UNIVERSIDADE DE SÃO PAULO ESCOLA DE ENGENHARIA DE SÃO CARLOS DEPARTAMENTO DE ENGENHARIA DE PRODUÇÃO BUILDING A LEAN MANUFACTURING SYSTEM TO IMPROVE THROUGHPUT AND QUALITY AT OTTENWELLER COMPANY INC GABRIELA PIOVEZAN Advisor: Prof. Dr. Daniel Capaldo Amaral São Carlos 2015
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UNIVERSIDADE DE SÃO PAULO
ESCOLA DE ENGENHARIA DE SÃO CARLOS
DEPARTAMENTO DE ENGENHARIA DE PRODUÇÃO
BUILDING A LEAN MANUFACTURING SYSTEM TO
IMPROVE THROUGHPUT AND QUALITY AT
OTTENWELLER COMPANY INC
GABRIELA PIOVEZAN
Advisor: Prof. Dr. Daniel Capaldo Amaral
São Carlos
2015
GABRIELA PIOVEZAN
Building a Lean Manufacturing System to Improve Throughput and Quality at
Ottenweller Company Inc
Senior Project presented to São Carlos
School of Engineering, São Paulo
University, in partial fulfillment of the
requirements for the Degree of
Mechanical Production Engineering
Supervisor:
Prof. Dr. Daniel Capaldo Amaral
São Carlos
2015
Autorizo a reprodução e divulgação total ou parcial deste trabalho, por qualquer meio
convencional ou eletrônico, para fins de estudo e pesquisa, desde que citada a fonte.
Catalogação na publicação
Serviço de Biblioteca e Documentação
Escola de Engenharia de São Carlos da Universidade de São Paulo
Piovezan, Gabriela
Building a Lean Manufacturing System to Improve Throughput and Quality at
Ottenweller Company Inc / Gabriela Piovezan; Orientador Daniel Capaldo Amaral. São
Carlos, 2015.
Monografia (Graduação em Engenharia de Produção Mecânica) – Escola de Engenharia
de São Carlos da Universidade de São Paulo, 2015.
Nome: Piovezan, Gabriela
Título: Estruturando um Sistema de Manufatura Enxuta para Melhorar Produtividade e
Qualidade na Ottenweller Company Inc.
Monografia apresentada à Escola de Engenharia de São
Carlos da Universidade de São Paulo para obtenção do
título de Engenheira de Produção Mecânica
Aprovado em:
Banca Examinadora
Prof. Dr. Antonio Freitas Rentes Instituição: EESC – USP
Prof. Dr. Daniel Capaldo Amaral Instituição: EESC – USP
Prof. Dr. Kleber Francisco Esposto Instituição: EESC – USP
6
ABSTRACT
PIOVEZAN, G. (2015). Building a Lean Manufacturing System to Improve Throughput and
Quality at Ottenweller Company Inc. Trabalho de Conclusão de Curso, Escola de
Engenharia de São Carlos, Universidade de São Paulo, São Carlos.
Lean Manufacturing has been one of the most pursued methods of elimination of waste and
maximization of utilized resources by manufacturing and service businesses seeking to
enhance productivity and quality, from a perspective of customer value. One of the initial
steps for the implementation of Lean is the analysis of the current state, followed by a
proposal encompassing future scenarios. This senior project report describes the challenges
faced at this stage in the metal business at issue, Ottenweller Company Inc. A literature review
of concepts, tools and techniques of lean production will be presented, as well as the
application and adjustment of the lean system to the company scenario to bring up solid
results to that business. As most prominent result, it was captured significant cycle-time
reduction, impacting dramatically on cost savings and sprint capacity for both parts analyzed
in this report and the entire resource group.
7
RESUMO1
PIOVEZAN, G. (2015). Estruturando um Sistema de Manufatura Enxuta para Melhorar
Produtividade e Qualidade na Ottenweller Company Inc. Trabalho de Conclusão de
Curso, Escola de Engenharia de São Carlos, Universidade de São Paulo, São Carlos.
A Manufatura Enxuta tem sido um dos métodos mais buscados para eliminação de
desperdícios e maximização dos recursos utilizados por indústrias de fabricação e por
empresas de serviços que visam aumentar produtividade e qualidade, a partir de uma
perspectiva de valor agregado para o cliente. Um dos primeiros passos para a implementação
de modelos enxutos é a análise do estado atual, seguida da proposição de cenários futuros.
