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Analyzing The Benefits of Lean Manufacturing and Value Stream Mapping Via Simulation A Process Sector Case Study
Analyzing The Benefits of Lean Manufacturing and Value Stream Mapping Via Simulation A Process Sector Case Study
Abstract
The ‘‘lean’’ approach has been applied more frequently in discrete manufacturing than in the continuous/process sector,
mainly because of several perceived barriers in the latter environment that have caused managers to be reluctant to make
the required commitment. We describe a case where lean principles were adapted for the process sector for application at a
large integrated steel mill. Value stream mapping was the main tool used to identify the opportunities for various lean
techniques. We also describe a simulation model that was developed to contrast the ‘‘before’’ and ‘‘after’’ scenarios in
detail, in order to illustrate to managers potential benefits such as reduced production lead-time and lower work-in-process
inventory.
r 2006 Elsevier B.V. All rights reserved.
Keywords: Lean manufacturing; Value stream mapping; Simulation; Process industries; Steel
0925-5273/$ - see front matter r 2006 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2006.09.009
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224 F.A. Abdulmalek, J. Rajgopal / Int. J. Production Economics 107 (2007) 223–236
this does not mean that the approach is completely ufacturing.’’ The system focused on pinpointing
inapplicable; for example, Ahmad et al. (2005), the major sources of waste, and then using tools
Melton (2005), Radnor (2000), Cook and Rogowski such as JIT, production smoothing, setup reduction
(1996), and Billesbach (1994). Abdullah et al. (2002) and others to eliminate the waste. A very brief
and Abdelmalek et al. (2006) examine aspects of description of the most common lean tools is
continuous production that are amenable to lean given below (Monden, 1998; Feld, 2000; Nahmias,
techniques and present a classification scheme to 2001); the interested reader is referred to one of the
guide lean implementation in this sector. The many books on lean manufacturing for more
objective of this paper is to use a case-based details:
approach to demonstrate how lean manufacturing
tools when used appropriately, can help the process Cellular manufacturing: Organizes the entire
industry eliminate waste, maintain better inventory process for a particular product or similar
control, improve product quality, and obtain better products into a group (or ‘‘cell’’), including all
overall financial and operational control. A large the necessary machines, equipment and opera-
integrated steel mill is used to illustrate the tors. Resources within cells are arranged to easily
approach followed. Since some of the information facilitate all operations.
is confidential, the company is referred to as AB Just-in-time (JIT): A system where a customer
steel (or ABS) throughout this paper. In our initiates demand, and the demand is then
approach, value stream mapping (VSM) is first transmitted backward from the final assembly
used to map the current operating state for ABS. all the way to raw material, thus ‘‘pulling’’ all
This map is used to identify sources of waste and to requirements just when they are required.
identify lean tools for reducing the waste. A future Kanbans: A signaling system for implementing
state map is then developed for the system with lean JIT production.
tools applied to it. Since the implementation of the Total preventive maintenance (TPM): Workers
recommendations is likely to be both expensive and carry out regular equipment maintenance to
time-consuming, we develop a simulation model for detect any anomalies. The focus is changed from
the managers at ABS in order to quantify the fixing breakdowns to preventing them. Since
benefits gained from using lean tools and techni- operators are the closest to the machines, they
ques. are included in maintenance and monitoring
activities in order to prevent and provide warning
2. Background of malfunctions.
Setup time reduction: Continuously try to reduce
We begin by providing a brief overview of the the setup time on a machine.
principles used in this work, followed by some Total quality management (TQM): A system of
background information on the company where the continuous improvement employing participative
work was conducted. management that is centered on the needs of
customers. Key components are employee in-
2.1. Overview of lean manufacturing and its tools volvement and training, problem-solving teams,
statistical methods, long-term goals, and recogni-
After World War II Japanese manufacturers were tion that inefficiencies are produced by the
faced with vast shortages of material, financial, and system, not people.
human resources. These conditions resulted in 5S: Focuses on effective work place organization
the birth of the ‘‘lean’’ manufacturing concept and standardized work procedures.
