Mixed Model - High Mix, Low Volume [HMLV]
For many businesses, the challenge in lean transformation is to manage the complexity of your products and processes and to manage under almost constant change. Mixed Model or High Mix Low Volume (HMLV) is increasingly the kind of manufacturing remaining in North America. Increased product differentiation, shorter product life cycles, and greater configurability are typical. Lean transformations can "hit the wall" of complexity unless techniques to manage variation and change are adopted.
VSEM was designed specifically to provide the support needed for HMLV manufacturers to rapidly implement lean. Shared resources, alternate routings, load balancing, engineering-required batching, multiple branches in the value stream all can be incorporated. At the onset, analysis tools identify product families properly and use historical demand patterns to project the inventory levels needed to buffer for demand and mix variation. Once isolated into product families each supported by a value stream, item-specific processing details can be easily managed. Key lean metrics such as EPEI take into account capacity limitations including changeovers between products. Business strategies such as moving from MTS to MTO or hybrid MTS/MTO can be supported with the value stream model.
Breakthrough tools for high mix, low volume (HMLV) Product family analysis can begin from your bills of materials and routings to look groups of products with common processes. These can be quickly isolated into their own value streams. Once separated, demand analysis takes your ordering history to graphically depict the opportunities to isolate runners, repeaters, and strangers and to show the amount of demand and mix variation that the value stream must support. Value stream mapping for HMLV has been very difficult using manual methods. VSEM allows you to generate a complete value stream map for all levels of your products bill of material and their routings. This sets the basis for analysis tools to quickly identify opportunities for reductions in inventory and lead time.
Unlimited 'What-If' Analysis
Decision-making in your world requires the careful evaluation of competing alternatives as you face the challenges of changing volumes and mix. Do you add people, add a shift, look to contract out some work, shift work to other processes or facilities, or make capital investments in new production equipment? Each alternative must be analyzed from a quantitative basis. VSEM provides extensive "what if" scenarios to quickly show how the value stream can respond to differing volumes and mixes and how the effect of process improvements changes the overall picture. This allows you to make business decisions based on fact and analysis rather than on "gut" feel - which then helps to avoid unanticipated difficulties.
Shared Resource Management
HMLV manufacturers commonly have large, often legacy, "monument" processes - equipment that cannot be dedicated to individual value streams. Planning for shared resources must address the combined demand from multiple value streams and still consider the total changeover picture to establish operating intervals and production lot sizes. Managing shared resources simply with a "time slice" dedicated to each value stream can work in some situations however a more dynamic interval-based treatment allows you to reduce batch size and therefore inventory even further.
Value Stream Profitability
The bottom line for successful lean transformation is increased profit. Lean accounting guides an overall philosophy towards value stream based profitabilty based on a simplified managerial accounting approach. For HMLV manufacturers, managing multiple value streams allows you to understand which product families contribute the most to overall profit for the enterprise. This allows you to make strategic decisions for the markets to target and the products to service your customers.