Fast Cycle Production

In the world of production, there are truisms that never fail when tested. When you have excess WIP, you will have a longer product cycle time. When you have a low Cycle Time, you have your WIP under control. These are basic examples that are based on Little’s Law, but there is another that is not as well known but is certainly equally true.

Cycle Time (CT) can be improved by reducing WIP or improving the output rate, but will you solve your production problems by just arbitrarily cutting inventory or hiring more people? The answer should be obvious to many managers but sadly, it is not. It is my experience in manufacturing that many managers look for easy answers that often slap them in the face later because they didn’t use the correct value set to arrive at the conclusions that they based their decisions on.

For years, there has been a measurement that was used for some time by IBM manufacturing companies that practiced Continuous Flow Manufacturing (CFM). The measurement was called MCE and I don’t remember just who in the CFM team came up with this measurement, but I did find it very powerful when I worked with the CFM team. It wasn’t used much then, but I did resurrect this measurement in my simulation consulting while with IBM, and even used it in calculating the positive effects of potential process changes with my clients. I continued to use it after I formed my own company.

The common belief in companies (especially manufacturing companies) is that the less that you pay for labor, the more successful that you will be. This sophistic reasoning is commonly associated with the movement of manufacturing responsibilities to countries that can provide labor at low cost. It is also the logic used by some companies to escape the influence of unions.

Manufacturing companies in countries that employ low cost workers are also deceived by the belief that not only is their economic future tied to their ability to offer low cost labor to foreign companies, but that productivity improvements would not work for them.

I can’t even begin to guess how many times I have heard a plant manager say that implementing a productivity improvement effort would “never work for them”. It was either their culture that would keep such an effort from succeeding or it would be something like low labor costs. “Why do we need productivity?”, they ask. “We pay peanuts for our labor!” To them, the prospect of implementing good manufacturing practices in their plant would not be worth the effort or the cost.