ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Business and Employment»
  • Business Management & Leadership

HEIJUNKA |Examples & Meaning of Production Levelling

Updated on March 1, 2015
Heijunka means levelling production
Heijunka means levelling production | Source

Heijunka is a system of production-levelling that produces the right product mix as demanded by the customer by making optimal utilisation of the available capacity.

This lean principle is normally applied to mature lean organizations that have successfully streamlined all their process using the appropriate tools. These capacity enhancements are a prerequisite for implementation of this concept because system instability may result if it is implemented prematurely.

What is Heijunka?

Production levelling is a means of stabilizing production volume and variety by consolidating the total number of customer orders, and then spreading out their production in an even manner through-out the day. This is done to mitigate against the variation in customer demand that happens on a daily basis.

The even spreading-out of production ensures a high order fulfillment rate because variety and volume requirements are catered for. Heijunka also ensures that the internal production is balanced, and that the established capacity is not over or under-utilized.

How does Heijunka Work?

The ideal situation in a lean production system would be to produce as per the customer order sequence. But such system would not work well because of the daily fluctuations that normally occur with customer orders.

At one moment there would be no orders, leaving the production capacity idle, while the next moment there will be a flood of customer orders that the current production capacity cannot satisfy.

This evenly spreads the production of customer orders by looking at the average demand over a slightly longer period, then consolidating them into a production schedule that takes into account the volume and mix.

This results in flexibility in customer choice. There are two ways to level the production process:

  • Levelling by quantity
  • Levelling by product

The main goal is to effectively produce what the customer needs, when they need it and in the quantity that they require. It results in stabilised production that can withstand erratic spikes in customer demand. These spikes are what lead producers to operate in a mass production mind-set that encourages large buffer stocks, over-production, over-staffing and over-capacities.

Large batches of products increase the costs of production and eventually result in poor customer satisfaction ratios because resources are used to produce goods that are not in demand. Batching of production results in poor quality, overburdening of resources and increased costs of production.

The system leads to a predictable and stable working environment as the resources are evenly balanced over a specified period of time. The number and variety of goods produced over a specific period of time is averaged out so as to ensure all orders are fulfilled in time.

Let us take an example of Company X that produces sandals. Company X produces sandals of three different colors – red, blue and green:

Example of Production Levelling

 
8:30 TO 9:30
9:30 TO 10:30
11:00 TO 12:00
12:00 TO 13:00
14:00 TO 15:00
15:00 TO 16:00
16:00 TO 17:00
MONDAY
RED
RED
RED
RED
RED
RED
RED
TUESDAY
RED
RED
RED
RED
RED
RED
RED
WEDNESDAY
RED
RED
RED
RED
RED
RED
RED
THURSDAY
BLUE
BLUE
BLUE
BLUE
BLUE
BLUE
BLUE
FRIDAY
GREEN
GREEN
GREEN
GREEN
GREEN
GREEN
GREEN

From the example above, you find the production of red sandals is done for the first three days, followed by blue, then green sandals. This way of producing has several disadvantages:

  • If the customer suddenly decides to order a large number of blue sandals on Monday, it will mean that the order will not be met because the red sandals have been put in production. The company might stop production of the red sandals and try to expedite the new order. Because of the change over of machine to cater for this new order, production sequence will be disrupted.
  • There is a possibility that the red sandals will accumulate due to lack of orders. This inventory build-up will negatively affect the profitability of the company, while at the same time customer order will not be fulfilled.
  • Labour and machines are not properly utilised because on some days there will be a heavy workload, while on others there will almost be no work to do.
  • The internal variability in production may lead to upstream instability. This means that suppliers will be inundated with unpredictable orders and might have to build-up too much inventory which they get stuck with when orders reduce.

The amplification of demand from one process to another is known as the ''Bull whip effect'' and often leads to bigger inventory piles as you go upstream. This inventory pile continues upstream when in reality the downstream demands are fairly uniform.

Example in a production setting

Producing to customer demand at a steady pace within the organisation is the aim of production levelling. It is a balance between the needs of the customer and the efficiency within the factory. The system utilises capacity in an optimal manner and leads to stability along the whole value chain be it upstream suppliers or downstream customers.

Levelled production

 
8:30 TO 9:30
9:30 TO 10:00
10:00 TO 11:00
11:00 TO 12:00
12:00 TO 13:00
14:00 TO 15:00
15:00 TO 16:00
16:00 TO 17:00
MONDAY
R
R
R
R
B
B
G
G
TUESDAY
R
R
R
R
B
B
G
G
WEDNESDAY
R
R
R
R
B
B
G
G
THURSDAY
R
R
R
R
B
B
G
G
FRIDAY
R
R
R
R
B
B
G
G
Production without heijunka
Production without heijunka

Benefits of Levelling Production

Spreading out of the production volume and variety in an even manner over a defined period of time helps in mitigating against the effects of erratic customer demand. This done by ensuring a stable and predictable manufacturing environment.

