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February 14, 2003                       www.strategosinc.com

#7 Rational Lot Sizing

Small lot production is an important element of Lean Manufacturing. It smoothes production, eases scheduling, improves quality in many ways and makes Kanban feasible. The problem is: What does “small” really mean?

Some experts insist that “small” means one piece; others assert that lot size is irrelevant. Still others waffle or avoid the question by insisting that setup reduction cures everything. Of course, setup reduction is a good thing but it does not happen instantly. Toyota took many years to achieve SMED. So, what do you do about lot sizing in the meantime?

Most manufacturers take an intuitive approach to lot sizing which frequently misleads. As a result, lot sizes are often much too large and some are much too small.

Economic Lot Sizing (ELS) has been widely discredited. But, used properly, ELS is one of several valid considerations for a rational decision. You can learn more about lot sizing on our website at:

www.strategosinc.com/lean_lot_sizing.htm

This and subsequent pages discuss:

-  How to make rational lot size decisions

-  Why lot sizing is different for bottlenecks and non-bottlenecks

-  How Setup Reduction impacts the lot size decision

-   How benchmarks make the job easy

In some respects, these ideas go against widely held beliefs among Lean Manufacturing advocates and I expect disagreement. That's OK. Discussion and debate is constructive and there are probably some things we’ve missed.

All The Best-

Quarterman Lee


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