Why Implement SMED (Single Minute Exchange of Die) If Changeovers Aren't Your Biggest Constraint?

Very often Lean manufacturing tools used in isolation only serve to embrace a culture of local-optimization (optimizing the parts rather than the whole.) In other words, you can optimize operation "C" to the point that it is running great, producing terrific numbers, and really looks fantastic, but if operation "D" is your constraint, all your efforts on operation "C" may not have much of an impact on your overall throughput or profitability.

If you have limited resources, and can only focus your kaizen efforts on one issue at a time, I'd recommend you focus on operation "D" in the example above, until it has been resolved, or is no longer your biggest constraint.

Sometimes, however, you can spend some Lean improvement time on non-constraint processes and realize very substantial, even incredible, and immediate bottom-line gains. SMED is one of the Lean tools that virtually always pays for itself many times over. Allow me illustrate with a brief case study.

SMED Case Study:

A medical device manufacturer (company "X") can sell every product it can possibly produce. The more their lines run, the more money they make; it's pretty much that simple. Changeovers take time, and therefore reduce the run-time of the lines. In reality, however, changeovers are not their biggest constraint when you look at the company as a whole, (re-read your TOC materials on "policy constraints;") but opportunity for improvements and the potential for additional run-time was obvious.

To address line and product changeovers we formed a "kaizen team" and took a closer look at the situation in an "up-close and personal" way. I've listed some of the results from our efforts below. We'll let the math speak for itself.

After a five-day SMED event, company "X" was able to reduce their setup/changeover time by 4 hours per changeover. That may sound like a lot, or just a little depending on your experience and industry, but this is what 4 hours more production time means to company "X."

Company "X" produces about 90 million units per year
Every minute of line run-time is valued at $500.00 per line
There are 9 lines running
Each line experiences a changeover an average of once per day

So, how does that all work out?

Well, a reduction of 4 hours of downtime due to changeovers for 9 lines actually turns out to be an increase of production time across those 9 lines. Each line literally has another 4 hours to produce pre-sold products every day.

4 hours x 9 Lines = 36 hours more production time everyday

Since company "X" values each minute of production time at $500.00 we can further break this down:

36 hours x 60 minutes per hour = 2160 minutes more production time each day

2160 minutes more production time x $500.00 per minute = $1,080,000.00 increased sales every day provided their customers keep purchasing all company "X" can produce.

If that's not an impressive ROI than nothing is!

And...they are still improving.

Now, just for a minute, let's pretend that company "X" can easily out-produce customer demand, or they are just a one-shift operation. Where's the value now?

Well, the truth is, the dollars won't add up the same way, but company "X" could still enjoy the following benefits:

*Increased capacity, (capacity they don't actually need at the moment, but may as sales increase)

*Might work a shorter workweek or reduce overtime

*Less downtime/production losses when an "urgent" changeover is needed

*More maintenance attention to bottleneck equipment that runs 24/7 (if this situation exists)

*Might not need to purchase additional equipment (capacity increases negate need)

*Might allocate freed changeover team time to proactive maintenance of equipment

*Increased flexibility on the production floor (think "mixed-level-loading,") which results in smaller batch sizes, and carrying less inventory, etc., and

*Could probably reduce a 1 1/2 shift operation to a 1 shift operation (that doesn't mean a RIF! but that's a subject for another time)

Occasionally I'm asked, "Why should we care about SMED if we do all our die/mold changes at night when nobody's here anyway?" The simple answer is; you can do more of them in less time, with greater ease and safety, and prepare your company for future increased demand. You also need to ask; if changeovers only take ten minutes to complete, why would you need a night shift to do them? Why wouldn't you just do them during the daytime so you could run smaller batch sizes, and carry less inventory, while being more responsive to your customer's needs?

I like to think of SMED as a tool of efficiency and execution. Great teams and great companies know how to execute for outstanding results. Eventually, most companies will need to implement SMED in one form or another. Even if changeovers/setups aren't your biggest "constraint" you may find that a little attention in this area can have a major bottom-line impact for relatively little expense and effort.


