Why large lots are expensive

Most companies try to reduce manufacturing costs through large lots. This costs flexibility and has a negative impact on inventory and on-time delivery. Large lot sizes also consume valuable production time and extend lead times. The resulting inventory blocks production and ties up capital that can sit idle for weeks or longer – waste, and anything but lean.

The lever: fast changeovers

Anyone who wants to produce to customer demand has to change over more often – and fast changeovers create the room to do so. The time saved allows more frequent changeovers or an increase in output. More frequent changeovers allow smaller lots; this reduces inventory and improves the availability of all variants. SMED is therefore a central component of a lean production system.

With the standardised SMED procedure, changeover time reductions of 50 % and more are achievable.

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