Lean in High-Mix Low-Volume (HMLV) Manufacturing -- Does it Work?

Lean thinking and methodology have resulted in many organizations instituting powerful initiatives and gaining major improvements, but most still associate Lean principles with low-mix high-volume (LMHV) manufacturers. There are, however, a gamut of high-mix low-volume (HMLV) manufacturers that wonder if the power of Lean is really applicable to them given their very different factors regarding volume, variety, and scheduling.

I recently spoke with Shahrukh Irani – who actually just published a book entitled Job Shop Lean:  An Industrial Engineering Approach to Implementing Lean in High-Mix Low-Volume Production Systems – and asked him the very specific question: “How is Lean applicable in High-Mix Low-Volume (HMLV) manufacturing?” Here is his detailed answer: 

Of all high-mix low-volume (HMLV) manufacturers, a job shop has the most complex production system.  The classification of different production systems that is shown in Figure 1 provides the simplest evidence that forcing a job shop to adopt a production system and tools that were designed to improve a repetitive assembly line’s performance is like fitting a square peg into a round hole. 

Figure 1: Comparison of an Assembly Plant and a Custom Fabrication Job Shop

Currently, nearly every job shop has failed to realize the full gains from Lean because they have stopped at implementing only the Lean tools listed in the left-hand column of Table 1.  In contrast, the Lean tools in the right-hand column of Table 1 are ineffective, often inapplicable, in any job shop.  So how does any Lean job shop reap additional benefits from Lean?  By implementing a new “Job Shop Lean Toolbox” in which the Lean tools in the right-hand column of Table 1 have been replaced with other tools that were developed for job shops!  

Table 1: A New “Job Shop Lean Toolbox” for High-Mix Low-Volume Manufacturers

Lean tools that will work in job shops also	Lean Tools that will not work in job shops
Strategic Planning	Pencil-and-Paper Problem Solving
Top-Down Leadership	Value Stream Mapping
Gemba Walks by Managers	Assembly Line Balancing
Employee Engagement	One-Piece Flow Cells
Workplace Design with 6S	Product-specific Kanbans
TPM (Total Productive Maintenance)	FIFO Sequencing of Orders
Setup Reduction (SMED)	Pacemaker Scheduling
Error-Proofing (Poka-Yoke)	Inventory Supermarkets
Quality At Source	Work Order Release based on Pitch
Visual Workplace	Production based on Level Loading
Product and Process Standardization	Mixed Model Production with Takt Time
Right-sized Flexible Machines	Right-sized Inflexible Machines
Standard Work	Pull-based Production Scheduling
Continuous Problem-Solving	Manual Scheduling with Whiteboards

 

If the Tool Works for High-Mix Low-Volume, Then Job Shop Lean Uses It!

In Table 1, the tools in the left-hand column will also work in HMLV production systems.  “Top-down Leadership” and “Employee Involvement” are essential.  “Standard Work Instructions” and “Setup Reduction” are needed to minimize variation in setup times on any machine (or manufacturing cell) due to different parts having varying setup sequences, tooling packages, material sizes, tolerances, etc.  “Quality at Source” empowers employees to reduce costs, take pride in their workmanship and have ownership for their work.   “Right-sized Machines” appears in both columns of Table 1 because simple machines are easy to learn to use, setup, operate and maintain.    

If the Tool Does Not Work for High-Mix Low-Volume, Then Job Shop Lean Replaces It!

In Table 1, the tools in the right-hand column will almost never work in HMLV production systems because those tools are simply not applicable to MTO (Make-To-Order) HMLV production systems that do not operate like assembly lines.  It is these tools that have been replaced by a more effective set of tools, often enabled by software, to successfully implement Job Shop Lean.

What do you think of Shahrukh's observations? What are the experiences of those who work in a HMLV environment and have been part of a Lean initiative?

Special Applications of SMED in Process Plants

Initial adoption of lean initiatives in the process industry was quite slow. Many of the early lean techniques used in traditional manufacturing, such one-piece flow and u-shaped work cells, had little application in a chemical plant, so most leaders in that industry concluded that lean could only benefit discrete-parts manufacturing.

On tool, however, that can have a major impact on waste reduction in the process industry is SMED (Single Minute Exchange of Dies). Peter King, author of the book Lean for the Process Industries: Dealing with Complexity has some comments about SMED:

"The benefit of SMED in simplifying product changeovers has been widely documented: SMED allows for shorter campaigns, lower inventory, and faster response to customer needs.

SMED has enabled significant improvement in process plants, operations which produce chemicals, paints, plastic films, food products and personal care items. But its benefit goes far beyond product changeovers. Many process lines never undergo a changeover, but have seen dramatic improvement through the application of SMED. A chemical plant may produce a single product 24 hours per day, 365 days per year, and thus never experience a product change. But these plants generally are taken off line periodically, say once a year, for a complete overhaul. These overhauls can take days or weeks, and involve the same wastes that changeovers do: inventory build-up in preparation for the outage, wasted time due to lack of coordination, tasks being done internally which could really be done outside of the overhaul window, and yield losses getting back to on-aim conditions after re-start. SMED has provided great benefit to these plants even though there is never a true product change!

SMED has also been used to improve process operations that can go down due to a process upset. Again, there is no product change, but getting the process restarted after the upset includes all of the wastes that SMED is so capable of reducing or eliminating."