Basic Factory Dynamics

1
 HAL Case

Large Panel Line: produces unpopulated printed circuit boards

Line runs 24 hr/day (but 19.5 hrs of productive time)

Recent Performance:
• throughput = 1,400 panels per day (71.8 panels/hr)
• WIP = 47,600 panels
• CT = 34 days (663 hr at 19.5 hr/day)
• customer service = 75% on-time delivery

Is HAL lean?
What data do we need to decide?
2
 HAL Case - Science?

External Benchmarking
• but other plants may not be comparable

Internal Benchmarking
• capacity data: what is utilization?
• but this ignores WIP effects

Need relationships between WIP, TH, CT, service!

3
 Definitions

Workstations: a collection of one or more identical machines.

Parts: a component, sub-assembly, or an assembly that moves through
the workstations.
End Items: parts sold directly to customers; relationship to constituent
parts defined in bill of material.
Consumables: bits, chemicals, gasses, etc., used in process but do not
become part of the product that is sold.
Routing: sequence of workstations needed to make a part.
Order: request from customer.
Job: transfer quantity on the line.
4
 Definitions (cont.)

Throughput (TH): for a line, throughput is the average quantity of

good (non-defective) parts produced per unit time.
Work in Process (WIP): inventory between the start and endpoints of
a product routing.
Raw Material Inventory (RMI): material stocked at beginning of
routing.
Crib and Finished Goods Inventory (FGI): crib inventory is
material held in a stockpoint at the end of a routing; FGI is material
held in inventory prior to shipping to the customer.
Cycle Time (CT): time between release of the job at the beginning of
the routing until it reaches an inventory point at the end of the
routing.
5
 Parameters

Descriptors of a Line:
1) Bottleneck Rate (rb): Rate (parts/unit time or jobs/unit time)
of the process center having the highest long-term utilization.

2) Raw Process Time (T0): Sum of the long-term average

process times of each station in the line.

3) Congestion Coefficient (): A unitless measure of

congestion.
• Zero variability case,  = 0. Note: we won’t use  quantitatively,
• “Practical worst case,”  = 1. but point it out to recognize that lines
• “Worst possible case,”  = W0. with same rb and T0 can behave very
differently.
6
 Parameters (cont.)

Relationship:

Critical WIP (W0): WIP level in which a line having no

congestion would achieve maximum throughput (i.e., rb)
with minimum cycle time (i.e., T0).

W0 = rb T0

7
 The Penny Fab

Characteristics:
• Four identical tools in series.
• Each takes 2 hours per piece (penny).
• No variability.
• CONWIP job releases.

Parameters:
rb = 0.5 pennies/hour
T0 = 8 hours
W0 = 0.5  8 = 4 pennies
 = 0 (no variability, best case conditions)

8
The Penny Fab

9
 The Penny Fab (WIP=1)

Time = 0 hours

10
 The Penny Fab (WIP=1)

Time = 2 hours

11
 The Penny Fab (WIP=1)

Time = 4 hours

12
 The Penny Fab (WIP=1)

Time = 6 hours

13
 The Penny Fab (WIP=1)

Time = 8 hours

14
 The Penny Fab (WIP=1)

Time = 10 hours

15
 The Penny Fab (WIP=1)

Time = 12 hours

16
 The Penny Fab (WIP=1)

Time = 14 hours

17
 The Penny Fab (WIP=1)

Time = 16 hours

18
 Penny Fab Performance

WIP TH CT THCT
1 0.125 8 1
2
3
4
5
6
19
 The Penny Fab (WIP=2)

Time = 0 hours

20
 The Penny Fab (WIP=2)

Time = 2 hours

21
 The Penny Fab (WIP=2)

Time = 4 hours

22
 The Penny Fab (WIP=2)

Time = 6 hours

23
 The Penny Fab (WIP=2)

Time = 8 hours

24
 The Penny Fab (WIP=2)

Time = 10 hours

25
 The Penny Fab (WIP=2)

Time = 12 hours

26
 The Penny Fab (WIP=2)

Time = 14 hours

27
 The Penny Fab (WIP=2)

Time = 16 hours

28
 The Penny Fab (WIP=2)

Time = 18 hours

29
 Penny Fab Performance

WIP TH CT THCT
1 0.125 8 1
2 0.250 8 2
3
4
5
6
30
 The Penny Fab (WIP=4)

Time = 0 hours

31
 The Penny Fab (WIP=4)

Time = 2 hours

32
 The Penny Fab (WIP=4)

Time = 4 hours

33
 The Penny Fab (WIP=4)

Time = 6 hours

34
 The Penny Fab (WIP=4)

Time = 8 hours

35
 The Penny Fab (WIP=4)

Time = 10 hours

36
 The Penny Fab (WIP=4)

Time = 12 hours

37
 The Penny Fab (WIP=4)

Time = 14 hours

38
 Penny Fab Performance

WIP TH CT THCT
1 0.125 8 1
2 0.250 8 2
3 0.375 8 3
4 0.500 8 4
5
6
39
 The Penny Fab (WIP=5)

Time = 0 hours

40
 The Penny Fab (WIP=5)

Time = 2 hours

41
 The Penny Fab (WIP=5)

Time = 4 hours

42
 The Penny Fab (WIP=5)

Time = 6 hours

43
 The Penny Fab (WIP=5)

Time = 8 hours

44
 The Penny Fab (WIP=5)

Time = 10 hours

45
 The Penny Fab (WIP=5)

Time = 12 hours

46
 Penny Fab Performance

WIP TH CT THCT
1 0.125 8 1
2 0.250 8 2
3 0.375 8 3
4 0.500 8 4
5 0.500 10 5
6 0.500 12 6

47
 TH vs. WIP: Best Case

0.6
rb 0.5
0.4
TH

0.3
1/T0
0.2
0.1

0
0 1 2 3 4 5 6 7 8 9 10 11 12
W0 WIP
48
 CT vs. WIP: Best Case

26
24
22
20
18
16 1/rb
CT

14
12
10
T0 86
4
2
0
0 1 2 3 4 5 6 7 8 9 10 11 12

W0 WIP

49
 Best Case Performance

Best Case Law: The minimum cycle time (CTbest) for a given
WIP level, w, is given by
T0 , if w  W0
CTbest 
w / rb , otherwise.

The maximum throughput (THbest) for a given WIP level, w is

given by,
w / T0 , if w  W0
TH best 
 rb , otherwise.

50
 Best Case Performance (cont.)

Example: For Penny Fab, rb = 0.5 and T0 = 8, so W0 = 0.5  8 = 4,

8, if w  4
CTbest 
2w, otherwise.

w / 8, if w  4
TH best 
0.5, otherwise.

which are exactly the curves we plotted.

51
 A Manufacturing Law

Little's Law: The fundamental relation between WIP, CT, and

TH over the long-term is:
WIP  TH  CT

parts
parts   hr
hr

Insights:
• Fundamental relationship
• Simple units transformation
• Definition of cycle time (CT = WIP/TH)

52
 Worst Case

Observation: The Best Case yields the minimum cycle time and
maximum throughput for each WIP level.

Question: What conditions would cause the maximum cycle time

and minimum throughput?

Experiment:
• set average process times same as Best Case (so rb and T0
unchanged)
• follow a marked job through system
• imagine marked job experiences maximum queueing

53
 Worst Case Penny Fab

Time = 0 hours

54
 Worst Case Penny Fab

Time = 8 hours

55
 Worst Case Penny Fab

Time = 16 hours

56
 Worst Case Penny Fab

Time = 24 hours

57
 Worst Case Penny Fab

Time = 32 hours Note:

CT = 32 hours
= 4 8 = wT0
TH = 4/32 = 1/8 = 1/T0
58
 TH vs. WIP: Worst Case

0.6
Best Case
rb 0.5
0.4
TH

0.3
0.2
Worst Case
1/T0 0.1
0
0 1 2 3 4 5 6 7 8 9 10 11 12
W0 WIP

59
 CT vs. WIP: Worst Case

32
Worst Case
28
24
20
CT

16 Best Case
12
T0 8
4
0
0 1 2 3 4 5 6 7 8 9 10 11 12
W0 WIP

60
 Worst Case Performance

Worst Case Law: The worst case cycle time for a given WIP
level, w, is given by,

CTworst = w T0

The worst case throughput for a given WIP level, w, is given

by,

THworst = 1 / T0

Randomness? None - perfectly predictable, but bad!

61
 Practical Worst Case

Observation: There is a BIG GAP between the Best Case and

Worst Case performance.

Question: Can we find an intermediate case that:

• divides “good” and “bad” lines, and
• is computable?

Experiment: consider a line with a given rb and T0 and:

• single machine stations
• balanced lines
• variability such that all WIP configurations (states) are equally
likely

62
 PWC Example – 3 jobs, 4 stations
clumped
up states
State Vector State Vector
1 (3,0,0,0) 11 (1,0,2,0)
2 (0,3,0,0) 12 (0,1,2,0)
3 (0,0,3,0) 13 (0,0,2,1)
4 (0,0,0,3) 14 (1,0,0,2)
5 (2,1,0,0) 15 (0,1,0,2)
6 (2,0,1,0) 16 (0,0,1,2)
7 (2,0,0,1) 17 (1,1,1,0)
8 (1,2,0,0) 18 (1,1,0,1)
9 (0,2,1,0) 19 (1,0,1,1)
10 (0,2,0,1) 20 (0,1,1,1) spread
out states
Note: average WIP at any station is 15/20 = 0.75,
so jobs are spread evenly between stations.
63
 Practical Worst Case

Let w = jobs in system, N = no. stations in line, and t =

process time at all stations:

CT(single) = (1 + (w-1)/N) t
CT(line) = N [1 + (w-1)/N] t
= Nt + (w-1)t
= T0 + (w-1)/rb

TH = WIP/CT From Little’s Law

= [w/(w+W0-1)]rb

64
 Practical Worst Case Performance

Practical Worst Case Definition: The practical worst case

(PWC) cycle time for a given WIP level, w, is given by,
w 1
CTPWC  T0 
rb

The PWC throughput for a given WIP level, w, is given by,

w
TH PWC  rb ,
W0  w  1

where W0 is the critical WIP.

65
 TH vs. WIP: Practical Worst Case

0.6
Best Case
rb 0.5
0.4 Good (lean)
PWC
TH

0.3
0.2 Bad (fat) Worst Case
1/T0 0.1
0
0 1 2 3 4 5 6 7 8 9 10 11 12
W0 WIP

66
 CT vs. WIP: Practical Worst Case

32 Worst Case PWC

28
24
20 Bad (fat)
CT

16 Best Case
Good
12 (lean)
T0 8
4
0
0 1 2 3 4 5 6 7 8 9 10 11 12
W0 WIP

67
 Penny Fab Two Performance
0.5
Note: process
Best Case
rb 0.4 times in PF2
have var equal
to PWC.
0.3
But… unlike
TH PWC, it has
0.2 unbalanced
line and multi
0.1
machine
stations.
1/T0
Worst Case
0
0 2 4 6 8 10 12 14 16 18 20 22 24 26
W0 WIP
68
 Penny Fab Two Performance (cont.)
80

70
Worst Case
60

50

CT 40 1/rb

30

T0 20
Best Case
10

0
0 2 4 6 8 10 12 14 16 18 20 22 24 26
W0
WIP
69
Back to the HAL Case - Capacity Data

Process Rate (p/hr) Time (hr)

Lamination 191.5 4.7
Machining 186.2 0.5
Internal Circuitize 114.0 3.6
Optical Test/Repair - Int 150.5 1.0
Lamination – Composites 158.7 2.0
External Circuitize 159.9 4.3
Optical Test/Repair - Ext 150.5 1.0
Drilling 185.9 10.2
Copper Plate 136.4 1.0
Procoat 117.3 4.1
Sizing 126.5 1.1
EOL Test 169.5 0.5
rb, T0 114.0 33.9

70
 HAL Case - Situation

Critical WIP: rbT0 = 114  33.9 = 3,869

Actual Values:
• CT = 34 days = 663 hours (at 19.5 hr/day)
• WIP = 47,600 panels
• TH = 71.8 panels/hour

Conclusions:
• Throughput is 63% of capacity
• WIP is 12.3 times critical WIP
• CT is 19.5 times raw process time

71
 HAL Case - Analysis

TH Resulting from PWC with WIP = 47,600?

w 47,600
TH  rb  114  105.4 Much higher
w  W0  1 47,600  3,869  1 than actual TH!

WIP Required for PWC to Achieve TH = 0.63rb?

w
TH  rb  0.63rb
w  W0  1
0.63 0.36 Much lower than
w (W0  1)  (3,869  1)  6,586 actual WIP!
0.37 0.37

Conclusion: actual system is much worse than PWC!

72
 HAL Internal Benchmarking Outcome

120.0 Current
TH = 71.8
Throughput (panels/hour)

“Lean" Region WIP = 47,600

100.0

80.0
Best
60.0 Worst
“Fat" Region
PWC
40.0

20.0

0.0
0 10,000 20,000 30,000 40,000 50,000
WIP
73
 Labor Constrained Systems

Motivation: performance of some systems are limited by labor or

a combination of labor and equipment.

Full Flexibility with Workers Tied to Jobs:

• WIP limited by number of workers (n)
• capacity of line is n/T0
• Best case achieves capacity and has workers in “zones”
• ample capacity case also achieves full capacity with “pick and run”
policy

74
 Labor Constrained Systems (cont.)

Agile Workforce Systems

• bucket brigades
• kanban with shared tasks
• worksharing with overlapping zones
• many others

75
 Factory Dynamics Takeaways

Performance Measures:
• throughput
• WIP
• cycle time
• service
Range of Cases:
• best case
• practical worst case
• worst case
Diagnostics:
• simple assessment based on rb, T0, actual WIP,actual TH
• evaluate relative to practical worst case

76