Basic Factory Dynamics

Basic Factory Dynamics
1
© Wallace J. Hopp, Mark L. Spearman, http://www.factory-
1996, 2000
physics.com
HAL Case
Large Panel Line: produces unpopulated printed

circuit boards
Line runs 24 hr/day (but 19.5 hrs of productive time)

Recent Performance:
• throughput = 1,400 panels per day (71.8 panels/hr)
• WIP = 47,600 panels
• CT = 34 days (663 hr at 19.5 hr/day)
• customer service = 75% on-time delivery
Is HAL
lean?
What data do we need to
decide?
2
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HAL - Large Panel Line Processes
Lamination (Cores): press copper and prepreg into core blanks
Machining: trim cores to size
Internal Circuitize: etch circuitry into copper of cores
Optical Test and Repair (Internal): scan panels optically for
defects
Lamination (Composites): press cores into multiple layer
boards
External Circuitize: etch circuitry into copper on outside of
composites
Optical Test and Repair (External): scan composites optically
for defects
Drilling: holes to provide connections between layers
Copper Plate: deposits copper in holes to establish connections
Procoat: apply plastic coating to protect boards
3
Sizing: cut panels into http://www.factory-
boards
© Wallace J. Hopp, Mark L. Spearman,
1996, 2000
physics.com
End of Line Test: final electrical test
HAL Case - Science?
External Benchmarking
Internal Benchmarking
Need relationships between WIP, TH, CT,

service!
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Definitions
Workstations: a collection of one or more identical

machines.
Parts: a component, sub-assembly, or an assembly that
moves through the workstations.
End Items: parts sold directly to customers; relationship to
constituent parts defined in bill of material.
Consumables: bits, chemicals, gasses, etc., used in process
but do not become part of the product that is sold.
Routing: sequence of workstations needed to make a part.
Order: request from customer.
Job: transfer quantity on the line. 5
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Definitions (cont.)
Throughput (TH): for a line, throughput is the average

quantity of good (non-defective) parts produced per unit
time.
Work in Process (WIP): inventory between the start and
endpoints of a product routing.
Raw Material Inventory (RMI): material stocked at
beginning of routing.
Crib and Finished Goods Inventory (FGI): crib
inventory is material held in a stockpoint at the end of a
routing; FGI is material held in inventory prior to
shipping to the customer.
Cycle Time (CT): time between release of the job at the
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beginning of the routing until it reaches an inventory
http://www.factory-
point at the end of the

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routing.
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Parameters
Descriptors of a Line:
1) Bottleneck Rate (rb): Rate (parts/unit time or jobs/
unit time) of the process center having the highest long-
term utilization.
2) Raw Process Time (T0): Sum of the long-term

average process times of each station in the line.
3) Congestion Coefficient (α): A unitless measure of

congestion.
Note: we won’t use α
• Zero variability case, α = 0. quantitatively,
• “Practical worst case,” α = 1. but point it out to recognize
• “Worst possible case,” α = W0that. lines
with same r b and T 0 can behave
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very
http://www.factory-
physics.com
differently.
Parameters (cont.)
Relationship:
Critical WIP (W0): WIP level in which a line

having no congestion would achieve maximum
throughput (i.e., r b) with minimum cycle time (i.e.,
T0 ).
W 0 = rb T 0
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The Penny Fab
Characteristics:
• Four identical tools in series.
• Each takes 2 hours per piece (penny).
• No variability.
• CONWIP job releases.
Parameters:
rb = 0.5 pennies/
hour
T0 = 8
hours
0.5 × 8 = 4
W0 =
α = pennies
0 (no variability, best case
conditions)
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The Penny Fab
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The Penny Fab (WIP=1)
Time = 0
hours
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Time = 2
hours
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Time = 4
hours
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Time = 6
hours
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Time = 8
hours
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Time = 10
hours
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Time = 12
hours
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Time = 14
hours
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Time = 16
hours
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Penny Fab Performance
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Time = 0
hours
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Time = 2
hours
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Time = 4
hours
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Time = 6
hours
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Time = 8
hours
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Time = 10
hours
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Time = 12
hours
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Time = 14
hours
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Time = 16
hours
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Time = 18
hours
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Time = 0
hours
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Time = 2
hours
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Time = 4
hours
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Time = 6
hours
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Time = 8
hours
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Time = 10
hours
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Time = 12
hours
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Time = 14
hours
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Time = 0
hours
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Time = 2
hours
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Time = 4
hours
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Time = 6
hours
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Time = 8
hours
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Time = 10
hours
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Time = 12
hours
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TH vs. WIP: Best Case
r
b
1/
T0
W
0
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CT vs. WIP: Best Case
1/
rb
T
0
W
0
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Best Case Performance
Best Case Law: The minimum cycle time (CT best) for
a given WIP level, w, is given by
The maximum throughput (TH best) for a given WIP