Este relatório de conclusão de curso descreve os desafios enfrentados nesta fase em uma
indústria mecânica em análise, a Ottenweller Company Inc. Uma revisão da literatura sobre os
conceitos, ferramentas e técnicas de produção enxuta foi desenvolvida, além de uma aplicação
e ajuste do sistema de manufatura enxuta ao cenário da empresa de modo a trazer benefícios
sólidos para esta organização. Como resultado mais notável, uma redução do tempo de ciclo
significativa foi alcançada, impactando drasticamente nas reduções de custo e gerando um
aumento de capacidade para produção de ambos os produtos analisados neste relatório, assim
como para todo o grupo de recursos da empresa.
1 Este trabalho de conclusão de curso está normatizado de acordo com o Manual de Publicação da American
Psychological Association (APA) disponibilizado pela Universidade de São Paulo em http://www.teses.usp.br/index.php?option=com_content&view=article&id=52&Itemid=67
Ava = 27.35 % Ava = 27.35 % Ava = 27.35 % Pass = 97.4 % Pass = 99.3 % Ava = 27.37 % Pass = 98.9 % Ava = 7.49 % Pass = 99.9 %
Max at resource = 6.91 pc Max at resource = 4.53 pc Max at resource = 4.3 pc PPM = 26034 All weld PPM = 6891 Max at resource = 8.92 pc PPM = 11485 Max at resource = 3.78 pc PPM = 766
Max at 100% = 25.26 pc Max at 100% = 16.55 pc Max at 100% = 15.74 pc Ava = 23.23 % Ava = 48.55 % Max at 100% = 32.58 pc Ava = 39.6 % Max at 100% = 50.53 pc Ava = 7.49 %
Max at resource = 2.79 pc Max at resource = 4.91 pc Max at resource = 5.9 pc Max at resource = 33.12 pc
Max at 100% = 12 pc Max at 100% = 10.12 pc Max at 100% = 15 pc Max at 100% = 320 pc
5.5 Days 0.76 Days 0.5 Days 0.24 Days 0.83 Days 0.64 Days 0.12 Days 0.02 Days 0.31 Days 0.55 Days Total Lead Time
57 Min 87 Min 90.5 Min 120 Min 142.5 Min 44.2 Min 96 Min 19 Min 3 Min 9.93 Days
0.04 Day 0.06 Day 0.06285 Day 0.0833 Day 0.099 Day 0.03069 Day 0.067 Day 0.013 Day 0.0021 Day
Tack Weld 1 Tack Weld 2 Robot FinishManual Finish
Weld Machine A Phos
OPERATIONOPERATIONOPERATION
Paint Final Inspection Pack and Ship
First Operations.........
Ottenweller Company:OCI8539A
Steel Supplier
First Operations
Daily schedule
Production Control
MRP
Customer
1 1 1 2 1 2 1 2 1
Figure 8: Current state map for OCI8539A
30
Forecast= 3 months Forescast= 1 year
Weekly email 12 working days
max capacity= 50 parts/week
color: email - Monday
PO accepted - Tuesday
7.73 pc/day
21 days/ month
Pass = 99.9 % CT = 56.6 Min CT = 118.7 Min CT = 76.5 Min CT = 51.6 Min CT = 164.5 Min CT = 87.25 Min CT = 44.2 Min CT = 96 Min CT = 19 Min CT = 3 Min
PPM = 638 C/O = 30 Min C/O = 6 Min C/O = 38 Min C/O = 7.2 Min C/O = 11 Min C/O = 14.8 Min C/O = 33.8 Min C/O = 18 Min C/O = 2 Min C/O = 0 Min
Ava = 47.53 % Ava = 47.53 % Ava = 47.53 % Ava = 47.53 % Pass = 98.4 % Pass = 99.7 % Ava = 36.8 % Pass = 97.9 % Ava = 8.72 % Pass = 99.9 %
Max at resource = 12.11 pc Max at resource = 5.77 pc Max at resource = 9.13 pc Max at resource = 13.26 pc PPM = 15954 All weld PPM = 2553 Max at resource = 11.97 pc PPM = 21059 Max at resource= 6.61 pc PPM = 1276
Max at 100% = 25.5 pc Max at 100% = 12.14 pc Max at 100% = 19.2 pc Max at 100% = 27.91 pc Ava = 41.16 % Ava = 63.27 % Max at 100% = 32.6 pc Ava = 31.09 % Max at 100% = 75.79 pc Ava = 15.63 %
Max at resource = 3.6 pc Max at resource = 10.44 pc Max at resource = 4.66 pc Max at resource = 75.02 pc
Max at 100% = 8.75 pc Max at 100% = 16.5 pc Max at 100% = 15 pc Max at 100% = 480.0 pc
6.6 Days 0.02 Days 2.76 Days 0.54 Days 0.61 Days 0.57 Days 0.37 Days 0.11 Days 0.11 Days 0.07 Days 0.37 Days Total Lead Time
56.6 Min 118.7 Min 76.5 Min 51.6 Min 164.5 Min 87.25 Min 44.2 Min 96 Min 19 Min 3 Min 12.63 Days
0.0393 Day 0.08 Day 0.05313 Day 0.0358 Day 0.1142 Day 0.0606 Day 0.031 Day 0.0667 Day 0.01 Day 0.0021 Day
Tack Weld 1 Sub Robot Tack Weld 2 Robot Finish Machine B Phos
OPERATION
Steel Supplier
OPERATIONOPERATION
