This article: Introduction Quick Response Manufacturing
|QRM: The cellular organization|
^ For more articles on QRM and/or POLCA, use the drop down menu in the top left corner. This is the introductory article about QRM, another article introduces POLCA
Introduction Quick Response Manufacturing
Quick Response Manufacturing (QRM) is a process improvement method developed from the standpoint of logistics, like Lean and the TOC. QRM focuses on gaining time from order to delivery. Reducing the Manufacturing Critical-path Time (MCT) is the holy grail, because this will result in shorter lead and delivery times. Less obvious is that the production costs will decrease. The reason: hidden costs are reduced. Costs are saved because of among others less work-in-progress, less mistakes, less telephone calls from customers about late deliveries, and less stock of products which possibly cannot be sold.
To implement QRM, adopting a process-oriented way of thinking is a condition. Higher costs during individual production steps should sometimes make done with, because this brings advantages in other departments. QRM and the accompanying Kanban-variant POLCA are already sucesfully applied for ten years in the US, mainly by companies that make customer-specific products. Examples are Harley-Davidson and JoyGlobal, a multinational that manufactures mining machines. During the last 5 years QRM also catches on in Europe. This is demonstrated by applications of QRM in Dutch companies like Interfocos and BOSCH Hinges.
The cellular organization
To reduce the Manufacturing Critical-path Time, it is needed to reform your business-organization drastically, from functional to cellular. One way to do that is to reorganize the complete company, from the office to the shop floor, by forming work cells. Each of those cells is staffed with three to ten persons, and each cell performs a group of similar tasks.
To keep the throughput time short, the work-in-progress per workcell should be kept small. Big product batches are therefore absolutely forbidden. In addition, each cell is staffed by a multidisciplinary team and, if necessary, group members can take over eachother's task.
Quick Response Manufacturing or QRM (introduction article)
Reducing the Manufacturing Critical-path Time
By Dr Jaap van Ede, editor-in-chief business-improvement.eu.
The first version was published in a Dutch specialist journal, PT Industrial Management. Since then, the article is regularly updated.
Rajan Suri is not only a professor at the University of Wisconsin-Madison, he is also the founder of the method ‘Quick Response Manufacturing’ (QRM).
According to Suri, reducing the lead-time should be the top priority in every company that makes or assembles ‘customer-specific’ products. In that situation, lead time reduction not only means shorter delivery times, but also entails lower costs, due to less inventory, less mistakes, less telephone calls about late orders etcetera.
The result: an ideal competitive position for your company, because you can deliver customer-specific products fast and at a relatively low price!
Wrong, says Suri. If you do that, applying QRM seems to increase the costs, which is not true. Take for example the shop floor. To increase the throughput there, the work-in-progress should be reduced. This means smaller batch sizes, and thus more changeovers.
To attain that, investments in extra people and/or machines maybe needed. On the other hand there are however huge savings, but those savings are realized in other departments such as warehouses.
Time is money
In spite of his rather American approach, Suri holds his audience in suspense for hours. A lot of his sheets are filled with dollar signs, and a favorite slogan of Suri is: “time is not money, time is a whole lot of money’.
Suri asks his workshop-participants to find potential savings by applying QRM. Some of the suggestions in my group are smaller warehouses and less handling.
‘Ok, but is it possible to make those savings tangible’, aks a manager from a automotive company. ‘Can you make a business case for implementing QRM?’
‘That is a problem, because the current accounting methods only allocate costs during the time in which something is happening’, Suri admits. ‘Idle time seems to be for free, but that is not true. If you remove idle time, then a lot of existing activities become superfluous. However, it is difficult to provide hard evidence for that beforehand. Therefore, I recommend to start with a pilot-project, for one product segment. Then the advantages will emerge automatically. From my experiences in companies such as John Deere, National Oilwell Varco and Rockwell Automation, I can say that the savings are 25% on average.’
Manufacturing Critical Path Time (MCT)
The MCT is defined as:
The amount of calendar time from when a customer creates an order until the first piece of that order is delivered, through the critical path.
^ An operator at Alexandra Extrusion (Minnesota) plans work with POLCA-cards,
one of the QRM-tools.
To keep the throughput time short, the amount of work-in-progress per workcell should be kept small. Big product batches are therefore absolutely forbidden. In addition, each cell is staffed by a multidisciplinary team and, if necessary, group members can take over each others task.
Fine-tuning a workcell – how many people and/or machines are necessary, what is the optimal batch size – is not an easy task. If different processing steps needs to be taken care of, in varying order, system dynamics can lead to unexpected results. In that case, simulation might help to detect and remove bottlenecks.
It is a challenge to make the orders flow from workcell to workcell. One method to control this is the POLCA-system, which is a variant of Kanban.
Until 2007, implementations of POLCA and QRM were still rare in the EU. However, the tide is turning, as more and more companies are now struggling to produce tailor-made goods. Will QRM, ten years after the introduction by Rajan Suri, finally become popular worldwide?
Interfocos makes 98 types of stoves. When you take into account that a customer can choose between several energy sources (wood, natural gas or propane), colors, and different types of interior work, then there are thousands of stove versions possible.
