TACO'S NEW FACTORY LAYOUT REDUCES INVENTORIES AND THROUGHPUT TIMES
In the early 1990 , when John White Jr. became president of TACO he found the factory floor crammed with inventories and delivery times for products taking weeks and even months. Not coincidentally this was about the same amount of time it took for a product to make its way through the factory floor from beginning to end. The factory layout was designed according to processes, with all of the machining taking place in one area assembly taking place in another, painting in a third area, and so forth. As a result TACO's products spent a lot of time traveling from one work area to the next often waiting for long periods of time before the required operation was performed.
These long waits were the reasons there was so much inventory on the floor.
TACO IS an old traditional New England manufacturer located in Cranston, Rhode Island. It has been prc5ducing circulator pumps since the early part of the 20th century when John's grandfather started the business. (Circulator pumps are used in forced hot water heating systems to move the water through the pipes.JTACO makes both residential and industrial circulator pumps. The former are made ill very high volumes, whereas the latter are produced in much lower volumes, often being designed and made to order to meet the specific requirements of an individual building.After analyzing the various products being produced, TACO redesigned its fac!ory layout to be product-oriented rather than process-oriented. The three main bays in its factory were divided into three major product lines. One bay was devoted to the high-volume residential pump, where an assembly-line process was I s aned. In the middle bay, group technology cells were established, with each cell ocusing on a spec,' c family of products. In this bay, the pumps were procuced m varying batch sizes of between 100 and 600 units. All of the different pieces of equipment required to make a particular family 0 pumps were organized in a U-shape layout in the sequential order required to make the pump, and there were several cells in the bay. Thus, a typical work cell would consist of machine tools, an assembly area, and even a small paint booth.
The third bay does all of the low-volume products which are often the large bulky commercial units. The volumes here are very low sometimes being as little as one or two units of a specific design. The layout in this bay' uses a single-process flow approach which in many ways resembles an assembly line. The main difference here is that the time spent at each station is very long compared to a traditional assembly line and each station is designed so that it is very flexible in order to accommodate the wide variety of products that are made in this bay.
TACO's new product-oriented layouts have reduced the work-in-process inventories by more than 30 percent. while at the same drastically reducing the average throughput time by more. than 50 percent. Products that once took weeks and even months to complete are now manufactured in days and even hours if necessary. Another benefit of the new layouts is that
TACO has been able to increase its output by more than 50 percent without requiring any additional floor space. TACO's new factory layout is one of the major reasons that it currently hasa major share of the markets in which its products compete.