Lean Formulas

Lean Formulas

Line Rate = Customer Expected Demand / Working Days

Takt Time = Working Minutes Per Day / Line Rate

Target Manning = (Work Content / Takt Time) * 115%

MCT = WIP of Control Part / Exit Rate

Work Content Ratio = Work Content / MCT

#Kanbans =

Daily Demand * (Order Freq. +Processing Lead Time + Transit Time + Safety Time) / Container Size

Line Rate = Customer Expected Demand / Working days

For a specific product line, we are anticipating average monthly demand of 8000 units; our “normal month” of production is 20 days. Our Line rate =400 units per day – this is the line rate to design the line for.

Takt Time = Working Minutes per Day / Line Rate

We plan to operate the specific line 2 shifts. Everyone “clocks in” for 8.5 hours per shifts. Each shift gets 2-15 min. breaks and 1-30 min. lunch. Each shift is allowed 15 minutes for meeting and clean-up.

Working Minutes – 2 shifts * (510 minutes – 15 – 15 -30 - 15) = 2*435 = 870 min.

Takt Time = 870 min. / 400 units per day = 2.2 min.

Target Manning = (Work Content / Takt Time) * 1.15%

The average human work content for this product family is 15 minutes.

Target Manning = (15 min. / 2.2 min)*1.15 = 7.8 people (rounded to 8)

MCT = WIP of Control Part / Exit Rate

This product family has a PCB that begins the process. While on a waste walk, we counted 1,500 PCB’s somewhere in process.

Manufacturing Cycle Time = 1,500 parts / 400 (line rate) = 3.75 days

Work Content Ratio = Work Content / MCT

The total work content of the line is 15 min. The work content involving the steps the PCB goes through is 10 minutes (the other 5 minutes in other subassemblies not on the critical path.)

Work Content Ratio = 10 minutes / (3.75days * 17 hours *60 min) = 0.25%

(Remember “world class” is 5-10%!)

#Kanbans =

Daily Demand * (Order Freq. +Processing Lead Time + Transit Time + Safety Time) / Container Size

We decided to Kanban the PCB’s with the suppliers. So, we need to develop a workable kanban system. One of the key PCB model is consumed on the average of 150 units / day.

Daily demand = 150 per day

We asked the supplier if they could take a daily order. After reviewing their capacity and looking at set-up issues, we jointly decided they could only afford to set-up and run our range of parts every 3 days – this became the Order Frequency. The supplier committed that they could process any order within a day – Lead Time. The supplier is 2-3 days away by non expedited freight. We decided a 3 day assumption was safe – Transit Time. Finally, we looked at variation that could happen during the Replenishment Time (LT + TT). We figured we might need to cover a demand spike of 1 day’s worth. When the supplier’s press goes down, it might be down for 1 full day. Also, freight sometimes gets delayed an extra day. Since everything will not happen at once, we chose 2 days for Safety Time. The standard pack size if 150 units.

#Kanbans = 150 * (3+1+3+2) / 150 units / container = 9 kanban signals

The supplier will set-up and ran whenever they get three signals ---

(3 days Order Freq. *150 units) / 150 per cont. = 3 containers.