Since the early 1980's, the benefits of producing a given production volume throughput with the minimum amount of inventory have been well documented. Beginning with the Just-in-Time methodologies, using Kanban cards for inventory replenishment, to Demand Flow methodologies, like that posited by Suri (Paired-cell Overlapping Loops of Cards with Authorization, or POLCA) of the Quick Response Manufacturing Institute in 1998, and that patented by Costanza (US 6,594,535) in 1999, and more recently JDA Software's patents of 2009 (US 8,989,879) and 2015 (US 8,965,539). See also R. Suri, “QRM and POLCA: A Winning Combination for Manufacturing Enterprises in the 21st Century,” Technical Report, Center for Quick Response Manufacturing, May 2003.
A goal of production businesses is a high return on investment. Thus, if the same throughput (return) can be achieved with a smaller investment (inventory), methods of reducing inventory for a given throughput provide businesses with a competitive advantage.
The use of Kanban scheduling was championed early by Toyota Motor Company in its high volume, low variety automobile factories. Kanban cards were assigned to batches of inventory and when consumed at a production operation, they were sent back to be replenished at an upstream operation. Using this "demand-pull" method, production at an operation would only take place with an authorizing Kanban, and this resulted in:
1. Limiting the amount of inventory in a factory to that determined by the number of Kanbans issued; and
2. Stopping production at upstream operations if production was stopped at some stage. This is because the Kanbans would stop flowing upstream. This synchronized production and enhanced quality, and reduced cost, because if a defect was found at one stage upstream, production would be automatically stopped until the problem was solved.
Suri recognized in his 1998 innovation that the Kanban method does not work well in high variety production environments. This is because any individual part may only be made once, or at least infrequently, and replenishment based on batches of similar units is not possible. To implement his push-pull system (POLCA), the pull-signal is based on the number of production hours that a batch of work (the Work Order, or WO) represented in its destination Work Center (WC). This normalizes all production parts based on the hours required to accomplish the work in a given WC.
POLCA has been successfully implemented and has been shown to be a solution to the high-variety production problem. This disclosure describes another approach to this problem that is based on matching the flow times of WOs to their downstream demand requirements.