Have you ever went shopping at a supermarket on a Saturday and the lines are so long, you wish to just leave your cart full of groceries right there in line and walk out the door? This type of situation happens more often than it should because it is a challenge for managers to predict customer demand and eliminate waste. This is why Heijunka is necessary for many organizations that need improvements in efficiency.
Whether your business is B2B or B2C, it is critical to level the type and quantity of production output over a fixed period of time. Heijunka is commonly used for organizing the manufacturing process especially with companies involved in mass production. There are also challenges for many companies who implement Heijunka to include adjusting production to mirror customer demand as closely as possible.
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Heijunka is a word that has had a hard time finding its way into common usage in the English language, but when translated from Japanese it means “leveling”. To understand this word more, it is also important to understand three other Japanese words: “mura”, “muri”, and “muda”. Mura means unevenness in quality and productivity. Muri is the overburden of managers, machines, and production associates. When you combine mura and muri together, muda (waste) is created.
The concept of Heijunka was first implemented by Toyota during the 1980s to massively reduce vehicle production times as well as inventory levels. It continues to be a foundation for Toyota and it is now used by companies worldwide as an important lean manufacturing method to facilitate Just-In-Time (JIT) and reduce muda, muri, and muda. Heijunka can be applied to all departments as well as the entire supply chain to include all suppliers.
How Does Heijunka Work?
Let's go back to the example where you are in a supermarket and totally frustrated because the lines are long, the cashiers are moving in slow motion, and you really do not have the patience to wait because you have many other things to do today. Heijunka can be implemented in this scenario so that you can get to a cashier quickly, check out, and be on your way without getting a migraine headache or shopping cart rage in the process.
An excellent example is Wal-Mart. The management noticed that some checkout lines are long while others are shorter (muda). They decided to use Heijunka to attack muda with the use of a digital board that would tell the customer to go to the next available line. Once a cashier checks out a customer, the cashier will push the button that will light up the digital board to let the next customer proceed to that available cash register.
In mass production companies, Heijunka is a commonly-used method for organizing the manufacturing process; especially for companies that produce large lots of products without considering the fluctuation of customer demand. Many companies fail to grasp the concept of Heijunka and instead resort to batching which has several drawbacks. A big one is that it creates large amounts of inventory which leads to decreased profitability. Batching also fails to anticipate buying patterns and erratic demand on upstream processes.
So you have been given a few examples of Heijunka, but you still may be asking what is all the hype about this production method? To keep it in simple terms, if your company or business produces a high volume of any type of product, your production process should avoid inefficiencies and should be in line or at least come close to customer demand.
Here are a few benefits that Heijunka brings to manufacturing:
- Flexibility - Reduces changeover time
- Predictability - Occurs when demand is leveled
- Stability - Averages production volume and type over the long run
When implemented properly, a Heijunka leveling schedule creates a number of advantages that will help your company beat your competitors to include:
Having the flexibility to produce what the customer demands when they need it
- Reduced inventory of unsold goods
- Balanced use of machines and labor
- Demand is more predictable on upstream processes and suppliers
When implemented, Heijunka Requires companies to adjust production in order to mirror customer demand as much as possible. There is greater flexibility to meet changing customer demand patterns when a company makes all product types and maintains a small inventory buffer throughout the year. When there are periods of peak demand and erratic customer purchasing, Heijunka will allow buffer inventory to be liquidated during the year to meet demand fluctuations.
Leveling by Volume
Here is an example of how Heijunka is implemented using a hat producer. In terms of leveling volume, the hat maker receives the same order for 500 hats per week. There are 200 orders on Monday, 100 on Tuesday, 100 on Wednesday, 50 on Thursday, and 50 on Friday.
Instead of trying to meet demand by producing batch orders which is a mistake many companies often do, Heijunka is implemented by this hat maker to produce an inventory of 100 hats nearest shipping to fulfill the orders for Monday. For the rest of the week, the hat maker well also produce 100 hats per day which is a leveled amount when compared to the batch method.
There are other factors to consider such as the demand for multiple types of hats or a buyer deciding to change orders at the last minute. This is why it is important to create a Heijunka production schedule when implementing Heijunka. This schedule will allow producers to have more control over changeover times and create buffer inventory that meets demand on items that are more popular than others.
