News Notes

September/October 2000

Setup Reduction

by: Jeff Vincent, CITEC Field Engineer

Setup Reduction is one of the tools in the lean Manufacturing toolbox. As with all lean tools, Setup Redution focuses on eliminating waste, increasing value-added time and increasing quality -- all of which add up to increased productivity and profitability.

Setup is the time between the last good piece of one run (batch or lot) to the first good piece on the next run of a different product.

Traditionally, this has caused production to run large lots to reduce the number of setups performed during a shift or day. The "optimal lot size" is determined by the point where the cost of carrying excess inventory is more economical than incurring the cost of setup. This is known as the Economic Order Quantity.

Traditional production thinking goes something like this... Setup is a difficult, time-consuming job and it requires specialized personnel. So, if we keep setups to a minimum, we don't need as many skilled people. It's okay if we make extra inventory because we run into problems with the equipment once in a while. Besides, short production runs don't apply to our business.

Setup Reduction proponents challenge traditional production thinking. The rationale behind Setup Reduction is:

• Manufacturers should only produce to customer orders;
• Machines can be idle but workers should be busy adding value;
• Production capability should be flexible enough to meet any requirements within its capacity.

Minimal lot sizes are the best way to achieve these goals but the setup time must be reduced to the shortest time possible.

Although there is a wide spectrum of setup times, each dependent on equipment and processes, they typically break down as follows:

These numbers are based on traditional setup procedures -- last piece is completed, the machine is turned over to setup people, and setup begins. Using these percentages, approximately 80% of the setup time is spent preparing and fine tuning.

To see the effects of Setup Reduction, consider the following example of a North Country manufacturer:

• Production operates 24/7. The company has eight different products to make and only one machine to run them.
• Production time is 15 minutes per product with a total run time of two hours. Customer demand is for six of each of the products, per day, for a total of 48.
• Under their six setups and six production run process, the company had to build inventory and rotate their production schedule in order to meet customer demand.

Without changing demand, equipment or run time, how could the manufacturer meet demand in one day's production?

The Answer:  Setup Reduction

By reducing setup time from two hours to one, production capacity increased by six hours. That allows them to meet customer demand in one day's production -- a daily inventory of zero. The results: no carrying costs, no space requirements and less scheduling and managing.

Consider the benefits of Setup Reduction for your company: reduced setup & total costs; increased capacity; increased flexibiilty; quicker delivery; reduced inventory; increased quality; and more. Can you afford not to?

JV