Q 379. What is a supermarket in lean six sigma? What are the characteristics of a good supermarket?

 

 

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      Supermarket in Lean manufacturing is one of the pull strategies in production. It is a system used when one-piece flow or FIFO are not an option.

      In simple words, it is a method of inventory management system. In this method, the internal customer will draw a random part from the supermarket after which the internal supplier will replenish the drawn parts at needed interval. This is known as replenishment pull system.

The size of the supermarket is determined by the time which needs to be buffered.

Now, how does the internal supplier know when to replenish and which part? There are two well-known methods-

1.        Implementation of Kanban boards.

2.       Two-bin system (in which bins themselves are used as signals)

      In Kanban board method, every position in supermarket is represented by a card on which all replenish information is printed. Kanban card is an authorization to produce. This method can be implemented in almost all situations.

      In Two-bin system, as name signifies, there will be 2 bins assigned which are filled with parts. This system is best suited for cheap parts which are needed in multiple workstations, example, bolts, pins as the impact on financial costs and the space.

      Supermarket is a very useful Visual management system. It helps to see which inventories are high, low. It can be implemented physically or digitally in ERP system.

Supermarkets:

            Independently on the type of production (custom job shops or repetitive manufacture) the work flow can benefit from using a supermarket. In fact, the secret for an effective manufacturing operation is to align production capacity to customers’ demand.
A zero inventory strategy would be ideal but the concept is utopic since the supplier’s deliveries are not always regular, quality control is inevitable and batch size is variable in each production line. A right size inventory strategy is crucial. It employs the use of supermarkets located at specific points of the production process. Supermarkets are incredibly helpful in businesses with wide variations in customers demand and when the production lead time is longer than the takt time.
  There are two questions to answer when establishing supermarkets where should it be located and how large should it be?
       To answer the first one the following should be considered: If there are shared resources that can cause bottlenecks, a supermarket should be placed immediately before the processes that can cause such bottlenecks. Another supermarket right after each of these processes should also be considered in order to provide a small number of parts that can be used until the machine is once again available to run that item.
           The last supermarket should be placed in a location where its downstream lead time is smaller than the established delivery time to the next client. For example, if the established delivery time is 5 days, the last supermarket has to be somewhere in the production line where it’s possible to make its products arrive to the customer in 5 days. It should also be as upstream as possible in  the production line. This will allow a lower product differentiation and therefore least references to stock, which contributes to the reduction of supermarkets dimensions and costs of stocking due to lower transformation of the product. 
For the second question the reorder point, average stock and maximum stock should be measured. 

The term supermarket in lean six sigma refers to a predetermined market or space to be used for storage / inventory. The supermarket carries the necessary "supplies" for a work area that is close to it. When a customer (internal / external) needs an item they can take the same from the supermarket. The supermarket then replenishes their supplies based on the downstream demand.  Supermarkets prevent overstocking and help to lower the inventory levels. 

 

Supermarkets normally are located near the supplying process to help that process see customer usage and requirements. Each item in a supermarket has a designated location from where a material handler take out the products in amounts needed by the downstream process. As an item is removed, a signal to make more or to replenish (such as a kanban card or an empty bin) is taken by the material handler to the supplying process.

Toyota implemented first supermarket in year 1953 in machine shop of main plant. Toyota executive Taiichi Ohno got the idea of the supermarket from photos of American supermarkets showing goods arrayed on shelves by specific location for withdrawal by customers.

 

A supermarket is nothing but a series of parallel FIFO (First in First Out) lanes sorted by product. This term in manufacturing originated from the normal retail supermarket. The key of a supermarket (both retail and manufacturing) is that taking out any part or product gives a signal to replenish this part (via Kanban). Therefore, a supermarket also aims to keep all the required parts in stock, while at the same time avoiding overproduction.

 

Diagram of a Process with Supermarket (ꓱ) :

Diagram of a Process with Supermarket at 3 different locations i.e. close to Supplier, close to Customer and between the processes :

 

How Supermarkets Look like in real?