Leveling by Product
As mentioned, most companies provide a mix of products so they are faced with choices when it comes to the production mix and sequence. A famous production quote that is often told in relation to Heijunka is about Henry Ford who had a company meeting in 1909 to address production issues at Ford Motor Company. He said, “A customer can have a car painted any color he wants as long as it's black”. Although humorous, this philosophy cannot fit in today's business world since customers usually demand a mix of choices.
Once again, Toyota led the way in terms of leveling by product through discussions on economic order quantities to address changeover times and the inventory required. Their approach resulted in reduced time and a lower cost of changeover so that smaller and smaller batches did not negatively affect production. In addition, quality cost and lost production time were not significant.
One important tool that was created and is still used by Toyota to simplify the leveling of products with different demand levels is a visual scheduling board called a Heijunka box. The Heijunka box is now used by lean companies to level upstream sub-processes as well as reduce lead time and total inventories along the entire value stream.
This is another concept developed through the implementation of Heijunka to deliberately influence demand itself or the demand processes to identify a pattern that is more difficult in terms of customer demand. Companies do this by influencing the order process or manipulating the product offering.
It has now evolved into a subset of production leveling and there are three ways to approach it:
- 1st Approach - Careful management of the sales pipeline to maximize revenue from the customer over the long term.
- 2nd Approach - Gaining a deep understanding of the systems used to order products by sellers from other manufacturers and retailers.
- 3rd Approach - Create a buffer by keeping finished goods or nearly finished goods in stock which isolates the production facility from actual demand.
Core Concepts to Guide Heijunka Implementation
There are important core concepts that manufacturers should keep in mind in order to implement Heijunka successfully:
- Takt Time - This serves as the guidance for the entire implementation of Heijunka. In simpler terms, it is the time required to finish your product in order to meet customer demand. It is also known as the customer buying rate.
- Volume Leveling - Levels of long-term average demand are used to manufacture products. Companies keep a buffer inventory that is proportional to demand variability, shipping speed, and the stability of the production process.
- Type Leveling - Reserve capacity for change over flexibility and make every product every day instead of batch production methods.
- Heijunka Box - A visual working diagram of the production schedule and type leveling
- Buffer Inventory - Having products ready to ship at the start of each production cycle is necessary for smooth production and consistent leveling of demand; resource waste is also minimized on the production line.
- Changeover Time - This is a critical point of Heijunka since the narrowing of changeover times helps keep a tighter value stream when it comes to supply and demand.
- Work Slowly and Consistently - Production systems that are slower and cause less waste are preferred over faster ones that have the potential for more errors and waste.
- Type Standardization - Knowledge can be more readily shared across product type to benefit every process when the manufacturing of one of each product is done daily.
Once these terms are identified, the first step to implement Heijunka is to match customer demand to set the pace of manufacturing according to Takt time. When this is done properly, the manufacturing process will be free of bottlenecks since the production rate is a closer match to customer demand. Since customer buying behavior is also frequently unpredictable, Heijunka helps to match customer buying patterns so that manufacturers fulfill the customer’s needs. It also creates a leaner process by the reduction of waste during the production process.
Challenges for Heijunka
Companies do face some challenges when implementing this powerful method for lean production. These challenges can be broken down into technical and social factors:
- The tools needed for large-scale Heijunka leveling is often not available
- When Heijunka is implemented, there is often a need for more finished goods inventory and this is viewed by some managers as a contradiction to lean production
- Some finished parts become obsolete
- Heijunka Sometimes cannot be implemented right away because of customer data and predictable environments
- Bad data can ruin the process since predicting demand is imperfect
- The implementation of Heijunka relies on direct customer contact and accurate information about projected or future events
- Before implementing Heijunka, it is sometimes difficult to explain to employees why it is important to do standardized work
- Resistance is sometimes drawn because Heijunka reduces operator flexibility
- Detailed planning and strict discipline is required
A Major Player in Lean Methods
Companies like Toyota and Walmart attribute Heijunka to a lot of their successes increasing production and eliminating waste. This lean process is not only used in the Walmart example and the past and continued successes of the Toyota company, but also everyday processes such as visiting a doctor for a procedure like getting your tonsils removed or gas companies providing customers a more efficient way to get fuel at the gas pump. Organizations and manufacturers that properly implement Heijunka bring stability to the production process that spreads upstream to both internal and external suppliers.