ECONOHIC-LOT SIZE METHOD

The right quantity to produce Is that which best balances the costs related to the number of production runs (setup coats)., against the costs related to the lot size (holding costs). When these costs have been properly balanced the total cost is minimised. The resulting production quantity is ttie economic lot size or economic order quantity (BOO). (21)

Q = / — — - (21) Where Q s EOQ D = Demand S = Setup Cost 10 = Carrying Cost

toe application of. this formula ie illustrated in figure 3.1 below. The BOQ is essentially where the total coat is Minimised.

%

The BOQ graph can now be modified an a h e m in figure 3.2 where the EOQ can be made to approximately equal one in theory or a very email lot siae in practice. On the graph it is shown that setup costs ore cut dramatically using setup reduction techniques. This leads to the feasibility of producing in small lots which in turn reduces carrying costs. The graph clearly implies that setup reduction is a catalyst for achieving small lot production at minimum cost.

BENEFITS OF BBDOCING SBTOP TIMES

A larger proportion of eetup error* are eliminated due to the standardisation and simplification of setups.

Operating conditions are fully regulated in advance ie. a quality item can be produced on the first run. This leads to the elimination of trial rune and therefore fetter defects are produced. By using dead stops and making adjustments during external setup. Viro Looks has almost eliminated the trial and error process required to achieve a quality workpiece, thus eliminating approximately 40% of setup time.

Simplification of setups leads to an increase in safety levels. Promex have reduced the risks of handling heavy dies by adopting suitable materials handling equipment. (26)

Housekeeping is simplified since many tools are standardised as well as unstandardised tools more functionally organised. Afrox have placed tooling cupboards on the shop floor at the GT cell for whioh the respective tooling is used. (40)

The cost of standardising setup operations and tooling ia relatively low when compared to the benefits received from productivity increases. Vlro Locks has achieved a 67%

reduction of eetup times on bottleneck machines, and have subsequently increased productivity by 10% at a ooet of approximately R6760.00

Tooling changes are quick, therefore workers have no reason to avoid them. At Bowen Engineering many setups have been simplified and reduced by over 90%, allowing operators to perform many of the setups themselves. (46)

Lower skilled workers oan be adopted for simple tool changes. Furthermore workers oaij stay with one machine for a reasonable amount of time rather than being moved around when a setup is required. This leads to workers feeling a sense of responsibility for their particular machine. At Viro Looks specific operators have been soleoted to assist with setups and have been included in the setup teams. Therefore they feel part of the programme and know more about setup reduction in the changing JIT environment.

When setups are short it la less likely for interruptions to take place eg. lunch breaks, telephone calls, other urgent tasks, etc. At Vlro Looks Idle time has effectively been eliminated since setups are now short enough to be performed between breaks.

Setup procedures are standardised, therefore known setup tlaee facilitate better production planning. Rowen

>Hng know their setup tiaes to within 5% and ire plan production more accurately. (46)

iied materials handling avoids lifting of heavy i, Promex have adopted methods for lifting and >ning of heavy dies (as shown in figure 4.8). (26)

Job security is increased einoe setup teams are responsible for reducing setup tines, and will perform advanced setups more frequently when lot sizes are reduced, Note that the setter's Job is not at risk since his job role will ba diverted to other activities, such as training of operators, reducing setups, tooling organisation, etc. At Viro Looks the time saved on setups is diverted to these activities, resulting in a shift of job definition.

Scrap is reduced since setup reduction techniques eliminate trial runs and adjustments. Also quality is improved since setups are standardised and no longer depend on individual setup skills. At Bowen Engineering the scrap level has been reduced to less than IX due to setup reduction and preventative maintenance techniques. (46)

Hell says that a programme to reduce setup times is much like any other programme of industrial engineering methods study. (2) Since much of the work of changing the setup on any equipment is a matter of making mechanical changes and revising the layout of material and items around it, much can be done to reduce setup times without resorting to advanced engineering. (2) There are no "hard and fast" rules for setup reduction, however any changes arndo to the production process with respect to setups should be simple, with changes restricted to equipment which is available and easy to understand. If the whole production process is to be altered in the future, it is advisable to get a basic idea of what the eventual system will consist of and select operations which are least likely to be disturbed by these changes. Management cannot escape the fact that future development cannot be entirely foreseen, and that revisions may have to be made. (2) The setup programme can only proceed by "doing"; failing this it is doubtful whether setup reduction will ever be implemented. (2)

A nummary of the setup reduction implementation programme discussed in this section is shown in table 4.1 with other considerations for implementation summarised in table 4.2.