(Womack et al., 1990). Kiichiro Toyoda, the
president of Toyota Motor Company at the time,
recognized that American automakers of that era
were out-producing their Japanese counterparts by 2.2. Overview of VSM
a factor of about ten. Early Japanese industrial
leaders such as Toyoda, Shigeo Shingo, and Taiichi A value stream is a collection of all actions (value-
Ohno responded by devising a new, disciplined, added as well as non-value-added) that are required
process-oriented system, which is known today as to bring a product (or a group of products that use
the ‘‘Toyota Production System,’’ or ‘‘Lean Man- the same resources) through the main flows, starting
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F.A. Abdulmalek, J. Rajgopal / Int. J. Production Economics 107 (2007) 223–236 225
with raw material and ending with the customer these. As a result, management decisions on
(Rother and Shook, 1999). These actions consider implementing lean manufacturing often come down
the flow of both information and materials within to their ‘‘belief’’ in lean manufacturing, reported
the overall supply chain. The ultimate goal of VSM results of others who have implemented lean
is to identify all types of waste in the value techniques, and heuristic rules of thumb on the
stream and to take steps to try and eliminate these expected payback. For many managers this is
(Rother and Shook, 1999). While researchers insufficient justification, and lacks the quantifiable
have developed a number of tools to optimize evidence needed to convince them to adopt lean
individual operations within a supply chain, most of (Detty and Yingling, 2000). This raises the question
these tools fall short in linking and visualizing the of how we can make lean and VSM more viable.
nature of the material and information flow While in some situations the future state map can
throughout the company’s entire supply chain. be evaluated with relatively modest effort, it is not
Taking the value stream viewpoint means working as easy to do so in many others. For example,
on the big picture and not individual processes. predicting inventory levels throughout the produc-
VSM creates a common basis for the production tion process is usually impossible with only a future
process, thus facilitating more thoughtful decisions state map, because with a static model one cannot
to improve the value stream (McDonald et al., observe how inventory levels will vary for different
2002). scenarios (McDonald et al., 2002). In general, we
VSM is a pencil and paper tool, which is created need a complementary tool with VSM that can
using a predefined set of standardized icons (the quantify the gains during the early planning and
reader is referred to Rother and Shook, 1999 for assessment stages. An obvious tool is simulation,
details). The first step is to choose a particular which is capable of generating resource require-
product or product family as the target for ments and performance statistics whilst remaining
improvement. The next step is to draw a current flexible to specific organizational details. It can be
state map that is essentially a snapshot capturing used to handle uncertainty and create dynamic
how things are currently being done. This is views of inventory levels, lead-times, and machine
accomplished while walking along the actual utilization for different future state maps. This
process, and provides one with a basis for analyzing enables the quantification of payback derived from
the system and identifying its weaknesses. The third using the principles of lean manufacturing, and
step in VSM is to create the future state map, which the impact of the latter on the total system. The
is a picture of how the system should look after the information provided by the simulation can enable
inefficiencies in it have been removed. Creating a management to compare the expected performance
future state map is done by answering a set of of the lean system relative to that of the existing
questions on issues related to efficiency, and on system it is designed to replace (Detty and Yingling,
technical implementation related to the use of lean 2000), and assuming that this is significantly super-
tools. This map then becomes the basis for making ior, it provides a convincing basis for the adoption
the necessary changes to the system. of lean.
For companies that have long relied on tradi- ABS produces several grades of steel that are used
tional approaches to their manufacturing systems, it primarily in appliance manufacturing. The focus of
is often difficult to gain from management the this VSM is on one product family: annealed
commitment required to implement lean manufac- products, of which there are three types produced;
turing. Doing so is hard because of differences in a open coil annealed, hydrogen batch annealed, and
number of aspects including raw material procure- continuous annealed. Average customer demand
ment, inventory management, employee manage- was estimated as 76,500 tons per month, and the
ment, and production control. For traditional distribution by product is as follows:
manufacturers, the reluctance to implement many
lean ideas arises because their distinctive require- 8500 tons per month of open coil (OCA),
ments often make it hard to predict the magnitude 10,000 tons per month of continuous (CA),
of the gains that can be achieved by implementing 58,000 tons per month of hydrogen batch (HBA).
