A FINANCIAL MODEL FOR SET UP REDUCTION (SUR) JUSTIFICATION

The implementation of a Set Up Reduction (SUR), or fast changeover programme, is an essential part of the move towards a lean production environment. The authors are researching and developing SUR methodologies and have identified three key strategic areas; namely the Strategic, Preparatory and Implementation phases. This methodology highlights the need for clear planning and key commitment, both in terms of time and finance, at all levels in the management hierarchy. To ensure this commitment is achieved it is essential that the potential benefits of such programmes are both identified and subsequently quantified These benefits have been reported, but there is little published work which attempts to cost the potential benefits to a business. Hence, a financial analysis model has been proposed to enable the implementation of SUR to be justified.

This paper discussed the areas where the financial benefits can accrue. These have been identified generally as Machine Utilisation, Manpower, Inventory and other Commercial Benefits. The paper gives examples through several case studies of the methodology to assess and analyse these benefits. It also discusses the relative importance of the benefits, so that it is possible to see the impact from a production and commercial point of view. The paper provides a stable basis on which to progress a Set Up Reduction programme in the direction of greatest financial benefit and should enhance management decision making in the strategic planning of a business.