Implementing Pull Systems
Calculations & Terms based on:
George, Rowlands, Price, &Maxey (2005) The Lean Six Sigma Pocket Toolbook. McGraw Hill ISBN: 0-07-144119-3
Topics
I. Types of Pull Systems
II. Estimating Amount of WIP for a Pull System III.Moving to One-Piece Flow
Appendix: Kanban Card System
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I. Types of Pull Systems
Some common types of pull systems include:
A. Kanban –An information system that controls the production of the necessary products in the right quantities, at the right time, in every process in the facility and also between facilities
Point Of Use (POU) Sight Systems
Card Systems (One-card or Two-Card)
Bin Systems (Container system)
B. “FIFO” System – Use of pre-established rules to trigger re-order points and changes to resource allocation
C. “CONWIP” System – Use of constant work in process system
Control release of units into a process based on exits
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A. Kanban – Point of Use Sight System
Customer:
Pull from Available Units Supplier
Fill Available Space
By Sight Kanban and
Point-of-use
Kanban replenish area
Supplier replenishes empty Kanban area
Kanban = Signal for pull system
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Kanban Signals – Different Types
Many ways to use Kanbans to trigger production or replenishment
Cards
Bins
Min/Max Marks
E.g., Water Lines
Red-Yellow-Green Zones
Electronic Signals
Best signals are simple to understand, easy to maintain, and highly visual!
Material Kanban Bins
Office Kanban – Pull System Board
Use fixed container sizes to control maximum amounts
Use of boards to show status/prioritize work Pull System Board
(Orders to Process)
On Track to meet Delivery Schedule
Behind schedule, but should
be recoverable with minor adjustment Not on track to meet delivery
schedule, requires intervention
Type A Type B
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B. FIFO Pull System
FIFO Rules – Process all orders in queue in a first-in-first-out (FIFO) basis
The "supplying" process should stop when the maximum allowable number of orders in system is reached –
“Supplier" should perform other activities, or assist ‘next-process customer’
For this example, what should the operator for Process Step A do next?
Step C
Step B
Maximum = 4 orders Minimum = 1 order
Step A 1
4 2 3
“The Complete Lean Enterprise” – Keyte & Locher, Productivity Press, 2004
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FIFO Lane Pull System Example
People in line at a bank teller provide an example of a FIFO Lane
Customers enter a queue (FIFO)
If FIFO high level is reached (max number of people in line) resources (i.e., another teller) are pulled from other activities to open a new window
The additional resources then work the queue until the FIFO low level is reached at which time they go back to other activities
Here, the number of resources provides a capacity buffer to adjust to demand variation
Bank Teller
FIFO high & low levels control the flow of resources among activities
C. CONWIP Pull System
In a CONWIP (Constant work-in-process) system, WIP is controlled by restricting the amount of orders (units) released into the process
New orders are released into a system only when another one exits
May be implemented by attaching a Kanban ‘card’ to each order and circulating cards back to the start after an order is completed
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Step 1 Step
2
Step
3 Step
4
K
Exit
Orders
(pacemaker)
Strategic Buffer
Use of a CONWIP System
With CONWIP systems, variation in demand is buffered prior to start of the process so that constant WIP is maintained within the system
What are some advantages/potential challenges with using CONWIP?
Step 1 Step
2
Step
3 Step
4
K
Exit
Orders
(pacemaker)
Strategic buffer
Example: CONWIP Pull System
Given a limited # of software engineers, there is a limited number of jobs dept can handle at one time
Putting more work into the system just crowds the work flow and increases total time per request
Here, we may apply a CONWIP System
Amount of work in the system or WIP is held constant
A new request is not put into the system until another one is completed (paced induction)
A buffer of jobs before the process is controlled and is allowed to grow and shrink with the demand variation however the jobs are processed at a consistent rate
Include Strategic Buffer: Bottleneck Operation
Variation in demand is buffered with time
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Software Change Requests
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II. Design of a Pull System – Establishing Amount of WIP
Pull systems require establishing a desirable amount of work in process (# orders-system, # fixed containers)
To determine this amount, we need to understand:
Demand (DMD) - Typically expressed as Average Daily Usage (ADU) or average weekly usage
Based on history, forecast, or combination
Replenishment Lead Time (LT) - Time from when a unit has been completed until new inputs are received
Order Interval (OI) or Order Frequency (OF) - Frequency (time usually in days or weeks) between next process customer orders
Safety Stock (SS) Level - Parts required to compensate for variation (i.e., demand, quality, downtime,..)
