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Lean focus minimizes product-specific challenges: steady demand, CTO industries need tailored lean programs.

CAN LEAN PHILOSOPHY help minimize product or industry-specific challenges? The metering industry is one segment in which the answer is unquestionably "yes." Companies in the metering industry have unique challenges not always addressed by generic Lean solutions or standard processes typically found in commercial contract manufacturing. Raw materials and packaging can be bulky. Lot sizes and demand patterns can vary widely. And since participants in the industry, such as third-party automated meter reading (AMR) technology providers, meter manufacturers and utilities, tend to work tightly together, a single project may involve supporting three entities rather than a single customer. For that reason, logistics management and fulfillment expertise are as important as manufacturing expertise in this industry.

Meters are typically multi-board products that include common subassemblies. However, the requirements of each utility vary. Meter display, features, communications protocol and power settings can vary by meter manufacturer and/or end utility customer. While overall demand is predictable, demand for a specific configuration can be highly variable. The Lean philosophy assists in optimizing support in several key areas.

The raw materials equation. EPIC's standard Lean material management processes are used in designing local stocking programs with buffers. However, metering products often have bulky packaging and plastics. To minimize inventory and the space this inventory would occupy, we use local suppliers for this content. These suppliers may deliver daily or weekly, depending on requirements.

Schedule flexibility. Lean philosophy is also used to address the schedule flexibility issue. This is an area where tradeoffs are made. Common subassemblies are built on a regular basis and placed in kanbans. Typically, the most used (and consequently the most often produced) subassemblies will have one-to-two days of inventory in kanban, and the most unique (and less frequently produced) subassemblies may have one-to-two weeks of inventory. Holding a larger inventory for unique subassemblies may seem inefficient; however, historical demand trends show demand for these low-volume products can be highly unpredictable. Setting smaller bond sizes tends to create shortages and requires reactionary production runs. Holding a larger amount of this inventory costs less than having to reactively increase production frequency of these unique subassemblies. As orders are placed, products are configured to order from the subassembly kanban, tested, packed and shipped. Configure to order from adequately sized subassembly bins is a fast production process. Comparatively, building the entire unit as orders are received increases the probability that some subassembly element of the product may not be available, creating a production bottleneck. In the subassembly kanban system, the production team stays focused on relevant configuration differences.

Schedule flexibility is further enhanced by cross-training production operators to allow them to be shifted around the factory as demand varies across production operations.

Configuration management. Each customer has unique configuration requirements and each meter behaves differently, creating a parametric data file known as a config file that is unique to the unit. Utilities typically require transmission of config files prior to shipment. Units are tracked via serial numbers. Configuration management requires strong traceability and a foolproof system for ensuring that labeling, firmware, and unit all match up. A Lean test strategy can address this requirement well by minimizing wait time, transport, processing and inventory.

EPIC's test systems, for example, use an industry-standard platform modified to accommodate the full range of configurations. As a result, any meter display configuration, communications protocol or power requirements can be tested on the same test platform. The test stations have been modified to validate that each unit has gone through the full set of processes and tests required for that configuration. The serialized unit label is generated as part of the test process.

Efficient fulfillment. Tested units are packed by the test station. The label for each box of units is generated after a second packout validation process immediately following test. Since the units are configured to order, they can immediately be shipped to the end-customer, and the config file data can be transmitted to the utilities ahead of shipment as part of this final packout process. This streamlines the fulfillment process, and eliminates the potential for mistakes in a finished goods inventory storage process and the cost of an additional transport link between the meter manufacturer and end-customer.

By dividing production into a front-end subassembly production process and a backend configure to order process, order fulfillment can occur in days vs. weeks. Teaming with raw materials suppliers helps minimize the amount of raw materials in wait state. Integration of data collection, test, labeling and packaging minimizes labeling defects and ensures adequate traceability and configuration management data are stored, while streamlining an otherwise complex operation in a high-mix environment.


STEVE FRASER is vice president of Mexico operations at EPIC Technologies ( He can be reached at
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Title Annotation:GETTING LEAN
Author:Fraser, Steve
Publication:Printed Circuit Design & Fab
Date:Dec 1, 2010
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