Production Leveling based on the Heijunka Box
The Heijunky Box is a fundamental tool to level and schedule your production. Further explanations about Kanban and the Heijunka box can be seen in the Kanban bonus pack (www.lean-toolbox.org).
As customer demand fluctuates and may change within days or even hours, your production has to have some mechanism to protect your upstream processes. Leveling is one of these protections. It helps you to run a smooth production without having to react 1:1 onto your customer fluctuations. The Heijunka Box helps you as a tool to level your shop floor and avoids the bullwhip effect to be passed upwards your internal and external suppliers. – The bullwhip effect is a term often used to explain the effect of fluctuating demands. The further you go upstream through your processes, the higher the fluctuations will be. The sooner you start to decouple the real demand with an average demand, the easier it is to handle the bullwhip effect.
Same effect can be seen at the Watergate. The Watergate acts as a barrier and protection for the downriver valley. Regardless of the water level of the basin and weather conditions, the river rising at the Watergate will keep its smooth level without sudden changes. The Watergate levels the water level. Just imagine your production having such kind of gate. Your processes can work constantly without the basin to overspill, making it far easier to plan. – The Heijunka box itself does not act as the Watergate of your production. The box is a powerful tool of visualizing your customer demand and production planning. Instead, the process behind the box is the Watergate. Calculate a weekly average production based on forecasts and history data and use the Heijunka box to run that process.
So, why do you have to implement the Heijunka / Leveling process? As we just spoke about, the Heijunka allows you to better schedule your production – when leveling your production, demand for a defined time span (for example 1 week) can be forecasted. Hence, production managers and Group Leaders can plan the shifts for that week more precisely. You can give a far better forecast towards your suppliers and improve your planning for machine and line changeovers. Avoid the bullwhip effect – the bullwhip effect appears due to actions taken by different parties trying to limit fluctuations. In the case you have internal customers, your production will try to serve that demand. As that will happen delayed, you will even increase the peaks and valleys of that demand instead of limiting them. Those peaks will be passed forward upstream your process and supply chain making it more difficult to handle the demand. Reduce inventory and throughput time – When leveling your production and processes you also level the space needed to store WIP material and supplier parts. As you limit the peaks, you also limit the space required between process steps and your storage.
How do you start leveling your production? As always, you should pick one particular product or production line to start with. Start to gather history production data. Choose a week, for example last week and review how you scheduled your production. How big were the fluctuations? Calculate the average demand per day. Simulate that particular week based on that average production output. At which day have you been out of stock? The first day already? When leveling the production for these 5 days, you have to increase your stock of finished goods. Try to increase the stock level at the first day. Once you found a suitable stock level, use that information to simulate further weeks. That is the foundation for your production leveling approach. Try to cover peaks with additional night shifts just in few cases. Try to define safety stock for the beginning, but eliminate it over the time. Leveling by decoupling your process – Start leveling your production by decoupling your production from the customer. For example, increase the buffer of finished goods to cover peaks during 1 week of production. Or decouple inside your process chain between a pre and final assembly process. By increasing that buffer, you smooth your production. This will result in far more benefits compensating the additional buffer you implemented by far. Define the size of the buffer by simulating a production week based on history data. What size is needed to be able to fulfill the customer needs but also your production schedule for one week? – As buffer is waste, keep it as small as possible. Let your organization learn from that approach until you will be able to reduce that buffer even further.
Mixed production scheduling to reduce a bullwhip effect – Leveling your production means also to reduce batch-sizes. That will result in more changeovers. By decreasing the batch-sizes, you will reduce your work-in-process inventory and throughput time, giving you far more transparency and control on your shop floor. Use the Heijunka Box to produce each product each day. Put Kanban cards inside the Heijunka Box representing 1 Finished Good pallet per card. Each Kanban card is a production order. Make sure to produce according to the Kanban card, card by card. – You will find further examples of Heijunka and Kanban Cards in the Kanban bonus pack. Feel free to have a look.
The Heijunka and Leveling approach is part of the Level 4 – Pro-Tools and supports further lean activities, like Takt Time / Lead Time, Standardization, Visualization, Pull / Kanban and Mixed Model Lines.