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Should you improve the flexibility of your production lines?
How frequently do Supply Chain teams discuss this topic? Moreover, does it lead to a conclusion? My experience suggests that many Supply Chain teams just end up in a prolonged discussion with a long list of both pros and cons.
People in favour of production flexibility cite its benefits in terms of faster response to demand changes, leading to better customer service levels and lower inventory. Is it supported by evidence? The results are actually mixed. On the other hand, some production personnel feel that the line configuration and batch size recommendations have been optimized by the equipment manufacturers and should not be tinkered with.
How should we approach this problem? It really depends on whether the specific production line is a constraint or a bottleneck or not. If it is neither a constraint nor a bottleneck, we won’t gain much by improving its flexibility. The time and effort spent in this improvement would yield only marginal benefits.
However, if it is indeed a constraint or a bottleneck, we must work on improving its flexibility. Every improvement in this area will have leveraged benefits. Every time we reduce the production batch size or make it suitable for producing a wider product portfolio, we would see a significant positive impact on customer service levels and profits.
Have you identified the bottlenecks in your production facility?