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226 F.A. Abdulmalek, J. Rajgopal / Int. J. Production Economics 107 (2007) 223–236
The processes for this product family start with a shutdowns and runs a three-shift operation in all
blast furnace where on a daily basis raw material production departments except for continuous
including skips of iron ore, coke, and limestone are annealing, which runs two shifts. Each shift is 8 h
charged at the top of the furnace. The melted raw long.
material is then poured into sub-ladles (essentially,
large bins for holding liquid iron) from the tap hole 3. VSM: current state map
at the bottom of the furnace. The liquid iron travels
in the sub-ladle to the basic oxygen process (BOP) All data for the current state map were collected
where scrap is added and oxygen is blown in to burn according to the approach recommended by Rother
off excess carbon and obtain the initial form of and Shook (1999). Data collection for the material
liquid steel. Depending on the grade of the final steel flow started at the shipping department, and worked
to be produced this initial liquid steel can go either backward all the way to the blast furnace process,
to a ladle metallurgical facility (LMF) or a Degasser gathering snapshot data such as inventory levels
to further refine and remove impurities from the before each process, process cycle times (CTs),
liquid steel. The refined liquid steel then goes to a number of workers, and changeover (CO) times.
dual-strand continuous caster where steel slabs are Fig. 1 shows the current state map that was
cast in accordance with specific customer widths. constructed; the small boxes in the map represent
The hot slabs are then shipped on railroad and rack the process and the number inside the box is the
cars from the continuous caster process to the number of workers at each process. Also, each
finishing mill facility for further refining processes, process has a data box below, which contains the
which include the hot strip mill (HSM), pickling, process CT, machine reliability (MR), the number
cold reduction (CR), annealing (OCA, HBA or of shifts, and the CO time. It should be noted that
CA), temper mill (TM), and finally, shipping. this data was collected whilst walking the shop floor
At ABS the business planning department re- and talking to the foreman and operators at each
ceives demands from two types of customers: repeat workstation. The processing and set-up times are all
and spot business (open market). The repeat based on the average of historical data.
demand is received on a weekly basis, where major Note that there are two inventory triangles ahead
ABS customers call or send through EDI their of some processes, one for annealed products and
requirements for the weeks ahead. Since these are one for all other products. This simply indicates that
committed customers the quantity and the order other products could be scheduled to use the process
delivery time are more or less fixed. On the other in addition to the annealed products considered
hand, spot customers generate daily schedules. herein, so that the total inventory is actually higher
There are currently two separate scheduling groups: than what is shown. After collecting all the
one is for the hot end liquid steel, which usually information and material flows, they are connected
includes the blast furnace and caster, and the second as indicated by arrows in the map, representing how
is for the finishing mill, which handles the product each workstation receives its schedule from business
from the HSM through shipping. When an order planning.
