As I talked about in the last post, I will be examining the seven wastes identified in lean manufacturing and showing how CNC Industries handles each in a high mix / low volume aerospace machining environment. The first of the seven wastes is Overproduction. Overproduction is using more resources than necessary to create and deliver a part to the customer. Overproduction can be further defined as producing more, sooner or faster than what is necessary. Elimination of overproduction is a large factor in Just-In-Time systems that many manufacturers are focusing on. Just-in-time has a goal of eliminating inventory and producing or ordering material to arrive just in time for the operation that it is needed in.
Batch size is a large factor to consider when looking at overproduction. It is important to not produce too many parts – this leads to storing the excess parts in inventory for an excessive amount of time. However, in an aerospace machining environment the complexity of the parts is prohibitive to a true just-in-time system. When a part may take 6-8 weeks to manufacture and only a small amount of the parts are needed each week to create a new batch for every shipment would necessitate setting up a new batch each week and having multiple batches open at the same time. The logistics of tracking all of these batches combined with the costs and time of setting up a machine each week for the same part would be prohibitive. In addition to the setups and the logistics, material orders would necessarily be smaller and more frequent which would eliminate cost savings in ordering and require more time in purchasing and receiving material. Of course a production facility can avoid many of these pitfalls by having specially made machines that are dedicated to a certain process or part. In a high mix environment, machines tend to be needed for many different parts and cannot be dedicated to a select group of part.
Instead for a high-mix low volume aerospace machining facility, selecting the right batch size includes factoring in the setup costs and the lead time to create a batch that is a reasonable multiple of an individual shipment. In the above example it may be seen that a batch that is the equivalent of 10 weeks of shipments is the optimum size to reduce overproduction and minimize inventory storage time as well. The key is to account for holding costs, batch setup costs, and the estimated demand on a given machined part. Our ERP system, Job Manager 2, has a module to handle these calculations and give a suggested batch size in order to lower the overproduction to the lowest feasible amount. Selecting the right batch size is of paramount importance in attempting a lean operation in an aerospace machining environment that tends to have high mix and low volume production.
CNC Industries solves the problem of overproduction waste through efficient information handling and analysis. We have strong visualizations of our production and inventory and we regularly examine our production to ensure optimum batch size. Our ERP system both handles the batch size determination and the scheduling of the new batches to ensure that parts are produced at the right time and with the right quantity. When maintaining a Kan-Ban System for our aerospace customers it is vital that we both maintain enough inventory to handle their surges in demand, as well as minimize our batch size to allow us to produce the wide variety of parts that are requested.
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CNC Industries is a Fort Wayne, Indiana based machine shop specializing in precision CNC machining, fabrication and assembly of application-critical and custom machined parts for the Aerospace, Defense, Medical, Industrial and Transportation markets. The company presently employs approximately 55 people.
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