 

 

When to use Supermarkets?

i)  Use Supermarkets when there is difference in lot sizes at different processes

ii)  Use Supermarket if Material Flow Splits Up into Different Directions

iii)  A supermarket is also strongly recommended if two processes have very different cycle times.

iv)  Use Supermarket when there are different shift patterns

v)   Use Supermarket when next process creates different variants of the product

vi)  Use Supermarket if there is merging of the material flows

vii) Use Supermarket when there is large distance between the processes

viii) Use Supermarkets in case of very high demand on flexibility and Reaction time

ix)  Use Supermarket whenever there is change in responsibility

 

Characteristics of a Good Supermarket:

i)   Supermarkets must aim at reducing the overproduction and inventory in the process where it’s not possible to eliminate the inventory completely  or deployment of the one piece or continuous flow

ii)  Supermarket must work on a pull system i.e. as and when signal is received to replenish the supply at process or by customer via a Kanban, it should be able to supply that demand and at the same time supplier also shall be able to replenish the goods consumed in supermarket.

iii)  A good supermarket must be able to supply the right quantity of goods at the right time and there shall be sufficient stock of material / goods to meet the customer’s demand

iv)  Supermarkets should be close to close to Supplier / Supply Source so that immediate process / processes can take the material or supplies needed for doing the operations at that process OR Supermarkets can also be close to Customer as well so that customer may take up the finished goods as required from the supermarket.

v)  A good supermarket must aim to develop a continuous kind of flow and shall not allow any disruption in the operations / production by maintaining the adequate quantity of products / materials / parts for the downstream process

vi)  A good supermarket shall be sensitive to customer demand / process demand and shall be able to replenish the stock as per stakeholders / process requirement by usage of technology say RFID at Amazon / Kanban in manufacturing

vii)  A good supermarket shall have place for everything and everything at its place i.e. it must follow the principles of 5S, Lean, JIT etc.

viii)  Visual Controls / ANDON / Signage / Labels can be used in a supermarket to make it more structured / easy to refer

Supermarket in lean six sigma refers to a predetermined market inventory/storage. It's the location where a predetermined standard inventory is kept to supply downstream process. When any internal or external customer need any item they can retrieve the requisites from the supermarket . The supermarket basis the usage and demand, restocks the supplies .Supermarkets are located near the supplying process in order to have a quick check on customer's buying pattern, usage & requirements .

Before we go into further details of Supermarkets, lets understand what is a Three Pull strategy that is often put in use and how  supermarket is one of the derivatives from the Three Pull strategies

 A Pull Process is one where a unit/ workstation starts to work on its next order only when there is an available free slot on the output section . Which means if the demand of any item is high be it from an internal or external customer it would trigger the production of that item . Here the customer pulls order rather than the Push production where items are prepared no matter whats the demand is . The output section is not considered in Push production .

In Pull Process the inventories between workstations are managed & it directly influences and maximises the Lead time. The 3 forms of Pull connections are 

 

1.  Continuous flow : Products are worked on one by one with maximum inventory of one between workstations

2. Sequential Pull :A fixed quantity is determined & the sequence of product is defined, however a buffer with a defined maximum is allowed between workstations for variance.

3. Replenishment pull: Maximum number of products waiting where which type of product to be used is unknown

 

Supermarket is also known as a replenishment pull system where it manages inventory where variation of parts can be kept without knowing in what order the parts can be taken from the inventory/storage. A customer can take out parts randomly from the supermarket and the supplier replenishes the taken parts after a certain interval.

Supermarket can be implemented as connection between process steps when designing a Future state VSM

 

