Great comment B.D. I will attempt to answer the why here this evening. Let’s dig into the manufacturing side of things in this article and tomorrow night I will write about heijunka in the front office.
Taiichi’s Take on Heijunka
First, let’s start with some words of wisdom from a man of immense wisdom.
“The slower but consistent tortoise causes less waste and is much more desirable than the speedy hare that races ahead and then stops occasionally to doze. The Toyota Production System can be realized only when all the workers become tortoises.”
– Taiichi Ohno
Last night we introduced the basic concepts of heijunka. To recap, let’s assume a company generally sells equal amounts of two particular products – A and B.
A mass producer would likely tool up and run a giant pile of A’s, switch over and run another giant pile of B’s. These evil people, OK they are not evil just misguided, normally live by the mantra “build it and the orders will come.” Funny thing those orders… when we want them to come they rarely do. And when we are not quite ready they flood in.
In this same situation, a lean producer would likely attack this demand as follows: ABABABABABABABAB. If you are new to lean this is perhaps the most counterintuitive thing you have ever seen. I will grant you this… I really struggled with heijunka myself. But by keeping an open mind and actually seeing it work I came to believe.
So Why Heijunka?
There are many reasons for implementing heijunka. I will touch on a few that helped me understand this concept.
First, building in huge batches is not optimal for many reasons. One that impacted me greatly at my previous company (a mobile phone manufacturer) was that customers change their mind – a lot.
For example, if I thought I needed 100 red toasters, 50 blue toasters, and 25 green toasters this month based on hard orders and a forecast I may set off and build all 100 red toasters first, then all the blue, and last but not least those shiny green toasters.
This is all well and good until the worst thing that could ever happen to a mass producer happens. Let’s say we are on red toaster number 98 and our friend Sal, from sales, calls and explains, “Hey buddy, great news! I just got our customer to commit to 200 blue toasters! Isn’t this great? I mean we are making a killing on the blue toasters. Oh, yeah, and Ron (I sheepishly answer yes) they only want 25 red toasters now so can you just tweak that little MRP system of yours and make it happen? Thanks buddy. You’re the best.”
While this may be great news for Sal I am now stuck with a bunch of red toasters. Granted, we may sell them next month. But now we enter that dangerous game of “demand gambling” and the good guys rarely win this bet.
Now, had we leveled production as previously discussed we may have only produced a few red, blue, and green toasters enabling us to be much more flexible and not be stuck with all the red toasters. Truth be told, even lean producers get nailed with demand changes… but these situations are few and far between as compared to what mass producers deal with.
There are also many more advantages to heijunka.
The “bullwhip” effect is common in mass production circles. The slight twist of the wrist (i.e. demand) can create a massive strike at the end of the bull whip. This means even small demand variations can wreak havoc throughout our plant and especially with our suppliers. If you don’t believe me just ring up some of Dell’s suppliers and ask them how demand gyrations impact them. Dell doesn’t just flip their wrists… they wind up and pound on their suppliers. When we level production the entire value stream, including our suppliers, can cope much better.
Heijunka also allows us to schedule resources (equipment, employees, etc.) in a more balanced manner. Instead of having employees stand around in January or February, when demand is lower, and then watching them run around like maniacs and paying “mandatory” overtime in October and November during the peak season we can level the demand producing the same or similar amounts throughout the year. In some cases this may mean overproducing and carrying a small amount of inventory during the slow seasons as we prepare for the peak season. While not the perfect situation this is far better than the alternative.
There are many more advantages I am not discussing tonight. There are entire books written on the topic. But these are a few of the biggies that helped me get over the heijunka hump.
Challenges to Heijunka
What about the challenges to heijunka? Dr. Jeffrey Liker explains that implementing heijunka is a “self inflicted choice.” Sounds painful, eh? What Dr. Liker means is that when we implement heijunka, and one piece flow for that matter, we can no longer allow things like long changeovers to exist, or to produce defect after defect, or to basically hide behind the piles of inventory mass producers do. These crutches are gone.
But even with these challenges heijunka yields far more advantages once the system is working as a smooth machine. Tomorrow night I will discuss heijunka in the front office which is what B.D. was really asking for clarification on I think.
To read the next installment of this heijunka series please follow this link: Why Heijunka – Part 2.