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beyond JIT and TQM lies flow management.

For decades, managers have been searching for a sure fire means of controlling and optimizing industrial production. First, there was PERT in the 1950s; then, MRP in the 1970s; followed by JIT and TQM in the 1980s. Each system introduced some efficiencies into the manufacturing process, but none of them has proven effective in turning American industry around.

Now comes Flow Management Technology-a technique that some claim produces verifiable results in a matter of months at a surprisingly low cost.

Steven Segal, chairman of North American Products Corp, jasper, IN, says that Flow Management Technology (FMT) produced a 50% reduction in raw-material inventory, reduction in leadtimes from eight weeks to eight days, an increase in throughput of 142%, and the total elimination of late deliveries. Moreover, FMT is credited with doubling corporate profits in the first year.

How FMT started

The concept was developed about five years ago by Itzik Kostika, founder of Business Technology Management, Milford, CT. Flow Management Technology applies the laws of physics to the manufacturing process, utilizing flow valves, strategic buffers, economic shock absorbers, and various types of feedback controls.

Flow Management is designed to work in conjunction with many other systems, including JIT, MRP, and TQM.

The system has two basic components: a total plant analysis from top to bottom and a comprehensive plan of remedial action. Because FMT looks at a manufacturing operation in its entirety, from product design and purchasing to manufacturing and shipping, putting it in place requires a complete realignment of the corporate culture from top management on down to individual workers on the shop floor.

To help accomplish this, Mr Kostika holds in-plant seminars to acquaint employees with the possibilities of the system. He and his staff then conduct a two-day workshop for key personnel to show them how the tenets of FMT apply to their particular needs.

If, after the workshop, management is convinced that Flow Management Technology can help cure its ailments, an analysis of the company's operation is done. In short order a clear picture of the plant's traditional, and usually inefficient, way of doing business begins to emerge.

Standard practice is to identify key pieces of equipment (or resources) such as control valves, whose function is to control the flow of work and material through the production pipeline (refer to diagram). After analyzing the entire system, protective capacities are designed into the work flow to serve two major functions: 1) To overcome flow disruptions at the various resources, 2) To create an accelerated flow through the system, reducing leadtimes and providing a faster response to customer needs, including constant on-time delivery.

Providing buffers

Protective capacity can take many forms, such as a standby grinder in a key operation or even a lathe operator cross-trained to run a nearby milling machine. In addition, the plant analysis enables Kostika's planners to place strategic buffers that act as shock absorbers at vital points, eliminating possible shortages at the valve and the resulting waves of disruptions that would flow both upstream and downstream from the valve. A strategic buffer is much like an accumulator in a hydraulic system that compensates for flow fluctuations and changes in fluid pressure.

When the time comes to train personnel in the application of FMT, a specially developed Manufacturing Flow Simulator software package is used to graphically present the manufacturing problems in the plant and to generate potential solutions. It also provides actual examples of how FMT can be applied to any manufacturing operation.

Michael Sutton, plant manager at Black & Decker Corp, Beloit, WI, says that the success of his Flow Management program lies in its ability to look at a plant as a single huge machine in which the operation of every component is synchronized to that of every other.

The effectiveness of FMT can be shown in many ways, such as reduced inventory levels, improved cash flow, shorter manufacturing leadtimes, better customer service, and less overtime. But the single most important sign that the system is working is profit generation.

Users of FMT all say that the key to its success is the analysis of the plant. It allows them to assign priorities to their objectives and identify areas where they will achieve the most benefit in the shortest time. At most companies, only management is involved at the beginning. As plans begin to jell, group leaders and other key workers are brought in from the shop floor and melded into the implementation process.

Howard Roquet, president of Virginia Abrasives Corp, Petersburg, VA, says that the business analysis of plant activities "applies common-sense principles to your business and leaves you wondering why you didn't see the problems and the opportunities that were present all along." From these rather dramatic initial findings, the windows of opportunity continue to expand and the system improves continuously, he says.

Black & Decker assigned a champion to fight for every goal it was trying to reach, says Mr Sutton. "The thing ended up like a baseball team with individual people doing their own thing but still working as part of an integrated team."

Users of Flow Management say that it's not uncommon to run into some resistance from traditionalists in the plant. For one thing, at first glance the concept seems too simple to be effective. In addition, workers are accustomed to traditional planning and scheduling processes which FMT greatly simplifies. But once it becomes obvious that substantial improvements are being achieved very quickly, as Mr Roquet puts it, "There aren't many people left to convert."

He points out another potential problem. Because FMT moves the product through the factory under so much control, people can get an uneasy feeling because they no longer see a large backlog of work in process. "When you have only a small backlog, people naturally get concerned," Mr Roquet says. "But we reassure them by telling them that if you're going to have the shortest leadtime in your industry, you can't accept industry leadtime as the norm. They buy that."

The people who use FMT emphasize that the system impacts all aspects of their business. It has a major effect on company strategy and the direction the company will take in the future. It affects sales and marketing and even the product mix the company is able to offer.

Properly implemented and supervised, FMT allows a manufacturer to tell its customers exactly when and how much of the product it is going to deliver. Mr Sutton reports that once he got to that stage, he could deliver even faster than promised.

For more information on FMT, circle 379.
COPYRIGHT 1992 Nelson Publishing
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Author:Eade, Robert
Publication:Tooling & Production
Date:Feb 1, 1992
Words:1095
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