As businesses start to emerge from the shutdown status it will be more critical than ever to ensure that the flow of product on the manufacturing floor moves as efficiently as possible. The elimination of waste will be paramount. Many businesses do not understand that time consuming setups are a significant source of waste. Every minute a machine is not operational and creating value is a huge waste. Every minute lost is free straight time capacity that will dramatically impact the ability to grow a business. In today’s competitive environment customers will not pay for a setup – non value added time. Most do not understand that by externalizing the setup activity to remove time that the machine is down (SMED) not only creates capacity but allows the business to reduce order quantities and more specifically inventory. SMED allows the business to schedule and run the product in the sequence needed by the customer supporting Just in Time. Leadtime in the manufacturing environment is a critical KPI. If a business can reduce Leadtime (elapsed time from receipt of Raw Material to Shipment of Product) the time to recover the investment in Raw Material improves the cash flow for the business. Setup reduction and implementation of SMED is a tremendous tool if implemented properly. This type of initiative must be driven from the top of the organization to be successful.
