1. Introduction

Question 1

Type of Variability

Answer 1

1. Dysfunctional

2. Strategic

Question 2

Dysfunctional variability

Answer 2

Rework, machine breakdowns, wrong specifications, etc.

Question 3

Strategic variability

Answer 3

Many product options, custom-engineered products, highly variable demand

Question 4

Choice of strategy to deal with variability

Answer 4

1. Exploit

2. Eliminate

Question 5

Work “smarter” not faster

Answer 5

Time-based management thinking (instead of cost-based which is bad)

Question 6

Impact of lead time

Answer 6

Waste

Question 7

Waste

Answer 7

All the things that would be reduced or eliminated, and all the new opportunities you would have if the lead time was reduced

Question 8

Things to reduce

Answer 8

Activities, tasks, material, resources

Question 9

Waste examples

Answer 9

Overtime costs, forecasts development, inventory costs, obsolescence, order cancellations, loss of sales to competition, meetings to set new priorities

Question 10

Consequences of reducing waste

Answer 10

Less overhead (operating expenses)
More productivity
Higher sales

Question 11

The need for safety stocks (Make to Forecast) produces

Answer 11

High WIP and Inventory

Question 12

The need for safety time (Make to Order) produces

Answer 12

High WIP and Inventory

Question 13

Lead time is the result of

Answer 13

Dynamics and interactions between resources and product/tasks

Question 14

Dysfunctional effect of those “nice” large orders

Answer 14

Lot size of one product impacts lead time of other products

Question 15

Strategically plan for spare capacity (operate at 75-85% capacity)

Answer 15

As utilization approaches 100% queues get longer and longer (Highway or supermarket)

Question 16

Invest in people and machines

Answer 16

Not in warehouses

Question 17

Manufacturing system view

Answer 17

Graph: Lead time (Y) vs. Lot Size (X)

There is a U-shape, if lot size increases too much lead time starts to increase. Need to find the minimum (optimal lot size).

Question 18

Cost-based view

Answer 18

Graph: Efficiency (Y) vs. Lot Size (X).

Square root of x. As the lot size increases, the efficiency increases. (This approach does not help reduce lead time)

Question 19

MRP/ERP will increase lead time

Answer 19

To be on-time, each area must quote a lead time that it can meet regardless of workload (worst-case). Total MRP/ERP lead time becomes a collection of worst-case scenarios.

Question 20

Why ordering long lead time items in large quantities is bad?

Answer 20

Beer game (everybody orders more, and then the supplier lead time increases more)