Pull out the power

The core of demand-driven production is to produce exactly what the customer orders and deliver it straight from production, thus being able to keep minimal stock of finished goods. Properly used, a pull-based production system can release the innate power of an organization and the creativity and responsibility of its workers. The entire production process can be turned into a synchronized chain of customer orders, production planning and manufacturing, and when creating a closer connection between production, material flows and suppliers the whole supply chain is improved. Converting to demand-driven production can revitalize the entire company, so stop manufacturing for stock. Start manufacturing for your customers! Here are some tips and things to consider in the process.

Nowadays, many companies are under enormous pressure to increase profitability and cost effectiveness. In recent years the main tool used to resolve the situation has been cutbacks, which in many cases were not particularly successful. Companies often ended up eliminating value-adding costs, which affected their customers and resulted in sales drops. Releasing resources by working smarter is a much better solution.

Work smart!
Investing time and money in systematic improvement efforts can drastically improve the performance of both company and workers. Involvement and commitment can be fostered by delegating responsibility and power. Experience shows that the road to successful improvement work is full of potholes and ditches. At Establish, we know the seven secrets of successful change work.

1. Clarity and commitment from management. The attitudes, approaches and behaviors of company management play crucial parts when it comes to the success or failure of change work. By having a clear picture of the reason for the changes, we understand why we need to change our situation and we can see the benefits. It is also good to have a common set of goals, both for the change work in general and for individual projects. Management is also responsible for creating crystal-clear areas of responsibility, where everyone knows which requirements and powers each individual has. Helicopter and overall views are important to ensure an overview, and flexible management is needed to create good teamwork.

2. Anchoring with the people concerned, for understanding and commitment. Implementation of management’s intentions requires understanding, committed and competent staff who comprehend the purpose of the change.

3. Incentive for successful implementation to motivate and stimulate employees to continue making great achievements.

4. Identified and prioritized projects for step by step progress. The entire change process should be described in steps in a project plan with clear content, clear areas of responsibility and clear undertaking of involved workers and others. One thing at a time, in the right order.

5. Continual and clear follow-up, where management are participants and drivers. Management should gradually follow up work and communicate its status – preferably by presenting solutions that successfully solved problems and by highlighting success in the project.

6. Good tempo in implementation, but with the understanding that change takes time. Change is a process that needs time, but it is important to keep up the pace.

7. Don’t lose focus on the present. Even though you are in the middle of a change process, you cannot forget your current customers and their needs.
 

Using these seven points provides structure to the change process and helps the workers involved gain understanding and feel like they are part of things. In addition, there are a number of tools that can be of great value in helping a company change its production from push to pull. Different methods that can be used are described below. Note that these are only suggestions and must be tailored to the specific company and its change process. If Establish participates in and leads your change process, we apply these aids to the degree they are beneficial.

Start with a value flow analysis
The basic idea of demand-driven production is to produce exactly what the customer orders and deliver it straight from production, thus being able to keep minimal stock of finished goods. In order to make production demand driven, those involved must be committed and understand why the company benefits from demand-driven production. A good way to create understanding is to let the workers perform a value flow analysis. This gives them an overall picture of the production, clarifying which flows in the production process that create value and which do not, and therefore can be considered sources of waste.

When properly used, the value flow analysis supports the workers' long-term improvement work and prevents isolated improvements that may not affect the value flow to the customer. Eliminating aspects that do not create value releases resources that can be used elsewhere. Time that does not create value can be divided into necessary under present conditions and pure waste which can be eliminated with simple means. Lean production usually refers to eight wastes:
 

Overproduction – Producing ahead of what is actually needed by the next process or
customer. The worst form of waste because it contributes to the other seven.

Waiting – Operators standing idle as machines cycle, equipment fails, needed parts
fail to arrive, etc.

Conveyance – Moving parts and products unnecessarily, such as from a processing step
to a warehouse to a subsequent processing step when the second step instead could be
located immediately adjacent to the first step.

Processing – Performing unnecessary or incorrect processing, typically from poor tool or
product design.

Inventory – Having more than the minimum stocks necessary for a precisely controlled
pull system.
 

Motion – Operators making movements that are straining or unnecessary, such as looking
for parts, tools, documents, etc.

Correction – Inspection, rework and scrap.

Workers – their untapped creativity.
 

