Establishing A Lean Factory Layout

Lean Layout

As lean thinking continues to evolve with things like Industry 4.0, improving your factory layout utilizing lean methodologies can greatly improve your factory efficiency.

Many factory managers today experience the same headaches that were common years ago. Do any of these sound familiar?

  • Long production and lead times
  • Bottlenecks in production- at max capacity
  • Too much energy spent putting out fires and fixing problems
  • Work environment is nasty, full of excuses, and too much finger pointing amongst departments
Lean Factory Layout, What is it?

One key to success in factory management is having an effective factory layout. Not only will it have a direct effect on the efficiency of your operations, but it will also affect the total operation of your business, including inventory, production processes, administration, etc. There are always varying view as to what a “good” factory layout is. Such views will change depending on the type of layout you wish to accomplish.

At MCDA CCG, we deem a good factory layout as one that utilizes and applies lean principles to create a lean factory layout. Lean eliminates waste, and delivers value to your customers with lower costs, higher quality, and shorter lead times.

A lean factory will create a seamless flow for material and information, will minimize handling time and effort, will save on floor space, shorten lead times to customers, and will increase productivity and its quality. If you are redeveloping or starting design on your operations, a lean factory layout will assist you in creating a more flexible and efficient use of available space.

What Is The Difference Between Traditional And Lean Factory Layouts?

A variety of factors separate a lean factory layout from a traditional factory layout. We will explore some examples below.

Process Based Vs. Focused Value Stream

A traditional factory layout will focus more on process based departments. Like machines are grouped into functional work centers. A traditional machining factory might be separated into work centers of cutting, milling, lathe, fabrication, and assembly. In most cases, walls are between these different work centers and materials are moved between departments by forklifts. Work will often be done in batches to make production more economical. This often leads to high levels of work-in-process (WIP) inventory, and long lead times.

Lean factory layouts focus on value streams, all value added steps from raw material to delivery to the customer. Lean layouts are more likely to merge processes horizontally across the factory, compared to the vertical process departments in a traditional factory layout. In a lean layout, different machines tend to be grouped together by product families. As the processes are connected in a lean layout, the factory will experience much less material handling requirements.

Cost Per Unit Vs. Flexible

Majority of manufactures have a handful of large machines that are key to the quality and cost of the product. In traditional mass production, larger equipment is required to make larger batches within less time and lower costs.

The large equipment on a per-unit basis might be efficient, but it is more than likely disrupting material flow through the facility. Traditional plant layout builders place large machines in layouts that often impede material flow resulting in stoppages and/or blockages. These traditional builders will show how much capacity they have, how fast they are able to run, and how low the cost per unit can be. However…They generally fail to mention that large machinery is expensive and brings with it, higher work-in-process (WIP) inventory before and after, and is generally speaking very inflexible when demand changes.

Alternatively to the massive almost impossible to move machinery in a traditional factory layout, lean layouts attempt to use smaller equipment dedicated to each product family. Equipment that is right sized is used to suit the demand of the value streams, allowing quick change over, enabling smaller batch size. More importantly, they are easy to install, are easily moved, and are flexible to demand changes. In some cases, you might consider having equipment on casters for easy movement to align with takt time from the customers. Lean layouts utilize small and right sized equipment to make the flow to the customers quicker and more flexible allowing manufactures to be more agile to demand.

Beautiful Vs. Visual Controls

The fact is – factories are meant to be functional. In some cases, artistic considerations are allowed to override common sense. At MCDA CCG we have been inside factories that are incredibly beautiful on the inside, with large amounts of space between machines and in a few cases with tables, chairs, and statues between machines. As you can imagine, the excess space is often and very quickly occupied with excess WIP inventory. The wide space also locks in excessive movement and transportation waste. As for the statue in the factory, it just provides a detour for moving goods to the next process. Forget the artistic beauty and put your focus on function. At MCDA CCG we can show you that a well designed lean production cell operating at its optimum level is a thing of absolute beauty in itself and that will be proven when you see your bottom line improve along with it.

Lean factory layouts generally have extremely little room between machines helping to prevent inventory build up, as well and helping reduce motion and transportation. Less waste will be produced, excessive inventory will naturally reduce, as will over production, motion and transportation. In addition, when you have waste it will become visible. The lean factory layout make the flow of people, material, and information much more streamlined, and use visual controls to make obstacles and flow stops visible. Lean factory layouts utilize visual controls for increased communication and set visual standards.

Do I have A Good Lean Factory Layout?

How can you tell if your factory layout is a successful lean factory layout? Here are 5 benchmarks you can apply to see if your factory has achieved a lean factory layout.

