How to Apply Lean Principles in High-Mix, Low-Volume Manufacturing?

High-mix, low-volume manufacturing produces a diverse range of products in small quantities. Facing challenges in supply chain and workforce training, how could manufacturers optimize production with lean principles?
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Published on:
17 May 2024
Updated on:
22 May 2024

When we think of manufacturing, the first that might come to mind is a large factory with streamlined assembly lines and mass production of standardized products. However, there’s another manufacturing side that’s equally important but often overlooked; high-mix, low-volume manufacturing.

In this article, we’ll introduce high mix, low volume along with its defining characteristics and examples. Then, we’ll dive deeper into the limitations of high-mix, low-volume production, and how lean manufacturing principles can address these challenges, even though they have traditionally been implemented in low-mix, high-volume settings.

What Is High-Mix, Low-Volume Manufacturing?

High-mix, low-volume manufacturing is the process of producing a diverse range of products in relatively small quantities. High mix indicates the wide variety of products, low volume refers to the low production volumes.

High-mix, low-volume production is often referred to as “made-to-order manufacturing”. In made-to-order manufacturing, products are built or customized according to specific customer orders or demand signals, rather than being produced in anticipation of future sales (made-to-stock) or in large quantities for inventory (mass production).

This high-mix manufacturing approach is usually the go-to for custom-made items, prototypes, limited editions, or niche products, due to its flexible and customizable nature.

Characteristics of High Mix, Low Volume

The following characteristics define high-mix, low-volume manufacturing:

  • Variation: each product variant within the high mix presents unique features or specifications. The diversity can range from minor variations in product design to entirely different product lines.
  • Customization: products can be tailored to meet specific customer requirements, allowing for customized products.
  • Flexibility: high-mix manufacturing settings are designed to be flexible, with rapid changeover. This flexibility refers not only to the processes but also to the materials, resources, and workforce.
  • Adaptability: closely intertwined with flexibility, the adaptable nature of high mix, low volume refers to the swift responses to market fluctuations and evolving customer demands.

These traits are commonly linked to specific industries where high mix, low volume manufacturing is common.

Examples of High Mix, Low Volume Manufacturing

High-mix, low-volume manufacturing plays a crucial role in industries such as aerospace, automotive, and pharmaceuticals, where customization and flexibility are essential.

Aerospace Industry

The aerospace industry generates relatively low volume output since aircraft components require specialized parts tailored to different aircraft models. Aerospace manufacturers such as Boeing and Airbus apply high mix, low volume methods to produce custom plane parts, cabin interiors, and specialized components.

Pharmaceutical Industry

The pharmaceutical industry produces specialized medical devices and equipment tailored to meet the unique healthcare needs of individual patients. This includes custom implants, prosthetics, and pacemakers, each meticulously designed and manufactured to address specific medical conditions and improve the patient’s outcome.

Automotive Industry

When you think of the automotive plant, you might think of highly efficient operation belts producing hundreds of copies of the same standard model a day. However, there’s another side to automotive manufacturing, where high-mix, low-volume production methods take center stage.

This is the case for luxury car manufacturers that produce customized vehicles based on customer preferences, limited-edition models for niche markets, or showcase vehicles.

High Volume vs. Low Volume

On the other side of the spectrum, we find low-mix, high-volume manufacturing. This might sound familiar as mass production, characterized by the production of a limited range of standardized products in large quantities.

What are the main differences between high and low-volume production? Unlike low-volume manufacturing, this mass production approach focuses on a standardized production process with minimal customization or product variety, and benefits from economies of scale, where the cost per unit decreases as production increases.

Low-mix, high-volume manufacturing is typical for commodities in high demand. Most of your cupboard staples, such as beverages, packaged food, and household products are produced in high volume manufacturing settings. These fast-moving consumer goods (FMCG) often have standardized formulations, packaging, and features, allowing manufacturers to achieve large volumes and keep up with consumer demand.

As we mentioned earlier, the automotive industry mainly relies on high-volume production methods to deliver large quantities of standardized vehicles. Popular car models such as sedans, SUVs, and trucks are typically produced on high-speed assembly lines with streamlined processes for optimal efficiency, and economies of scale.

High-Mix, Low-Volume Challenges

While high-mix, low-volume manufacturing offers benefits like adaptability and tailored production, it’s not without its limitations. What characterizes the high-mix manufacturing, also limits it in terms of managing production, creating a flexible supply chain, and sustaining an adaptable workforce.

Production Management

One of the main challenges is planning, control and management in high-mix productions, due to the high volatility of demand and unpredictability in production. This requires careful coordination to oversee and maintain inventory control, staffing levels, quality control, resource allocation, and equipment maintenance.

Supply Chain Flexibility

Fluctuations in demand and product mix can complicate inventory control, making it challenging to maintain optimal stock levels and lead times. Suppliers have to respond quickly to changing production requirements and deliver custom or specialized materials on time and in the right quantities. Coordination with multiple suppliers and managing a network of vendors adds complexity to the supply chain management.

Adaptable Workforce

In a highly variable working environment, workers should be able to switch seamlessly between variant production processes. However, when a worker hasn’t been assigned to a particular workstation for some time, they might struggle to remember the specific steps, risking errors or delays in the process. Without well documented procedures or proper training, managing a flexible workforce becomes challenging.