Following are the characteristics of a good Supermarket

•  Supermarkets must have access to wide range of products, which is why they need to be arranged in shelves. A FIFO approach can be followed here where everyone involved can immediately see the state of things.FIFO lanes be implemented when a particular workstation uses different colours and is not aware how many colours they need in a particular day.A Supermarket should contain a FIFO is each lane to help guide which colour used in what quantity for a particular day which in terms will help forecast & strategise production 
• Market location serves an important factor. It is important to help gauge on unit consumption & back it up with demand. Market Locator can be used as a sort of isolator between batch demand spikes & upstream supply .If a market is positioned at loading bay it will automatically receive indications of spikes of demand whenever a truck reaches for loading . So its known in advance when the trucks arrive there is a demand spike over a certain period of time. Thereby designating a location or a marked floor area to be the virtual truck area of moving items from virtual truck smoothly for a chosen period is required in supermarket
• Products to be placed in plastic boxes , whose size would depend on the size of the material & each box is to be identified with a tag that shows the item details, the supermarket where it is located, supplier & quantity
• Supermarkets should be located in loops.The sequential operations need to have a similar production pace (Cycle time, Downtime, Changeover time etc.),Have similar requirement of workers ( multi-skilling & multitasking) & hence to be located close to each other
• The boxes become an indication of Cycle flow & Buffer stock depending on the demand. Each box leaving the supermarket triggers signal for the supplier in multiple forms  like Same box needs to be placed . A Kanban card can be put in use to identify when the material goes out and becomes a replenished order and instead of taking out label the whole box can be put in use

Thereby supermarket is important as it manages material flow and eliminates waste , it also carries extra items in quantity from a range of a minimum and maximum without interrupting the flow and that results in increase in lead time & associated levels of WIP

 

 

Supermarket:

In general sense, Supermarket is a self service place offering a wide variety of items stored and organized into sections. Similarly in Lean, Supermarket is the location where a predefined and standard inventory items are kept to supply downstream processes. It is a method of managing inventory in which items are kept without knowing in what order these will be taken from the inventory and the material handler withdraws items in the precise amounts needed by a downstream process.

 

Characteristics of a good supermarket:

• A supermarket should be located in front of the customer so that customer can order whenever there is a need.

 

• A good supermarket has material flow splits up in to different directions.
• A good supermarket is generally associated with a pull system. So when quantity of material reaches a low level, replenishment request can be generated to the supplier of the material to maintain the desirable level.
• A good supermarket has specific location for different items. This help in easy availability of the items and also easy to visualize the flow of the material towards the system.
• A good supermarket, generally, have items organized in shelves, which are filled by supplier on one side and picked from the other side. This creates FIFO process in a way and also state of items makes visible to supplier and customer both.

• The selves or the boxes containing items on the shelves are tagged to show what items are placed on the shelves or in the boxes.  

• A good supermarket is the one available between two processes of very different cycle times.

• A supermarket is required most in case of high demands on flexibility.

The ultimate goal of lean thinking is often defined as the “complete satisfaction of client requirements by producing and delivering, continuously, what the client wants”. This definition helps the Lean followers to realize the importance of the concept of flow, and to constantly work towards identifying, reducing and/or altogether eliminate factors that interrupt the flow (and is typically referred to as “waste”).

However, “uninterrupted flow” of products or services to customers, in the way they want is easier said than done. The interrupted flow can be due to many reasons like:

·         The existence of waste in the process design

·         The process being non-exclusive (the same equipment used to produce for one client cannot be used for another)

·         Uneven pace of production for different legs of the work as there may be different cycle times or a need to operate using different batches

·         The client and the supplier working in different shifts and/or time zones

These reasons, typically, contributing to the interruption of the flow results in an increase in lead-times and the levels of work-in-process.

To ensure that these interruptions are minimal, the lean organizations can rely on the “Supermarket”.

A Supermarket helps the production team to carry extra items that ranges between a minimum and a maximum quantity and is determined by the magnitude of the interruption it is meant to resolve.

A supermarket can be associated to a pull system. When the material quantity reaches a low level, the request for replenishing the material will be generated and sent to the supplier, ensuring the required level is maintained.

Characteristics of a good Supermarket

Supermarkets in a factory floor are similar to the regular supermarkets as they provide access to ta wide range of products within a small vicinity. The history behind the concept of Supermarket is said to be Taiichi Ohno finding his inspiration for regular supermarkets during his visit to America. A good supermarket will have the following characteristics:

·         All materials including parts and components should be delivered and stored in the Supermarket

·         All materials including parts and components should be grouped in a logical manner for example by family type, supplier, destination and frequency of use

·         A designated, unique and well identified location for each component and the address to be called out (Supermarket Address System)

·         All the containers and boxes should be “Customer or Line” ready meaning the material available should be of 100% quality, of right size and weight

·         The system to be designed in a way that FIFO is applied and oldest part gets used first

To sum up, Supermarket will optimize the flow of Man, Material and Machine Flow

o   In Material, it can be done by family grouping, defining normal and safety stock, utilization of parts

o   In Man/Machine, it helps in reducing the walk pattern, reduce transport traffic, management of information flow

Super Market is one of the most important tool in Lean manufacturing used for Optimization of Warehouse strategy and Supply chain excellence.

