Shipulski On Design

What would happen if the factory had to support demand that increased one percent per week? Without incremental investment, how many weeks could they meet the ever-increasing demand?  That number is a measure of the system’s flexibility.  More weeks, more flexibility.  And the element of the manufacturing system that gives out first is the constraint.  So, now you know how much demand you can support before there’s a problem and you know what the problem will be.  And if you know the lead time to implement the improvement needed to support the increased demand, in a reverse-scheduling way, you know when to implement the improvement so it comes online when you need it.

What would happen if the factory had to support demand that increased one percent in a week?  How about two percent in a week, five percent, or ten percent?  Without incremental investment, what percentage increase could they support in a single week?  More percent increase, more flexibility.  And the element of the manufacturing system that gives out first is the constraint.  So, now you know how much increased demand you can support in a single week and you know the gating item that will block further increases.  You know now where to clip the increased demand and push the extra demand into the next week.  And you know the investment it would take to support a larger increase in a single week.

These two scenarios can be used to assess and quantify a process of any type.  For example, to understand the flexibility of the new product development process, load it (virtually) with more projects to see where it breaks.  Make a note of what it would take to increase the system’s flexibility and ask yourself if that’s a good investment.  If it is, make that investment.  If it isn’t, don’t.

This simple testing method is especially useful when the investment needed to increase flexibility has a long lead time or is expensive.  If your testing says the system can support five percent more demand before it breaks and you know that demand will hit the system in ten weeks, I hope the lead time to implement the needed improvement is less than ten weeks.  If not, you won’t be able to meet the increased demand.  And I hope the money to make the improvement is already budgeted because a budgeting cycle is certainly longer than ten weeks and you can’t buy what you need if the money isn’t in the budget.

The first question to ask yourself is what is the minimum flexibility of the system that will trigger the next investment to improve throughput and increase flexibility? And the follow-on question: What is needed to improve throughput? What is the lead time for that solution? How much will it cost? Is the money budgeted? And do we have the resources (people) that can implement the improvement when it’s time?

When the cost of not meeting demand is high, the value of this testing process is high. When the lead times for the improvements are long, this testing process has a lot of value because it gives you time to put the improvements in place.

Continuous improvement of process utilization is also a continuous reduction of process flexibility.  This simple testing approach can help identify when process flexibility is becoming dangerously low and give you the much-needed time to put improvements in place before it’s too late.

Image credit — Tambako The Jaguar

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