Effects of SMED
This chapter discusses time savings achieved and other effects of applying the SMED system. The multiplicative effects of the high-diversity component, on the one hand, and the small-lot component, on the other, lead inevitably to a substantial increase in the number of setup operations that must be performed. Cutting setups that used to take two hours to three minutes with SMED, however, changes the situation considerably. The SMED system offers the only path to high-diversity, small-lot production and minimal inventory levels. Implementing SMED increases investment efficiency by making possible dramatic increases in productivity at relatively little cost. Production time can be cut 90% by engaging in small-lot production, for example, by dividing lots of 1,000 into lots of 100, and by using standardized processing times and single-item-flow operations. This leads, however, to a tenfold increase in the number of setup operations that must be performed.