This process support the strategy of fulfillment of Inventory at certain interval after it has been used by the customer. It ensure that the consumable will be filled after the customer use and create Gap for Ideal inventory. It focus on best management of Inventory.

The Supermarket strategy focuses elimination Of LEAN waste like Transportation , As It is focusing on the Reduction of Material handling time. As It ensure that the Materials require on high frequency to be keep near to the requirement source. It ensure the Cycle time for Access of the part is Less.

One of the common method to ensure of the same is KANBAN. There are lot of tools are used to work and improve efficiency of the supermarket are Visual Management , Min-Max , Electrical signal and Best Trial know as Milk Run. All this strategy with  KANBAN make Supermarket excellence for Supply chain excellence

Supermarkets can be broadly defined as one of the pull strategies that can be used while designing “future state value stream maps”. Supermarkets are best used when the demand vs supply considerations are difficult to model or not predictable.

 

The genesis of this idea was from the observations of American supermarkets by Taiichi Ohno, when he discovered the flawless mechanism used by the American supermarkets to effectively manage their inventory by making available a) what is needed b) at the time it is needed c) in the amount that is needed…. He then applied a similar concept to manufacturing production lines for seamless inventory/supply management.

 

In best case scenarios, streamlined manufacturing line will align production capacity with customer demand. However, for all practical reasons it is quite seldom that such cases exist, and a supermarket concept can be introduce to manage workflows better. A well-established inventory strategy aims to use supermarkets at appropriate points in their production lines. Additionally, supermarkets are used to effectively manage peaks and valleys in downstream/upstream process supply/demand variations.

 

Some of the scenarios where Supermarkets can be used –

a)     Different lot sizes requirement from one process to next, in such cases a continuous flow or FIFO cannot be implemented.

b)    If material flow splits into different processes throughout the value chain, i.e. Process 1 supplies material to Process 2 & 3, in such cases a supermarket is best positioned after process 1 to make sure the downstream (process 2&3) are not waiting for inventory

c)     Supplier with high lead time or unpredictable supplies. .. in such cases a supermarket helps to act as a warehouse and reduce the variability in the value chain

d)    Downstream process reliability is low, i.e. frequent defects are identified. In such cases a supermarket can be used to store buffer stocks and not impact the customer delivery timelines

e)     High changeover times in downstream process, in such cases supermarket can be used as storage

Characteristics of a good supermarket –

 

Any good supermarket will try to have the below –

a)     The supermarket should be located at appropriate points in the production life cycle to reduce variation due to demand and supply

b)    Kanbans are effectively used, to indicate when the a particular inventory is low on stock and flags production team

c)     Scientifically designed safety stocking mechanisms, which allows low disruptions to production line if there are delays from suppliers

Supermarket in Lean Six Sigma

 

The term Supermarket in lean six sigma refers to a location where a predetermined standard inventory is kept to supply downstream processes (storage/inventory). Necessary "supplies" for a work area are carried or monitored by Supermarket. When there is a Requirement from customer (internal/external), they can retrieve the item from the supermarket. Based on the Demand pattern, Supermarket restocks the Supplies.  This prevents from Overstocking of materials and helps in Lowering Inventory levels

 

The Supermarket is located near the Supplying process so the Customer Requirements and usage can be clearly visible. Toyota was the first Organization to install Supermarket in 1953 in its main plant machine shop in Toyota City. Taiichi Ohno, an Executive working with Toyota had this Idea from American Supermarkets photos having goods kept on Shelves at a pre decided location for the usage by Customers.