‘It is not possible to keep all those variants in stock, so we built them to order. However, the delivery time became too long. As a countermeasure, we had already started to apply Lean manufacturing. Soon, I noticed however that progress with Lean on the workfloor was frustrated, because other departments did not attune to our jobfloor-projects. Let me give you one example. When a specific component for a stove does not meet the expectations on the workfloor, engineering should change the drawings. However, that process could take as much as three weeks.’
Therefore, Baijens contacted Thomas Luiten, who at that time worked fulltime as self-employed consultant. Baijens: ‘Thomas had followed several courses about QRM in the US, given by Rajan Suri and others. He explained to me that QRM can be used to give direction to department-exceeding improvement projects, because it takes the speed from order to delivery as a guide.’
Luiten adds: ‘Interfocos was looking for a executive manager, with knowledge of both Lean and QRM. That job, with as goal to implement QRM, was offered to me. It seemed a challenge to work in the field instead of from the sideline. Therefore, I decided to snap. Since then my activities for LeanLeam, a cooperative consultancy, were reduced to giving a few workshops each year.’
^ Cards for POLCA, a Kanban-variant for QRM. The cards shown here were
used during an exercise in 2007, which preceded the implementation of QRM at
“BOSCH Hinges”. This is a Dutch company which produces hinges.
Workcells passing work to each other are still missing within Interfocos. Therefore the question arises why the organizational change is flagged as QRM. After all, the are a lot of companies who introduced a process oriented way of working, but these do not call that QRM.
‘We have one workcell for each product group, which deals with the complete process from order to delivery’, Luiten reacts. ‘In addition, QRM-tools are used to accelerate processes. An example is applying Value Stream Maps, to find and eliminate non-value adding activities.’
Isn’t that simply Lean Manufacturing?. ‘Yes that is true, but there is an important difference: Within Interfocos there are no longer departments, which strongly reduces the risk of local optimization. In our situation it is possible to add working time on one spot, if that leads to a big gain in time elsewhere. A change is seen as profitable, if it leads to an overall reduction in the lead time.’
To find such improvement-opportunities, the teams consult every two weeks. ‘In the beginning that took some getting used to. The members had to learn to respect each others skills. To goal is a concerted action to reduce the Manufacturing Critical-path Time. Therefore, you have to make yourself familiar with process-oriented thinking.’
Luiten gives an example: ‘In the past, after the production of the stoves, two additional steps followed: packaging and shipping. Searching for accessories like manuals took an awful lot of time, and slowed down the packaging process significantly. As a countermeasure, we decided to close down the packaging department. Now, packaging has become part of the production process. As a result, we gained days of time. In addition, much fewer products are delivered with parts missing in the box.’
Thanks to these kind of improvements, the delivery time of the stoves has already been cut in half. ‘Now, we are busy rolling out QRM to other product groups. In addition, we will investigate if we can use the Polca-system for some of our planning processes’, Luiten concludes.
POLCA within Bosch Hinges
Godfried Kaanen, general manager of BOSCH Hinges: "When I believe in something, I take decisions quickly"
The production of a hinge starts with a RVS plate. ‘First, we cut the desired form out of that plate with a laser. Then several treatments follow, like pressing and drilling holes. Every hinge we make is unique, and thus requires different treatments, as well as a unique routing along a selection of our 40 machines. That is the reason why we can’t produce in line.’
To get to grips with the production planning, a project was started. ‘We do not work with the same consulting partner all the time. We ask one party to solve one specific problem, and then another. In this case the problem was the conflict between our need for flexibility and the need for production control. In my opinion, new consulting parties bring new insights.’
The well-known Kanban-system, as developeed by Toyota, is widely used to gear the activities of work centers. After consumption of a small amount of certain items, a workcenter signals the need for replacement by sending a Kanban-card to the preceding workcenter. So, Kanban is essentially a pull-system. However, Kanban only works if the intermediate stock – which can be many items - is always the same. This is not the case with made-to-measure production, because then all products are different and so are the components needed to built them!
^ In 2007, employees of “BOSCH Hinges” practiced with
the Polca-system. Match boxes stood model for materials,
to be exchanged between workcells.
After one year all production employees were fully acquainted with the new system. ‘Adding or replacing Polca-cards now goes flawless’, says Kaanen. ‘But more important, the cards do what they should: Signaling where there is free production capacity downstream. That way, no semi-finished products are made, unless these can be processed further.’
The Polca-system not only controls the workload per cell, it also provides a clear view on all processes and possible problems. In addition, the throughput times were significantly reduced. ‘That was not caused by a reduction of our work-in-progress. That was already low, since we had already implemented Lean manufacturing. The reason that the Polca-system increased the throughput rate further, is that our employees know immediately on what kind of orders they should work.’Supplementary
Interfocos and BOSCH Hinges both consider QRM as supplementary to Lean Manufacturing. So, it can be concluded that QRM is a method to adapt Lean to a situation with customer-specific production, and/or high variety production, and/or short product lifecycles, and/or a very volatile demand.
To conclude, when you deal with one of those situations, it is certainly worth the effort to study QRM. That is even more the case, if your company can gain a competitive advantage if it can deliver products faster. Then, the question if QRM will lead to return on investment operationally, becomes less important.
1) The first version of this article, published in the Dutch specialist journal "PT Industrieel Management", was based on information gathered during a workshop QRM, given by Rajan Suri at LeanTeam consultancy. Additional information came from interviews (originally in 2007) with people from Interfocos en Bosch Hinges. The content of this article is regularly updated.
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