Organize your day – 5S
Once you have a clear picture of the company’s value flows, it is time to create a solid structure for daily work. 5S is a Japanese method for organizing the workplace and is a solid foundation for continued change work. The aim is to eliminate waste by removing everything not used and marking storage sites to make it easier to find tools and material. In English, 5S comprises Sort, Straighten, Sweep, Standardize and Sustain.

Sort – The personnel of the workplace collaborate to rate actions in the facility. Anything that
hinders cleaning or makes things dirty is to be improved. The same applies to all types of known
problems and work elements that steal time from more beneficial tasks. All unnecessary objects
are eliminated.

Straighten – All tools and aids are put in the right spot. Everything that is used is marked. Floor
markings are made easily visible.

Sweep – The facility is thoroughly cleaned. The work is documented to create routines. The new
level is photographed to make it easier to maintain.

Standardize – Follow-up systems are established to maintain the new level.

Sustain – Reviews are performed with management’s involvement.
 

Preventive maintenance – TPM
There is much to be gained by continually keeping machinery and equipment in good working condition. The aim is to create smooth performance by having all workers participate in operational reliability work. Industrial automation has often resulted in operators losing the “close relationship” they used to have with the machines. Consequently, early stage problems often go undetected and few problems are solved permanently. TPM stands for Total Productive Maintenance. The foundation is operator maintenance, with production personnel being trained in and taking responsibility for maintenance tasks such as inspections, preventive maintenance and lubrication. Operator maintenance primarily refers to minor operations such as inspections, checks and adjustments. For this to be successful, the operators must be trained, have the proper equipment and have time to carry it out. The effect is a boost in employee motivation and increased operational reliability.
 

Shorter setup times – Single Minute Exchange of Dies (SMED)
Demand-driven production always leads to shorter series. It is therefore important to keep setup times as short as possible. Setups become more common and more frequent in a pull system and must therefore be considered a direct part of the production cost. A natural goal of streamlining is the reduction of throughput times. Since lot size and throughput time are often related, the reduction of setup times and thereby a reduction of ordering cost is a tool in this work. SMED (Single Minute Exchange of Dies) is a tool that helps companies reduce setup times through a number of measures. Methods have been developed to make it possible to change tools in machines and other equipment much quicker. This means less internal activities in the process and more external ones that are performed in parallel.
 

From push to pull – a summary
Demand-driven production is closely related to lean production. With this method, the goal is to create a production system in which production is directly determined by demand. Items are produced and delivered based on actual demand (consumption) downstream. Changing from traditional production with push planning to demand-driven production with pull ordering is not easy, but it is possible! Depending on the type of production, different size steps can be taken at different times. The most important thing though, is to start a process that aims at better satisfying customer needs in an efficient manner.

The core of demand-driven production is to produce exactly what the customer orders and deliver it straight from production, thus being able to keep minimal stock of finished goods. Customer orders are therefore crucial. The earlier this is in the chain customer order is situated, the less stock you can maintain, but it is often difficult to place customer order early in your own production. Despite this, you can still have demand-driven production. A pulling flow means that production in one station/group/section is initiated by demand in the subsequent step. There are several different techniques to realize this type of order. The two-bin system and kanban (manufacturing card) are two examples. Demand-driven production often requires small lots to be produced in each station, resulting in frequently changed setups.

Focus on, and reduction of, setup times is often required. In order to make production demand-driven, the workers must be committed. It is crucial that the workers understand what demand-driven production is and why it is good for the company. A good way to create understanding and insight is by carrying out a value flow analysis. This serves as an aid in mapping current conditions – often resulting in “Aha!” moments – and identifying potential improvements by creating a future scenario.

The many benefits of pull
The pull system has many concrete benefits. Not only do the workers become more involved, but they also become more aware of customer needs and take greater responsibility. Areas of responsibility become clear and they get a better understanding of their own place in the big picture. This makes it easier to do a good job. In the production process, lead times are shortened when customer orders pull towards the goal. At the same time, setup times gets shorter since production series are reduced and new setups occur more often.

The amount of capital tied up in raw material stock, buffer stock and finished product stock drops dramatically. Costs for stock are reduced in general since the flow is intensified and tuned to the immediate needs of the customers. Last, but not least, the innate power of the company and the creativity of the workers can be unleashed in pull-driven production.

That alone can be worth millions!