Level Operations, small company located in Pennsylvania, manufacturers a variety of security devices and safes. Several different models of safes (S7-S8-S9-S1-S2) are available for purchase and due to increased demand the production facility has been enlarged to accommodate the additional production needs. Production manager Stephanie Cole must determine the best production quantity per cycle for each day of the week. She understands that partially completed safes are not permitted (each cycle must turn out finished cycles). Stephanie consulted the engineering department; they have determined the best production sequence is S7-S8-S9-S1-S2.
Stephanie must comprehend the large picture of production demand in order to ensure the product availability to meet the needed demand. The ultimate goal should be a balanced operation system. One that makes the process time as short as possible, eradicate disruptions and eliminate waste (excess inventory)(Stevenson,2012). Stephanie was given weekly quantity demands; she must first break those numbers down to daily production demands, determine the number of cycles to run daily, and how many of each safe model to produce in any given cycles as shown in Figure 1. The cycle time should be set to equal the takt time.
Takt time is defined as “the cycle time needed to match customer demand for final products” (Stevenson, 2012). By only running three cycles per day, the company is producing fewer inventories. Additionally, the company is practicing lean production techniques by not allowing work-in-process inventory (reducing carry costs and space requirements) and lot sizes are small; yielding the similar benefits but also exhibiting better quality control and minimal inspection time if errors do arise. Stephanie has determined the best production quantity per cycle for each day of the week (Figure 2).
Figure 3 forecasts the quantity demanded versus the quantity supplied over the five week time frame. Model S8 and S9 are showing excessive inventories. However, by using a lean flexible production system Stephanie has the ability to decrease the units made during each cycle. By waiting to decrease the units per cycle till the later weeks in the production timeline; Stephanie is eliminating waste, and reducing the possibility of bottlenecks effects in the starting days of production. All other models are meeting their target numbers creating zero excessive inventories.