There are many compelling reasons for implementing heijunka but the following stand out:

  • Despite the misconceived notion that producing in large batches at a time will reduce changeovers and set time, the opposite is normally true as such production methods of lead to lengthy lead times, high stocks, poor quality and poor utilization of available capacities.
  • To counter the effects of the Bullwhip Effect which is the amplification of demand throughout the value chain. Trying to respond to these fluctuating demands often leads to a myriad of problems within the supplier facility such as variation in production with periods of underutilization of capacity followed by periods when the capacity cannot satisfy customer demand.

Heijunka aims at levelling production in such a way that the above mentioned problems do not occur. To understand the negative consequences of the bullwhip effect on supply chains, we look at the typical sequence of events that lead to the situation:

  1. A supplier makes forecasts based on average demand of the preceding period and produces accordingly
  2. After some time, a sharp decline in the orders prompts the supplier to stop producing and he utilises the stock that he has accumulated to fulfil the little orders that are coming in.
  3. Customer orders increase once again and the supplier again ramps up production in order to meet this increasing demand.
  4. This erratic production runs are in the meantime causing other problems within the production floor as workers lose morale and costs escalate.
  5. The cycle continues alternating between increased demand and a reduction in orders – each time the supplier trying to keep up with the fluctuations.

Instead of trying to follow the pattern of external demand that will always be erratic in nature, heijunka production levelling results in consistent daily output which is determined by average demand that is spread evenly within a specified period of time, ideally a week.

Take for example a twelve week production cycle for a particular product. Each week will have different customer order levels- some days these orders will be above the capacity of the production facilities, while on other days the orders may below the capacity which may result in poor utilization.

Using heijunka, a four week total demand will be taken, then production will be planned on a weekly basis from the average.This will result in the same number of units being produced thus preventing the issues that normally arise when production levels are different on eve other day.

One thing that you will notice with heijunka is that there will be a need for an inventory of finished goods – which appears to conflict with lean thinking principles about inventory (it is a waste).

However, this needs to be weighed against the overall goals of the organization – which is basically to satisfy customer needs. It is therefore better to have some inventory of finished goods that are produced in a cost-effective manner than trying to produce in the exact sequence and quantity that is demanded by the market.

The following table compares the benefits of Just in Time (JIT) production to those of producing using heijunka production levelling:

Levelled Production with Heijunka
Levelled Production with Heijunka
Just in Time Production
Heijunka Production Levelling
Customer demand is fulfilled on request
Customer demand is met based on total demand over a given period
There is a smaller inventory of finished goods
Large inventory of finished goods to cater for high demand periods
There are many fluctuations in demand that are felt the higher up the value stream on goes
The predictable orders along the value chain result in reduced overall supply chain inventory
Erratic work schedules
Balanced work schedule
Overtime
Less overtime

Challenges of Heijunka

The heijunka production systems have more flexibility as well as higher customer satisfaction ratios than an unbalanced production that is characterized by large batches, long set-up times and long wait times.

While production levelling using heijunka is a powerful lean tool that can result in improved efficiencies within an organization, there are a number of technical and social factors that may impede its proper implementation:

  • It requires a major tool redesign within an organization in order to ingrain the kind of flexibility needed for proper implementation
  • As production does not match actual customer demand, a relatively large inventory of finished goods will be necessary- along with the attendant issues that accompany large inventory levels such as stock obsolescence and high carrying costs
  • It requires a predictable environment as well as accurate and timely data without which it would be very difficult to implement
  • Requires proper coordination with the customer so as to better project future demand
  • There has to be a very high degree of discipline within the workforce as well as well thought out work standards that must be followed at all times
  • As there is little operator leeway as to what and how to produce, there can be resultant issues of resistance due to lack of flexibility

When properly implemented, heijunka is a powerful tool that stabilizes not only the individual business, but the entire supply chain. There are circumstances whereby implementing the tool makes a lot of sense while in other circumstances it does not.

For example, in businesses where the customer demand rarely fluctuates, heijunka would not be useful at all and may in fact have unintended negative consequences.

What businesses need to internalize is that production levelling of the kind heijunka demands requires plenty of accurate and actionable data for it to be successful.

The main reason that production levelling is practised is to counter sudden fluctuation in customer demand through production of a wider variety within the same production line.

Heijunka box and board

A heijunka box isa place where the production signals or kanbans in a levelled production system are kept. It is a visual tool to show the people working in the Gemba what should be produced next.

The Heijunka board is divided into rows which indicate the products to be produce and columns which indicate the time for production. The production kanbans are placed in the time slots depending on the quantity and mix required.

All the time slots have an equal amount of work which ensures that production flow is constant through-out the day.