Lean Manufacturing Principles for High Mix, Low Volume

Lean manufacturing focuses on minimizing waste within manufacturing systems while simultaneously maximizing productivity. The idea finds its origin from Toyota, a car manufacturer where the low mix, high-volume production model has been prevalent.

Waste in High Volume, Low Mix Manufacturing

The concept of lean manufacturing suggests that anything that doesn’t add value from the customer’s perspective, is seen as waste. 8 types of waste are defined:

  • Defective products
  • Overprocessing
  • Overproduction
  • Idle resources
  • Excess inventory
  • Transportation
  • Unnecessary motions
  • Underutilized skills
An illustration showing eight forms of waste in lean manufacturing: Defective Products, Excessive Processing, Overproduction, Idle Resources, Having to Store Items, Unnecessary Motions, Transportation, and Underutilized Human Resources. Each with an accompanying icon.

By eliminating all waste, your production process will become lean, resulting in increased output while reducing costs and time. For a high-volume repetitive process, a small implementation could already have a considerable effect on its output.

However, since volumes are less high, you might think that waste is not a main concern in high-mix, low-volume manufacturing. That is true for the most part. Waste, such as overproduction, overprocessing, and excess inventory are not associated with high-mix manufacturing. This is because the produced quantities are lower and production is more targeted than in high volume cases.

Five lean principles are commonly implemented to eliminate waste and achieve lean manufacturing:

  1. Value: identify what your customers value from your products.
  2. Value Stream Mapping: visually map the flow of resources in your product’s entire life cycle.
  3. Flow: check whether there are any of the following 8 forms of waste within your value stream map.
  4. Pull: a product will only be produced when there’s already a customer demand for it.
  5. Continuous Improvement: repeat the principles and improve constantly.
A flowchart displaying the 5 principles of lean manufacturing: 1. Identifying What's Your Customers' Value, 2. Value Stream Mapping, 3. Creating a Lean Manufacturing Flow, 4. Establishing a Pull System, 5. Kaizen (Continuous Improvement).

While these principles may not be effective to eliminate waste in high mix manufacturing, they can effectively tackle other challenges, such as managing an adaptable workforce and ensuring supply chain flexibility, as mentioned earlier.

Pull System

The pull system in lean manufacturing refers to the concept where a product will only be produced when there’s already a customer demand for it. This is opposed to the push system, where a product is manufactured without particular demand, generally based on market projections or inventory levels.

This one should speak for itself, since high-mix, low-volume production is already customer-driven. In HMLV environments, where product mix and order volumes vary, a pull system allows manufacturers to respond quickly to customer orders and minimize excess inventory. By implementing a pull system, lead times reduce, responsiveness improves, and resource utilization optimizes.

A pull system ultimately contributes to a higher supply chain resilience. By minimizing dependencies on forecasts and reducing excess inventory, companies can enhance their resilience to supply chain disruptions and market volatility.

Continuous Improvement (Kaizen)

Continuous improvement (also known as its japanese translation kaizen) focuses on the ongoing efforts to keep on improving the operations.

Standard Work

One of the main implementations of continuous improvement is standardizing work procedures. Standard work is a set of standardized procedures needed to complete a production process. Standardization of work processes involves documenting the established processes in clear, step-by-step work instructions, along with visual aids.

Without proper documentation, training, or standardization of work procedures, maintaining an efficient workflow can be difficult for employees, leading to errors and quality issues. Even more so in an environment where workers face frequent production changes. For them, standardized work instructions are not a nice-to-have, but a must-have.

An efficient way to centralize operating procedures is by digitizing work instructions and training documents. This becomes increasingly important in environments with an aging workforce and high staff turnover, where the risk of losing critical information on how to work efficiently is heightened. Digitizing work instructions and training documents helps preserve institutional knowledge and ensures that crucial information is readily accessible to all employees, regardless of their experience level or tenure.

Training and Skill Development

When production processes and product variants change frequently, employees not only need clear instructions to do so, they also need ongoing skill development. Continuous training ensures that workers are equipped with the necessary skills and knowledge to adapt to evolving production requirements, minimizing disruptions and maintaining productivity.

One way to measure a worker’s strengths and weaknesses is by ranking their skill level on a scale of difficulty (1-5) and measuring the time it takes the operator to machine parts at a certain difficulty. Once the operator has demonstrated an appropriate speed and accrued time working on a certain complexity level of part, they can be moved up to work on the next level of difficulty. This approach not only provides insights into each employee’s strengths and weaknesses, but also motivates them to enhance their skill set.

With skills matrix software, you can measure and track competencies digitally across the workforce and create customized training plans. This process facilitates continuous learning and development within the organization, allowing employees to enhance their skills over time.

High-Mix, Low-Volume Manufacturing in A Nutshell

High-mix, low-volume manufacturing involves producing a diverse range of products in relatively small quantities, marked by variation, customization, flexibility, and adaptability. Challenges in this environment include production management, supply chain flexibility, and maintaining an adaptable workforce.

Despite traditionally thriving in low-mix, high-volume settings, lean manufacturing principles can be applied to high mix, low volume. By embracing lean principles and adapting them to these challenges, manufacturers can enhance workflow flexibility, reduce lead times, and ultimately deliver greater value to customers.

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