PaintFinal
Inspection
Customer
Pack and ShipFirst
Operations
Ottenweller Company:OCI4081B
Manual Finish Weld
Production Control
MRP
Daily schedule
1 .5 1 1 2 1 2 1 2 1
Figure 9: Current state map for OCI4081B
31
The symbols used to draw these maps, Figure 9 and 10, are from the pattern stablished
by the authors Rother & Shook (2003) as showed in Section 5.3.3.1.
In the beginning of this project, it was decided that the current state map would contain
only cream colored parts for the two part numbers because cream represents about 78% of all
colors requested. However, during the measuring stage, it was observed that the inventory
snapshots collected within processes did not represent only cream parts, since all parts
remained the same until the paint operation, at which point the application of paint takes place
differentiating the parts one from another by color. The discrepancy was also evident in the
considerable increase in inventory between processes not followed by an increase of demand
for cream parts during the same period, meaning that the demand for other colors was not
taken into account. In light of this and in view of the fact that different colors represent a
significant percentage, the team decided to expand the scope for all colors in order to have
more precise measurements.
Appendixs A and B bring together all data collected during time studies as well as the
quantities of inventory present within the entire mapped process evident through snapshots.
During the measurement phase, the inventories were counted around 11am, every Monday and
Wednesday. That particular time was chosen for two reasons. First, the operators were at
lunch from 11 to 11:30am on the first shift, meaning the parts were static, thus facilitating the
count of the pieces at the current position in the flow. Second, during this interval, the
shipping operation has not yet been done, since the first daily truck arrives at Ottenweller
around noon. Through gathering snapshot data, seven cycles of inventory were collected for
each one of the parts, and then the means were inserted into the current state maps as viewed
in Figures 9 and 10.
Since the first operations, where all of components are cut, are not being considered in
this scope, a decision needed to be made about what items should be considered in the
inventory snapshots. For the OCI8539A product, which is assembled by thirteen components,
the two with the highest cost are: upright plates and the pair of side plates. This division in
Figure 9 was made for Tack Weld 1 and Tack Weld 2 processes because after them the part
becomes known by OCI8539A, as viewed at the Figure 9. In this analysis, for each set, two
side plates and one upright plate are necessary. Following this condition, the side plates were
considered in pairs, and the final value to their inventories is the maximum inventory, because
it means one product can be completed if all parts necessary are available to go to the next
process.
32
OCI8539A
Summary Table Product
Process Lead-Time (Min) 658.53 Avg Day Dmd 6
Process Lead-Time (Days) 1.37 Hours per Day 8
Total Inventory (Pieces) 57.14
Total Inventory (Days) 9.52
Production Lead-Time (Days) 10.90
OCI4081B
Summary Table Product
Process Lead-Time (Min) 717.29 Avg Day Dmd 7.73
Process Lead-Time (Days) 1.49 Hours per Day 8
Total Inventory (Pieces) 100.54
Total Inventory (Days) 13.01
Production Lead-Time (Days) 14.50
For OCI4081B, which is assembled by nine components, the three with the highest
cost are: back plate, pair of side plates, and web plate. That division in Figure 10 was
necessary because these are the three initial processes through which the components go
before it becomes known as OCI4081B: Tack Weld 1, Robot 1, Tack Weld 2. The inventory
time could be obtained through the division of these top level pieces by daily demand in days.
