Fixed-Cycle Smoothed Production Improves Lean Performance for Make-to-Stock Manufacturing

Eastman Kodak Company is a well-known imaging and printing company that has been practicing lean manufacturing in its production and distribution operations for many years. Kodak manufactures a number of products with sufficient demand flow and volume relative to lot size so that its finishing operations are repetitive. For these products, it applies a production smoothing policy known as heijunka. Kodak's supply chain model also requires finished goods inventory to ensure an immediate and reliable supply to customers. Appropriate inventory and production control policies are needed to satisfy stochastic demand at a qualified fill rate and to set the cycle time per unit to replenish inventory at a level rate of supply. The lean production control process Kodak implemented initially was an elementary system of action limits prescribed by lean consultants. This system was difficult to interpret and performed erratically. Kodak replaced it with a new system based on operations research and statistical process control techniques, which analytically model the inventory and production control policies for stochastic demand and level supply. The new method improves operational control of lean manufacturing for a make-to-stock application that is realized in production schedule stability, product availability, and lower operating costs.