SMED: The Lean Technique That Can Transform Manufacturing Efficiency

In today's competitive manufacturing environment, companies are constantly searching for ways to increase flexibility, reduce costs, and respond more quickly to customer demand. One of the most powerful Lean Manufacturing techniques for achieving these goals is SMED, which stands for Single-Minute Exchange of Dies.

Despite its name, SMED is not limited to changing dies in a press machine. It is a systematic methodology for reducing setup or changeover times in any manufacturing process. Whether switching between product models, adjusting machine settings, or preparing production lines, SMED helps organizations minimize downtime and maximize productivity.

What is SMED?

SMED was developed in the 1950s and 1960s by Japanese industrial engineer Shigeo Shingo as part of the Toyota Production System. The primary objective is to reduce setup times to less than ten minutes or at least make them dramatically shorter than before.

Long changeovers force manufacturers to produce large batches in order to justify the downtime. While this may seem efficient, it often results in excessive inventory, longer lead times, and reduced flexibility. SMED addresses this challenge by making changeovers so quick that smaller production batches become economically viable.

The SMED methodology follows three main steps:

1. Separate Internal and External Activities

Internal activities can only be performed while the machine is stopped, whereas external activities can be completed while the machine is still running. The first step is to identify each activity and determine whether it truly requires production to stop.

2. Convert Internal Activities into External Ones

Many tasks traditionally performed during downtime can actually be completed beforehand. Preparing tools, preheating equipment, organizing materials, or verifying settings before shutdown significantly reduces idle time.

3. Streamline Remaining Internal Activities

For the tasks that must occur during the changeover, the goal is to simplify and standardize every step. Quick-release fasteners, standardized tooling, parallel operations, and visual work instructions all contribute to faster and more consistent setups.

Reducing setup times delivers benefits that extend far beyond the production floor. Faster changeovers enable manufacturers to produce smaller batches without sacrificing efficiency, leading to lower inventory levels and improved responsiveness to customer demand.

Let´s see a simple example to illustrate this technique.

Imagine a packaging line that requires 90 minutes to switch from one product size to another. By analyzing the setup process, the team discovers that many tools are collected only after the machine stops, settings are adjusted manually, and operators perform tasks sequentially.

After applying SMED principles, tools are prepared in advance, machine settings are standardized, and two operators perform different tasks simultaneously. The result? The changeover time drops from 90 minutes to just 15 minutes. The company can now produce smaller batches, reduce inventory, and respond more quickly to changing customer orders.

SMED is more than a technique for speeding up machine setups, it is a mindset focused on eliminating waste and improving operational agility.

In a world where customer expectations continue to evolve and product lifecycles become shorter, the ability to change production quickly is a significant competitive advantage.

Whether you manage a large manufacturing facility or a small production line, implementing SMED can unlock hidden capacity, improve efficiency, and support a more responsive and resilient supply chain. Sometimes, the biggest improvements come not from working harder, but from making every minute count.

The Hidden Factory: The Silent Killer of Supply Chain Efficiency

In supply chain operations, we pride ourselves on precision, efficiency, and continuous improvement.

But what if I told you there’s an entire shadow process operating inside your workflows quietly consuming time, resources, and money and it’s not even on your radar?

Welcome to the world of the Hidden Factory.

What is a Hidden Factory?

A Hidden Factory is the collection of all the rework, corrections, and unofficial fixes that happen behind the scenes to make a process appear like it's working smoothly. These aren’t logged as defects. They don’t show up in your dashboards. But they exist.

These might look like:

• Warehouse staff quietly relabeling mis-picked items before shipping.
• Customer service reps manually adjusting inventory levels in the system to correct errors.
• Planners double-checking forecasts with spreadsheets because they don’t trust the MRP output.

Individually, these “workarounds” seem harmless even helpful. But collectively, they signal process gaps that are eating into your margins and scalability.

Hidden factories are dangerous because they create the illusion of control. Everything looks good on paper, but under the surface, people are compensating for broken processes.

The good news is, Hidden factories can be found and fixed. Here are some ways to shine a light on them:

1. Listen to the “Off-the-Record” Conversations; pay attention when someone says:

“Oh, I always fix that before it causes a problem.” “It’s faster if I just do it this way.”

2. Map the Actual Process (Not the SOP)

Use value stream mapping to compare how the process is supposed to work versus how it actually works. You'll often find extra steps that aren't documented anywhere, that's your hidden factory.