arrives, business planning enters it into the planning The timeline at the bottom of the current state
system, estimates the date by which they think they map in Fig. 1 has two components. The first
can complete it, and rough-schedule orders on the component is the production waiting time (in days),
production units on a weekly basis. Next, they affix which is obtained by summing the lead-time
a routing on the order and assign a ‘‘plan week’’ to numbers from each inventory triangle before each
it. This schedule on the operating side becomes the process. The time for one inventory triangle is
basis to monitor day-by-day and week-by-week calculated by dividing the inventory quantity into
increments against how closely they are in accor- the daily customer requirements. For example, the
dance with the schedule. The schedules can then be lead-time for the inventory triangle ahead of
updated further on an as-needed basis to daily or pickling is 17.65 days; this is calculated by dividing
even bi-daily schedules. ABS uses three types of 45,000 tons (the total inventory ahead of the
transportation modes: truck, rail, and barge. The pickling) by 2550 (the daily average demand rate
shipments go to different customers on a daily or for the annealed product). The total observed value
weekly basis. The plant works on a continuous basis for the waiting time is around 46 days. Other than
for 24 h a day all year long except for major about three days that are required for the coils to
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F.A. Abdulmalek, J. Rajgopal / Int. J. Production Economics 107 (2007) 223–236 227
cool down after processing at the HSM, the rest of map, where target areas for improvement start to
this time is non-value added time. Note that we do show up. Looking at the current state map for ABS
not consider the amount of raw material at the several things stand out: (a) large inventories, (b) the
beginning of the production, since ABS owns the difference between the total production lead-time
mines and raw material sources, so that and raw (around 51 days) and the value added time (5 days),
material is not an issue for them. which is under 10% of the total, and (c) each
The second element of the timeline is the process producing to its own schedule. Inventory
processing (or value-added) time, which is about and lead time may be viewed as two related issues
two days. This time is calculated by adding the since the more the inventory, the longer any item
processing time for each process in the value stream. must wait for its turn and thus, the longer the lead
The CT for each process is the average CT, which time. In creating the ideal future state map we try to
was determined by using actual data from the identify lean manufacturing tools to drive both of
company. Thus the total lead time is around 48 these down, while looking at the schedule across the
days. If we are conservative and include the entire value stream. We follow a systematic
approximately three days required for the coils to procedure where we try to answer a series of
cool down after processing at the HSM we get a structured questions; this allows us to come up with
total of about five days (429,030 s) of value-added an ideal future state map that will help in eliminat-
time; this works out to slightly over 10% of the total ing or at least reducing different types of waste in
production lead time. the current manufacturing system.
Question 1. What is the takt time?
4. VSM: future state map
‘‘Takt time’’ refers to the rate at which customers
The process of defining and describing the future are buying products from the production line; i.e.,
state map starts while developing the current state the unit production rate that is needed to match
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228 F.A. Abdulmalek, J. Rajgopal / Int. J. Production Economics 107 (2007) 223–236
either the pickle line can slow its production rate to assembly line where every product starts to flow
match that of CR or it should be halted. The first rather than stop and start.
option is costly in a steel mill, while the second is
almost always infeasible. Therefore if the super- Question 5. What single point in the production
market at the pickle line is full our recommendation chain (the ‘‘pacemaker’’ process) should ABS
is that it be switched to satisfy other product types schedule?
until the time of the next order for the annealed
product is reached. In doing so we prevent To stop overproduction at any workstation in the
producing more than the capacity of the super- value stream, only one point in the supplier-to-
market and also satisfy requirements for other customer value stream needs to be scheduled. This
product types, while avoiding shutting down the point is called the pacemaker process, because this
pickle line. point sets the pace of production for all the
In the following questions we will address how a upstream processes and ties the downstream and
production order will be released and the time upstream processes together. Every workstation
increment at which those orders will be released. upstream produces by a pull signal from the next
downstream process and flows downstream from
Question 4. Where can continuous flow be used?
the pacemaker must occur in a continuous manner.
Manufacturing assets in the steel industry are The pacemaker is typically the continuous flow
such that they cannot easily be moved into the process that is farthest downstream in the value
classical cellular arrangement, and batch sizes are stream, so there should be no supermarket (other
typically fixed. However, the steel industry does than finished goods) downstream of it (Rother and
have a significant amount of continuous flow Shook, 1999).
manufacturing at the hot end. For example, starting For ABS, since the hot end is located in a
from the blast furnace through the BOP, the different facility than the finishing mill, the schedul-
degasser/LMF, and finally the continuous caster, ing of a single process is unrealistic. For this reason
the flow is continuous since the liquid steel moves in one schedule will be released to the continuous
a ladle in a batch size of one. At the finishing mill caster to set the base for the hot end production
however, the slab can move through one of many area and the pacemaker process for the finishing
possible routings using expensive general purpose mill is the TM; this is the final process and sets the
reduction equipment, which precludes cellular flow. base for the entire production at the finishing mill.
