I have discussed in some of the previous topics the attitude in the 1990’s that kitting was to be avoided at all costs, and replaced with a no-fuss Kanban system that was easier on the material organization and less “wasteful”. Part of the reason for this attitude was no doubt related to the definition of the term Kitting. In those days kitting was done in a separate area, often the warehouse, and delivered to the line based on an MRP schedule. The kit would sit for a while until used, and sometime get cannibalized while waiting.
We are big promoters for the use of simulation modeling to test Mixed Model line designs from a work-flow perspective. Simulation is really a requirement because most mixed model lines experience a high level of variability, from a number of different sources. Since you don’t want to be making major changes after the fact, the best time to improve a design is before you implement it, and simulation modeling will help you to do that.
In the previous topic I discussed the goal of have a small amount of material at the workstations or Points of Use. How small is small? Toyota Material Handling has a goal of a few hours of usage, and Toyota Georgetown has virtually eliminated line-side material by kitting just about everything (as far as I saw on a recent tour). The primary motivation for this is not inventory reduction, but on space reduction and improvements in operator productivity.
I remember the days when our rule of thumb for Point of Use material was to try to stock at least a day’s worth of usage for as many items as possible. In the DFT workshop that I must have taught 100 times in the 1990’s, the guidelines for inventory quantities were as follows:
We are reviewing the biggest changes in Material Management that have taken place since the 1990’s, and the attitude that Material Management or material handling is a form of “muda” was a big one back then.
Pulling from overseas is of special importance, because without optimizing material flow from outside suppliers and especially from overseas suppliers, it will be very difficult to achieve high overall inventory turns and reduce working capital. (Note: I’m using the term “overseas” to refer to imports from outside of your country. Yes, I know that they may not literally come from across the ocean!) Reducing the amount of material at a workstation is important to save valuation production floor space, improve operator productivity, and reduce part selection errors, but the Point of Use inventory locations represent the smallest part of your total inventory.