Uiutrt o) Sptw BtducHw UticieaUtiHi Proortw

leplmntitlan Sle» hMriftiea

,tm t Uehnoiotf wjutnclnfl

l i Eautnt averill — iidiciiH iitftinei production

OH principle riif » / » n it

-looping of iKhlnn according to conpontnt fuilles ili? li1ies tooling orjmUitlta and allow lipreved cuntrof over setup tejoenciitg, • Brwjplo} i laally of parts into « ipecific order such that tSe change frw one toiponent U the eequonci to tfce neit is stall wd requires iloor ttiangoo.

■ htieatlng suUtr, sltple ucbim m h p>ra!M ny «U*iMiv ■ Redutlag letup tises on bottlMiecIc norfccentm Increases overall throughput and n r be used as i line balancing tecNiique, ■ Criterl/ met i t ucbines peneriting largest turnover, highest throughput, <tc >ty be used to deteriine «kich eithlnei tale priority for setup rrtuctioa.

, ^ luiflloj projrjw# 2. Triltitng •—

Setup tins

- Study activities include too i l ! concept, JIT eanofaeturlog, ) lt in the changing kisiness eavlroneent, utertlm and analysis eetheds and sotep deeonstntions,

• Consists of M setters md ogeritori who are supported by technical people, eanageewt and controllH by a prograeie facilitator, Distingulih betneefl tetirnil 1 eitorna! / aeperittne istimil y ' 1 utornil setup 7. kpfroxti te situo nduttiori \ "''x . Converting iateriul \ to eitemil tetop ' Strmllnlni Mtup oporitloM

- A Hort/tiie study is recorM using a tiie-iapse video cnen for whici t sisple pmets ci rt describing setup activities and isiocltud t l i t i is devised,

- Im lm tbrlrnu ehmfii tthrri sptnilm an be ptrlctui wter»all)f siiply by taking organisational changes, rescheduling and tooling siepllfitiUon. Emples Include tooling grouping, standardisation, preprtparatioi, Uollfi? triaspoftatioii md vtroing <yttm, - A tiiple piretc analysis Is conluctrt « riailnin; operations to rank In highest order the tiw coniuiing internal operations, this (kterublng which setup operations take priority. HodificitlMt indole setup procedure itandardisatlw, parallel operations, functional claeps, die centering techniques, functional standardisation, interertlary Jigs and eedueisation, Adjuitienti ire elieinated during internal setup by ■atittt fined settints or adjusting during external setup. - Involves farther iiprweaents to both internal and eiternal setup. UnderwMcity schgdollnt allom letup practise tiee for building skills, trying ait new ideas and mugging m setup poceAMS.

m E t.2i ftimrv cl Othtr CcmUmUmn Boenlre* for Setup Beductlw

Const ieriUonf Couents

1. Study/ietton ipproith - It If preferable tu tike ictlge toeetlitely whes an idea Is {Merited tbte to plvi continuously ini w t taU my physicil progress. 2. Ornigeeveri during a

(irotfnttlon run ' these thingeovers should te treated as setups »l*ri all tooling is pretiKtion run prepared lit idvicee duriag eitemil setup (lie. $. Dflcueeetition • All inforeation conterging the setup lust be iocuientid for others to

folio* and to act as i bisls for further leprovesant. 4. lUthlm seleetien -Use eiiller, less expensive aachlies with wpbasis m rellibility,

eiie ol nintenance, eise of setup, seitibility te ovenll production process tuA laso ol npfration. By upgrading eilsting aachino; In-hoiiH, eguipwit can be eodifled to incorporite quick setups. ■ luring initial stages of setup redactl«> sltple lodMUitlone «id tooling organisitita yield large tiee HYings at loo cost. During the final stages, seill lapoveeent; retire lirp* eipendlture (dlelniihla* returns). A budget eiy U allocated for elnor cost changes and further cipital etpediture Justified iefore loads are approved. 4. Noriir eotivitlnn - Eccnoilc Incentives include prollt sharing etiaees, wage and salary

sysiets, proiotlnn prictlcee, eerit evaluation and perquisites, Km- ecoweic incentives include Job redesign, job rotation and iwfinancial recegnitle, It is rwoaeended ttat grwp ntkar thin Individual renirdt ire given to avoid letup tea* letters competing agatnit one another.