Point Of Use

Point of Use (POU) is a key component of Lean initiatives aimed at reducing waste, increasing efficiency, and improving overall production processes. It is a philosophy that focuses on delivering materials, tools, and equipment directly to the worker at the moment they need them. The goal of POU is to minimize unnecessary movement, handling, and storage of materials, which not only streamlines production but also reduces the risk of damage, loss, and obsolescence.

In traditional manufacturing processes, raw materials and supplies are often stored in central locations, such as inventory rooms, and are retrieved and moved to the production line as needed. This can result in excess inventory, increased lead times, and the need for multiple trips to retrieve materials. Additionally, workers may spend significant amounts of time searching for the tools or materials they need, which reduces productivity and increases the risk of mistakes.

Point of Use aims to eliminate these inefficiencies by bringing materials and supplies directly to the worker at the point of need. This reduces the need for workers to search for materials and increases the speed and accuracy of the production process. POU also reduces the amount of inventory that needs to be stored and managed, which helps to reduce the risk of damage, loss, and obsolescence.

There are several different approaches to implementing POU, each with its own set of benefits and challenges. One approach is to use kanban systems, which are visual signals that tell workers when it’s time to replenish materials or supplies. Another approach is to use automated systems, such as conveyors or robots, which move materials and supplies directly to the production line as needed.

Regardless of the approach used, POU requires careful planning and coordination between all departments involved in the production process. It also requires regular monitoring and adjustments to ensure that the system is working as intended. This can include tracking key performance indicators (KPIs) such as inventory levels, production lead times, and worker productivity.

One of the benefits of POU is that it helps to improve worker morale and job satisfaction. When workers have access to the materials and supplies they need exactly when they need them, they are able to focus on their work without worrying about finding the right tools or supplies. Additionally, POU helps to eliminate the frustration that workers may feel when they are unable to find the materials they need, which can lead to decreased job satisfaction and even burnout.

Another benefit of POU is that it helps to reduce the risk of mistakes and increase quality. When workers have everything they need at their fingertips, they are able to focus on their work without worrying about searching for materials or supplies. This reduces the risk of errors, which in turn helps to improve overall quality and reduce the need for rework.

In a nutshell, Point of Use is an important concept in Lean Manufacturing that aims to reduce waste, increase efficiency, and improve overall production processes. By bringing materials and supplies directly to the worker at the point of need, POU streamlines production, reduces the risk of damage, loss, and obsolescence, and improves worker morale and job satisfaction. To be successful, POU requires careful planning, coordination, and monitoring, as well as a focus on continuous improvement. By implementing POU and other Lean principles, manufacturers can reduce costs, increase efficiency, and improve overall production outcomes.

JIT

Just-in-Time (JIT) is a manufacturing and inventory control system in which raw materials, components, and finished products are delivered to the production line exactly when they are needed. The goal of JIT is to minimize inventory levels and reduce lead times, while maintaining high levels of production efficiency.

JIT is a pull-based system, which means that production is driven by customer demand rather than by a production schedule. This is achieved by using Kanban, a signaling system that alerts the supplier to send more materials or components when the inventory level of a specific item reaches a predetermined minimum level.

The origins of JIT can be traced back to the manufacturing practices of the Toyota Motor Company in the 1950s. It was developed by Taiichi Ohno, an engineer at Toyota, as a response to the inefficiencies he observed in the company's production processes. Ohno recognized that by reducing the amount of inventory and increasing the flow of materials, Toyota could improve its production efficiency and responsiveness to customer demand.

One of the key principles of JIT is the elimination of waste, or "muda" in Japanese. Ohno identified seven types of waste in manufacturing: overproduction, waiting, unnecessary motion, overprocessing, defects, excess inventory, and unused human potential. JIT aims to eliminate these forms of waste by creating a smooth and efficient flow of materials and products through the production process.

JIT also relies on the concept of "one piece flow", which is the production of one item at a time, rather than producing large batches of items. This allows for better control of the production process, as well as the ability to quickly identify and correct any problems that may arise.

Another important aspect of JIT is the use of visual management tools, such as Andon boards and Kanban boards. These tools allow for real-time monitoring of the production process, and can alert workers to potential problems before they become major issues.

JIT also requires a high level of collaboration and communication between suppliers, manufacturers, and customers. This is necessary to ensure that materials and components are delivered to the production line exactly when they are needed, and that finished products are delivered to customers in a timely manner.

JIT has a number of benefits for manufacturers. One of the most significant is that it can help to reduce inventory levels, which can free up valuable floor space, reduce storage costs, and minimize the risk of stockouts. JIT can also help to improve production efficiency by reducing lead times and minimizing downtime caused by waiting for materials or components.

JIT can also help to improve product quality by reducing defects, and increasing the ability to quickly identify and correct any problems that may arise in the production process.

JIT also helps companies to be more responsive to customer demand by reducing lead times and increasing the speed of delivery. This can help to improve customer satisfaction, and increase the chances of repeat business.