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Nov 24 2009 The 8-Basics Of Lean Manufacturing

by Bill Gaw

Here's the question heard around the world: How do we continuously increase speed, improve quality while lowering our operating costs? This article's answer is to stop chasing computer sophistication and start applying the 8-basics of lean manufacturing.

Nov 24 2009 What Are Gerber Files for Printed Circuit Boards, and Who Needs Them?

by Jim Usery

This article tells what a gerber file is and what it is used for in the electronic manufacturing industry.

Nov 24 2009 I Have an Idea for a New Product, but Now What?

by Jim Usery

Do you have an idea for an electronic product, the next must-have gadget or the greatest problem-solving device that was ever invented? This article will provide you with some guidelines to assist you in getting your idea turned into a successful design.

Nov 24 2009 Lean Manufacturing Definition

by Carl Wright

There are many definitions of lean manufacturing. Some include words about value added activities and waste reduction. Our definition is the “continuous elimination of all waste resulting in a system of value added activity”. The key word is continuous. The journey to a state of lean never ends.

Nov 24 2009 Strategic Use of Lean Six Sigma

by Carl Wright

Six sigma and lean manufacturing are utilized as improvement tools to improve the business. This improvement can take many forms, such as increased business, reduced costs, and improved cycle times or service.

Aug 1 2009 How Barcode Printers Enhance Warehouse Performance

by Nate Rodnay

Many warehouses are able to increase productivity and performance levels by optimizing their barcode automation system. Barcode printers can significantly improve performance in warehouses.

Jul 9 2008 Manufacturing

by Aweng Moral-Basco

Manufacturing is a branch of industry which accounts for about one-quarter of the world's economic activity. It is the application of tools and a processing medium to the transformation of raw materials into finished goods for sale.

Jul 4 2008 Are You Thinking of Diversifying Your Product Line? Think Long and Hard Before You Do

by Cash Miller

Your small business is growing up. Now you think it's time to expand your product line. A word to the wise it could cost you everything if you're not careful. Diversifying your product line can be expensive and time consuming. So much so that you once you've begun you might not realize what kind...

Feb 28 2008 Growing Tobacco

by Albert Nale

Cheap cigarettes? Well, no discount cigarettes can get as cheap as the one made by you. Growing tobacco is no difficult a job if you take care of the plants especially in the beginning. Historically cigarette companies have helped farmers grow tobacco.

Feb 6 2008 Quick Guide to Laser Engraving

by Helen Hecker

The most popular materials in the engraving fields are coated metals, wood, acrylic, glass, leather, marble, plastic, and host of synthetic materials made specifically for lasers.

Sep 26 2007 Why Implement SMED (Single Minute Exchange of Die) If Changeovers Aren't Your Biggest Constraint?

by Bill Hanover

A little time and effort implementing SMED could literally make your company $millions$ even if changeovers aren't your biggest constraint.

Jun 13 2007 Manufacturing Credit Cards: Materials and Processes

by Devlin Gilliland

The credit card is made of many plastic layers, laminated together. The center is commonly made from a plastic resin known as polyvinyl chloride acetate (PVCA). This resin is then mixed with other materials, such as dyes and plasticizers to give it the appropriate look and feel.

Feb 21 2007 Prototyping Your New Electronic Product Idea

by Jim Usery

This article outlines the minimum tasks needed to send your new electronic product idea out for prototyping. It lists and defines the minimums to either perform your self or to have subcontracted.

Feb 20 2007 Basics of Manufacturing Printed Circuit Boards

by Jim Usery

This article tells about the basics of manufacturing printed circuit boards including the terminology and the steps to processing a pcb.

Feb 20 2007 What Your Electronics Manufacturing Service Provider Needs from You

by Jim Usery

This article tells what your electronic manufacturing service providers needs from you to prepare an accurate quotation for a typical printed circuit board assembly project.

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Manufacturing Articles

Why Implement SMED (Single Minute Exchange of Die) If Changeovers Aren't Your Biggest Constraint?