Determining optimum level of Work in Progress (WIP) in between the process?

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chan0192

I'm trying to find an equation to calculate out the ideal optimum level of WIP in between the process i.e. buffer? What is it based on? For both with variability and without variability cases. Thank you so much!!!
 

BradM

Leader
Admin
Re: How to determine optimum level of WIP in between the process?

Hello, there!

What kind of process do you have? Let's assume you have a three stage process. Are you wanting to know the level of WIP in stage 2 so that stage 3 is never idle? Can stage 1 always provide adequate materials to stage 2?

How long does the work take in stage 1, stage 2, and stage 3?

Sorry for all the questions. I'm just trying to get a feel for your process.:)
 
C

chan0192

Re: How to determine optimum level of WIP in between the process?

Hello, there!

What kind of process do you have? Let's assume you have a three stage process. Are you wanting to know the level of WIP in stage 2 so that stage 3 is never idle? Can stage 1 always provide adequate materials to stage 2?

How long does the work take in stage 1, stage 2, and stage 3?

Sorry for all the questions. I'm just trying to get a feel for your process.:)
Hi my process is a needle part production. The production line is quite a long line. However, I have to determine amount of buffer in between each process so that the inventory can flow through the system. Machines are not nesscessary running all the time just that the inventory must be flowing in the system. I'll have to construct the ideal VSM first then later introduce all the variability i.e. downtime and etc. Then used to compare with the current VSM to evaluate performance and find opportunities to improve.

Let's assume that there are 3 stages of processes, with the cycle time of 300 mins, 250 mins and 400 mins. Also assume that all process and provide adequare for the next process. I need to find out how much I need to keep WIP from process 1 for process 2 and also WIP from process 2 for process 3?
Is there any fomula to apply to calculate it??
 

BradM

Leader
Admin
Re: How to determine optimum level of WIP in between the process?

I think Little's Law will help you. The formula is:

Cycle Time= (Work In Progress)/ThroughPut

Here are some additional links:

http://en.wikipedia.org/wiki/Little's_law


***DEAD LINK REMOVED***

You know your cycle time, and you should know how much you can produce at each station. Thus, you can determine proper WIP levels.
 
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W

wmarhel

Re: How to determine optimum level of WIP in between the process?

I'm trying to find an equation to calculate out the ideal optimum level of WIP in between the process i.e. buffer? What is it based on? For both with variability and without variability cases. Thank you so much!!!

I refer you to Demand Flow Technology (DFT) from JCIT for the answer. DFT would refer to the required buffer level between two processes/stations/etc.; as an IPK or In-Process Kanban. This is their method used to allow production to continue moving while covering any variation in cycle times of the processes.

Please check out the attached spreadsheet which can calculate the required buffer sizes for assembly lines that aren't perfectly equal. In this sheet for example, there needs to be a buffer of 258 units between stations two and three in order to meet the required takt time.

If you want to play around with it, just enter data into the blue fields and hit the "Calculate" button. You will need to allow macros to run, but all this accomplishes is triggering calculation cycle.

Wayne
 

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  • LineBalancing Sheet_Rev1-example.xls
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L

leftysteven

Re: How to determine optimum level of WIP in between the process?

I would use littles law
Process lead time = work in process / exit rate

the exit rate is equal to the output of the process (the slowest process step).
you can modify this equation to determine the amount of wip you need to stablize your process lead time. Process lead time X exit rate = wip cap. You need to determine the PLT that you want and then determine the maximum amount of wip you should have. Design your process to meet the wip cap.

Example: you want a 5 day process lead time. Your process is capable of producing 100 units a day.

5 days X 100 units/ per day = Wip Cap = 500 units.

As long as you have less than 500 units, you can meet your PLT goal.
 
W

wmarhel

I've had a couple of e-mails over the past few days and thought I'd post the questions and responses in case anyone else had questions regarding my spreadsheet in Post #5 of this thread. Quotes by "anonymous" are those questions posed by the sender.

MESSAGE #1

anonymous said:
You mentioned 258 unites between station 2 and 3, so do you mean those units need to be built up to be stored for next operation? so how would you do that if there is no resource set up or station set up to build that WIP? where is this WIP coming from? if station 2 is taking long? a little confused with assigning kanban levels...could you clarify this for me?

I found (Post #5 in this thread) I think your referencing. You are correct, there would need to be a 258 piece buffer between these stations in order to address the level of imbalance in the assembly line.

As far as where that buffer comes from, it would probably require overtime. If a feeder line were present or plausible, then the buffer might not be needed. Please keep in mind that this would not be a permanent fix, but put in place to meet takt for the line.

What this 258 piece buffer describes is a line that is not balanced, and one in which no solution might be available at the time. A buffer between stations is solely used to allow the line to meet their daily takt. At the end of each day (assuming one shift), that buffer should be zero; and would require replenishment on a second or third shift.

Let me know if that clarifies the posting. This model is based on Demand Flow Technology (DFT) concepts and takes a more mathematical approach to solving line imbalances.


MESSAGE #2

anonymous said:
Thanks, yes it does clarify it, but i have one question regarding the data tab on the excel file. the column "build qty's", what does that represent? the hours extra to build the buffer stock? so this would determine what overtime or if an extra shift is required to catch up with the imbalance?

You are correct, any imbalance present in the line would be represented at the bottom with a corresponding level of buffer inventory, and the associated time to build that stock.


anonymous said:
there are some processes that require this buffer stock (kanban i would think its called) so if so, then we may need to implement overtime. For purchase components, i would use a 2 bin system with a replenishment cycle to cover any shorts that occur. Am i on the right track here?

Ah, but why do they require buffer stock? Looking at production processes they can be (from least desired to most desired):

Batch ---> Pull ---> FIFO Flow ---> Flow

Reference my post here on this topic.

Kanban is used because there is an absence of material/information flow (and yes, it creates a buffer of inventory driven by replenishment time). Kanban is in essence a "waste". It should be used to create a connection between processes, but the use of it shouldn't be the ultimate goal. This is why the trick to using kanban is to constantly look for ways to remove cards or lower card quantities in the system. At some point you shouldn't have any cards which represents you attainment of "flow".

The two-bin system is usually saved for internal processes and consumption/replenishment. If you want to implement kanban with a vendor you will probably have more than the two- bin/card.

Just the fact that your asking questions and thinking through this, puts you on the right track.

Regards,

Wayne
 
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