Reducing manufacturing work in process (WIP) leads to higher liquidity, better cash flow, enhanced customer service and diminished business risks. Large benefits can be gained when WIP is reduced significantly, focusing on raw materials as well as finished products. WIP reduction could be accomplished through execution of a Lean Six Sigma project.
WIP can affect various areas in the manufacturing process, like labor productivity and line efficiency. This is especially important for bottlenecks in a manufacturing operation. However, there are techniques that can aid in reducing WIP. Five of these techniques for the reduction of manufacturing WIP will now be described:
1. Forecasting and WIP Levels
It is an excellent practice to track inventory and WIP levels so manufacturing operations operate smoothly. What is desired is to determine the lowest batch sizes and WIP levels to maintain a good operational flow. A big hurdle to overcome is making appropriate judgments according to demand. Tracking WIP using a 30,000-foot-level predictive performance reporting format helps with this decision-making process.
Accurate forecasting promotes awareness, which leads to sound planning. The outcome desired is a reduction in buffer sizes as there will be adequate parts to maintain continuous flow without the danger of over-stocking. Hence, one needs to obtain updated visible WIP level data regularly with the aid of a system that is simple and can be revised easily depending on the requirements.
2. Sharing Capacity
Manufacturing operations usually involve higher capacities relative to the required demand from line production. Organizations need to understand where bottlenecks exist and then have a policy where they can take a portion of the bottleneck operation to the adjacent operations that have higher levels of capacity. Organizations should sustain sharing capacity at particular intervals. The challenge that might occur is that some operators or organizational structure/policies may discourage this way of thinking.
3. Adding Machines and Improving Workforce
This is the most common way to trim down WIP at bottleneck manufacturing operations. Yet, it is not suggested to opt for these techniques initially as other techniques might achieve work WIP reduction without encountering additional capital expenses. If one still finds that the addition of machines is not adequate, where the potential capacity is lower than the targeted output need of a specific line, adding manpower or machines may be appropriate; e.g., like adding sewing machines in a particular sewing line. The same consideration is applicable with identical manufacturing lines.
Implementing this strategy could have a very large positive affect in WIP levels reduction. Yet, one needs to ensure that the capacity of each personnel or machine is calculated according to the operation demands. It needs to be noted that the addition of equipment could reduce the productivity of operations.
4. Just in Time Production (JIT)
Just in time production is closely associated to cellular manufacturing. With this technique, an organization will be able to manufacture the products that the clients want at the desired quantities, just when they need them. JIT can balance production by spreading the manufacturing process evenly throughout a certain time period to cultivate seamless flow between the different processes involved. At times, there could be a need to produce various products on one line — JIT offers an effective means for manufacturing product mix without encountering major difficulties.
JIT depends on the utilization of control cues in inventory to indicate the need to produce products from raw materials. There are also cases where reusable parts are put into used to get what is needed. A great number of manufacturers that practice lean manufacturing necessitate JIT to deliver components. The outcome can be a very large reduction in WIP and other issues like over production and inaccurate inventory.
5. Time Saving and Allocating the Right Operator
Select operators who have the best skill set for each operation, especially the bottleneck, so that workflow is executed smoothly and effectively. It is also important to have good training for operational personnel. One must understand that everyone is not the best person for every job. If someone does not perform satisfactory when there is satisfactory training, consideration should be given to transferring that person to another position or perhaps termination if there is no other position suitable for that person.
Benefiting from WIP Reduction
Methodologies that save time can be used to positively impact WIP levels. This can be accomplished through extra machines or making process improvements that reduce defects and produce more at a given time, among other things. Company policies can also have an impact — for example, a company policy that encourages departments to work well together for the benefit of the enterprise as a whole.
By reducing WIP levels in a synchronized and controlled manner, organizations can gain much. Problems can be revealed quickly and resolved timely, which benefit the business as a whole. A Lean Six Sigma project is a structured approach that can be used to determine what can be done with processes and policies to reduce WIP.