Different CT and down times of the workstations
also make it difficult to introduce continuous flow, Question 6. How should ABS level the production
and many of the workstations are restricted to at the pacemaker process?
different schedules depending on width, gauge and
product type, so that it is unrealistic to join these The basis for addressing this question is to
workstations at the finishing mill to obtain a distribute the production of the three annealing
continuous flow. Therefore, the focus at the cold processes uniformly over the production time at the
end should be on developing a system to enable pull pacemaker process. This means that several batches
by the customer, rather than continuous flow. In of the same sequence must be scheduled. This will
most steel mills, the hot end (liquid steel) and the allow ABS to avoid long lead-times, large amounts
finishing mill (solid steel) are located in the same of in-process and finished goods inventory, quality
area; however, at ABS the two are actually about problems, and in general, help them avoid wastes
nine miles apart, purely based on historical circum- related to overproduction. We consolidate the
stances. This actually enables a natural decoupling scheduling width and gauge for the coils so that
of the two phases and allows a pull system to be we deal with only three different products; adjust-
incorporated. ment for width and gauge within a particular type
The introduction of supermarkets that are con- can be made as required. The key idea is for ABS to
trolled by a kanban system forces the entire cold end send a schedule to the pacemaker process (TM) that
to pace every workstation to the speed of the ensures that each product is produced at a constant
bottleneck, which as the current state map indicates rate. We use a simple formula (Monden, 1998) to
is between the pickling line and the CR mill. Thus determine the product sequence that levels the mix
the mill begins to take on the characteristics of an and has a constant rate for the three different
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230 F.A. Abdulmalek, J. Rajgopal / Int. J. Production Economics 107 (2007) 223–236
inventory shortages created by work stoppage for 5.3. Setup time reduction
maintenance result in minimal disruption of flow.
As an example, when the pickle line is maintained The two levels for the setup reduction factor are
then the kanbans in its supermarket (the area ahead also labeled ‘‘without’’ and ‘‘with.’’ The ‘‘without’’
of cold rolling) would empty; therefore, the next level models the current situation at ABS with setup
maintenance operation is scheduled on the cold mill. times the same as they are now, while ‘‘with’’
This permits the pickle line to restock its super- denotes reduced setup times. Again, the changeover
market, and so on. reduction times were selected based on optimistic
TPM can significantly reduce random machine but reasonable estimates, with values that are
breakdowns and in turn, inventory and lead-time. It realistic for ABS to drive their CO time down.
is usually defined in terms of an increase in overall These were based on extensive discussions with floor
equipment effectiveness (OEE), which in turn is a personnel including operators and engineers and are
function of down time and other production losses summarized in Table 5. For example, we analyze a
(Nakajima, 1989). Suehiro (1992) states that ma- setup time reduction for the HSM from 35 to 10 min
chine breakdowns and minor stoppages account for for the backup rolls and 120–20 min for the work
20–30% of loss in OEE; Ljungberg (1998) also rolls. For CR the reductions analyzed were from 15
reports a 20% figure for the same. Volvo Gent to 5 min for the backup rolls and 120–20 min for the
reports that the OEE in the company increased from work rolls. Other setup times reductions are as
66% to 69% before implementing TPM to 90% found in Table 5.
after TPM where most of the increase is a result of
the elimination of machine breakdowns and minor
stoppages (Ljungberg, 1998). Similarly, Avon Cos- 6. The simulation model
metics report significant increase of OEE after TPM
was implemented at its pump spray line (Ljungberg, To evaluate potential gains based on the im-
1998). Based on this experience we assume a 20% plementation of the tools described in Section 5 and
increase in OEE at ABS. based on the questions analyzed in Section 4, a
Table 4 shows proposed TPM times at the detailed simulation model was developed using
finishing mill. The maintenance times were chosen System Modeling Corporation’s Arena 5 software.