level, w is given by,
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Best Case Performance (cont.)
Example: For Penny Fab, rb = 0.5 and T0 = 8, so W0 = 0.5

× 8 = 4,
which are exactly the curves we plotted.
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A Manufacturing Law
Little's Law: The fundamental relation between

WIP, CT, and TH over the long-term is:
Insights:
• Fundamental relationship
• Simple units transformation
• Definition of cycle time (CT = WIP/TH)
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Penny Fab Two
2
hr 5 3
hr hr
10
hr
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Penny Fab Two
0.
5
0.
4
0.
6
0.6
7
0.4 p/
r b = ____________ 20
T0 = ____________ 8
W 0 = ____________
hr hr pennie
s
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Penny Fab Two Simulation (Time=0)
2
hr 5 3
hr hr
10
hr
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7
4
2
hr 5 3
hr hr
10
hr
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7
6
9
2
hr 5 3
hr hr
10
hr
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7
8
9
2
hr 5 3
hr hr
10
hr
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1
7
1
8 2
9
2
hr 5 3
hr hr
10
hr
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1
7
1
1 2
0 9
2
hr 5 3
hr hr
10
hr
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1
7
1
9
1
1 2
0 1
4
2
hr 5 3
hr hr
10
hr
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1
7
1
9
1
1 2
2 1
4
2
hr 5 3
hr hr
10
hr
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1
7
1
9
1 2
1 7 2
4 1
4
2
hr 5 3
hr hr
10
hr
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1
7
1
9
1 2
1 7 2
6 1 2
9 4
2
hr 5 3
hr hr
10
hr
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1
7
1
9
1 2
7 2
1 2
9 4
2
hr 5 3
hr hr
10
hr
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2
7
1
9
2 2 2
2 2 0
1 2
9 4
2
hr 5 3
hr hr
10
hr
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2
7
2
9
2 2 2
2 2 0
2 2 2
4 4 2
2
hr 5 3
hr hr
10
hr
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2
Note: job will 7
arrive at
bottleneck just in 2
time 9
to prevent 2 2
starvation.2 2 2
2 2 2 2
4 4 2
2
hr 5 3
hr hr
10
hr
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2
7
2
9
2 3 2
2 7 2 5
4 2 2
4 4
2
hr 5 3
hr hr
Note: job will

arrive at
bottleneck just in 10
time hr
to prevent 70
starvation.
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2
7
2
9
2 3 2
7 2 5
2 3 2
9 4 7
2
hr 5 3
hr hr And so on….
Bottleneck will
just
10 stay busy; all
hr others
will starve
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http://www.factory- periodically
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Worst Case
Observation: The Best Case yields the minimum cycle

time and maximum throughput for each WIP level.
Question: What conditions would cause the maximum

cycle time and minimum throughput?
Experiment:
• set average process times same as Best Case (so r b and
T0 unchanged)
• follow a marked job through system
• imagine marked job experiences maximum queueing
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Worst Case Penny Fab
Time = 0
hours
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Time = 8
hours
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Time = 16
hours
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Time = 24
hours
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Note:
Time = 32
CT = 32 hours
hours
= 4× 8 = wT 0
TH = 4/32 = 1/8 = 1/
T0
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TH vs. WIP: Worst Case
Best
r Case
b
Worst Case
1/
T0
W
0
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CT vs. WIP: Worst Case
Worst Case
Best
Case
T
0
W
0
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Worst Case Performance
Worst Case Law: The worst case cycle time for a

given WIP level, w, is given by,
CTworst = w T0
The worst case throughput for a given WIP level,

w, is given by,
THworst = 1 / T0
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Practical Worst Case
Observation: There is a BIG GAP between the Best

