January 2020 | ISE Magazine 45

An assembly line, as deﬁned by www.dictionary.com,

is “an arrangement of machines, tools and work-

ers in which a product is assembled by having each

(stage) perform a speciﬁc, successive operation on

an incomplete unit as it passes by in a series of stages

organized in a direct line.”

In contrast, a job shop is deﬁned by www.inc.com/encyclopedia

as “a manufacturing business in which small batches of a vari-

ety of custom products are made. In the job shop process ﬂow,

most of the products produced require a unique setup and se-

quencing of process steps. Job shops are usually businesses that

perform custom parts manufacturing for other businesses.”

An assembly line is a low-mix, high-volume (LMHV)

manufacturing system. In contrast, a job shop is a high-mix,

low-volume (HMLV) manufacturing system.

An assembly line is designed for single-piece ﬂow. In con-

trast, a job shop is designed to produce an order with a lot size

of one (single-piece order ﬂow) or orders with lot sizes that

could be in the hundreds or even thousands.

An assembly line is inﬂexible but efﬁcient because it does

not have to produce a large variety of products. In contrast,

a job shop is ﬂexible but inefﬁcient because it must produce a

large variety of products.

Make-to-stock vs. make-to-order

A Toyota assembly plant operates in a make-to-stock (MTS)

production mode. If it were not for the 1,500 Toyota dealership

lots spread across the U.S., every Toyota assembly plant would

have millions of dollars of ﬁnished goods inventory (FGI) at

the end of every model year. Instead, the carrying cost of the

hundreds of thousands of automobiles produced every year by

each Toyota assembly plant is paid for by the dealerships that

get rid of their end-of-year inventory with discounted sales.

In contrast, a job shop operates in a make-to-order (MTO)

production mode. Taiichi Ohno, the creator of the Toyota

Production System (TPS), said, “The more inventory a com-

pany has, the less likely they will have what they need.” An

MTO manufacturer will not produce a larger quantity of

Production system design for high-mix,

low-volume manufacturing

Not all lean tools are suited to work in a make-to-order job shop

By Shahrukh A. Irani

46 ISE Magazine | www.iise.org/ISEmagazine

Production system design for high-mix, low-volume manufacturing

a product than the

quantity the customer

ordered. Nor will an

MTO manufacturer

ﬁll a customer’s order

from FGI stored for

months in their ware-

house.

Having FGI indi-

cates that the MTO

manufacturer need-

lessly wasted capacity

(machine hours, labor

hours and overtime),

inventory (materi-

als, consumables and

tools), overhead (ware-

house staff, electricity,

gas and security) and supplier capacity (steel service centers,

outside vendors and logistics providers) to produce unsold

products. In turn, that wasted capacity probably prevented ca-

pacity being used to process other jobs that missed their deliv-

ery dates and had to be expedited.

Waste elimination vs. lead-time and delivery

by due date

Ohno also said, “All we are doing is looking at the timeline,

from the moment the customer gives us an order to the point

when we collect the cash. And we are reducing the timeline by

reducing the non-value adding wastes.” According to Ohno,

order ﬂow time = order shipment date – order start date; or-

der ﬂow time can be reduced by eliminating the waste in the

order’s timeline.

But unlike Toyota, a customer of any MTO manufacturer

does not ask it to report how much waste was eliminated to

deliver the product(s) that were ordered. Instead, the customer

assesses the manufacturer on age-old, time-tested metrics for

customer service such as price, quality, lead-time and on-time

delivery (OTD) against a due date.

Management bestsellers like The Machine That Changed The

World by James P. Womack, Daniel T. Jones and Daniel Roos

(1990) and Lean Thinking by Womack and Jones (2003) have

misled make-to-order manufacturers to believe the Toyota

Production System is a good ﬁt for their manufacturing envi-

ronments. In reality, machine shops, custom fabricators, ship-

yards, construction companies and maintenance, repair and

operations service companies that claim to have implemented

lean have only succeeded at implementing the lean tools that

are listed in the left-hand column of Figure 1. The lean tools

listed in the right-hand column will not work in the dynamic

high-mix, low-volume make-to-order environment of any

job shop.

Adapting a system for HMLV manufacturing

A job shop simply does not operate like an assembly line. Here

are some of the operational characteristics of a job shop:

• It fulﬁlls orders for a diverse mix of hundreds of different

products.

• Manufacturing routings differ signiﬁcantly in their equip-

ment requirements, setup times, cycle times, lot sizes, etc.

