The problem
Where the time was going
This manufacturer is one of the largest makers of office furniture in the world, and one of its North American divisions wanted to expand manufacturing capacity inside its existing floor space. The plan was to get there by removing unnecessary inventory from the floor and streamlining the assembly line, and the team focused on the kanban, the container that holds the parts needed to assemble each product and controls work in process across the factory.
Sizing those kanbans is a standing tug-of-war. A container that holds too few parts risks running dry and starving the line, while one that holds too many ties up money and materials in excess inventory. Manufacturing tends to push kanbans larger for safety, accounting pushes them smaller for cost, and the real answer is a balance neither side can find by intuition.
What we modeled
Mapping the process, then testing the fix
The company's simulation team set out to help manufacturing size its kanbans correctly, confident the model could do the job. A kanban model was designed, and the process was divided into three areas to size against: fabrication of steel parts, painting of those parts, and final assembly of the painted parts.
Most kanbans are used between fabrication and paint, so that segment went into the model, and with simple changes to the arrival cycle each kanban part could be tested and tracked individually. The user enters the part number to test and the cycle time of the replenishing process, and the model tracks a quantity-on-hand variable that shows whether the supply held or ran dry, with the consumption and replenishment both visible as it runs.
The result
The proof, and the payoff
The early returns came in as a cascade that grew with each level. The first three parts tested saved 3,000 dollars in material and labor and freed much-needed floor space. Scaled to the roughly 120 kanbans in the plant, the team estimated another 100,000 dollars in savings and 50,000 to 60,000 square feet of floor space freed.
Extending the same approach across the six additional plants in the company's two complexes pushed the potential to as much as 600,000 dollars in material and labor savings, plus 300,000 to 1,800,000 square feet of floor space. A model that began with three parts pointed toward inventory and space gains across the entire operation.
- $3,000
- saved on the first three parts
- ~$100,000
- estimated plant-wide savings
- up to $600,000
- potential savings across six plants
Part of our work in manufacturing.