JIT also helps companies to be more flexible and adaptable to changes in customer demand. It allows companies to more easily shift production to different products or product lines, which can help to maintain profitability during periods of slow sales.

However, it's worth noting that JIT is not suitable for all industries and companies, it's best applied in companies where the production process is well-defined, the demand is stable and predictable, and the lead times are short. Implementing JIT can also be challenging and requires a significant investment of time and resources to establish an effective system.

Additionally, JIT requires a high level of coordination and communication with suppliers and customers, which can be difficult to achieve. This is particularly true for companies that have a large number of suppliers or customers, or those that operate in

Kanban

In this article we want to talk about another classic from Lean Management Kanban or the so called Pull System.

The word Kanban itself has its roots in the Chinese Japanese language and means card, label or sticker. In industrial manufacturing planning systems or general in logistics control Kanban describes a replenishment system for consumed parts according to the amount used steered by cards that give the signal following the Pull Principle.

The material in the Kanban System is exclusively oriented to the consumption of your production process. The cards are a key element of this kind of control system and provide proper information transfer. Kanban control loops from the work station of flexible production control and serves to smooth material flow through your inbound or even outbound logistics. In addition Kanban serves you to implement a sustainable reduction of material stocks, increases the ability to deliver and saves you pure cash.

In an ideal world Kanban would control your entire value chain from the supplier to the end customer. In this way you would have installed an complete smooth supply chain with almost no chance of interruption and massive stocks. And now comes the but – to steer production with Kanban – a continuous monitoring is required for a smooth material supply. To make it short: it requires discipline from all involved parties along the supply chain.

Lets have a look to the development of Kanban.

The first Kanban System was developed by none other than Taiici Ohno (of course) at Toyota Motor in the 1940s. One of the main reasons for the implementation of Kanban was the low productivity and efficiency of Toyota compared to western competitors. With the Kanban System, Toyota achieved a significant change towards flexible and efficient production control that had a massive impact on productions output while at the same time reducing the costs for inventory in raw material, work in progress (WIP) and finished goods.

To give the complete picture it wasn’t implementing the Kanban system itself to drive the success of Toyota, there are other key factors that together where making the difference. Just to name Just in time as an example of key elements of the Toyota Production System. It is and always will be a combination of different methods and philosophy that brings you forward.

In the 1970s the Kanban Concept was adapted in the industry in the USA and Germany. As they haven’t known better, they pretty much copied the complete Toyota Production System (TPS) in order to get the principles running.

Pull or Kanban System

Either way you call it, the material flow is controlled by boxes or cards. Kanban Cards serving in a simple way all information needed to identify what parts are needed in what quantity at what place. The amount typically is defined by the replenishment time at the work station. With the so called two box principle you make sure that the operator never runs short on components. Nowadays there are also digital version of it called eKanban, but the principle behind is the same. The trigger of supply is the Kanban Card starting of the pull chain of material.

To use Kanban efficient, it is not suitable for all parts. Kanban is perfect for small parts with a small amount of variants and a consistent demand. For this reason, you’ll see Kanban Systems in the industry mostly used for C-Parts management. The rest of the components are steered with the support of MRP. Only in rare cases you find that even the supply of big components are controlled with the Kanban methodology.

One nice side effect with Kanban, you can set up the way you can steer your bottleneck. That means, when you have done a proper value stream analysis you know the capacity for your bottleneck and will only order what this process step can handle.

Supermarket

When speaking of a supermarket in lean context we are talking about an independent instrument that is used to control production. In a supermarket raw material and pre-commissioned components can be found in defined areas. The amount is well organized according the replenishment times of each component, in general the inventory is limited and components are refilled as soon as they are used. Following the Pull Principle with the help of the Kanban-System.

Concerning the supermarket we see it as one of the pull strategies that can be implemented as link between two process steps when developing the future value stream. The supermarket is the third option when firstly One-Piece-Flow and secondly FIFO are no options at all.
The supermarket is a great methodology to help your organization to manage a variety of inventory where you don’t need to know in what order the components will be consumed. Through the so called Kanban-Pull-System “internal customers” will take components of the supermarket, which are replenished by the internal logistics following the Kanban-Pull-Principle or in a pre-defined interval. With this integrated pull system of the supermarket as link between logistics and production you can also speak of a general replenishment pull system. But let’s have a look at the supermarket, what it can be used for and how it could look like in your organization.

The supermarket itself is a mix of FIFO lanes for different components stored in Mobile Racks or a typical shelf where components are stored in bins or on pallets. Let’s assume on workstation A 3 different components are assembled, in the supermarket 1 lane would be dedicated to only this component following the FIFO principle. With this explanation you can see why FIFO itself is preferred the supermarket. The supermarket is either steered with two bin principle or kanban cards. According the replenishment time, the replenishment is triggered with the extraction of components and the stock dropping below the minimum quantity.
You see, the key question is when to use a supermarket instead of installing plane FIFO lanes or even follow the One-PIece-Flow.

