Setup Reduction and Quick Changeover
Reducing setups and the time associated with changeover is an absolute must in a lean environment. Setup by definition is non-value-added. The customer is not willing to pay for the extra time or cost your organization incurs performing it. Changeover is the process of setting up a machine, equipment, or a production line for another process or product. This time is downtime during which no value-added work is being performed. Many factories have excessive setup times when machines or processes are not operating. Companies can create a lot of problems with long setup times.
Excessive work in process (WIP) and finished goods can accumulate. Rather than changing over more frequently, the manufacturer simply builds more than is needed, knowing that the downtime will be significant. This is a “what if” scenario in that there is anticipation of orders or of future need for the part or product. The problem is not output; it is the long changeover time. Extra inventory can add to the internal cost of the organization. The cost of added inventory is not simply the cost of the parts; an entire infrastructure is required to maintain and control it. It requires people, floor space, racks and shelving, software, forklifts, paperwork, and computers. Inventory can get damaged while in stock, or entire lots can be manufactured incorrectly and the problem may not surface for months, when the item is pulled to place an order—when it’s too late. So reducing the time associated with setups and changeovers is extremely important in a lean journey.