3. Look at Cycle Time Variance

If your standard cycle time says an order takes 3 hours, but in practice it’s closer to 5, that discrepancy is usually where the rework is hiding.

4. Involve the Front Lines

Your team knows. Engage operators, planners, and support staff early and often, they live the day-to-day realities that KPIs can’t always capture.

How tariffs impact Supply Chains?

In today's globalized economy, supply chains are increasingly complex and interconnected, stretching across countries and continents. As businesses source materials and goods from around the world, they must also navigate a constantly shifting landscape of regulations, trade policies, and tariffs. These trade barriers can have a profound impact on the flow of goods, production timelines, and overall costs.

But what exactly are tariffs, and how do they affect supply chains?

Tariffs are taxes or duties imposed by a government on imports and exports. Governments use tariffs to regulate trade, protect domestic industries, or retaliate against trade imbalances or unfair trade practices. While tariffs serve as a source of revenue for governments, they also increase the cost of goods that cross borders. These added costs are typically passed along the supply chain, ultimately impacting consumers.

One of the most direct impacts of tariffs is the increase in the cost of goods. When a government imposes tariffs on imported goods, it raises the price of those goods for businesses importing them. For supply chains that rely on foreign suppliers for raw materials, components, or finished products, this results in higher production costs.

In response to tariffs, many businesses reevaluate their sourcing strategies to mitigate increased costs. This often means shifting production or sourcing to countries with lower or no tariffs. However, moving production or sourcing to a new country isn't always a simple solution. The decision to relocate production can involve significant capital investment, operational changes, and the development of new supplier relationships all of which can take time to implement.

Tariffs can also affect consumer behavior. Higher prices on imported goods due to tariffs may lead consumers to reconsider their purchasing decisions. If goods become more expensive, they may seek alternatives or reduce their spending altogether.

All in all, tariffs are more than just a political or economic issue they have tangible impacts on global supply chains. Increased costs, disruptions, and the need for strategic adaptation are just a few of the challenges businesses face in navigating tariff-related obstacles.

Good Distribution Practices (GDP) & Good Manufacturing Practices (GMP)

 

Good distribution practices (GDP) and good manufacturing practices (GMP) are quality standards and guidelines that have the same objective, to ensure medical device and pharmaceutical products are safe, meet their intended use, and comply with regulations.

GMP focuses on manufacturing processes, while GDP covers distribution activities.

Good manufacturing practices involve consistently producing products that meet quality standards. This requires the implementation of a system where the aim is to minimize risks, from incorrect labelling of products to contamination to incorrect ingredients and everything in between. GMP cover all parts of the production process, from raw materials through to the production of the finished product.

Good distribution practices involve maintaining the quality and integrity of products through all stages of the supply chain. GDP applies to warehousing, storage, and transportation, and it covers everything from storing and transporting products under the right conditions and ensuring product integrity at the correct destination on time.

There are parts of GDP that are unique, so they don’t apply to GMP. Those unique parts of GDP include guidance on transportation covering aspects such as temperature control, vehicle controls, and conducting risk assessments on transport routes.

Logistionary: Kanban

Kanban is a visual scheduling system for lean manufacturing.

It all started in the early 1940s when the first Kanban system was developed by Taiichi Ohno for Toyota automotive in Japan. It was created as a simple planning system, the aim of which was to control and manage work and inventory at every stage of production optimally.

The Kanban method gets its name from the use of kanban, visual signalling mechanisms to control work in progress for intangible work products.

Kanban aligns inventory levels with actual consumption. A signal tells a supplier to produce and deliver a new shipment when a material is consumed. This signal is tracked through the replenishment cycle, bringing visibility to the supplier, consumer, and buyer.

In contexts where supply time is lengthy and demand is difficult to forecast, often the best one can do is to respond quickly to observed demand. This situation is exactly what a kanban system accomplishes, in that it is used as a demand signal that immediately travels through the supply chain.

Kanban cards are a key component of kanban, and they signal the need to move materials within a production facility or to move materials from an outside supplier into the production facility. The kanban card is, in effect, a message that signals a depletion of product, parts, or inventory. When received, the kanban triggers replenishment of that product, part, or inventory.

Three-bin system

An example of a simple kanban system implementation is a "three-bin system" for the supplied parts, where there is no in-house manufacturing. One bin is on the factory floor (the initial demand point), one bin is in the factory store (the inventory control point), and one bin is at the supplier. The bins usually have a removable card containing the product details and other relevant information, the classic kanban card.

