POLCA: A Simple Visual-Control System to Boost Profitability

 https://commons.wikimedia.org/wiki/File:Polca_card.png
APICS Magazine 2019
 By Rajan Suri

Increasingly, today’s manufacturers are reorganizing their shop floors into cells. The APICS Dictionary explains that a cell is “a manufacturing or service unit consisting of a number of workstations and the materials transport mechanisms and storage buffers that interconnect them.” Meanwhile, order quantities are getting smaller, as businesses are seeing more orders for customized products. To serve this high-mix, low-volume environment, companies need to route jobs through varying combinations of cells.

Unfortunately, there have been no significant changes in the use of materials requirements planning (MRP) and control systems. Traditional systems do not take advantage of the cell structure. Plus, MRP has difficulty addressing the variability in a high-mix, low-volume business because MRP logic can lengthen lead times, causing late deliveries and an increasing cycle of rush jobs. Add-on solutions such as finite capacity scheduling and manufacturing execution systems can be expensive and take a lot of time to implement. Finally, kanban — while simple and straightforward — is inappropriate for low-volume or custom production.

There is an effective and proven solution: POLCA. POLCA stands for paired-cell overlapping loops of cards with authorization, with each of these terms signifying a feature of the system. This a card-based, visual tool that manages job flow by controlling which jobs should come next in order to meet delivery targets. In even the most dynamic environments, POLCA ensures that upstream operations use their capacity effectively by working on jobs that are needed downstream while preventing work-in-process buildups when bottlenecks appear unexpectedly.

Real-world success

Alexandria Industries specializes in small batch and custom aluminum extrusions. For several years, the Minnesota-based company had struggled with long lead times and late deliveries. Alexandria Industries professionals tried numerous production control strategies — including enhancing MRP and implementing kanban — but none of these approaches had alleviated the problems. Newly implemented shop floor production cells reduced lead times from 12 weeks to about 8 weeks, but the overall material flow problem remained, and late deliveries still required herculean expediting efforts.

After much deliberation, Alexandria Industries’ management decided to implement POLCA. Within months, the business had cut both lead times and work in process (WIP) by more than 50 percent and was achieving near-perfect on-time delivery. This led to a dramatic increases in sales. Moreover, less expediting and rush shipping expenses also boosted profitability. Time that managers had previously spent on hot jobs was greatly reduced, allowing these people to focus on strategic business efforts. Perhaps most importantly, the benefits of POLCA are not confined to the shop floor; they extend to the entire organization.

Authorizations

Even though the A comes last, the starting point for POLCA is the concept of authorization. Authorization dates for each cell in a job’s routing are calculated by backward scheduling from the due date using the planned cell lead times. Sorting through the data for all jobs leads to the creation of an authorization list. It contains only jobs that have not yet been launched into the cell, sorted by authorization date.

A central part of POLCA is that jobs with a date of today or earlier are authorized, while those with a date of tomorrow or later are not. Only authorized jobs can be launched, and these are highlighted in the list for visibility.

Paired-cell loops of cards

If jobs flow between any two cells, they are connected by a POLCA loop. The loop contains circulating POLCA cards, which are labeled based on the origin and destination cell. To further enhance the visual nature of the system, cells are assigned colors and cards are color-coded.

POLCA cards signal the availability of capacity at destination cells. For example, when Cell A is authorized to start a job destined for Cell B, the Cell A team must have an A/B card to launch the job. Additionally, each cell has a POLCA board where available cards are organized. If an A/B card is available on Cell A’s board, the job can be launched. Then, the A/B card is kept with the job. When Cell A completes the job, it sends the job, along with the A/B card, to Cell B. The card conveys the message, “We finished one of the jobs you sent; you can send us another.” Thus, a returning POLCA card signals available capacity in a downstream cell.

POLCA cards ensure that upstream cells work on jobs that continue to flow downstream, instead of those that will end up sitting at a bottleneck. These capacity signals are a key reason why POLCA works so well in low-volume and custom production. To clarify: Suppose there are five cards in the A/B loop. If no A/B card is available to Cell A, this means there are five jobs already at, or on their way to, Cell B. Working on yet another job would result in more piling up at Cell B. Instead, POLCA rules redirect Cell A to work on a job destined for another cell that could benefit by receiving it.

Starting small

The team at Alexandria Industries decided to first try POLCA in a small, self-contained area. They chose products that traveled from one of the extrusion presses to the centerless grinding cell. This was a good test case because products on this routing suffered from inconsistent deliveries.

Alexandria Industries professionals came up with three problems to be solved:

1. Reduce queue times by eliminating the padding that had been put in place as a safety margin for unexpected problems, errors and schedule changes.
2. Eliminate the stocking of semi-finished products. In the past, commonly used, semi-finished products were made to stock and stored to optimize batch sizes and reduce setups.
3. Implement a make-to-order process on the extrusion press to reduce the extrusion batch size.

Once leaders approved these objectives, team members proceeded by training the affected shop floor and office personnel. Next, they designed the POLCA cards and chose POLCA board placement. They decided how POLCA cards would be incorporated into the shop packet and how the packet would move along with the product. Then, it was decided that the team in the second cell would be responsible for the return of the POLCA cards. Lastly, a detailed procedure was established for the scheduler to assign the inventory of semi-finished products until they could move to a make-to-order approach.

The transition to POLCA at Alexandria Industries was smooth and swift. It was clear early on that POLCA was working. Floor space started to visibly clear up as WIP decreased and delivery performance improved. Furthermore, in less than two months, expediting efforts were almost eliminated. These results convinced decision-makers to extend POLCA to the whole factory.

Simple and effective

POLCA has been applied in large multinational organizations and job shops with only 10 machines, in a wide variety of industries and international locations. These implementations have demonstrated that, through POLCA, companies can reduce lead times, eliminate expediting and achieve the highest levels of on-time delivery. Factors contributing to the success of this uncomplicated and practical system include the following:

• POLCA is designed for high-mix, low-volume production, which is crucial for companies wanting to succeed in demanding production environments.
• Shop floor personnel find POLCA easy to understand. They support its operation and stimulate organization-wide buy-in.
• Because it is a visual system, POLCA cards and boards provide instantaneous feedback to workers and management on the status of any area.
• POLCA does not require complex software, so factories can implement it quickly and without great expense.
• The tool builds on the increasingly popular cell structure and supports better coordination among cell teams.

“We had struggled to implement a pull system for our high-mix, low-volume products,” explains Tom Schabel, CEO of Alexandria Industries. “Through implementing POLCA, we dramatically reduced our work-in-process, freeing up cash and creating additional space for manufacturing. In addition, our internal chaos decreased, and customer satisfaction and profitability heightened.”