Mini-Case 1 TWI Industries 4 Steering Arm Value Stream: Future State In the current state, the Steering Arm Value Stream shop floor was swamped with orders due to the long lead times. Because of the long lead times, the order quantities were changed after they were issued. The result was a lot of juggling of the production schedule to expedite urgent customer requests. Over a six month period, the Steering Arm Value Stream made changes and improvements, arriving at the future state. TWI decided to release production orders in 30- minute production increments (pitch) to a newly configured Weld & Deflash cell and have production proceed on a FIFO basis from that point. The Weld & Deflash cell draws materials from rods and forgings parts supermarkets restocked by the cutting and machining cells using a kanban system to avoid overproduction. By limiting overproduction and variability, the lead time from the weld schedule point has been reduced to three days and the overall lead time is ten days. Because the lead times were shorter, customers could order much closer to the time they actually needed the steering arms, eliminating the need for quantity adjustments. In addition to combining the weld and deflash processes into a single cell, changeover times had to be reduced and machine uptime improved to achieve the desired future state performance Customers continue to order 24,000 steering arms per month. Each customer order is for 25 200 steering arms, with an average of 50 steering arms per order. Each customer's configuration requirements (part numbers and quantities) vary greatly from order to order. The orders are packed in corrugated boxes with each box containing up to 5 steering arms. TWI now quotes a lead-time of 14 days. Despite the much shorter lead time quoted, TWl's on-time shipment rate has improved to 93%. The accounts receivable balance is now $3,122,000. The ending book value of inventory is now $737,600 Compared with their (22,000 square foot) use of floor space in the current state, the Steering Arm Value Stream saved 200 square feet of floor space for every day's worth of inventory they eliminated (Inventory at the outside painting process does not occupy space). Combining the weld and deflash processes into a single Weld & Deflash cell saved them an additional 500 square feet of space. The occupancy cost TWI charged to the Steering Arm Value Stream has been reduced by $3.00 for every square foot of space saved Work time remains 20 days per month, 8 hours per day, with two shifts in all production departments and overtime, if necessary. Workers have two 15-minute breaks per shift, and 30 minutes (unpaid) for lunch. Machines are not run during the unpaid lunch breaks, but the machines can operate through the 15-minute morning and afternoon breaks. Manual processes stop during breaks. Operators and assemblers continue spend the first fifteen minutes of each shift at a production meeting, and the last 10 minutes of each shift engaged in cleaning and 5S activity. Machines are not running during the production meetings or the 5S and cleanup activity The average time operators and assemblers spend gathering and reporting data and filling out reports has been cut to 10 minutes per day. Machinery can be running while operators are gathering and reporting data. When machinery is down, operators are occupied with trouble- shooting and bringing the machinery back on line Production control: Two people. Customer orders are received 14 calendar days before ship date and are entered in the MRP system. Shop orders with 30 minutes of work (about eighty steering arms) are released in 30-minute increments Cutting: A manual machine process with one operator per shift. Cycle time: 15 seconds for both operator and machine. Changeover time has been reduced to 5 minutes per changeover Batch size is now 40, The defect rate remains 0%. Unscheduled downtime has been cut from 8% to 4% Mini-Case 1 TWI Industries 4 Steering Arm Value Stream: Future State In the current state, the Steering Arm Value Stream shop floor was swamped with orders due to the long lead times. Because of the long lead times, the order quantities were changed after they were issued. The result was a lot of juggling of the production schedule to expedite urgent customer requests. Over a six month period, the Steering Arm Value Stream made changes and improvements, arriving at the future state. TWI decided to release production orders in 30- minute production increments (pitch) to a newly configured Weld & Deflash cell and have production proceed on a FIFO basis from that point. The Weld & Deflash cell draws materials from rods and forgings parts supermarkets restocked by the cutting and machining cells using a kanban system to avoid overproduction. By limiting overproduction and variability, the lead time from the weld schedule point has been reduced to three days and the overall lead time is ten days. Because the lead times were shorter, customers could order much closer to the time they actually needed the steering arms, eliminating the need for quantity adjustments. In addition to combining the weld and deflash processes into a single cell, changeover times had to be reduced and machine uptime improved to achieve the desired future state performance Customers continue to order 24,000 steering arms per month. Each customer order is for 25 200 steering arms, with an average of 50 steering arms per order. Each customer's configuration requirements (part numbers and quantities) vary greatly from order to order. The orders are packed in corrugated boxes with each box containing up to 5 steering arms. TWI now quotes a lead-time of 14 days. Despite the much shorter lead time quoted, TWl's on-time shipment rate has improved to 93%. The accounts receivable balance is now $3,122,000. The ending book value of inventory is now $737,600 Compared with their (22,000 square foot) use of floor space in the current state, the Steering Arm Value Stream saved 200 square feet of floor space for every day's worth of inventory they eliminated (Inventory at the outside painting process does not occupy space). Combining the weld and deflash processes into a single Weld & Deflash cell saved them an additional 500 square feet of space. The occupancy cost TWI charged to the Steering Arm Value Stream has been reduced by $3.00 for every square foot of space saved Work time remains 20 days per month, 8 hours per day, with two shifts in all production departments and overtime, if necessary. Workers have two 15-minute breaks per shift, and 30 minutes (unpaid) for lunch. Machines are not run during the unpaid lunch breaks, but the machines can operate through the 15-minute morning and afternoon breaks. Manual processes stop during breaks. Operators and assemblers continue spend the first fifteen minutes of each shift at a production meeting, and the last 10 minutes of each shift engaged in cleaning and 5S activity. Machines are not running during the production meetings or the 5S and cleanup activity The average time operators and assemblers spend gathering and reporting data and filling out reports has been cut to 10 minutes per day. Machinery can be running while operators are gathering and reporting data. When machinery is down, operators are occupied with trouble- shooting and bringing the machinery back on line Production control: Two people. Customer orders are received 14 calendar days before ship date and are entered in the MRP system. Shop orders with 30 minutes of work (about eighty steering arms) are released in 30-minute increments Cutting: A manual machine process with one operator per shift. Cycle time: 15 seconds for both operator and machine. Changeover time has been reduced to 5 minutes per changeover Batch size is now 40, The defect rate remains 0%. Unscheduled downtime has been cut from 8% to 4%