The Practitioner's Guide to POLCA

The Production Control System for High-Mix, Low-Volume and Custom Products

Rajan Suri

• Publisher: Productivity Press
• Year: 2018
• ISBN:
  9781351170741
• Edition: 1
• Topic: Negocios y empresa
• Subtopic: Operaciones

POLCA ( P aired-cell O verlapping L oops of C ards with A uthorization) is a card-based visual control system that manages the flow of jobs through the shop floor: at each operation, it controls which job should be worked on next to meet delivery targets. POLCA ensures that upstream operations use their capacity effectively by working on jobs that are needed downstream, while at the same time preventing excessive work-in-process (WIP) build-ups when bottlenecks appear unexpectedly.

POLCA is particularly suited to companies manufacturing high-mix, low-volume and customized products. Such companies struggle with long lead times, late deliveries, and daily expediting to meet delivery dates. ERP systems are not designed to deal with this highly variable environment, and add-on software such as Finite Capacity Scheduling systems can require complex installation. Also, the Kanban system does not work well with low-volume or custom production. POLCA has delivered impressive results in such environments. It does not require any complex software implementation: it can be used without an ERP system or it can seamlessly complement an existing ERP system.

This book:

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• Provides a step-by-step roadmap on how to implement POLCA; invaluable for both companies that wish to implement POLCA as well as consultants and academics advising such companies.

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• Explains the concepts in practical and easy-to-understand terms by showing detailed shop-floor examples.

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• Includes more than 100 illustrations for understanding how POLCA works as well as for elaborating on details of the implementation steps.

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• Contains case studies written by company owners and executives documenting their POLCA implementation process and the results achieved in various industries in six countries.

IUnderstanding POLCA

1POLCA—Simple Yet Highly Effective: A Tale of Two Companies

Although they were separated by half a continent and a major ocean, Alexandria Industries in Minnesota and Bosch Hinges in the Netherlands were facing exactly the same problems. Both companies produced a high variety of products in low volumes—Alexandria made aluminum extrusions, and Bosch manufactured specialty metal hinges—and both had long lead times of six to eight weeks. Despite having this large window of time, both organizations were struggling with late deliveries, which required daily expediting efforts in attempts to get jobs out on time. For several years the two companies had tried a plethora of manufacturing and control strategies but none had alleviated this ongoing problem. Then, although separated by some 5,000 miles, management at each company independently decided to implement POLCA, which was a relatively novel idea at that time. Within a few months both companies had reduced their quoted lead times by more than 50%, and, even with this smaller time window, they were able to achieve near-perfect on-time delivery. And thus it was that these two companies joined the ranks of the pioneers of POLCA in both the new world and the old one.

The benefits of POLCA implementation were not confined to the shop floor; at each company, it had larger implications for the business as a whole. With customers taking note of their shorter lead times and excellent delivery records, both Alexandria Industries and Bosch Hinges experienced dramatic increases in sales. In addition, the reduction in overhead activities of rescheduling and expediting jobs as well as the reduction in expenses such as rush shipments to customers meant that the two companies also saw significant increases in profitability. Hours of management time—previously spent in “hot job” meetings and related expediting efforts—were liberated, allowing senior managers to focus on more strategic efforts that helped improve and grow the business. Finally, the reduction in work-in-process (WIP) by more than 50%, combined with getting jobs to customers quickly, meant big improvements in cash flow for both companies. More details on the POLCA implementations and results achieved at these two companies will follow in Chapters 10 and 12.

So why was POLCA able to achieve, in a relatively short time, what these two companies had been unable to accomplish for many years? The answer to this question provides an excellent executive summary of the strengths of POLCA. First, let’s understand what POLCA does for a company. POLCA is a card-based visual control system that manages the flow of jobs through the shop floor: at each of the main operations it controls which job should be worked on next in order to meet delivery targets. Specifically, it ensures that upstream operations use their capacity effectively by working on jobs that are needed downstream, while at the same time preventing excessive WIP build-ups when bottlenecks appear unexpectedly. POLCA is particularly effective in high-variability environments where the variability arises for external reasons such as unpredictable demand, many different types of orders, and dynamic changes in customer requirements, as well as internal reasons such as changes in equipment and labor status and other day-to-day conditions on the factory floor.

Next, to get an overview of why POLCA is so effective, we need to understand the acronym: POLCA stands for Paired-cell Overlapping Loops of Cards with Authorization. Each of these terms signifies a key feature of POLCA. As background, POLCA is aimed at companies that have already organized their shop floor into several manufacturing cells; however, it can also be used with companies that still have individual workcenters, or even a combination of cells and standalone workcenters. The three key features of POLCA that we mention at this stage are:

1. POLCA connects pairs of cells (or workcenters) with loops that contain circulating cards, which provide capacity signals between each pair of cells. These signals help with the decision regarding which job should be worked on next at each cell.
2. The operating rules for the loops are intentionally designed so that for a job going through several cells the loops for this job actually overlap, like interlocking links in a chain.
3. In addition to the card signals, in deciding which job to work on next, the cells also need to check the “Authorization Dates” of jobs—these are dates calculated for each cell that the job visits, based on the required completion date for a job.

