Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 4 of 8. The N in DOWNTIME


Non-utilized resources waste is sometimes referred to as an additional waste. It is not one of Taiichi Ohno’s original seven forms of muda identified in the Toyota Production System, but its potential to drain value from processes is tremendous. Waste from non-utilized resources typically refers to a failure to utilize the full potential of people in a team or organization, but it can also refer to the failure to use any sort of resource effectively, whether the resource is tangible or intangible, human or non-human. Tangible resources that are not used to their full potential are obvious forms of waste in the supply chain. Assets are associated with measurable costs that can be calculated to determine the specific results from underutilized assets or even assets that lie dormant for extended times. Intangible resources are sometimes harder to measure but can be equally costly. The waste of human resources can also take multiple forms. It can be costly to fail to utilize the full creativity and talent of people throughout the team or organization. When creative ideas and solutions remain untapped, the opportunity cost – the benefits that are foregone as a result – can be virtually impossible to measure. The wasted potential for improvement results when people doing the work are not involved and consulted for ideas on improving the methods and processes of the work.

LOOK FOR old guard thinking, politics and business culture, and no or low investment in training.

REDUCE BY eliminating worker’s “check your brain at the door mentality”. Tap into and embrace the thoughts, ideas and intelligence of the persons performing the work, and require that level of involvement as part of the daily business culture. Implement balanced scorecards for measuring performance and create a visual workplace. Brainstorming sessions, idea gathering techniques, team work, training, and clear leadership are required to begin to involve all employees in the company’s drive towards perfection; for continuous improvement to succeed there must be welcomed involvement by each and every employee. Encourage people to take ownership of their areas, processes and products to promote a sense of pride and involvement. Employees must always be considered the company’s biggest asset and leadership should respect them, nurture them, and involve them in the business. Those companies that do so will create a competitive advantage and reap the rewards.

A Balanced Scorecard (BSC) is a strategic management tool that measures how well the business activities are aligned with the organization’s strategic vision.  It balances financial results with non-financial performance metrics.  The novelty of the Balanced Scorecard is the addition of non-financial metrics. It is also a management system, not just a measurement tool, in that it helps to clarify vision and to translate strategy into activity.

A Visual Workplace is not about buckets and brooms or about posters, signs, and lines on the floor. It is a compelling operational imperative, central to the war on waste, vastly reduced lead times, and an accelerated flow of material, people, and information in and through the workplace. Visuality is first and foremost a language; the language of the company’s operational approach, optimized through visual devices and systems. This language translates vital information into visual displays as close to the point of use as possible, thereby making it possible to recognize the pattern of work without speaking a word. A visual workplace is populated by the many visual devices invented by a workforce that knows how to think visually. Visual thinking is a person’s ability to recognize motion and the information deficits that trigger it, and, then, to eliminate both through solutions that are visual. One of the main by-products of effectively implemented visual workplace is the emergence of a new core competency – employees who know how to think visually, and a workforce of visual thinkers is the way to true visual management in any company.

Is your company leadership reaping the maximum rewards of sustained financial success by harnessing the intelligence, skills and experience of all employees?

Watch for upcoming articles on Lean Manufacturing and the remaining Hidden Wastes of DOWNTIME…

August 7, 2012 at 10:36 am 1 comment

Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 3 of 8. The W in DOWNTIME


Waiting wastes come from people, processes or partially finished goods sitting idle while waiting for instructions, information or raw materials. Poor scheduling, poor vendor support or communications and inaccurate inventories cause processes and people to come to a halt and cost valuable time and profit.

LOOK FOR idle people or machines waiting on the preceding or following operation, materials, schedules or information.

REDUCE BY Line Balancing (schedule balancing) workloads and using a Cycle Time/Takt Time Bar Chart for process synchronization.

Line Balancing is simply leveling the cycle time for all operations within a line or process. It is building the cycle time concept into the standardized operations of a production line for maximum efficiency. Line balancing smoothes work tasks and operator motions to create a harmonious and uninterrupted flow of product through the process steps. Workers learn to identify those processes that are out of balance with others and how to bring them back into line. While most companies assign the duties of measuring and improving production lines to process engineers, there ARE things that a team of line personnel can measure and examine for improvement opportunities. These people handle the process daily and understand the impact that balanced flow has on through-put, lead time to the customer and inventory levels, all of which play a very important role in the financial success of the organization.