based on optimistic but reasonable estimates after We began with a model for the current system,
conversations with floor personnel. One issue that which was later modified to model the proposed
had to be taken into consideration with the future state. Before evaluating the future state
proposed TPM program is that the time for each considerable effort was expended to verify and
of the different maintenance tasks for a given validate the model for the current system. Verifica-
process should not exceed the total proposed tion is the process that ensures that the simulation
(reduced) maintenance downtime. This issue was model mimics the real system (Law and Kelton,
discussed with ABS and it was confirmed that the 1991). Since this model is large with many types of
proposed downtime should be feasible. entities (grades and products) in the system,
verification required that every kind of product be
traced and checked to ensure that it follows its
required sequence. In order to see if the model
Table 5
Table 4 Proposed setup reduction times at ABS
Proposed TPM times at finishing mill
Process Setup Times (min)
Process Maintenance Day
Work Rolls Backup Rolls
Uptime (days) Downtime (min)
Current Proposed Current Proposed
HSM 7 240 Monday
8400 Pickle 7 240 Tuesday Hot strip mill 120 20 35 10
6400 Pickle 7 240 Wednesday Pickling 15 5 – –
CRM 7 240 Thursday Cold reduction 120 20 15 5
TM 7 240 Friday Temper mill 90 20 7 5
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represents the real system adequately, the first step 7. Simulation results and assessment
was to check the code and verify the model logic
and the experimental conditions; followed by a Once the simulation model for the current system
careful trace study where various entities were was verified and validated it was used to evaluate
traced from the point of creation until the point of the future state map and assess the relative impact
disposal from the system. Finally, a detailed of adopting the lean approach detailed in the
animation was used to further verify that the model previous two sections. It is worth mentioning that
sufficiently replicated the real system. there are other lean techniques like 5S and visual
Validation of the model calls for comparing systems, the benefits from which are not directly
outputs of the simulation to those from the actual quantifiable and cannot be modeled as part of a
system. Measures that we included were inventory simulation model. These have therefore not been
at the finishing mill and the total time in the system, included in our analysis, but these techniques could
for both of which actual data was available. The easily be applied at numerous places within the
simulation model was run for a one-year period, production system at ABS, and can be expected to
which is equivalent to an expected 11,520 heats further increase the potential gains from the
(furnace batches) out of the BOP, so that the model adoption of lean.
can be validated when it is in steady state. Table 6 Based upon our initial observations from the
shows the actual values and the simulation results current state map and discussions with managers at
that were obtained by running the model. It should ABS it was decided that two primary performance
be noted that the figures represent average values. measures would be examined: production lead-time
From the table it is clear that the numerical outputs and work-in-process inventory. The latter is eval-
from the simulation are all within the range of the uated as the sum of the WIP starting at the pickling
actual data. line and ending at the TM; only this portion of the
Our simulation is non-terminating (Law and WIP is considered because the systems are identical
Kelton, 1991) but initial conditions do influence up to the push-pull boundary point at the pickling
the initial dynamics of the system. Starting with an line. As mentioned earlier for the hybrid production
empty system at time zero, a transient (warm up) system the WIP inventory is just the sum of the
period was used for the system to load itself with average utilizations of the kanban resources.
