| The
yellow curve shows how inventory varies when all stations are
balanced and work times have no variation. At low
utilization, workpieces enter the line at well below the maximum
production rate and quickly move from station to station. With ten
stations and 10% utilization only one workpiece is in the system.
It exits before the next is released.
Above 10% (in this case) several
workpieces are in the system but each is at a workstation. Above
100% capacity, all stations are full and inventory builds at the
line's first station. This is how most
production systems are presumed to operate, but they rarely do so
because of variability.
With variable work times, shown by
the other curves, stations are unsynchronized and inventory
collects between them. This inventory
buildup begins to accelerate well below 100% utilization.
Eventually, the system cannot process work as fast as the
inventory builds and output remains constant, even with rising
input. |
In this
particular model, the system choked at about 75% capacity when
the coefficient of variation reached 1.0. This
explains why many production systems never seem to achieve their
potential.
What
It Means
The
behavior of these systems has important strategic implications for
marketing and finance in addition to manufacturing.
Click below for more discussion.
Related
Topics
Variability Effects
Strategic Implications
Lean & Variability
Capacity & Inventory |