Heijunka is best applied to a production facility that has a large variety of products that have different demand characteristics. These kind of products have high variation in terms of type and quantity demanded by the market and there has to be some inventory in order to reduce the amount of fluctuation in the production facility.

This increase in inventory appears to contradict the lean system that considers inventory as a form of waste. However, the sensible use of inventory to balance production can eventually result in a significant reduction of the overall system inventory.

Building inventory to safeguard against fluctuations involves categorizing the type of inventory into four distinct types:

  • Build-to-order inventory is the stock that is kept so as to satisfy the real and current customer demand. It is what is required by the market or has already been order by the customer and is just awaiting dispatch
  • Seasonal inventory buffer is required by the market during certain periods within the year and is built up slowly over time (usually a monthly production target is set and spread out evenly over the months)
  • Safety stock is built in order to take care of market fluctuations that are normal for many products. A sudden spike in demand caused by increased orders can result in unfulfilled customer orders if there is no safety stock in place. The increased demand will have to be met by expediting within the production facility which only ends up in disrupting production
  • Buffer stock is kept so as to cater for internal disruptions such as machine downtime or staffing issues.

These inventory buffers should be stored in separate locations for ease of monitoring and replenishment should only be done using kanbans. When the maximum allowed quantity for a particular type of inventory has achieved, production efforts should be directed at the next inventory type that has not reached its maximum quantity levels. This is done so as to utilize the available capacity (labor and machine) in an optimal manner instead of leaving it idle.

For heijunka to be even more effective, there are several other internal improvements that must be made within the organization:

  • Standardization of work processes so as to achieve reliability and repeatability
  • Change-over time reduction which increases the available capacity
  • Error-proofing of machines and processes

Companies that have implemented heijunka have attained spectacular gains in terms of overall efficiency. Typical results that can be achieved through production levelling include:

  • 40% lead-time reduction
  • 70% change-over time reduction
  • 40% reduction in work in process (WIP)
  • 60% reduction is inventory obsolescence
  • 100% improvement in on-time customer delivery

What is Heijunka?

By definition, heijunka is a production levelling and scheduling tool that is used in lean manufacturing to effectively utilize the available capacity within an organization. This is informed by the need to respond in a flexible manner to customer demand.

Production levelling and scheduling is necessitated by the reality in the business world where customer demand tends to fluctuate on a day to day basis but when looked at from a longer term perspective almost always remains constant.

Heijunka in Lean Manufacturing

While lean manufacturing calls for producing only what the customer demands when they demand it, doing so will in reality result in erratic production. On one week you may be producing large quantities of a product while in the next week you will find that the resources within the organization are been underutilized.

Because of this uneven production schedule, the supplies coming into the organization will also be erratic – meaning that inventory levels will increase to unmanageable levels. There will also be a lot of incidences of stock-outs as it is virtually impossible to keep large quantities of all stock items.

It is therefore not a wise decision to try to run a strictly build-to-order system because of the inherent difficulty of keeping optimal inventory levels. Such a system will result in hidden problems such as quality defects and very high lead times that will make it difficult to fulfil customer demand.

Heijunka solves this problem by levelling out the production schedule resulting in better customer service and quality. In fact, some of the best lean manufacturing firms such as Toyota do not insist on a build-to-order system in the strictest sense of the word but work out the best process that will lead to efficient production.

Production levelling works by not trying to fulfil customer order as they come but by accumulating orders then levelling the production schedule. By using such a process, a firm becomes much better at fulfilling orders through shorter lead times, better quality and higher profits caused by reduced inventory of parts.

Implementing Heijunka Production Levelling

The fact that build-to-order might work against the goals of lean manufacturing shows that it is not always prudent to try and apply tools with considering the big picture of whether they will achieve their intended goals. Many companies when implementing lean go about trying to remove the seven wastes but in the process end up hurting the organization.

As an example, if a firm is trying to implement lean in a system that has variation in the production processes it will find that focussing on only removing waste will do more harm than good to the organization. The workers will be overburdened because they will have to work faster than is naturally possible and this will be the downfall of the lean program. There will be a negative attitude towards lean by the workforce who will conclude that it cannot be implemented in their organization.

Heijunka Example in an airline caterer

An airline catering firm produces meals for airlines that pass through the international airport every day of the week. There is a wide range of products demanded by the airlines including desserts, hot meal and salads.

The caterer operates in three shifts that cover a twenty four hour period because the flights operate throughout the day. Each meal item is prepared by different sections of the kitchen and then transferred to the catering department to assemble into trays.

As an example of how heijunka can be applied in the final assembly of trays, we take a look at the assembly of desserts. This production levelling is applied across the hours of the day as there is no stock kept given the fact that these are food items.

Heijunka does not build according to the customer demand which can be completely unpredictable. Instead orders are totalled over a given period of time and produced evenly over the production schedule in terms of volume and mix.

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    Click to Rate This Article