Product Wheel Designer

Overview

Product wheels balance the costs of transitions between products (typically dependent on the order of the products) and the cost of carrying inventory.  Phenix provides algorithms that guide the user to setting up product wheels that minimize these costs by:

• Finding sequences of products that minimize transition costs

• Putting products into families that require minimum transition costs between family members

• Assigning family members to production facilities that keep transition costs low while recognizing capacity constraints

• Calculating the cost of cycle stock inventory based on how often and how much product is made.  (The cost of carrying safety stock also adds to the annual inventory cost calculation.)

• Assigning run lengths and run frequencies that balance the costs of transitions with the costs of holding inventory

• Calculating the safety stock required to maintain target customer service levels

Wheel Setup

Click on General > Wheels in the left-side menu to go to the Wheel Setup page. You will see alerts for how many Lines in the Organization do and do not have an Active Wheel, entries for all current Wheel Sessions in the Organization, and a summary of all past, current, and future Wheel Activations.

Open

Starting a new session will get a prompt to “name” the session’s work:

Open

If you want to work on an existing “session”, click the “View” button to the right of the named session (see red arrow on “Wheel Setup” screen above) and you’ll be shown the “roadmap” for wheel development.  (You can go back to this screen to make changes, if needed later. )   If you have already completed part of the product wheel analysis, Phenix will automatically go to where you left off.

Roadmap to Building a Product Wheel

Phenix guides you through the build sequence for product wheels.  Once you’ve established the session, each of the steps for product wheel production is shown in a network diagram format across the top as a “roadmap” to what step (node) you’ve working on – and allows you to “backup” if you wish to make revisions or check something.  You should typically “more forward” through the product wheel development process by using the command in the “box” (red arrow below) near the top of the screen.  However there is a full set of commands under the “roadmap steps”  - nodes on the line across the top of screen (click the down “carat” to see individual steps).  The “next command” (in this case “Select Lines”) is always shown near the top of the screen and should always be used unless you want to go back.  After a step is finished, it will typically be in lighter text.   Users may stop the process anywhere and return later to the step they know needs to be updated.

Annual Cost Calculations

Much of the value of Phenix comes from the guidance that internal cost calculations provide.  Cost calculations are shown in the upper righthand portion of the Phenix Product Wheel screen:

Annual Costs – Ideal

The annual costs shown are calculated as the user progresses through the product wheel steps.   Calculations change as the analysis get progressively more detailed.  Each cost has a “magnifying glass” icon next to it.  Hover the mouse on this icon to see a window with detail about the cost calculation (shown below):

The detail can also be exported to an Excel file by clicking on  “Download Details” in the window.

Products (“materials”) have “characteristics” such as special contents, requirements (people and equipment) for processing, physical properties, etc. that must be changed or eliminated (cleaned) from the production line during a product change.   During “Setup”, the user inputs/reviews and organizes data used for calculating changeover costs and inventory carrying costs.  In the “Characteristics” section, the user ranks (“Prioritize Characteristics”) the relative importance (“priorities) of the product that will impact product changeovers and then runs uses the Phenix algorithm to “Set Ideal Sequence” which works to minize overall changeover cost.  The “Ideal” annual cost is calculated as though this “ideal sequence” were run on a single line.  Campaign lengths (and cycle stock) are set using the Economic Production Quantity equation for each product.  Safety stock is calculated using Phenix’s special simulator/optimizer software.  At this early stage in the product wheel analysis, no effort is made to recognize capacity constraints or to set campaign cycles that can work together on a single line (hence the descriptor “ideal”).

Assigning Products to Families

Products that possess similar characteristics often have minimal changeover costs associated with changing from product to product.  Production planners and managers tend to group these products into “families” that are run together in order to miniize overall changeover costs.  The “Families” step on the product wheel roadmap performs this function.  When the “Family Ideal Sequence” under the “Families” section is run the “Family Assigned” value for annual costs is calculated.  The run sequence now reflects products running in terms of families, and families running in a sequence that seeks to minimize changeover costs between families.  A special optimizing algorithm for balancing cycle stock carrying cost versus changeover costs within families and the cost of transitioning into the family, is run for every family.   The algorithm determines for each family, how frequently to run the family and run frequency for each product in the family.  Annual cost is calculated using these product sequences and frequencies to determine total changeover cost andcycle stock inventory costs.  Safety stock carrying cost is calculated using Phenix’s simulator/optimizer software and added into the annual cost.

Just as with the “Ideal” annual cost, all of the families are (implicitly) run on a single line that has no capacity constraint and no effort is made to coordinate the (likely) different family and product run cycle frequencies.