Understanding production leveling

Manufacturing companies use the Toyota Production System (TPS) or other process improvement strategies to eliminate waste. In TPS, there is a waste that is identified as mura.

Mura encompasses all the wastes at the company that are caused from a variety of things like production delays to employee error. With changing markets and customer demands, TPS is often combined with other process improvement strategies to implement production leveling.

Every company has some fluctuations on their production lines. The goal of production leveling is to try and keep these fluctuations to a minimum or a zero. To understand how this works, look at what Toyota does. Toyota has a strategy to never assemble the same model of car in the same batch. Each car is made individually and then another model is sent behind it. Since the batches they use are smaller, the risk of fluctuations is smaller.

Mass production companies are so focused on producing as many products as possible that they neglect to spend time actually working on them and inspecting them for defects. This causes the customer to be the first person to notice the defect and they become upset, causing the company to lose more money. With TPS, production leveling has found that it is actually cost-effective to produce fewer parts quickly and to spend more time fixing the defects from occurring in the future. Mass production is still effective if you can fix the defects. This is known as process optimization and you create value to the customer by removing the waste.

TPS also focuses on producing parts to order. Companies often order extra raw material and produce several parts, only to have them sit on the shelf for 6 months while they wait for customers to purchase them. According to Toyota, excess inventory is a waste. It doesn't add value to your company; instead it ties up your cash flow and can cause huge problems.

Their inventory method involves only keeping one or two of a certain product on stock, then using visual control to flag when it is time to order more of the product because it has been purchased. While your employees wait for a part to be delivered to them, they are assigned to work on a different project. This helps reduce defects because they are constantly engaging their mind. They have to think hard to remember how to work on this new project and it helps to satisfy the quality needs of the company.

Companies that are skeptical about TPS and production leveling often want to know what happens when a part is in high demand or in its "peak" ordering time. Production leveling will prevent overloading the machinery and employees during the peak seasons. If your demand fluctuations are predictable, it will be easy to add more employees during this time to keep up with the customer demands. This is why it is important for your marketing team to provide you with accurate numbers as far as their sales predictions go.

Proper production leveling is completely dependent upon your predictions, not the actual demand. The goal of production leveling is to reduce the production load so your employees will feel less stress during this time. Your machinery will also feel less stress because it will be well-maintained by not over-working it. Production leveling will make your internal processes stable during the fluctuating external demands of your customers.

Each product you manufacture will have a cycle time. Once you have accurate market predictions the cycle times will become smooth and consistent. Your employees will run the same sequence for a product for the exact same amount of time. This helps to reduced wasted time on their part because everything is consistent, it doesn't fluctuate and cause problems with setup times and maintenance problems.