Low Volume, High Mix Lean

Manufacturer Data I/O says real payoff from lean comes in the form of reduced lead times

Lean manufacturing is normally associated with long-run, repetitive manufacturing. But while the production facility of Redmond, Wash.-based Data I/O is geared towards small quantities of highly variable products, they still managed to make significant lean improvements.

Data I/O Corp. manufactures equipment and software required to add data and firmware to semiconductor devices. Data I/O's FlashCORE technology is the choice of leading manufacturers of wireless devices, handsets, television/set top boxes, digital cameras, automotive electronics, appliances and industrial products. This requires close collaboration with customers and by definition, a manufacturing environment characterized by small volumes of a large variety of complex products.

"Our customers might order several or just a few memory devices," Data I/O Production Manager Dwayne Jones said. "They need to program those blank devices with an operating system. Our machinery allows them to take that information and put it into that device. We have hardware as well as software, algorithms and other tools that allow them to do that. Some items, like an adapter, may be delivered only once. Our highest quantity for an item might consist of hundreds."

Plant Floor, IT Solution

According to Jones, the company made a breakthrough in their ongoing lean journey after attending an Association for Manufacturing Excellence seminar in 2008 and gaining insights into the 5S method... Sort, Set in Order, Shine, Standardize and Sustain. The use of visual signals on the shop floor and deployment of inventory near where it will be used have also become important parts of Data I/O's lean processes.

"We have some boards on the outside of our production cells that show when we have orders or work orders due for servicing and when we are short parts. We have a kanban system in place and we have cards for all of our inventory," Jones said. "Our inventory isn't locked up in a cage somewhere. It is out on the floor at the point of use. Before we had the inventory coming in through receiving and then through QA, into a store, it would be picked as a kit and put into an assembly and then maybe go back into store. There were several handoffs involved and it was very inefficient."

Data I/O has also eliminated non-value-added work from the front office value stream by consolidating on an enterprise-wide application, according to Jones.

"Before we implemented IFS Applications in the beginning of 2006 we had been using at least two systems. We had a system for our inventory -- what location it was in, how much it cost, and we used it for bills of materials. Then we had another system that was more engineering that had a bill of materials as well. That system had drawings, manufacturing assembly instructions and specs for all of the components attached, but it didn't have any costs. At any given time I would have both of them up on my screen at the same time. We had a configuration management department that would maintain the batch update between the two. And then we went to IFS and all of that data came together. That made things run much smoother -- assembly instructions, documentation, spec sheets, bill of materials, everything was released directly from engineering into production. We didn't have to go through this convoluted process of transferring things into a manufacturing system versus an engineering system.

Data I/O's lean program will provide a competitive advantage, helping them grow and succeed as a company. But the real beneficiaries will be the company's customers, according to Jones, who also acts as Data I/O's World Wide Service Manager.

"The real payoff from lean comes in the form of reduced lead times," Jones said. "Our customers are very demanding, and they use our products in facilities around the world that are running at high capacity 24-7. They can't afford any downtime. They need us to be very responsive because new device types come along all the time, so when a new product is coming out that requires a new memory device they need to start running it right away. We've got to deliver. Lean will help us do that."

What to Look for in ERP for Low Volume High Mix Lean

Diversity with a Single Solution

In many manufacturing environments, some product might come off the shelf while others are engineer-to-order or make-to-order. So in evaluating and choosing an enterprise application, it is important to select one that will support all of these processes in a single application. Otherwise you create repetitive work and disjointed communications as the systems are reconciled.

Tight Integration Between Engineering and Manufacturing

At a minimum, you should be able to export the bill of materials and specifications from a CAD package to the ERP. For more complex products lean benefits can be realized through integration between engineering and an ERP system's project management functionality.

Electronic Router to Shepherd Work Through the Front Office

Within the engineering area, there should be an electronic router that allows you to determine who needs to work on which projects, along with the capability for automated electronic notification.

Templates to Facilitate 'Same as Except'

The administration of manufacturing structures and routings and parts can be streamlined by an enterprise application that allows you to create templates and support "same as except." This lets you take an existing structure and associated routing, copy it and make your changes. This saves time while adding value to the process, which is the embodiment of lean.

Document Management

Some people might wonder how document management can be a lean initiative. The lean value comes from the ability to associate whatever documents are necessary with any object, be that document a quotation, a customer order or a bill, along with the ability to control who can view, print, revise or add a sheet level to that document.

User Defined Characteristics.

The ability to profile an object -- a project, a customer, a customer order or a manufactured item -- with user-defined characteristics which then can be searched is a real advantage. So if you are working on a project like a 10-kilowatt switching station, you can easily find all of the previous projects you have completed, and copy and re-use elements of that project to save time.

Greg Romanello is a business solutions consultant for IFS North America which. develops, supplies, and implements IFS Applications, a fully-integrated, component-based extended ERP suite built on SOA technology. http://www.ifsworld.com/us/

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