  1. Connection To Customers – Lean factories aim to deliver products to customers on time in full, with 100% quality. A critical factor of a lean facility is that value streams connect to the customers demand and provide quick response to customer demand. The value stream is either continuous flow to customers or pulled by real consumption from customers. Operators within each process should understand the requirements from the customer and also know why they do affects the customers decisions. Lean factory layouts not only allow the entire value stream to be connected with external customers but also connects processes with internal customers. Instead of process silos in the traditional batch production, Lean factory layout brings machines closer, makes production with smaller batches or even in one-piece flow. It physically brings your internal customers next to you, which allows defects to be communicated from the next process with short response time and with fewer defect products produced. Connecting supplier processes, customer processes, and communication simplifies the process of continuous improvement.
  2. Flow – Raw material, Work-In-Process, Finished Goods, Consumables, People Movement, Waste, Information Flows should all be considered when designing your factory layout. A successful lean factory will make these flows run efficiently through all processes. That’s why we use “value stream” to describe the connected value-added activities. We want to see these processes running smoothly and not blocking the flow of materials, information or people. The blocked flows in the plant should be avoided in the lean factory layout planning. If there are any blocked flows, they can be easily identified and removed. One example is easily set up and easily maintained machines being placed together under the same value stream with balanced cycle times streamlining the process as much as possible.
  3. Less Waste – You may hear the acronym TIMWOOD or TIMWOODS when referring to the 7 or 8 lean wastes. TIMWOOD = Transportation, Inventory, Motion, Waiting, Over-Production, Over-Processing, Defects. TIMWOODS= the above along with Skills. A poor factory layout will have the effect of increasing wastes. As we discussed earlier, traditional mass production creates long changeover times. Over-production of large batch size products will fill the empty space with excessive work-in-process inventory. Excessive inventory will subsequently create more transportation and over-processing. Large batch size makes other products or processes wait. Large batches also amplify the effect of defects, because they are often found only after a large batch has been created. Working in vertical silos in a departmental environment, people’s potential skills and knowledge are also underutilized. Lean layouts should have fewer wastes and promote continuous improvement. Continuous flow (or one-piece flow) makes just in time (JIT) production possible, with less inventory and waiting time. Smaller spaces between machines not only reduces motion for operators but also makes it hard to overproduce. There simply is not enough space for excess work in progress so you are forced to fix the causes of this work in progress.
  4. Flexibility – After you new lean layout is implemented, it is likely there will be a variety of changes such as expansion, demand increase, new product launches, changes in methods or equipment, or safety requirements. With that being said it is essential to design the layout in such a way that it is flexible enough to adapt to change. That’s why small and easy-to-move equipment is preferable in lean factory planning. Saving space for future expansion or new products is also worthwhile, rather than giving up space to excessive inventory.
  5. New Standard – A lean layout should not be developed by just one person or one group of stakeholders, it needs to be a collaborative effort from a range of stakeholders in the business. Incorporating stakeholders’ perspectives into plant layout design and engaging them during layout planning is vital to the success of a factory layout. However, emphasis on user-experience is usually not sufficient for developing a successful plant layout. It might just lead to a new plant layout similar to the current one with comparable wastes. At MCDA CCG we typically include Value Stream Mapping training classes before the new layout project kickoff. A good lean factory layout should set a new standard for everyone. A key step to prepare for a successful Lean plant layout is to train all involved people in lean skills. Basic lean tools such as standardized work, 5S, continuous flow and quick changeover are relevant. Without these skills, operators tend to complain about the new layout, instead of problem solving.
Lean Factory Importance Recap

Compared to traditional plant layout, a well-designed lean factory layout can bring a variety of benefits:

  • It will minimize the material handling distance and time;
  • It will save on floor space;
  • It will increase product quality by reducing large batch defects;
  • It will prevent excessive work-in-process (WIP) inventory;
  • It will shorten lead times to customers;
  • It will make flows of people, material, and information more streamlined, and make wastes more visible;
  • It will reduce the cost of investment and also production cost with the entire value stream as a whole;
  • It will set a new standard of “LEAN” future state for everyone to work toward;
  • It will have a positive effect on workforce safety and morale, and promote continuous improvement;
  • It will make future changes of layout more flexible and easier.

Remember –THERE IS NO PERFECT LAYOUT… there will always be room for further continuous improvement.

Contact our lean planning specialists and find out how MCDA CCG, Inc. can help streamline and layout a lean factory for your business. Call today! (714)872-2393 or complete the form below and a specialist will reach you within 24 hours.

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