entities and subsequently reach steady state. The Two sets of factorial design experiments were ran
warm up period for our simulation model was to study the effect of the three factors on the
established by carrying out five replications with production lead-time and WIP inventory, respec-
each having a run length of 1 year (11,520 heats tively. Each factor had two levels, and for each level-
from the BOP). The five replications examined factor combination the experiment is replicated five
successive observations of various performance times using the simulation model and is completely
measures. For example, Fig. 2 shows the plot for randomized. Thus, eight simulation runs were carried
the total work in process inventory in the system as out, each with five different replications. Analysis of
a function of time. Based on this type of analysis, a variance (ANOVA) was used to formally study the
warm up period of 60,000 minutes (42 days) was results and determine the significance and magnitude
adopted. of all effects and interactions. The statistical analysis
was done using Minitab with outputs displayed in
Table 7. The p-values indicate that for lead-time the
Table 6
production system and TPM are significant, while
Performance measures: actual vs. simulation
setup reduction, and all two- and three-way interac-
Performance measure Actual range Simulation tions are not.
For the WIP inventory, once again the main
Entity lead-time [30–49 days] 34 days
Hot strip mill inventory [1000–5000] 3703 slabs
effects of the production system and TPM are
Cold mill inventory [250–2000] 1755 coils significant. Interestingly, the table shows that the
HBA inventory [250–1750] 620 coils two-way interaction between the production system
CA inventory [100–750] 121 coils and TPM is also significant here. To better
OCA inventory [100–750] 636 coils understand this interaction, Fig. 3 presents a plot
Temper mill inventory [150–750] 653 coils
Number of coils per month [9000–9800] 9466 coils
of the production system-TPM interaction, the
significance of which is indicated by the lack of
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10
10
9
9
8
8
7
7
6
Avg WIP (X103)
Transient Period
6
5
5
4
4
3
3
2
2
1
1
0
0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 180 190 200
Simulation Time (X103)
Fig. 2. Transient period analysis for the average WIP inventory for five replications.
parallelism of the lines. In the figure, the lower solid inventory, whereas going from no TPM to TPM
line represents the hybrid production system and the when the production system is a push system will
upper dashed line represents the push system. The decrease the level of WIP inventory. An intuitive
interpretation of the interaction graph is that going explanation for this is that the WIP inventory in the
from no TPM to TPM when the production system pull system is dependent on the number of kanban
is a hybrid will not change the level of WIP cards that is predetermined before the run. This
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F.A. Abdulmalek, J. Rajgopal / Int. J. Production Economics 107 (2007) 223–236 235
makes the change in WIP inventory for the hybrid effects on reducing both lead-times and WIP
production system (WIP inventory is the sum of the inventory; for this particular instance setup reduc-
average utilization of the kanbans, which are tion did not have a similar effect. However, this
modeled as resources) insignificant when using does not necessarily mean that it is not a valuable
TPM. Even though TPM was found to be lean tool for ABS. Rather, the effect of the hybrid
significant, the kanban pull system is so instru- system and TPM outweigh the advantages of setup
mental in reducing the WIP inventory that the effect reduction in this particular case.
of TPM is relatively small.
Based upon our the simulation experiment the 8. The future state map revisited
actual magnitudes of the improvements in the two
selected performance measures were significant. The The future state map for the annealed product for
results indicate that using a hybrid production ABS is shown in Fig. 4. The results of the foregoing
system and TPM could potentially reduce the total analysis are documented on the future state map,
production lead-time from its current value of 48 and the proposed lean tools are shown as kaizen
days to under 15 days, a reduction of almost 70%. bursts to highlight the improvement areas. Also
Setup reductions in the amounts listed in Table 5 shown are the supermarkets between each process
does not seem to have any significant additional after the HSM. As we can see in the map, ABS
effect on lead-time. In terms of the WIP inventory, receives two schedules only; one at the continuous
the experiment revealed that the new system could caster for the push system at the hot end and the
potentially drive down the current average inven- other one at the TM for the pull system at the
tory level across all stations between the pickle line finishing end. With the new improvements at ABS
and the TM from the current value of about 96 coils the value added time (5 days) is up from approxi-
to around 10 coils; a reduction of almost 90%. mately one-tenth of the production lead-time in the
In summary, the results indicate that a hybrid old system, to approximately one-third of the total
production system with TPM can have enormous production lead-time of slightly under 15 days