Here are some examples when this is the case:

• Two main material flow streams come together before or are split after the supermarket

• Your organization follows the made to stock principle, then the supermarket is at the end of production and stores finished goods

• With the help of a supermarket different lead times of suppliers paired with a high variance can be leveled and production can be smoothly supplied

• Upstream processes are lacking quality, downstream process steps can easily replace defective parts/components (interim solution until problem is solved)

• Different change over times, when a downstream process needs a change over the upstream processes can fill the supermarket as a overflow stock that is drained after change over is done

All of this examples have in common that the final target is to eliminate the supermarket itself and improving the material flow in a way that simple FIFO lanes or a Two-Bin-Principle at workstations can be realized.
The size of a supermarket is always determined by the components and their space needed for storage and their replenishment lead times. So it is a good piece of advice to have a clear overview of your components, their recurring demand including their replenishment times and don’t forget about a little safety stock on top.

As already mentioned there are two principles that are already well-known for implementing and steering a supermarket. The first one we have a look at is the Kanban-Principle and the second the so called Two-Bin-Principle, in which the bins itself trigger the replenishment.

A supermarket running on Kanban Cards can be seen shematically in the picture below. Every component stored in the supermarket is represented by an individual card, on which all required information is listed in order to trigger the replenishment process. The Kanban-Card can be seen as order slip for suppliers. Usually Kanban-Cards are placed on the so called Kanban Board. This kind of a supermarket can be seen most of the time.

The Two-Bin-Principle is a kind of supermarket where the bins itself are utilized the same way the Kanban Cards are used. In this approach all components have e.g. two assigned bins, filled with the dedicated components for this exact bins. The full bins are placed at the workstation, components are used and the empty bins are placed on the empty conveyor, ready to be collected by the Mizusumashi. the Mizusumashi refills the bins with the defined components and brings the full set back to the workstation. This kind of “decentralized” supermarkets are typically used for small and C-parts, which are consumed by not only one but several workstations, e.g. screws, washers, etc. as the financial impact of c-parts are low and the space needed is small.

In the end the supermarket is the last possible way to implement a Pull System after failing on implementing a One-Piece-Flow or FIFO. The target is and always will be to reduce the size of the supermarket by changing it into a FIFO system or change the material flow in to One-Piece-Flow. Therefore the supermarket can be seen as needed but temporary. The size of a supermarket is always defined by the size of the components itself, the replenishment time incl. some safety surcharge and the consumption lead time of the production. By simply removing or adding Kanban Cards or Kanban Bins the level of WIP can be adjusted.

Signal Kanaban

Every container or bin in your production facility is marked with a so called Kanban card or signal. The time the last component is taken, the Kanban is send to the source it came in production and is added to the so called Kanban Board. This board actually shows you the amount of inventory you have in production. It is a great tool to minimize the risk of overproduction and can be used to steer your production facility. Besides this it helps you to have control of your inventories itself of course . Based on the design of Kanban Cards it is possible to identify directly where the container belongs to and in what interval you have to check on it.

The checking and supply of material or components lies in the hands of the mizusumashi.

Push vs Pull Principle

The pull principle is one of the main blocks in lean manufacturing > pull manufacturing. The customer demand determines which good will be produced and in which quantity. Max/Min inventory levels are agreed with suppliers and customers. This gives you the opportunity to limit overproduction.

In a pull process a workstation or process step is only being triggered when the downstream processes are free to take the output. This means that only when the customer initiates a need the value adding is started. By this a customer can be seen as internal as well as external one. This is lovely as you make sure that only what you will sell will be produced.

Pull is always to prefer against push. As it allows you to manage the WIP and inventories in between workstations which has a straight impact on your lead time. To successfully install a Pull System you have three choices, it is either the well known continuous flow installed, sequential pull or the replenishment pull.

All three types of connection will help you to achieve different levels of Pull in your environment.

No matter what it always comes down to three factors in your system:

1. Having max one piece of inventory between two process steps

2. Having a fix production sequence

3. and having a max number of parts waiting

Thinking about the three types of a Pull System, the continuous flow system has the highest level of Pull, as all three factors are highly involved. Only One Piece at the time and in between two process steps which means a fixed sequence as well as max one part waiting for the next process step.

If you have several workstation linked in one main manufacturing process working on one final product you have a work cell or simply a production line, depending on the shape you can call it e.g. U-cell.

With the sequential pull system you will have the second best choice of a pull manufacturing. It will have a fixed quantity, the sequence of production is defined but with a max number of WIP allowed between process steps. Basically you will allow buffers in your manufacturing. This can typically be seen in FiFo lines (First in First out).

Last but not least we have a look on the Replenishment Pull. This is in other words your supermarket in the production and your third and last option of implementing pull. The supermarket has a maximum number of components, parts or products waiting to be worked or processed on. But it is not known which one will be next. This type of inventory is usually steered or controlled using the Kanban systematic.

To put it in a nutshell - the following table should be fine to give you an overview: