10/21/2013

PRODUCT WHEELS
Balancing Production Flow in
Complex Environments

Peter L. King, CSCP

Lean Dynamics, LLC
September 2013

Peter L King

BS Electrical Engineering – Virginia Tech

DuPont Company – 42 years

R & D – 9 years

Project management – 15 years

Lean manufacturing & supply chain consulting – 18 years

Lean Dynamics – 2007

Consult with companies in process industries

Lean for the Process Industries – Productivity Press, 2009

Frequent speaker at technical society meetings

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AGENDA
1. Operations management challenges

2. The product wheel concept

3. Product wheel design

4. Examples of wheel application

BG Products, Inc.

Appleton

Dow Chemical

DuPont

5. Benefits

CHALLENGE # 1

Lean tells us to produce to takt (customer demand)

Customer demand can be variable

Lean also says to level production

“On a production line, fluctuations in product flow
increase waste. This because the equipment,
workers, inventory, and other elements
required for production must always be
prepared for peak production.”

Solution: integrate takt over some reasonable period of time

to smooth out variation

Product Wheels can find the most reasonable period
Ohno, Taiichi. Toyota Production System: Beyond Large-Scale
Production. New York: Productivity Press, 1988.
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CHALLENGE # 2

Many of our production lines must produce several product
types, part numbers, SKUs

What should we make next?

Should we run a regular
campaign cycle?

How long should the overall
campaign be?

How much of each material
should we make on each cycle?

Product wheel design can answer all of these questions

CHALLENGE # 3

If we’re making several materials on a regular cycle, is

there an optimum sequence?
Sometimes this is obvious ……
SHEET BASIS POLYMER
But some times not PRODUCT
WIDTH WEIGHT TYPE
423 J 12 3 J
403 L 10 3 L
403 J 10 3 J
423 L 12 3 L
426 J 12 6 J
406 R 10 6 R
406 L 10 6 L
426 R 12 6 R
406 J 10 6 J
Again – product wheel design has tools for determining this.
409 L 10 9 L
409 J 10 9 J
489 J 8 9 J
429 L 12 9 L
489 R 8 9 R
489 L 8 9 L
429 R 12 9 R

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DETAILED PRODUCT WHEEL CONCEPT

A regularly repeating
PRODUCTS (SPOKES) sequence of the production
of the various products

K
The sequence is fixed

J A
B
The overall cycle time is
I fixed
C
D
Spokes can have different
H lengths, based on the Takt for
E each product
G F

The amount actually
produced can vary from cycle
CHANGE-OVERS to cycle, based on actual
consumption

PRODUCT WHEEL ATTRIBUTES

The sequence is optimized

Products (Spokes) for minimum changeover loss

The cycle time is optimized

K
J A based on business priorities
B

Some low-volume products
I
C may not be made every cycle
D

When they are made, it’s
H always at the same point in
E
G F the sequence

Make-to-order and Make-

to-stock products can be
Change-overs
intermixed on a wheel

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PRODUCT WHEEL CONCEPT

PRODUCT WHEEL CONCEPT

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PRODUCT WHEEL APPLICABILITY

Product wheels support a pull replenishment system

 Each spoke is designed based on average historical demand
 What is actually produced on any spoke is just enough to
replenish what has been consumed from inventory

Product wheels can be employed in a make-to-stock

(MTS) or a make-to-order (MTO) environment

MTS and MTO products can be made on the same

wheel

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2 ∗





∗








= ඨ




∗

∗ (1 − )

PRODUCT WHEEL
DESIGN

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PRODUCT WHEEL DESIGN

1. Decide where to put wheels

2. Analyze product demand variability – consider MTO vs MTS
3. Determine the optimum sequence
4. Calculate the shortest wheel time possible
5. Calculate the most economic wheel time
6. Decide the wheel time – consider all factors
7. Calculate inventory levels required
8. Review with stakeholders - fine tune the design
9. Revise scheduling processes
10.Create visual displays

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PRODUCT WHEEL DESIGN

Step 1 - Decide which assets would benefit

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PAPER MANUFACTURING EQUIPMENT CONFIGURATION

Roll Forming Roll Forming Roll Forming Roll Forming

Machine 1 Machine 2 Machine 3 Machine 4

Roll Bonder 1 Roll Bonder 2 Roll Bonder 3 Roll Bonder 4

Roll Slitting Roll Slitting Roll Slitting

Machine 1 Machine 2 Machine 3

Chopper Chopper Chopper

1 2 3

Packaging

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SHEET FORMING VIRTUAL CELL GROUPING

Roll Forming Roll Forming Roll Forming Roll Forming

Machine 1 Machine 2 Machine 3 Machine 4

Roll Bonder 1 Roll Bonder 2 Roll Bonder 3 Roll Bonder 4

CELL 3
Roll Slitting Roll Slitting Roll Slitting
Machine 1 Machine 2 Machine 3
CELL 2
CELL 1

Chopper Chopper Chopper CELL 4

1 2 3

Packaging

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ASSETS TO BE SCHEDULED BY PRODUCT WHEELS

FIFO

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PRODUCT WHEEL DESIGN

Step 2 - Analyze product demand variability

– consider MTO vs MTS

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ANALYSIS OF DEMAND VAIABILITY

– PRODUCTS ON FORMING 1

WEEKLY σD COEFFICIENT of
VARIATION CV
PRODUCT DEMAND
D (Rolls) (Rolls) = σD/D
A 150 30 0.20
B 120 20 0.17
C 75 24 0.32
D 15 6 0.40
E 14 6 0.43
F 12 5 0.42
G 8 6 0.75
H 6 3.6 0.60

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AVERAGE DEMAND

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VARIATION IN DEMAND

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DECISION MATRIX
– VOLUME VS DEMAND VARIABILITY

G
PRODUCT VARIABILITY

H
MAKE TO ORDER (MTO) MTO? MTS?

F E MAKE TO STOCK (MTS)

D C
A
MTO? MTS?
B

PRODUCT DEMAND

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PRODUCT WHEEL DESIGN

3. Determine the optimum sequence
POLYMER SHEET BASIS
PRODUCTBASIS
SHEET POLYMER
PRODUCT TYPE WIDTH WEIGHT
WIDTH WEIGHT TYPE
423 J 12 489 J 3 J J 8 9
403 L 10 403 J 3 L J 10 3
403 J 10 406 J 3 J J 10 6
423 L 12 409 J 3 L J 10 9
426 J 12 6 J
423 J J 12 3
406 R 10 6 R
406 L 10
426 J 6 L
J 12 6
426 R 12 489 L 6 RL 8 9
406 J 10 403 L 6 J L 10 3
409 L 10 406 L 9 L L 10 6
409 J 10 409 L 9 J L 10 9
489 J 8 9 J
423 L L 12 3
429 L 12 9 L
489 R 8 429 L 9 RL 12 9
489 L 8 489 R 9 LR 8 9
429 R 12 406 R 9 RR 10 6
426 R R 12 6
429 R R 12 9

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PRODUCT WHEEL DESIGN

Determine the overall wheel time

4. Determine the shortest wheel time possible
5. Determine the most economical wheel
possible
6. Make the decision

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AVAILABLE TIME ANALYSIS – FORMING MACHINE 1

TOTAL TIME AVAILABLE = 168 HOURS (Planning Cycle = 1 week)

TIME AVAILABLE FOR

TIME REQUIRED FOR PRODUCTION (For one week) CHANGE-OVERS

= 136 HOURS = 32 HOURS

THERE IS TIME AVAILABLE FOR FOUR COMPLETE SETS

OF CHANGEOVERS WITHIN THE WEEK. SO FOUR 8 8 8 8
COMPLETE PRODUCT WHEEL CYCLES COULD BE RUN
PER WEEK
TIME REQUIRED FOR ONE CYCLE
ONE WHEEL OF CHANGEOVERS
CYCLE

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PRODUCT WHEEL DESIGN

Step 5 - Calculate the most economic wheel time

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PRODUCT WHEEL DESIGN

Step 5 - Calculate the most economic wheel batch size

2 ∗





∗








= ඨ




∗

∗ (1 − )

COC = Changeover Cost

Where

D = Demand per time period

V = Unit cost of the material

r = % carrying cost of inventory per time period

PR = Production rate in units per time period.

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ECONOMIC ORDER QUANTITY – EOQ - CONCEPT

ECONOMIC
14000 ORDER
QUANTITY TOTAL
12000
COST
10000

8000
COST

INVENTORY
6000
COST
4000
CHANGE-OVER
COST
2000

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

CAMPAIGN LENGTH = WHEEL TIME

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EOQ ANALYSIS – FORMING MACHINE 1

WEEKLY CHANGE INVENTORY OPTIMUM

COST PER
PRODUCT DEMAND OVER CARRYING EOQ FREQUENCY
ROLL
D (Rolls) COST COST (Days)
A 150 $1,800 $450 25% 158.0 7.37
B 120 $1,800 $450 25% 133.5 7.79
C 75 $2,000 $500 25% 98.0 9.14
D 15 $2,000 $500 25% 40.3 18.79
E 14 $2,000 $500 25% 38.8 19.42
F 12 $2,400 $600 25% 35.9 20.92
G 8 $2,400 $600 25% 29.1 25.50
H 6 $2,400 $600 25% 25.2 29.36

The high volume products suggest a ~ 7 day wheel

Low volume products could be made on alternating cycles

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DETERMINATION OF WHEEL TIME

WEEKLY OPTIMUM
RECOMD'N CYCLE 1 CYCLE 2 CYCLE 3
PRODUCT DEMAND EOQ FREQUENCY
(days) (7 DAYS) (7 DAYS) (7 DAYS)
D (Rolls) (Days)
A 150 158.0 7.4 7 150 150 150
B 120 133.5 7.8 7 120 120 120
C 75 98.0 9.1 7 75 75 75
D 15 40.3 18.8 21 45
E 14 38.8 19.4 21 42
F 12 35.9 20.9 21 36
G 8 29.1 25.5 MTO 25
H 6 25.2 29.4 MTO 20
TOTALS 390 407 406

We choose 7 days as the basic wheel time – high volume products

are made every 7 days

Lower volume products (D, E, F) are made every third wheel

Low volume, unpredictable products are MTO

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OTHER FACTORS ….

 Shelf life

 Demand variability
(short term)

 Minimum lot size

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PRODUCT WHEEL DESIGN

Step 6 - Decide the wheel time

The Available Time model suggested 4 complete wheels per week

Wheel time = 42 hrs

The EOQ model suggested a 7 day wheel time

We choose the 7 day alternative

1 3 5 7 9 11 13 15 17 19

It is more cost effective

It is still reasonably short, with reasonably small campaigns

Provides “process improvement time” each cycle

It is more convenient for operations to plan

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FINAL PRODUCT WHEEL DESIGN

C * Empty spokes are positioned

A H* on cycles 2 & 3 to allow H and G
to be made if ordered
B
D
C
A
CYCLE 1
(7 DAYS) B
E F
C A
CYCLE 2
(7 DAYS) B
G*
CYCLE 3
(7 DAYS)
(Then return to Cycle 1)

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PRODUCT WHEEL DESIGN

1. Decide which assets would benefit

2. Analyze product demand variability – consider MTO vs MTS
3. Determine the optimum sequence
4. Calculate the shortest wheel time possible
5. Calculate the most economic wheel time
6. Decide the wheel time
7. Calculate inventory levels required
8. Fine tune the design
9. Revise scheduling processes
10. Create visual displays

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KAIZEN EVENT

It is very helpful to get perspectives of all involved

Production schedulers

Operators

Mechanics

Supervisors

Managers

Lab technicians

Makes a very good scope for a kaizen event

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SUCCESSFUL PRODUCT WHEEL USERS

1) BG Products, Inc.
2) Appleton Papers, Inc.
3) Dow Chemical
4) DuPont Fluoropolymers

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EXAMPLES OF PRODUCT WHEEL IMPLEMENTATION

 BG Products, Inc.

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BG PRODUCTS, INC.

Manufactures high quality automotive fluids

 One manufacturing site – Wichita, KS
 Eight fluid manufacturing processes
 Eleven packaging lines

Scope of program
 Value Stream map entire plant
 Investigate flow improvements
 Product Wheels on four packaging lines

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BG PRODUCTS, INC.

Value Stream Map - Rotary Filling Line

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BG PRODUCTS, INC.
Key features
 Volume & variability analysis
 130 products suggested for Make-to-Order

 Products re-allocated among pkgg lines

 Reduced changeover combinations

 Sequence optimized on $$, not time

 Visual management – takt boards
 SMED to reduce changeover time

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BG PRODUCTS, INC.

PRODUCTION SCHEDULE – ROTARY FILL LINE

DAY MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY
TIME 6 AM 8 AM 10 AM 12 PM 6 AM 8 AM 10 AM 12 PM 6 AM 8 AM 10 AM 12 PM 6 AM 8 AM 10 AM 12 PM 6 AM 8 AM 10 AM 12 PM
PRODUCT ABC 55 XYZ66 XYZ77 XYZ94 5S - Sort, Set Preventive Maint
TAKT (SKIDS) 8 7 6 3 0 7 6 7 0 7 0 7 0 0 0 0 0 0 0 0
PRODUCED (SKIDS) 8 7 6 3 0 4 7 9

AHEAD OF TAKT

EVEN WITH TAKT x x x x x x

x
BEHIND TAKT
x

Changeover went long

catching up

REASONS Staggered lunch to catch up

Rotary filling line - Takt board design concept

BG PRODUCTS, INC.

Chart used to track

changeover progress

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BG PRODUCTS, INC.

Rotary filling line

29 products
Two week wheel
 Ten products made every cycle
 Eight on every second cycle – every four weeks
 Eleven made at lower frequency

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BG PRODUCTS, INC.
Benefits
 Reduced inventory
 Several hundred thousand $$
 Better performance understanding
 Faster changeovers – more effective capacity
 More predictability - less churn

The Team
 James Overheul  Matt Peterson
 Lisette walker  Gregg McCabe
 Dustin Mullen

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EXAMPLES OF PRODUCT WHEEL IMPLEMENTATION

 Appleton Papers, Inc.

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APPLETON
 A specialty coating, formulation, and
microencapsulation company
 Thermal papers
 Carbonless paper
 Security paper
 Microencapsulation technology.
 Headquartered in Appleton, WI
 Four manufacturing sites

 Began exploring wheel usage 10 years ago

 Became “a way of running the business” in 2008

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APPLETON
Key features
 Product segmentation by volume and variability
 Q1 = Runners
 Q2 = Kanban Q3 Q4

PRODUCT VARIABILITY
MAKE TO ORDER (MTO) MTO? MTS?
 Q3 = Make to order
 Q4 = Seasonal items
Q2 Q1
MTO? MTS? MAKE TO STOCK (MTS)

 Pull replenishment PRODUCT DEMAND

 Wheel design by kaizen event

 Wheels rebalanced as needed – at least annually

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APPLETON

 Began with two (2) carbonless coating machines

 Extended to two sheeters
 Dedicated each product family to a sheeter
→ Reduced changeover time
 Added wheels to three (3) coaters in 2009
 Now have eleven (11) machines on wheels

 Now extending across supply chain to include

customers

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Benefits APPLETON
 $20 million to $30 million annual savings
 Total inventory reduced by 21%
 Cash conversion days reduced by 17%.
 Leveled production
– eliminated peaks and valleys
 Reduced overtime
 Created better flow
 Increased predictability
 Reduced BSPs (broken service promises)
This information courtesy of Ryan Scherer, Lean Six Sigma Strategy
& Deployment Manager, Appleton

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DOW CHEMICAL

Focus of Continuous Improvements

5S

Product wheels

Demand driven pull

Applied to

Upstream continuous chemical reactions

Downstream batch conversion operations

Current status

15% -> 20% of all production facilities on
product wheels and pull

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DOW CHEMICAL

Typical benefits

10% - 20% lower inventories

30% - 40% shorter lead times

Greater stability

Greater predictability

10% - 25% higher fill rates

This information courtesy of Martin Fernandes, Director of

Supply Chain Innovation, Dow chemical Company

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DuPont FLUOROPOLYMERS
Problems & issues at one plant

Production based on forecasts

Too much inventory on some products

Stock-outs on others

Constant schedule changes

No spare capacity to accommodate changes

Solution

Design and implement a wheel very quickly

“Don’t let the perfect be the enemy of the good!”

Implemented within a few days

Replenish based on pull signals, not forecasts

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DuPont FLUOROPOLYMERS

Results

Stock-outs disappeared

The schedule became stable

The only unplanned changes were in package type

Asset productivity was improved
• Capacity utilization dropped from ~ 100% to 85%

Thanks to Rob Pinchot, Lean Master Black Belt and Steve Pebly,
Supply Chain Manager, for providing background on this example

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OTHER PRODUCT WHEEL

USERS
 Exxon Mobil
FSVV
Fixed sequence variable volume

 Pharmaceutical companies
“Rhythm wheels”

 Paint producers
”Color wheels”

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BENEFITS OF PRODUCT WHEELS

1. Levels production
2. Optimizes sequences
3. Optimizes campaign lengths
4. Enables inventory target setting
5. Reduces inventory
6. Improves delivery performance
7. Bring order to chaos – stop the insanity!
Brings order and structure to complex scheduling
decisions
8. Provides a mathematical basis to support decision making

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TO LEARN MORE …..

Productivity Press
May 2009

Productivity Press April 2013

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Questions?
PeterKing@LeanDynamics.US
(302) 239-1667
(302) 528-2700

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