You can see that these three features are directly related to the terms in the full name for POLCA, i.e., Paired-cell Overlapping Loops of Cards with Authorization. More details on these features and how they work will be provided in the next chapter. The purpose here is to explain the acronym and provide enough initial information for you to understand the points that follow.

We can now summarize the main factors that contribute to the success of POLCA.

• POLCA is designed for high-mix, low-volume and custom (HMLVC) production environments. In today’s world, companies are increasingly seeing demand for smaller batches, higher variety of products, and even customized products that are tailored to each order. Because of the application of computer-aided design and manufacturing, this trend—commonly referred to as “mass customization”—is only going to get more pronounced. Hence, a system aimed at this environment is critical for companies aiming to succeed in tomorrow’s production situation. Henceforth we will use the acronym HMLVC (defined above) to refer to this production environment.
• POLCA is simple and easy to understand. In the next chapter, you will see that at each cell the team of workers just needs to check three simple conditions to determine which job to run next at this cell.
• It is a visual system. In recent years there has been a recognition that visual systems have many advantages. Application of this approach is commonly called “visual management.” In keeping with this idea, POLCA uses cards that are attached to jobs or posted on notice boards to give clear visual signals that can be understood by both shop floor workers and management, and which provide instantaneous feedback and evaluation of the current status in any area.
• It does not require complex software implementation. There are many sophisticated scheduling software packages available today, but they suffer from two major drawbacks: (i) because the real world changes frequently, plans that are calculated—even if based on state-of-the-art optimization algorithms—are often obsolete soon after (or even before!) they are released to production; and (ii) complex software systems can take months, or even years, to implement, customize, and work out all the bugs for a given environment.
• POLCA works with your ERP system—or without it! In the next chapter, you will see that if you are already using an Enterprise Resource Planning (ERP) system, POLCA can seamlessly work with this system. On the other hand, if you don’t have an ERP system, you can still use POLCA just by performing simple calculations for each job—calculations that are easily implemented in a spreadsheet.
• POLCA builds on the capabilities of humans in the system. Many so-called “optimum” scheduling systems lose sight of the fact that such systems are deployed by people, and these people need to buy in to the system and support it. This oversight has resulted in ineffective or even failed implementations. In contrast, experience with many companies has shown that people on the front line like using POLCA, and they help to ensure that it works well.
• It builds on cells, teams, and ownership. In keeping with the latest manufacturing strategies, many companies are implementing cells and creating self-directed shop floor teams that have ownership of their areas. You will see in the next two chapters how POLCA not only builds on this structure but also takes advantage of it to get improved performance from these teams. In addition, it supports better coordination and cooperation between teams.
• It uses decentralized decision-making, resulting in agility and responsiveness. Instead of implementing a centralized planning system that attempts to optimize the whole operation, POLCA uses a simpler central system and pushes real-time decision-making to the cells and teams. This enables fast reaction times to real-world events.
• POLCA is an adaptive system. The combination of card signals, decision rules, and decentralized structure used in POLCA is designed so that the system continuously adapts to unforeseen real-world events such as changes in priorities or unanticipated bottlenecks. This adaptation includes outcomes such as: ensuring that upstream operations use their capacity more effectively by working on jobs that are needed downstream; at the same time avoiding building up too much work when bottlenecks appear unexpectedly; adjusting the job sequence at every operation to ensure that jobs are being processed in the right order to meet their due dates; and signaling to one team that another team might need assistance in order to keep jobs on track for their due dates. In particular, for HMLVC companies with a high variety of jobs that are made infrequently, or custom orders that have not been made before, estimated operation times may not be very accurate, resulting in unplanned bottlenecks. POLCA helps to alleviate such situations in real-time.

All these points will be explained in detail in later chapters and illustrated in practice through case studies from various industries. However, you can see from the above that POLCA offers many benefits and is able to achieve, in a relatively simple way, what many sophisticated scheduling systems have been unable to achieve for decades.

Overview of This Book

This book is intended as a comprehensive guide to both understanding and implementing POLCA. Although the book is primarily aimed at practitioners, academics and researchers will find substantial areas of the book that are relevant to teaching and research.

The remainder of Part I provides an understanding of POLCA. Chapter 2 explains how the system works and, in particular, the key rules that determine the sequence in which jobs will be tackled and how jobs and cards flow through the loops. Then in Chapter 3 we get into more depth on the benefits of POLCA; with a better understanding of how the system works, we can go into more detail than was provided in this chapter and understand how the benefits derive in practice.

Part II is a systematic guide to implementing POLCA. It is intended to serve as a detailed roadmap for teams at companies that wish to implement POLCA, as well as for consultants and academics that might be engaged in advising industrial clients. We begin in Chapter 4 by laying down the prerequisites for POLCA. This is not only to ensure that you are implementing POLCA in the right environment and for the right reasons, but also that some fundamentals are in place before proceeding with POLCA. Chapters 5 and 6 get into the detailed design of the system, including dealing with various special circumstances that might apply in different production environments, as well as practical techniques for dealing with unexpected situations that arise, particularly in HMLVC companies. Next, it is time for the rubber to hit the road. Providing you with the keys to a successful launch of the system is the subj...