When the bin on the factory floor is empty (because the parts in it were used up in a manufacturing process), the empty bin and its kanban card are returned to the factory store (the inventory control point). The factory store replaces the empty bin on the factory floor with the full bin from the factory store, which also contains a kanban card. The factory store sends the empty bin with its kanban card to the supplier. The supplier's full product bin, with its kanban card, is delivered to the factory store; the supplier keeps the empty bin. This is the final step in the process. Thus, the process never runs out of product, and could be described as a closed loop, in that it provides the exact amount required, with only one spare bin so there is never oversupply.

If all this is confusing, and you´re still not clear on how Kanban works, Im sure the next image will make everything fall into place! One image is indeed worth a thousand words as they say!

Addressing a bottleneck with Theory of Constraints

 

The Theory of Constraints is an approach to improving organizational performance; the rationale behind this methodology is that in every organizational system, there is one constraint that limits the output, and only when this constraint is addressed we can improve the whole process.

No matter how much we improve the rest of the non-constrained steps, the process will not improve until we improve the weakest link.

The Theory of Constraints uses five steps for optimising systems, allowing to address constraints is the simplest way possible.

Step 0: define the goal

Each process has a goal, and understanding the goal is often the most difficult step in the process. Finding the right goal and the right metrics to measure progress toward that goal will be critical to your success.

Step 1: Identify the bottleneck

In a similar way, each system has one constraint that determines the throughput of the entire process.

The constraint can be a person, a team, a physical machine, one organizational rule, or anything else that limits the output of a process.  The constraint is often called a bottleneck.

As mentioned earlier, making improvements anywhere but the bottleneck will not improve the throughput of the system and it can even have a negative effect.

To help identify the bottleneck, you can use tools like flow charts, swim lane diagrams, root cause analysis, Pareto charts, or queuing models, but it is critical to define what is the step that is limiting the system.

It’s important to understand that being a bottleneck doesn’t mean a person or team is bad at what they do or that they’re doing anything wrong.  Being the bottleneck is neither good nor bad; it’s just a fact of the system.  There’s always one constraint, and as we will say later on, once that constraint has been addressed, a new one will come up.

Step 2: Exploit the bottleneck

Once we have identified the step that is constrained, the first way to address it is to “exploit” it.

Exploiting the bottleneck means eliminating any work done by the bottleneck that doesn’t contribute towards the throughput.

There are several options when it comes to exploiting a bottleneck:

      -      Make sure the bottleneck works on only one thing at a time.

-      Remove any non-throughput producing work from the bottleneck.

-      Shield the bottleneck from interruptions.

-      Make sure that the bottleneck is never idle or waiting for information, equipment, or materials.

It’s important to only change one thing at a time as if multiple changes are made it will be impossible to tell what change had the positive effect.

After each change, it’s important to go back to the beginning to make sure the bottleneck hasn’t changed to a point where it is no longer the constraint.

Step 3: Subordinate Decisions to the Bottleneck

After you’ve exhausted what you can do through exploiting the bottleneck, the next step is to subordinate decisions to the bottleneck. Subordinating decisions means the rest of the system works to help the bottleneck produce maximum value.

In a constrained system, anyone working beyond the pace of the bottleneck is not increasing the throughput of the system, therefore instead of working faster, it’s more productive to work to the pace of the bottleneck and use the extra capacity to support the bottleneck further.

As with the exploit step, measure the result and go back to the beginning. 

Step 4: Elevate the bottleneck

After doing what you can to exploit and subordinate, you can elevate the performance of the bottleneck.

Elevating the bottleneck requires time and money, so it’s done only after exploiting and subordinating.

Some of the below examples can help elevate the bottleneck and improve performance:

 

-       Get more people that can do the same work as the bottleneck.

-       Buy more or faster machines.

-       Give people training and better tools.

-       Coach for individual improvement.

-       Improve the workspace.

-       Change organisational policies.

Often, we jump right directly to elevating by adding people, getting training, buying equipment and tools.  These changes can be expensive, and it takes time to get a positive impact on throughput.  They could even have a negative effect in the short term.

Elevate as a last resort when you can’t find any more ways to exploit or subordinate.

Step 5: Repeat

Every time you find a potential improvement, implement it, measure the results, and go back to the beginning.  Make sure the goal is still valid and see if the constraint has moved.

