Cannibalisation in the Production Line

Rogerio Bonatto Operations Management, Supply Chain Leave a Comment

Cannibalisation in the Production Line

 

It is easy to find comprehensive documentation on ways to reduce the inventory shortage risk, but what to do if a supply chain snag materializes?

  • Stop the production line?
  • Continue the production and deliver incomplete/untested products (if it is technically feasible)?
  • Identify alternative means to feed the assembly line?

The first two options are the most frequently adopted, with predictable consequences in the industry. Alternative solutions might arise from any kind of creative thinking but will also require an implementation process and a cautious evaluation of possible adverse consequences.

There are many approaches that emphasise the efficiency of production processes, such as MRP (Materials Requirement Planning), Kanban (JIT – Just in Time) and OPT (Optimised Production Technology), but, on the other hand, they are not focused on the mitigation of inventory shortage risk.

Cannibalisation

Cannibalisation is one of the alternative solutions. In this context, the word “cannibalization” means the utilisation of parts/subsystems coming from other sources, as a replacement for the missing items. These are some possible sources of cannibalisation:

Missing part
  • Other production lines that use the same part number.
  • Existing kits already prepared for future use in the same production line.
  • Stock units completed but not yet sold.
  • Production units that are not available for commercialization due to other reasons, such as:
    • units that were not approved on quality or acceptance tests.
    • units that have other missing parts.

How to implement

The implementation process and the analysis of possible consequences should consider:

  • The configuration control, which will influence the in-service-support, guarantees and future product recalls.
  • The extra work-hours required to perform the transfer (considering the work on the donor asset, the item inspection and the work on the receiver asset).
  • The need for additional functionality, quality and acceptance tests after the installation.
Assembly Line

Given that the decision regarding the use of cannibalised parts involves stakeholders from different business areas (operations, supply chain, procurement, QA, finance…) the suggestion is to create a cross-functional team to manage this alternate solution.

Cannibalisation that foresees the use of second-hand parts during maintenance procedures requires additional actions. In this case, safety is a relevant concern, as well as the control of service life and the revision requirements. A new article will address this type of cannibalisation.

Conclusion

It does not matter if the academic models/frameworks do not mention cannibalisation in the production line. There is a real life out there, inventory shortages continue to occur, and cannibalisation is a valid workaround. Be prepared to execute it the right way.

Do you think cannibalisation should be avoided at any cost? Post your ideas in the comments area.

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