In relation to the time studies, not only meetings with operators and managers were
implemented, but also a camera was used in order to analyze cycle times, changeover times,
and to determine improvements for processes, procedures and techniques. The cycle times
(C/T) were measured as the total time between the movements of one finished good to the
movement of the next one, in each operation. The cycle time for each process uses the average
cycle-time of all multiple measures made. From this standpoint, the process-lead time of the
entire stream could be obtained by the total time of the sum of the cycles for the product, not
including inventory time.
By implementing times studies and collecting inventory snapshot data, the production
lead-time for each product was calculated by combing its process-lead time and total
inventory time. The summary is in Figure 11.
Figure 10: Summary table for VSMs
33
While working with time studies for cycle times, it was revealed that parts were being
reworked at welding operations (Appendixes A and B). Data about quality performance, more
specifically rate of defects, was collected and included in the maps (Figure 9 and 10). In
reference to last year’s records, March-2014 to March-2015, ―pass‖ and ―ppm‖ correspond to
the percent of parts with zero defects produced, and the parts per million produced with
defect, respectively. Unfortunately, according to current operational procedures, quality
inspectors record only the category in which the defects were found, the date of occurrence,
and the operator in charge. There is no precise information about where, in the manufacturing
processes, the defects were generated. In the maps, there are quality rates only for the
processes where it was possible to identify the occurrence of the defect.
Furthermore, despite the fact that these two parts correspond to Ottenweller’s parts
with the highest production rate, they share resources with other products. The percent of
resource available for each part in each process of the stream was measured based on the
company’s forecast for the year. Considering the statistics of production for Ottenweller’s
portfolio of products, this data is going to be essential during the planning of Kanbans for the
future state. Additionally, the field ―maximum at resource‖ was designed to report how many
parts will be able to be produced per day, in the three shifts, based on the resources
availability, on the entire demand, for the processing of each one of the parts, OCI4081B and
OCI8539A. In a hypothetical situation where only products to this specific customer are
manufactured with priority of delivery over other products, and where there are no breaks and
downtimes, the capacity of the company was measured as ―maximum at 100%‖. Even though
this last parameter is not realistic, it is a basis for understanding the new lean system aptitude
in reaching on-time-delivery and increase of production efficiency goals without making
strategic investment decisions to boost the existing capacity.
The inventory is represented by orange triangles ahead of the processes, and the blue
arrows symbolize where material is transferred. The timeline at the bottom of the maps has the
processes lead-times, which is basically the processing time for each process, and the
inventory time, which is calculated by dividing the inventory quantity into the daily customer
demand for each product.
34
5.3. Analyze the Current Situation
The analysis of the current situation was made by taking the company’s goals as
guidelines to reach an understanding of the reality observed at Ottenweller and to assure that
improvements can be proposed to achieve the company’s aims for safety, quality,
productivity, and reduction of cost.
With regards to safety, an excessive flow of forklifts and employees transiting through
the facilities was identified, mainly due to operations not being grouped close enough to each
other to minimize transportation and movement over the stream. There is a lack of designated
traffic lanes indicating where forklifts can drive without incurring safety risks, as well as the
occurrence of hard braking and horns due to the fact that employees and/or material share the
same access ways as the forklifts. Also, the use of distinct cranes crossing products has
historically represented danger to the operators.
Concerning quality issues, a common practice throughout the company is the self-
inspection, in which the checkup is carried out by the operators who are doing the actual
work; they perform the inspection on the work they themselves have done. Based on historical
data, the highest occurrence of self-inspection took place right after the processes that had the
highest incidences of defects. Only the final inspection, at the end of the flow, is carried out
by a quality specialist, when the processing of the parts has been completed and before
packing.
Moreover, with respect to quality, it was detected that there is no standard to carry out
the manual processes of welding. Welding points are applied on Tack Weld 1 to connect
components to the side plates. Some of the parts are welded with multiple points while others
are welded with only single ones. The lack of standardization can result in non-value added
costs for the parts that are receiving more welding than necessary and it can represent future
quality problems in the stream.
