Improving Performance in Cyclic Production Systems by Using Forced Variable Idle Setup Time

In the early 1990s, research began to show that the Japanese production theory, which espouses reduction of machine setup time as a sure way to improve production performance, may be limited. Specifically, it was found that reduction in mean setup times without any change in variance can, paradoxically, increase waiting time and work in process (WIP) in a cyclic production system. Setup time variance was demonstrated to play a central role because of the paradoxes it produced with the resulting harm to effective capacity. Subsequently, explicit formulas were derived for determining whether adding fixed forced idle time (but holding variance constant) would reduce waiting time and, if so, the optimal amount of idle time to add. However, research to date has offered little guidance to reduce setup time variance to improve waiting time. We show that a greater reduction is achievable by adding a variable idle time that is a nonincreasing function of setup time and thereby reduce the combined setup time variance. We provide explicit procedures for finding the optimal variable idle time as a function of setup time when the latter follows any finite discrete distribution. We also show how to implement our policy and show that our approach can improve waiting time even when other currently known approaches cannot.