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Determining Pull System Parameters
To implement a pull system, need to determine the WIP quantity
Part Manufacturing: Need related # of containers (adjusted for standard pack quantity)
DMD – Demand
LT – Replenishment Lead Time (e.g., Process Cycle Time)
OI – Order Interval or Order Frequency
SS – Safety Stock
* 2 ) , max(
Quantity
WIP SS
DMD OI
LT
George, Rowlands, Price, & Maxey (2005).
The Lean Six Sigma Pocket Toolbook. McGraw Hill. ISBN: 0-07-144119-3
Bin or container here may equate to a Kanban card (signal) Size) Bin or Container Standard
Quantity ( WIP
Roundup )
Containers of
(#
#Bins
Note: If using fixed containers/standard bin sizes for batches:
Demand & Demand Variability
Demand & Demand Variability
1. Gather data (quantity):Historical orders
Historical shipments if orders are not available Forecast
2. Interview Marketing, Sales, Engineering, Product Development, and the various Product Line Teams, to check data validity Next Calculate:
Demand using “average daily usage” (ADU)
Demand variability (e.g., Coefficient of Variation in Demand)
Note: If demand varies significantly day-day (e.g., demand> demand), system may NOTbe a good candidate for a pull system
15 Demand
Demand
Safety Stock (SS)
We account for some demand variation using Safety Stock
SS represents strategic buffer inventory to guard against:
Demand Variability
Process Variability
Lead Time Variability
Quality Problems
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Safety Stock (SS) Estimates
Various methods are available to estimate safety stock and their calculations may vary widely
Some estimation techniques include:
By past experience (to avoid problems/starving system) –
This is the MOST COMMON
By rough approximation (Where SS = (0.5 * Max (LT,OI) * Demand)
Note: Demand = Average Daily Usage
By Service Level*
Ultimately, need to incorporate experience to establish the right level of safety stock/planned WIP per process
*George, Rowlands, Price, & Maxey (2005).
The Lean Six Sigma Pocket Toolbook. McGraw Hill. ISBN: 0-07-144119-3
Example – WIP Quantity
Suppose you have the following characteristics:
Demand (Average Daily Usage) = 100 units/day
Note: Same as average daily production
Order Interval = 1 day (time between when orders are arrive)
Total Process Lead Time = 2.5 days (‘Replenishment Lead Time’)
Note: This includes wait and delay times
Suppose you want to maintain Safety Stock = 45 units
Requirements
What is the WIP Quantity?
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* 2 ) , max(
Quantity
WIP SS
DMD OI
LT
WIP Quantity Calculations
Given these estimates, what should we do if:
System WIP is 275?
System WIP is 100?
System WIP is 40?
273 5 . 2 272 100 45
* 5 . 2
Quantity
Of importance, this is just a starting point
III. Moving to One Piece Flow
Moving from a ‘push’ to a ‘pull system’ may result in large reductions in total time in system and reduced WIP
Still, pull systems are not the ‘ideal state’
Where possible, try to move to One Piece flow
At the very least, all of those balancing and WIP calculations are no longer necessary!!
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Office Example: Order Entry
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Pull up Bill in QuickBooks
(15 sec)
Write Check (30 sec)
File Invoice (15 sec)
Enter Check in QuickBooks
(15 sec) Address,
Stamp, and Seal Envelope
(45 sec)
Original Process – performed each of the following process steps in batches of ~10 (Total time for 10 bills ~50 min))
New Process – One Piece Flow
First, perform process setup (2 min)
Setup: Open Quickbooks, check book, and identify all bills to pay
Then, process each bill (Total Time for 10 bills ~22 min)
One Piece Flow
While desirable, One Piece Flow may be difficult to adopt
What are some challenges to implementing One Piece flow?
What are some strategies to mitigate these challenges?
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Summary
Some common types of pull systems include: Kanban – Signals to trigger units from supplier processes
“FIFO Lanes” - First-in/first-out or with min/max controls
“CONWIP” - Constant work in process system
To estimate the amount of WIP or number of pull signals, we may consider demand, total lead time, order interval, and safety stock
While pull systems may help reduce WIP, one should try to move to One Piece continuous flow where possible
Appendix. Kanban Card Systems
Kanban may be applied using a kanban card system
Either a One-Card or Two-Card system
One-card Kanban: Used for both Withdrawal and Production
Kanban is sent to supplier and then returned with parts to customer (via exchange of bins or containers)
Two-card Kanban: 1-Card Withdrawal, 1-Card Production
Withdrawal Kanban is sent to supplier when minimum quantity reached and Production Kanban triggers replenishment
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Kanban Cards
Kanban Signals Include:
1. Part information (Part identification, part number, description)
2. Quantity specification and/or standard container size (Indicating Quantity) 3. Supplier (Where to get the item from – Internal or External)
4. Customer (Where to deliver the item to – Internal or External)
