Level production: why do it?
Batch logic, the foundation of most planning systems, has fundamental flaws that result in a different plan every time. That plan is then often changed, resulting in the firefighting that is endemic in many companies.
Level production is the foundation of the Toyota Production System, yet it is the least understood and least applied aspect. It consists of a progression aimed at producing a fixed schedule that is rigorously followed. At first, on a bimonthly cycle. Then on weekly cycles, and after that on daily cycles. This seems ridiculous to most people, because they believe that shorter runs and more variety will make them less efficient, with more waste, not better.
So why use level production at all?
Batch logic is based on the principle of “economies of scale.” The logic is focused on the machines. There is nothing wrong with economies of scale as long as you meet one criterion: that you have few products. As the product portfolio grows, it becomes harder to have long runs without causing unacceptable increases in finished goods inventory. Most companies have seen an explosion in their product portfolios over the last twenty years. What we need is a different focus that will improve efficiency while shortening runs and increasing variety. It sounds impossible, but bear with me.
It is possible to achieve this through a phenomenon called “economies of repetition.” It is based on creating a situation in which natural human behaviors that help improve performance can flourish. By having the same repetitive schedule (what Toyota originally called “standardized production”), three aspects of human improvement behavior naturally occurred. The first is the learning curve. When people do the same task over and over, they get better at it (this is not about applying improvement tools. It just happens).
Second, most people like routine. See for yourself. Go to your organization's cafeteria at lunchtime. Draw a map of where everyone is sitting. Go the next day at the same time and draw the map again. You will have practically the same map, with most people sitting at the same tables, and most of the time even in the same chairs! People live by routines. They like stability, security and predictability. They often feel stressed if their routines are disrupted. That is one reason why short-term plans demotivate people. If you give people routines, they will feel less stressed, more relaxed and more motivated. In addition, they find it easy to see opportunities to keep making small improvements to make their work more effective and efficient. Small improvements, across the whole company, start to become more frequent. The really good news is that experience shows us that the improvements do not stop; they keep getting better because of the rising learning curve and the routine.
There is a third reason that highlights the importance of a repetitive schedule. It creates an environment in which standardization can flourish. Without standardization, you cannot generate sustainable improvements. It is very hard to achieve standard work when short-term changes are frequent and the plan changes every week. That is what happens with batch logic. In a firefighting environment, the way to cope is for each person or resource to have their own way of doing things. It is much easier to accept the need for standard work in a stable environment of fixed repetitive cycles. Standard work starts to come naturally because, when people do the same things in the same sequence, they begin to agree on the best way to work. When every day is different, this is harder to achieve. The benefits of economies of repetition are surprisingly high.
One thing I learned that I find amazing is that Toyota recognized “economies of repetition” but never gave it a name. That is probably one of the reasons why no mention of this term appears in the literature written about TPS and lean. None that I have seen.
Does implementing a fixed repetitive schedule seem impossible to you? That is how it seems to most people, but, from my research, it is what Toyota did first to build stability, and today we know it is crucial in developing a sustainable continuous improvement environment. The BIG question is… How to start?
