each container of components has its own specified physical location. On the assembly line, for example, it will stand at the location where the components will be installed.
  • Point-of-use delivery: Fast connections are set up between suppliers and users. Components are delivered right to the buffer storage at the user workstation. The workstation can transmit its needs via electronic mail.

Quiz - not yet available
Find the correct answers to the following questions:
1.Which concepts of lead time aim to a reduction of waiting time ? 2. Which propositions of production are true ? 3. What causes the introduction of a complete processing ?

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Course section 6.2: Subsections and their intended learning outcomes