Tuesday, February 21, 2017

When Should Materials, Components or Supplies be Stocked at Point of Use?

It is unlikely that you will be able to effectively stock all the material, components, and supplies one needs to do work at Point of Use. Nine times out of 10, floor space is the greatest challenge to managing material, components, and supplies at Point of Use (POU). So then which ones should be stocked at POU?
While no two situations are alike, here are nine (9) rules of thumb we commonly use when confronted with more material, components, and supplies than space.

Top 9 Rules of Thumb:

Rule 1:  To Kaizen or Not to Kaizen that is the Question?
Often we are confronted with deployment of production assets, people, and non-production related stuff that defies stocking items at POU. Every time we capitulate to the pressure to get started with the good intentions of, “We will fix it later”. Later never comes and everybody suffers. So, when it doubt - Kaizen.
Rule 2: Where Used
The greater the use of an item within and across product types the greater the need for
POU Item locations
Rule 3: Work Order Volume
The higher the number of work orders calling for pervasively used items the greater the need for POU Item locations
Rule 4: Item Usage
The higher the volume of either pervasively used or single use items the greater the need for POU Item locations
Rule 5: Frequency of Use
The greater the frequency an item is used within an assembly, within a work station, or throughout a production line, the greater the need for POU Item locations
Rule 6: Physical Factors
•  Configuration of the Manufacturing Process
         (i.e. Flow, mfging cells, work stations…)
•  Cleanroom vs Non-Cleanroom
•  Direct Labor
•  Space
•  Movement
•  Size of the Parts X Usage
•  Item Packaging
• Item Minimum Order Quantity

Rule 7: Parent Child Relationships for POU Item Locations

If cumulative usage of an item < Minimum Order Qty then POU Locations must have Parent Child relationships to avoid excess inventory.

Rule 8: There are Several Replenishment Methods for
POU Item Locations

Each method has characteristics that Favors its use:

• Kanban
• MRP Planned Orders /Pos

Rule 9: There must be a replenishment plan for every Item at POU

This rule is akin to there must be a process for every part rule. No part can be stocked at POU without clear visual ques indicating the type of replenishment process (VMI, Kanban, MRP Planned orders/ POs) is at work to ensure item availability to work order requirements.
Want to know more? Contact Doug Markham at dmarkham.ipowerne@gmail.com.