Retailer-Manufacturer Collaboration - Keys to success

It is not new news that customers have become more and more savvy and educated when it comes to in stores and online shopping. This has lead to increase competition as well as higher expectations from both customers and retailers.

It's clear that the retail game has changed however many retailers and manufacturers are still playing by the old rules and therefore missing out on sales and customer loyalty.

In the current landscape, retailers and manufacturers need to identify opportunities to work together. In the article that you can find clicking in the below link, we explore some examples and case studies of collaborative work between manufacturers and retailers and how this has impacted consumers for the better.

You can fin the article here, hope you enjoy it!

Until next time!

Zero waste - the Unilever journey

Waste minimization is the process of reducing the amount of waste produced with the aim to eliminate the generation of harmful and persistent wasters. Waste minimization involves efforts to minimize resources and energy use during manufacture.

Waste management on the other hand, focuses on processing waste after it´s created, concentrating on reducing, reusing and recycling products and components. Waste minimization should be seen as a primary focus for most waste management strategies.

Zero waste is a philosophy that encourages the redesign of resource life cycles so that all products are reused and no waste is generated, it encompasses more than eliminatig waste through recycling and reuse, it focuses on restructuring the production and distribution systems to reduce waste.

Many companies have set ambitious targets waste reduction, and factories have been targeted as the primarily function to trial waste reduction principles.

One prime example of this journey to zero waste is Uniliver; the giant FMCG started his journey back in 2009 with the aim to achieve zero waste across their global factory network by 2020. They achieved this target in 2014, 6 years ahead of plan. Here is how they did it:

The challenge is now to roll out these best practices from factories to distribution centres, head offices and customers. Hopefully one day, the zero waste philosophy will be part of everybody´s life, in the meantime, a few pioneers are showing us the way. Only a few changes in our day to day life will mean a start to a journey to reduce our impact in our planet.

http://www.trashisfortossers.com/

Manufacturing Environments

Today, since I have been dragged into the world of manufacturing, we will try to shed some light into the most common manufacturing systems, but prior to that, a fairly extensive definition of “manufacture” is needed to understand the several manufacturing processes that a company could choose amidst.

Manufacture can be defined as the process of raw material into a finished product, especially by means of a large-scale industrial operation.

 There are five basic manufacturing or production environments

 

- Build to Stock or Make to Stock, often abbreviated as BTS or MTS, is a build-ahead production system in which production plans are based on sales forecasts or historical demand and goods are produced in advanced and stored in warehouses before they are sold hence, the supply is available before receipt of a customer order.

Build to Stock or Make to Stock are appropriate solutions for low configured products assembled massively.

Hammers, for example, are products that call for a Make to Stock manufacturing system.

- Build to Order or Make to Order, abbreviated as BTO or MTO is an order fulfillment strategy characterized for the end product not being built until a confirmed order is received. This method calls for much customized products where particular conditions need to be addressed to fulfill customer’s indications. However the level of sophistication is high, it does not require as much design lead time as in ETO.

This system is considered optimum for highly configured products like computers, bicycles or automobiles where holding inventories can prove to be very expensive.

Large utility transformers will be produced following the Make to Order approach.

- Assemble to Order also known as ATO is a hybrid manufacture strategy where parts and subassemblies are produced massively as in the Build to Stock strategy, but the assembly of the final product is delayed until an order in received.

 Personal computers are the most common example to illustrate the Assemble to Order manufacturing system.

- Engineer to Order (ETO) is a manufacturing process defined by the total customization of the product according to the final customer requirements. Obviously, as in MTO, in the ETO system, the product is not built until an order is received. This approach is only suitable for specific and very rare items and can be seen as the most extreme evolution of the MTO system.

 Energy plants that need very specific design requirements is an example of an Engineer to Order manufacturing system.

- Mass Customization The product is made in many different configurations mainly from stock components, but is quickly assembled in high volume.

 Finally bicycles are produced nowadays massively but with a certain level of customization.

 The choice of the most suitable manufacture system will be influenced by the following:

- Lead time expectations: Customers will have certain expectations with respect to delivery time; therefore the manufacture process should accommodate the customer delivery time frame.

- Product volume and variety: Primarily volume but also variety will play a significant role in the choice of the manufacturing environment.

- Product life cycle: Depending on the type of product and its life cycle different manufacturing approaches should be considered, and the system chosen might chance as the product evolves through its life cycle.

- The degree of customization: The degree of product design required will have an effect on the lead time and eventually on the manufacture system