From a managerial perspective, the production area is generally the highest-value space within a company, as it hosts all the transformational processes that convert raw materials into semi-finished and finished products. The high value of the production area is justified by the need to accommodate all equipment necessary for production (production lines), ensure all utilities required for the process (electricity, compressed air, etc.), provide suitable production conditions (e.g., ESD flooring, air overpressure, cleanliness levels, filtration), and, not least, facilitate the flow of raw materials and personnel to support production operations.
Pragmatically, given the high cost per square meter of production space, it must be used with maximum efficiency. Therefore, using production space for storage purposes is among the least justifiable expenses. Any storage area created within the production zone must contribute to and directly support the value of the production process. While most companies avoid storing unused equipment or idle lines in the production area, many fail to properly optimize the storage zones adjacent to the production line that house raw materials required for ongoing operations.
Raw Material Supply Models
We distinguish two major models for supplying raw materials to the line, each with different space requirements and unique constraints and opportunities for managing and optimizing the production area:
Push Model
A widely used approach is the kitting model, ideal for low-volume, high-mix production. In terms of storage space, kitting requires a large footprint and frequent material handling—especially when materials are returned to the warehouse and re-enter inventory.
Optimization Strategy
Optimizing storage space under this model can be achieved by integrating the material return process more efficiently within the warehouse.
Pull Model
Used mainly in high-volume, low-variability production, the KANBAN model allows for Just-In-Time (JIT) delivery, where materials arrive at the production line precisely when needed, minimizing in-line inventory.
Classic KANBAN
Minimizing in-line storage means periodically recalibrating cards based on production volume.
Electronic Min-Max
Lowering the minimum stock threshold can be done by increasing the backflush frequency and improving stock accuracy—especially by reporting losses or non-conforming products as close to real-time as possible.
JIDOKA KANBAN
Unlike these systems, JIDOKA KANBAN provides the most effective integration with the JIT model. It requires no ongoing maintenance after implementation and reduces inventory on the line to the minimum necessary.
Semi-Finished Product Storage
Just like raw material storage, every production area contains zones for storing semi-finished goods. Here, too, we observe two models through which these intermediate stocks are generated on the line:
Push Model
In this model, the planning department synchronizes production stages, scheduling stock levels of semi-finished goods between phases.
Pull Model
In this model, downstream production stages 'pull' semi-finished products from upstream, triggering a replenishment process.
Why the Model Matters
The model used for producing semi-finished goods directly impacts how raw materials are supplied to the line. That's why it's critical to balance processes and select the right push or pull methodology through lean techniques like Value Stream Mapping or SMED, always tailored to the actual constraints and dynamics of the production space.
The Ideal Scenario
A perfectly optimized and integrated production flow would have a KANBAN system that generates signals not only for raw materials but also for semi-finished products.
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