Lean manufacturing in a mass customization plant : improvement of Kanban policy and implementation

Abstract

This thesis documents the application of the principles of lean manufacturing and supply chain planning at Varian Semiconductor Equipment Associates. Varian is a manufacturer of ion implantation machines, and supplies and services equipment for most of the leading semiconductor manufacturers. The demand for the company's products is uncertain. The products are customizable, and the production schedules change from day to day to comply with customer requests. In situations where variability - whether in product features or logistics, use of lean manufacturing techniques like Value Stream Mapping and Waste Elimination helped to highlight the main problems. The main problem at Varian was the chronic part shortage from suppliers. Further investigation revealed improper supply chain and inventory management. Specifically, the Kanban policy is found to have a majority impact of current shortage situation. Lean manufacturing principles and supply chain planning were implemented to analyze and remedy chronic part shortage. Improper supply chain and inventory management practices were identified. A new Kanban policy was used to improve the shortage situation. Recommendations included a shorter lot size review period, larger safety factor and a new lot size decision making strategy based on historical demand.