In the last month or so I have worked with three different manufacturers who (1) figured out that the essence of lean is accelerating flow, and (2) promptly went out to re-arrange their factories to achieve better flow. They get an 'A' for effort, but to think that lean flow is simply a matter of factory layout is to delude yourself into believing that cycle time compression can be bought for the price of a few hours of rigger time. It isn't that easy. That is a bit like me thinking the only thing keeping me from the PGA Tour is my second rate golf clubs. While I would certainly need new and better clubs to be a pro golfer, there are a some bigger, more fundamental problems to solve before that is the the only thing stopping me.
While neither the logic nor the math are difficult it seems to be difficult for some folks to wrap their minds around the idea that the basic measurement of flow is cycle time: How long it normally takes for a unit of purchased material to go from the receiving dock to the shipping dock. And inventory is merely the physical manifestation of the cycle time. If you ship 50 items per day on average, and each product you ship takes 1 pound of a particular steel, and you have 200 pounds of that steel in your purchased inventory, it will take 4 days for the next pound of steel you buy to pass through your raw material inventory – you are shipping 50 pounds a day (50 units X a pound each) – so the 200 pounds in inventory equates to four days (200/50) of cycle time. All of this assumes first-in-first-out, of course. So the more inventory you have, the longer each pound of steel will sit, the longer the cycle time from receiving to shipping.
It is a fairly straightforward exercise to walk the entire process and count the inventory along the way and do the cycle time math. If you find a tub of 150 widgets stamped from that steel in process along the way, that tub represents 3 more days of cycle time. More WIP = longer cycle times.
So now we get to this factory layout matter. You have to ask yourself why there are three days worth of those widgets sitting there in that tub. It may well be that the next operation is a country mile away because the factory layout is lousy, so you can only afford to pay someone to haul them all that way every three days. More likely, however, is that three days of them were made because it takes a long time to set up the machine that stamped the widgets, so they are made in batches of 150 at a time. If that is the case, you can pay some guy a lot of money to pick up the stamping machine and move it next to the next machine in the process, but you will still have a tub of 150 widgets … and 3 days of cycle time.
In short, it does you no good to save distance if you are not saving time.
The reason for the batch may be a lot of things other than distance. It may be that you are not producing to demand pull so they were built to a forecast that turned out to be wrong, as forecasts always are. Or it may be that quality is shaky so you want to have plenty of them around just in case you encounter a bunch of defects. Or it may be that the machine breaks down a lot so you keep plenty of parts around for that eventuality. Sometimes the reason is as simple as having a handling container that holds 150 parts so people don't move things until they have filled the container – and all that is needed are smaller containers.
Sooner or later you will get to the point at which the biggest constraint to flow is the factory layout – the distance from one operation to the next, so sooner or later you will have to step up to it and pay those high priced riggers. For most factories, though, there is a lot of work to be done before you get to that point. And it stands to reason that you are not going to realize any of the enormous benefits from cycle time compression – flow – if you don't resolve the things that are truly constraining cycle time compression.
It's the same as me needing to do a lot of work on my putting … and chipping … and driving … and get rid of that wicked slice … and that ugly hook … before lack of professional clubs is the biggest problem I have to solve.