Level Loading Your Factory Can Dramatically Improve Performance
Most factories are driven to perform by some internally focused deadline — get all of your production out by the end of the year, or by the end of the quarter, by the end of the month (this is what we see the most), or even by the end of each week. Level loading your factory is exactly the opposite of this mentality — let’s produce the same every day, and even every hour, more in line with customer demand!
The Definition of Level Loading In Lean Manufacturing
But first, let’s describe what we mean by level loading. Level loading is often called production leveling, or production smoothing. It is a technique for reducing the unevenness in operation which in turn reduces waste. It was vital to the development of production efficiency in the Toyota Production System and lean manufacturing.
Beginning the Journey – How To Get Started With Lean Level Loading
Begin your lean operations journey by looking at the shipping volume or dollars shipped every day in your business over a one-year period. Most manufacturing operations will have peaks that occur at the end of the year, at the end of the quarter, at the end of the month, and even at the end of each week. Be sure to look at the entire data set for the year.
Here is the sequential approach you should immediately consider if you see peak shipping times in your business:
- If your business always peaks at the end of the year, immediately take steps to level load across the 4 quarters first.
- If your business peaks at the end of each quarter, immediately take steps to level load across the 12-13 weeks in each quarter.
- If your business peaks at the end of each week, immediately take steps to level load your shipping volume across the five days of the work week.
Understanding your business’ operational shipping peaks, and then developing a plan to address smoothing these peaks through level loading is often the first successful step in implementing a lean manufacturing transformation. Ultimately, the goal becomes a steady pace (Toyota uses takt time to describe this) moving toward one-piece flow.
Critical Steps to Move to Level Loading
While this sounds easy, leadership must recognize that there will probably be a deep cultural resistance to level loading versus end-of-period crisis management. Here are three specific actions that we recommend to our clients to change this culture:
- Schedule lean production reviews at the end of the new expected shipping period. For example – if the business is trying to move from a quarter shipping period to a weekly shipping period, schedule quick reviews every Monday morning. Discuss specific corrective actions that need to be taken if the targets were missed. Follow up on those corrective actions every Monday.
- Change the metrics of the key operations leaders most responsible for implementing load leveling in their production facility — metrics drive change.
- Some managers have great difficulty moving from an end-of-period crisis style of management to a more planned level loaded style of management required in a lean manufacturing transformation. If the first two approaches are not working, and there is continued resistance to the lean manufacturing transformation, these managers may have to be replaced.
First Case Study
We have a client that ships valves to the oil and gas industry in Asia. This facility panics at the end of every year, every quarter, and every month. More than 80% of all its products were shipped out in the last three days of each month. Repeated shipping targets were missed for the following reasons:
- Last minute quality issues.
- Scheduling issues with client inspections.
- Not enough final test equipment capacity (the test equipment sat idle the first three weeks of the month, but local leadership was asking for millions of dollars in additional final test equipment).
The general manager of the business and I flew out there to spend the last five days of a quarter to begin to understand personally what was going on in the facility. It was unmitigated chaos – and more importantly, the local leadership wanted us to see how hard they work working in this chaos. We quickly realized that the facility did not need to the millions of dollars in test equipment. They needed to level load the facility.
Because the facility shipped $250 million of product per year, it became a simple step to determine that they needed to ship $1 million per day, and when the general manager stated that would be the first step on their lean journey, the local leadership clearly did not believe that this simple approach could solve a lot of their problems.
Once the GM returned to corporate headquarters, he scheduled a daily 6 pm phone call with the plant manager in Asia (6 am his time, as he drove to the office). He only asked one question: ‘Did you ship $1M dollars yesterday?’
For the first two weeks, the facility did not ever meet the measurement. The local leadership begin to realize that the GM was going to call every week day. The first month there was only a slight improvement over the typical chaotic end-of-month, and once again, they missed their target. During the second week of the second month the facility began to occasionally hit the one main dollar minimum goal. This improved during the third month when they hit the $1 million daily goal once during the first week. But by the end of the fourth month they understood that every day they needed to ship at least $1 million.
The results included the following:
- Quality dramatically improved across the board.
- Clients began to comment that customer inspections were much easier to schedule.
- The final-test equipment was more consistently used and far exceeded necessary capacity when level loaded.
- Overtime decreased by over 70% within 6 months.
Second Case Study
We have a client that ships block windows for private residence bathrooms. The had trained their customer to get their orders in by Thursday and then would promise to have their windows shipped out by the following Friday.
Their orders come in based on a residence build from many different contractors, and the master scheduler would compile a Monday list of product based on orders received the previous week. The glass shop would work overtime on Monday and Tuesday, while the assembly shop was mostly trying to find activities to fill their day, and shipping was nearly completely idle. Then on Tuesday afternoon through Thursday, the assembly shop worked overtime to assemble the block windows, with no regard to how each order would end up in shipping from a sequencing standpoint – the production operation ran batches of the types of windows needed.
Then, beginning Thursday afternoon, shipping began to be deluged with miscellaneous arrivals of product that were not linked by residence, only by the type of window that came to shipping in batches. The shipping area became totally chaotic as people searched to put together the residence packages and moved product around all through the day Thursday and into Saturday most weeks. Remember, this is glass, so the damage that occurred was far too high after products were supposedly completed. The trucking companies were often left waiting for open bays and open orders during the last two days of the week.
The solution, while it was resisted heavily by some key operations leaders’ familiar with the original chaotic approach, was implemented as follows:
- Move to a sales model that took orders every day, and promised a one week cycle time regardless of the day ordered.
- Set up the lines by types of products made.
- Start each residence assembly line across the entire set of assembly lines at the same time, regardless of the type of assembly — this ensured that each full residence package would arrive at assembly within two hours.
Within one week of full implementation, glass breakage at shipping had dropped by 80%, overtime dropped by 90%, and customer delivery performance improved dramatically.
Level loading production should be one of the first steps in your lean transformation initiative. To reiterate, understand your current shipping peaks, and then take steps to move to smoothing your operations by demanding steady output every month, every week, every day, and maybe even every hour!
Do You Need Help With Level Loading?
Why not get in touch and see how Flow Consulting can help you with Level Loading improvements.
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