 

Characteristics of SUPERMARKET

 

1. Items are kept at specific location in a supermarket so the material handler can withdraw products in the required amounts needed by a downstream process.
2. As soon as an item is removed, a visual communication or a signal is alerted to make more (eg. a kanban card or an empty bin) is taken by the material handler to the supplying process.
3. Supermarkets commonly follow FIFO method for Inventory Valuation
4. Retail Supermarket is the best Example for Understanding Lean Six Sigma Supermarket

Definition of Supermarket: Supermarket in Lean Six Sigma is a store which stores/stocks a predetermined set of inventory or spares (depending upon the demand) necessary for the down stream operations/process.

 

How it is used?: Supermarket is a store where the down stream process can use/utilize a spare randomly, when in need, to ensure uninterrupted operations. As soon as the spare is used by the downstream process, that spare is refilled or replenished to ensure continuity of the operations. The size of the supermarket is derived based on how much buffer (# and type of) spares is expected for the downstream operations.

 

Supermarket can be implemented in 2 ways:

 

1. Supermarket using Kanban cards

2. Supermarket using 2-bin systems

 

Where it is used? It is used as one of the pull strategies when designing a Future Value Stream Map for a process. It is used only when FIFO (First In First Out) or One Piece Flow strategies cannot be used.

 

Benefits of Supermarket:

 

1. Whenever the supplied lead time of the spares or raw material is high, it is used to ensure the continuity in business operations

For eg. If the lead time of the spares is 1 week and the production interval is 1 day, then the supermarket strategy will ensure continuity in business Operations.

2. When the Changeover time is high, supermarket is used to run the batch in predetermined format, depending upon the demand.

3. Whenever the company is adopting finished good strategy is made to stock

 

Question : What is a supermarket in lean six sigma? What are the characteristics of a good supermarket?

Answer : Supermarket in Lean is a location where all the predefined / predetermined inventory is kept  to supply the downstream processes. Supermarkets are designed in a way that helps to fulfil the customer requirements quickly.

 

Supermarket carries the necessary “supplies” for a work area that is close by. When a customer needs an item so they can visit any nearby supermarket and retrieve the items from there. In supermarkets its easy to identify what item a customer needs due to the well-defined KANBAN boards and Bin System. Supermarket staffs keep a check in their systems and dedicated places / bins to replenish the material as per the downstream demand. These supermarkets prevent overstocking and help lower inventory levels.

 

Supermarkets are basically a group of centrally located Kanban:

• The central location is to allow ‘customers’ the time saving benefit of one stop shopping and supplier consolidation In Lean thinking
• This central location should be located as close as possible to the customer(s) and not confused with a buffer stock that may be held within the production chain.

Characteristics of Supermarket:

1. Strong tracking mechanism of process / store inventory
2. Fulfils the customer requirements / needs quickly
3. Customer is need not to struggle in finding the items / parts as it is displayed in well defined KANBANs and placed in proper BINs / boxes centrally
4. Pull system
5. Prevention of overstocking and over processing
6. Supplies as per demand
7. Cost benefits to the organization
8. Time savings for the employees and customers
9. Easy to reach for the customers

Visuals on Kanban and Bin system:

 

 

 

Supermarket is one of the 3 pull strategies which can be implemented between to process steps when designing a future state in value stream mapping.

 

The main characteristics of supermarket is to control production where continuous flow does not extend upstream

• To enables Visual Management
• Controlled Entry/ Exit of Parts “locked”
• Provide right sized to support level loaded plan
• FIFO for raw material

As a part of value stream mapping , when we start designing the future state process Supermarket is one of the strategies used.  It is one of the pull strategies that is used when we create Future State Value Stream Map.  It is an effective method to manage your inventory or what order the parts will be used from the inventory. It is actually placed in the process of the supply chain or workflow to support the need and the requirements. In the supermarket  materials in the flow will provide the materials if there is a demand in the downstream processes. A visual management tool like kanban board with different colors can be used to signal this. IT was Toyota who first installed this supermarket in 1953 in one of the main plant in Toyota city. Taiichi Ohno who was behind got inspired by the American supermarkets where the goods are arranged in shelves and the customer will selected based on the demand and it is refilled.

 

Benefits of Lean Supermarket

1. Helps in signaling if there is a lack of inventory
2. Its visual management tool to track the inventory
3. It works in FIFO principle 
4. Effective way in tracking the quality of the deliverable 
5. Eliminating the non value added activities in the whole flow

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