3 Myths About Every Part Every Interval
Nick Ostdick - June 21, 2016
Last week I took my daughter to the community pool for a swim and got a first-hand lesson in the importance of one of the most complex processes in today’s automotive production and supply chain. Yes, I know this seems odd, but stay with me.
We were in line for the pool’s tallest water slide watching the lifeguard at the entrance motion kids into position, check to see the previous rider had made it down the slide and was safely out of the way of the slide’s exit, and then give the next rider the green light to head down the chute. It was a delicate process of allocating when each rider is allowed to go so as to keep kids safe from harm but also to avoid a huge back-up of eager riders that very well could result in dissatisfied patrons because of the extended wait time.
My daughter picked up on this right away, especially when I was becoming impatient with how slow the line was moving. She said the lifeguard couldn’t make the line move any faster because otherwise somebody could get hurt - if one rider goes while the previous rider is still in the slide, a collision could occur, which could result in serious injury and an even bigger breakdown in the flow of the line.
Still with me? Good, because the principles in this anecdote are essentially the same principles in play with Every Part Every Interval (EPEI), which is perhaps one of the most underutilized schools of thought in today’s global supply chain management.
Much like the lifeguard who decides on the flow of riders down the waterslide, EPEI is the frequency at which parts of part families are produced within a fixed repeating production cycle - more or less, EPEI is an optimization of planned production processes to distribute the demand for production evenly over the course of a specified time, which, in the case of the automotive or other variant-rich industries, is ideally on a day-to-day basis.
The goal of EPEI is to break daily production into the smallest lots possible and distribute these lots evenly throughout the day. The end result, if implemented correctly, is a lean, more efficient production and supply network capable of meeting demand without running overages on inventory, encountering breakdowns due to supply constraints, or putting undue stress on production facilities that aren’t capable of meeting certain production criteria. Leveraging accurate EPEI through a series of somewhat elementary calculations based on production quantities, facility capacity, inventory, and size of customer orders results in reduced lead times, shorter and more efficient production cycles, and reduced space constraints for planned productions.
Back to my daughter at the pool: EPEI, much like the lifeguard, is the method by which smooth, sustainable, and profitable production is ensured through a methodical method of demand allocation over the course of a specific time period. In other words, you can’t let more than a certain number of riders down the slide at any given time lest significant bottlenecks or breakdowns occur. Yet even in today’s connected, digitized world, many myths still abound about EPEI and how it should be most effectively implemented to have the greatest impact across a company’s entire value chain.
With that in mind, here are 3 myths about EPEI and the truths behind those claims.
Myth #1: EPEI is achieved by increasing lead times and production lifecycles.
Wrong. Because the goal of EPEI is to evenly level and distribute production across a specified timeframe - months, weeks, and ideally days in the case of the automotive industry - lead times and production lifecycles should see significant decreases as demand planning and production is optimized and the associated processes streamlined with the aforementioned equal distribution of parts production. EPEI is also accomplished by reducing changeover time in mixed-stream productions and decreasing the quantity of parts volume allocated to certain machines or manufacturing facilities in order to engender a more responsive and agile production and supply network.
Myth #2: The goal of EPEI is to put a majority of demand onto one side of the production and supply network because that is best practice for ensuring optimized inventory of parts to meet customer orders.
False. As we discussed briefly in the above passage, the goal of EPEI is to reduce lot size to the point where production can be evenly distributed throughout a production day. While this process achieves the benefits laid out in the previous passage, it also allows for companies to facilitate small and on-demand orders in a functional manner without creating conditions for breakdowns or bottlenecks in planned production schedules and distribution schemes. Because companies leveraging EPEI can successfully fill small or of-the-moment orders - or, for that matter, successfully adapt to changes or modifications in orders or production constraints - these companies will operate more transparent supply streams with a greater potential for complete end-to-end (E2E) visibility across the entire value chain.
Myth #3: The longer the fixed sequence, the greater impact EPEI will have on a company’s supply network.
Not quite. If the entire point of implementing EPEI is to reduce the overall fixed sequence duration and decrease overall lot size to where the distribution of demand can be allocated on a daily - or perhaps even hourly - basis, it stands to reason EPEI’s impact will be greater based on a short fixed sequence as possible. Because a fixed sequence is repetitive in nature, reducing it down to the smallest amount of time possible can have long-term benefits for demand and production planning but also for supply and distribution logistics. These elements, in total, comprise a lean value chain where waste is significantly reduced and productivity is enhanced to create a more growth-oriented value stream that can adapt to today’s global supply hurdles.
It’s clear EPEI, along with other optimized inventory and production strategies like Plan for Every Part (PFEP), are key drivers in lean supply chain principles and fostering a value stream that is adaptable, responsive, and transparent. Given the complexities of today’s worldwide supply network and the tools necessary to cut through these complexities, companies should leverage EPEI as a primary method of facilitating an agile production and supply operation.