When the enhancement of productivity is desired, one of the most significant aspects
that should be targeted is production bottlenecks. The bottleneck for OCI4081B, where it has
its longest cycle time, is its manual finish weld. As OCI4081B goes through the welding
process, its physical structure becomes very restrictive resulting in some locations on the
product that robots are not able to reach to weld. This means that operators must position
themselves within the product to be able to touch these physical limitations to manually
perform the welding operation.
35
On the contrary, the bottleneck for OCI8539A is not the manual finish weld as it is for
OCI4081B; it is the machining process at Machining Center A. The reason for this change is
due to the difference in the shape of each part when both side plates have been welded in
place. The OCI8539A side plates structure allow the welding through the components within
the structure more easily, enabling the previous process, the manual finish weld, to be more
agile when compare its cycle time to the OCI4081B.
Another lean strategy to improve productivity is to promote setup reduction,
eliminating non-value added time. Currently, many of the setup operations at Ottenweller
promote idle time as machines sit inoperative, waiting to start processing parts.
In terms of the current layout and production set up, all assembly processes for
OCI8539A are located in building Loc2, even though there is still some physical distance
between consecutive processes. Only when the demand for this product exceeds the available
capacity in Loc2, is the excess of OCI8539A taken to the other building, Loc3, to be
machined. On the other hand, every single OCI4081B makes displacement to Loc3 after its
manual finish weld at Loc2 to start its machining process, where the machining center B is
located. After this process, all parts return to the previous building to continue the flow. Both
machining centers, A and B, are addressed as ―monuments‖, which means that they require a
heavy investment to make changes in their actual positions because of their complexity of
deployment. The spaghetti diagram is showed in the Figures 12 and 13. The orange spots
represent inventories of the parts in the study. The color blue represents OCI8539A’s flow,
and purple, OCI4081B’s.
36
Figure 11: Spaghetti Diagram from Tack 1 to Machining
37
Figure 12: Spaghetti Diagram from Phos to Shipping
38
Fortunately, OCI8539A is able to run in both machining centers A and B; however, the
OCI4081B only can go to machining center B. Through time studies, it was verified that
processing time for OCI8539A in machining center B is more efficient; it runs in 1h15min
compared to 1h45min in machining center A. Since OCI4081B only fits in machining center
B, this machine is basically designated to its production alone. The result is that each
OCI8539A is processed in machining center A then, where it normally requires an additional
30 minutes of processing time. The programming of both CNC machines is done by the
company’s specialists, and the recent improvement at Machining Center B that generated its
shorter cycle time when compared to the Machining Center A for OCI8539A, was carried out
by internal specialists.
In view of the fact that the demand for OCI4081B is usually higher than OCI8539A,
the possibility of making a fixture to run OCI4081B in machining center A as considered as
this could also save non-value added cost by avoiding transportation from building Loc2 to
Loc3. Coming from the perspective that OCI8539A has a shorter processing time in
machining center B, there also might be a potential advantage in developing programs to
switch both parts. However, it was found out that the height of OCI4081B is not compatible
with Machining Center A; it only fits in B. Changing this resource in order to be able to
machine OCI4081B would require heavy investments, which proved to be an unworkable
alternative.
Moreover, since Machining Center B has only one fixture to hold OCI4081B, valuable
time is wasted when the operator stops the machine to load it. The fixture is able to move
horizontally, cleaning access for the next part to start its manufacturing process. However, if
the next part to be processed in the machine is also the OCI4081B, the previous part needs to
be unloaded with aid of a chain, which takes up a large part of the changeover time. Adding
another fixture similar to the horizontal one could generate a significant reduction in non-
value added cost related to the waiting time of the machine.
Another interesting occurrence was identified during the OCI4081B changeover time.
The parts are received by forklift from the other building and are delivered to the front of the
machining center B. Each time, the machine operator must flip the part upside down to be
positioned on the fixture. For this operation of flipping, a tool change is required and that
process can take about eight minutes. Even though this process is implemented by the
operator when the machine is running, in the future, if that non-value added operation could
be eliminated, it would free the operator for other activities.
