If it suits your business, producing goods in small batches offers some significant benefits, helping to support your manufacturing KPIs. For example…
Manufacturing in small batches allows more flexibility in meeting customer demand. You can closely tailor production to demand, which minimises the need to hold a lot of stock. By manufacturing only what you need to meet demand you reduce waste and inventory.
Factories that are geared up for flexible batch production can often switch their assembly lines to manufacture different products, enabling businesses to react quickly to changes in customer needs and market trends.
On-time in full
A batch run may enable you to get first product into customers’ hands quickly. If your customer doesn’t like something or it’s not meeting the specification, you may be able to modify the product quickly so it better meets their needs.
Another advantage that batch production has over long assembly runs is that you can identify and fix any quality problems faster, without wasting more time and materials than is necessary.
Agility and adaptability in a process give you a key business benefit: the ability to reduce manufacturing risk.
Generally, manufacturers who produce identical goods week in, week out, in large batch runs, have the benefit of months or years of experience to inform their production scheduling, pricing, and refine their processes to establish accurate baseline data for KPIs like overall equipment effectiveness (OEE) and overall labour effectiveness (OLE).
Possibly the biggest drawback of small batch manufacturing is that it may not give you much time to learn from your experiences before you move on to another product variant. If you want to take a more agile manufacturing approach using small batches, or produce a lot of product variants, it is more challenging to gather and analyse manufacturing data – especially if you rely on paper-based systems for production recording. Does making a batch of 10 widgets really give you an accurate idea of how much labour content is involved in the production process? If not, how can you calculate OLE with any degree of accuracy?
The additional setup time for each batch, which adds to variable costs, makes it more difficult to price small batch runs to be competitive and at the same time ensure the job is profitable.
Improving KPI accuracy
GTK produces high-spec cable and connectors. Manufacturing small batch runs enables it to meet its customers’ needs. Production runs range from a single item up to around 1,000 pieces, incurring labour content anywhere from a few minutes for highly automated production up to several man-weeks. With only paper-based records to rely on, GTK found it difficult to accurately quote for new ‘small batch’ business while gathering data to improve its production efficiencies.
Adopting Mestec’s manufacturing software system enabled GTK to accurately measure labour and material content for even its smallest batch runs. It now has a library of cable assembly times as well as accurate standard times and costs. Using this information, it can bid profitably for new business and has increased the flow of work through the factory floor, improving due date performance.
GTK boosted its OLE to 86% and operator utilisation to 87%, as well as ridding itself of an estimated £10-15,000 of unrecovered labour costs per month.
Real-time factory data is key
There are many advantages of small batch manufacturing, but whether it’s better to manufacture in large or small batches really depends on the nature of your business.
For some manufacturers like GTK, batch sizes can be extremely variable – from a small production run of a few devices where the challenge is for operators to quickly become proficient in tackling the ‘first off’ assembly and to accurately price the job, to high-volume production runs, where minutes shaved off each assembly time can make a significant contribution to the profit of the job as a whole.
Whatever your batch size, having a way to collect real-time shop-floor data – without the use of paper, is key to transforming manufacturing productivity.
Read the full Mestec – GTK case study here.