• The shop layout is usually comprised of functional depart-

ment (aka, “process villages”) that each have equipment

with identical/similar process capabilities.

• It is a challenge to identify the part families in the product

mix in order to implement manufacturing cells, standardize

tooling, etc.

• Demand variability is high.

• Order quantities can range from one to hundreds and may-

be thousands.

• Production schedules are driven by due dates, which are

subject to change and are often non-negotiable.

• Production bottlenecks can shift over time.

• Finite capacity constraints limit how many orders can be

completed on any given machine on any day.

• Production control and scheduling is more complex. Lead-

times quoted to customers must be adjusted based on

knowledge of the production schedule.

• The diverse mix of equipment from different manufacturers

makes operator training, maintenance, etc., more challeng-

ing.

• Customer loyalty is not guaranteed. In fact, customers may

“threaten” to pursue other suppliers in order to negotiate

unrealistic due dates.

• A job shop must serve different markets. In fact, a job shop

expects its product mix to alter as its customer base changes

or it hires new sales and marketing staff who bring with

FIGURE 1

Choose the right tools

Lean tools that should and should not be used by job shops.

January 2020 | ISE Magazine 47

them their past business contacts from other sectors of in-

dustry.

• It is a challenge to recruit and retain talented employees

with a strong work ethic, a desire to learn on the job and

become cross-trained to operate different machines.

• There are limited resources for workforce training.

• It is hard to control the delivery schedule and quality of sup-

pliers.

A 1989 Harvard Business Review article, “Time to Reform

Job Shop Manufacturing: Organize Your Factory for Quality

and On-Time Delivery,” by James E. Ashton and Frank X.

Cook Jr., could serve as a foundation for developing a pro-

duction system for any high-mix, low-volume make-to-order

environment (see article above).

Members of the ISE community may be able to identify a

viable set of practices and tools similar to those in Figure 1 that

could be used to design, operate and manage a ﬂexible and

lean production system. 

Shahrukh A. Irani, Ph.D., is president of Lean and Flexible LLC,

a consulting company that delivers advisory, training and implementa-

tion services focused on lean for high-mix, low-volume manufacturing

(aka, job shop lean). From 2012-2014, he worked as the director of IE

Research at Hoerbiger Corp. of America Inc. in Houston, Texas. Prior

to his industry career, from 1996-2012 he was an associate professor in

the Department of Integrated Systems Engineering at The Ohio State

University. He is an IISE member.

Authors give tips on job shop reform

In their 1989 Harvard Business Review article on job shop manufacturing

reform (https://link.iise.org/irani_hbrjobshop), authors James E. Ashton and

Frank X. Cook Jr. detailed one manufacturer’s case as an example.

The HDS Division of Schlumberger made electromechanical sensors

(logging tools) that collect and process geological data for oil and gas

exploration. Its Houston factory was turning out 200 different products with

30,000 line items in inventory, as logging tools must be customized for the

type of drilling being done, which led to myriad engineering changes. HDS

was struggling to cope with operational costs, schedules and quality in 1985,

with 15% of its completed tools failing in ﬁnal tests and on-time delivery

topping out at 70%. Management knew changes had to be made.

Ashton and Cook detailed several steps recommended to help HDS turn

around:

Make quality mandatory. The organization set a goal that no product

should leave the factory that does not meet customer requirements. The goal

is to prevent defects from recurring to avoid having any to correct.

Get on schedule. Aim for 100% on-time delivery without sacriﬁcing

quality or increasing lead-times. To do this, get on schedule, whatever it takes.

Don’t sacriﬁce capacity for cost. Without adequate capacity, the

schedule cannot be met. Thus, it is critical that planned and actual stafﬁng

levels meet the master schedule’s requirements. Management must be able to

vary stafﬁng levels in different areas of the factory to meet the schedule.

Improve feeder shop responsiveness. To shorten the total lead-

time for products and allow for adherence to the master schedule, functions

that feed the assembly process with materials and parts must be responsive.

One way is an immediate and aggressive reduction in planned lead-times for

purchased parts.

Make performance visible. Making actual performance versus planned

performance highly visible is a powerful motivator when used as a reward, not

punishment. That includes a visible master schedule depicting planned versus

actual start and completion dates for each job; stafﬁng reports documenting

actual versus required personnel needs in each operations area; and reports

on how quickly defects and deviation are detected and corrected.