39
One key element of Lean Manufacturing system in reducing costs is to hold only the
necessary level of material to supply the customer demand. This represents a large opportunity
at Ottenweller. A frequent accumulation of inventory waiting to be processed is seen,
especially before bottlenecks. Beyond the misused investment, it also represents phycology
issues for the operators who are often in a situation of exhaustion and delay in their processes.
Many times, the orders created from the MRP system do not match with the reality of the
quantities of products already sitting on the shop floor. Furthermore, the lack of raw materials
and components that are held up in up line processes continue to be an ongoing concern of the
operators. Additionally, the company has stipulated a minimum quantity to have on-hand to
attend commercial strategies before each process. These issues will needs to be addressed in
order to implement lean effectively.
Nowadays, Ottenweller works with a programming of minimum lots to guide the
production of first components necessary to feed tacking processes. The idea is to maximize
the steel sheet cutting operations with the nesting processes (laser, plasma, and flame cut). In
the scope of this report, from the first process, tack weld 1, to the very last process, shipping,
the parts are transfer one-piece-flow.
Making use of tools for continuous improvement, the event known as a Kaizen Blitz,
―a sudden overpowering effort to take process, system, product, or service apart and put it
back together in a better way,‖ was scheduled in the machining and welding areas. Teams of
operators and managers were invited to come up with suggestion for improvements during the
brainstorming. Using posts-its, sharpie markers and pens, tape, butcher paper, floor tape,
foam, shadow boards, and laminates, the employees expressed their ideas during the
brainstorming session. The ideas were organized by category, and the team started discussing
what ideas could be implemented on a scale of effort (X) and impact (Y) as shown in Figure
14.
40
Upon reaching this stage, the leader invited the group to generate actions for future
implementation. The document called ―Action Tracker‖ containing due dates and owners for
each one of them was produced to make sure the ideas would be tracked for accountability.
Figure 15 is a summary of the Kaizen outputs.
Figure 14: Action tracker for Kaizen Blitz
Figure 13: Effort versus Impact Matrix.
Key Function Action Description Related Goal
Welding Promote 5S improvement at Weld Area Safety/Productivity/Cost
Welding Show Quality Pareto Chart and Tracker at Weld Area Quality
Welding Provide protect cords on the OCI8539A at Tack Area Safety
Welding New Finish Weld positioner for OCI8539A and OCI4081B Productivity/Quality
Welding Designate an operator to load parts in the Robot Productivity/Cost
Machining Promote 5S improvement in both Machining centers Safety/Productivity/Cost
Machining Update tooling and program for OCI8539A Productivity/Quality
Production Provide a dedicated bin to transport OCI4081B upside down Safety/Productivity/Cost
Production Provide a Robot Crib for tools in Loc3 Productivity/Cost
Lean Designate squares for Kanbans and allocate inventory Safety/Productivity/Cost
Lean Duplicate bins for component parts at Tack Area Productivity/Cost
Robotics Add Robot operation for OCI8539A to reduce constraint on Manual Finish Weld Productivity
Robotics Create a Robot program for running parts in both sides of Robotic Weld Productivity
Womack, J. P, Jones D. T., & Roos, D. (1990). The Machine that Changed the World:
The Story of Lean Production. HarperPerennial, New York.
Womack, J. P, Jones D. T., (2004). Lean Thinking: banish waste and create wealth in
your corporation. Revised and Updated. London: Free Press.
60
APPENDIX A
OCI8539ANote1. FIRST OPS - Currently Out of Scope for VSM. Inventory recorded is in terms of top level part number so if there is 2 side plates per part 1 will be recorded in the operation
Note2. Icon # is destinated to confidential information
Tim
e
11:0
0 A
M
11:0
0 A
M
11:0
0 A
M
11:0
0 A
M
1:30
PM
11:1
5 A
M
11:0
0 A
M
Queued Inventory Std Dev Mean Cost Total Maximum Inventory LT Dat
OCI4081BNote1. FIRST OPS - Currently Out of Scope for VSM. Inventory recorded is in terms of top level part number so if there is 2 side plates per part 1 will be recorded in the operation
Note2. Icon # is destinated to confidential information
Tim
e
11
:00
AM
11
:00
AM
11
:00
AM
11
:00
AM
1:3
0 P
M
11
:15
AM
11
:00
AM
Queued Inventory Std Dev Mean Cost Total Maximum Inventory LT Dat