Case and Worst Case performance.
Question: Can we find an intermediate case that:

• divides “good” and “bad” lines, and
• is computable?
Experiment: consider a line with a given rb and T 0 and:

• single machine stations
• balanced lines
• variability such that all WIP configurations (states) are
equally likely
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PWC Example – 3 jobs, 4 stations
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Practical Worst Case
Let w = jobs in system, N = no. stations in line,

and t = process time at all stations:
CT(single) = (1 + (w-1)/N) t
CT(line) = N [1 + (w-1)/N] t
= Nt + (w-1)t
= T0 + (w-1)/r b
TH = WIP/CT From Little’s

= [w/(w+W 0 -1)]r b Law
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Practical Worst Case Performance
Practical Worst Case Definition: The practical

worst case (PWC) cycle time for a given WIP level,
w, is given by,
The PWC throughput for a given WIP level, w, is

given by,
where W 0 is the critical WIP.

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TH vs. WIP: Practical Worst Case
Best
r Case
b
Good
PW
(lean) C
Bad (fat) Worst Case
1/
T0
W
0
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CT vs. WIP: Practical Worst Case
Worst Case PW
C
Bad (fat)
Best
Goo
(leand Case
T )
0
W
0
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Penny Fab Two Performance
Note:
Best Case
rb process
times in
y PF2
Penn
Fab 2 have var
t equal
ca l Wors
Practi to PWC.
Case
But…
unlike
PWC, it has
1/T 0
Worst
unbalance
Case d
line and
W multi
0 machine
87
© Wallace J. Hopp, Mark L. Spearman, http://www.factory- stations.
1996, 2000
physics.com
Penny Fab Two Performance (cont.)
Worst
Case t
ors
a lW
a c tic
Pr e nn
y
s Pe 2
Ca b 1/
Fa
rb
T0
Best Case
W
0
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Back to the HAL Case - Capacity Data
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HAL Case - Situation
Critical WIP: rbT0 = 114 × 33.9 = 3,869
Actual Values:
• CT = 34 days = 663 hours (at 19.5 hr/day)
• WIP = 47,600 panels
• TH = 71.8 panels/hour
Conclusions:
• Throughput is 63% of capacity
• WIP is 12.3 times critical WIP
• CT is 24.1 times raw process time
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HAL Case - Analysis
TH Resulting from PWC with WIP =

47,600?
Much higher
than actual
TH!
WIP Required for PWC to Achieve TH = 0.63rb?
Much lower
than
actual WIP!
Conclusion: actual system is much worse
than PWC!
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HAL Internal Benchmarking Outcome
“Lean"
Region
“Fat"
Region
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Factory Dynamics Takeaways
Performance Measures:
• throughput
• WIP
• cycle time
• service
Range of Cases:
• best case
• practical worst case
• worst case
Diagnostics:
• simple assessment based on rb, T0, actual WIP,actual TH
• evaluate relative to practical worst case
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Basic Factory Dynamics

Large Panel Line: produces unpopulated printed

Line runs 24 hr/day (but 19.5 hrs of productive time)

Need relationships between WIP, TH, CT,

Workstations: a collection of one or more identical

Throughput (TH): for a line, throughput is the average

point at the end of the

2) Raw Process Time (T0): Sum of the long-term

3) Congestion Coeﬃcient (α): A unitless measure of

Critical WIP (W0): WIP level in which a line

The maximum throughput (TH best) for a given WIP

Example: For Penny Fab, rb = 0.5 and T0 = 8, so W0 = 0.5

which are exactly the curves we plotted.

Little's Law: The fundamental relation between

Note: job will

Observation: The Best Case yields the minimum cycle

Question: What conditions would cause the maximum

Worst Case Law: The worst case cycle time for a

The worst case throughput for a given WIP level,

Observation: There is a BIG GAP between the Best

Question: Can we ﬁnd an intermediate case that:

Experiment: consider a line with a given rb and T 0 and:

Let w = jobs in system, N = no. stations in line,

TH = WIP/CT From Little’s

Practical Worst Case Deﬁnition: The practical

The PWC throughput for a given WIP level, w, is

where W 0 is the critical WIP.

Critical WIP: rbT0 = 114 × 33.9 = 3,869

TH Resulting from PWC with WIP =

WIP Required for PWC to Achieve TH = 0.63rb?

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