Why Implement SMED (Single Minute Exchange of Die) Even if Changeovers Aren't Your Biggest Constraint?
How 'bout A Million Reasons...
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After a five-day SMED event, company "X" was able to reduce their setup/changeover time by 4 hours per changeover. That may sound like a lot, or just a little depending on your experience and industry, but this is what 4 hours more production time means to company "X."
- Company "X" produces about 90 million units per year
- Every minute of line run-time is valued at $500.00 per line
- There are 9 lines running
- Each line experiences a changeover an average of once per day
So, how does that all work out?
Well, a reduction of 4 hours of downtime due to changeovers for 9 lines actually turns out to be an increase of production time across those 9 lines. Each line literally has another 4 hours to produce pre-sold products every day.
4 Hours x 9 Lines = 36 hours more production time everyday
Since company "X" values each minute of production time at $500.00 we can further break this down:
36 Hours x 60 Minutes per Hour = 2160 minutes more production time each day
2160 Minutes more production time x $500.00 per minute = $1,080,000.00 increased sales every day provided their customers keep purchasing all company "X" can produce.
If that's not an impressive ROI than nothing is!
Now, just for a minute, let's pretend that company "X" can easily out-produce customer demand, or they are just a one-shift operation. Where's the value now?
Well, the truth is, the dollars won't add up the same way, but company "X" could still enjoy the following benefits:
- Increased capacity, (capacity they don't actually need at the moment, but may as sales increase)
- Might work a shorter workweek or reduce overtime
- Less downtime/production losses when an "urgent" changeover is needed
- More maintenance attention to bottleneck equipment that runs 24/7 (if this situation exists)
- Might not need to purchase additional equipment (capacity increases negate need)
- Might allocate freed changeover team time to proactive maintenance of equipment
- Increased flexibility on the production floor (think mixed-level-loading,) which results in smaller batch sizes, and carrying less inventory, etc., and
- Could probably reduce a 1.5 shift operation to a 1 shift operation (that doesn't mean a RIF! but that's a subject for another time)
Occasionally I'm asked, "Why should we care about SMED if we do all our die/mold changes at night when nobody's here anyway?" The simple answer is; you can do more of them in less time, with greater ease and safety, and prepare your company for future increased demand. You also need to ask; if changeovers only take ten minutes to complete, why would you need a night shift to do them? Why wouldn't you just do them during the daytime so you could run smaller batch sizes, and carry less inventory, while being more responsive to your customer's needs?
I like to think of SMED as a tool of efficiency and execution. Great teams and great companies know how to execute for outstanding results. Eventually, most companies will need to implement SMED in one form or another. Even if changeovers/setups aren't your biggest "constraint" you may find that a little attention in this area can have a major bottom-line impact for relatively little expense and effort.
