Holding moneyIn these days where consumers demand an ever increasing variety of goods and services at the touch of a button, the flexibility of your process is key.

Whether you’re running equipment invented in the first industrial revolution or the fourth, you will almost always benefit from reducing the amount of time it takes to change from making one product to another.

This is what we do when we use the SMED (Single Minute Exchange of Die) tool, also known as Set Up Improvement and changeover reduction.

The major use of Set Up Improvement

Reducing the time it takes to do each set up gives you two options.

  1. You free up more time to produce parts. This is useful if you are running overtime to meet orders, but it can be counterproductive. If you don’t sell all those extra parts, you end up with excess finished goods. Overproduction and its resulting inventory are two of the 7 Wastes and have their own associated costs.
  2. Use the time to do more (now shorter) changeovers. This allows you to plan smaller production runs and so reduce batch sizes.

It is this second option that has more scope for improving not only your competitiveness, but your cash flow as well.

The 5 benefits of reducing batch sizes

  1. Reduce overproduction and thus the amount and cost of the inventory held in your plant and supply chain. This improves cash flow and reduces risk to your business.
  2. Planning smaller, but more frequent runs of a product results in a shorter lead time. This means you can respond much more quickly, and with less cost, to unexpected changes in customer demand.
  3. Running smaller and smaller batches allows you to internally level the demand on your process and so introduce pull and flow. This is one of the underpinning principles of a lean system.
  4. It makes current equipment more flexible, meaning you don’t have to purchase additional equipment to meet delivery and variety requirements.
  5. You will improve your Stock Turns and Floor Space Utilisation metrics, as less stock is held and the resulting space is used to generate value.

Always remember to calculate how much you have saved and share this information across your business.

Where and when can I use SMED?

Although the technique was refined by Japanese auto manufacturers after World War II, it is still an incredibly powerful tool that will play a more and more important role in today’s consumer driven society.

If your equipment (or process) is needed for more than one product, in one colourway, you will need to change it over.

This applies whether it is a 60 year old press or the very latest 3D printer.

I took the opportunity at a recent show to climb round the back of some 3D printers. It made me smile to see that there are as many opportunities to reduce changeover times on these as there are on our older manufacturing kit.

In next week’s blog I will outline the best method I know to improve your set up time and also share some of my favourite tips.

These can be applied to all sorts of equipment and also to non-manufacturing processes. So no matter what your business, read on to discover how you can make a host of low cost improvements.