Cycle time is the time that elapses from the beginning to the end of a process. It is the sum of all value-added processing time AND the all non-value added time.

Takt Time is an expression of your customer demand normalized and leveled over the time you choose to produce. It is not, and never has been, a pure customer demand signal. Customers do not order the same quantity every day. They do not stop ordering during your breaks, or when your shift is over. What Takt Time does do, however, is make customer demand appear level across your working day.

Using chart paper and a stop watch, record the time for each process or operation and the time for all steps or sub-processes. Record the minimum and maximum time for each step as it is completed by more than one operator.

This information can be used two ways. The first is to identify the number of workers and the duties each should accomplish to meet the changing demands of the customers. This information can be used to balance a production line for different levels of production and keep everyone informed. Another way this information can be used is to develop a Takt Time/ Cycle Time Bar Chart. Identification of the maximum and minimum individual process times within an operation points out the variation between the ways different operators complete their duties. Improvement teams can work on developing better SOPs and continued operator education to reduce this variation.

The average cycle time for each operation within a larger overall process needs to be shorter than the customer’s demand time or Takt Time. Analyze lengthy operations to see if there are small incremental sub-processes that can be moved to the operations with a shorter cycle time to help balance the line. Very few production lines will ever be 100% balanced. The goal should be a maximum variance of approximately 10%.

What are your customers and the improvement of your company’s bottom line Waiting for?

Watch for upcoming articles on Lean Manufacturing and the remaining Hidden Wastes of DOWNTIME…

July 25, 2012 at 8:10 am 1 comment

Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 2 of 8. The O in DOWNTIME


Many manufacturers believe in the traditional long runs of equipment because it is supposed to be more efficient to run a big batch versus running several shorter batches that include change-overs. Long runs require large inventories. Large inventories tie up large sums of money and keep our customers waiting longer. Thus, long runs reduce our ROI! Manufacturers that are leading their industries have found that when change-over times are drastically reduced and simplified, they can change-over more often and please more customers.

Over-Production waste occurs when we manufacture, assemble, or build more than what is needed. We make something just-in-case instead of Just-In-Time (JIT). Inaccurate scheduling, long lead times, long changeovers and not being close enough to our customers to understand their changing needs, leads us to longer production runs. We worry that our customer might need more while we have to suffer with the associated cost of unsold goods or services.

LOOK FOR processes producing more than is being “pulled” by the customer and requires storage between processes.

REDUCE BY improving Change-over and Set-up times and Line Balancing (Balancing Production Lines).

Quick Change-over and Set-up times on smaller and more flexible equipment make it easier to please many customers while reducing the overall cost of holding large quantities of inventory that is waiting for production opportunities. Drastically reduce change-over times requires an in-depth 2 step analysis and documentation of the process. The first step is to identify and move as many of the now internal (“power off”) activities to external (“power on”) activities. This first improvement step cost almost nothing to change, but are sometimes the hardest to implement because of years of old habits and resistance to change. The next step is to reduce the time required to perform the remaining internal activities. A valuable resource available on the subject is A Revolution in Manufacturing: The SMED System by Shigeo Shingo. His referral to SMED stands for Single Minute Exchange of Dies, and he believes the target for all change-overs should be 9 minutes or less. If you put together a cross-functional team from maintenance, operations, quality assurance and the tooling department (if it is separate from maintenance), the results can be amazing. These people have many ideas on how to improve change-overs and reduce the time required. They need to be empowered to suggest, plan and implement these improvements.

Line Balancing is simply leveling the cycle time for all operations within a line or process. It is building the cycle time concept into the standardized operations of a production line for maximum efficiency. Line balancing smooths work tasks and operator motions to create a harmonious and uninterrupted flow of product through the process steps. Workers learn to identify those processes that are out of balance with others and how to bring them back into line. While most companies assign the duties of measuring and improving production lines to process engineers, there ARE things that a team of line personnel can measure and examine for improvement opportunities. These people handle the process daily and understand the impact that balanced flow has on through-put, lead time to the customer and inventory levels, all of which play a very important role in the financial success of the organization.

What financial impact is Over-production having on your organization?

Watch for upcoming articles on Lean Manufacturing and the remaining Hidden Wastes of DOWNTIME…

July 12, 2012 at 8:46 am 4 comments

Lean Manufacturing: Eliminating the 8 Hidden Wastes – Part 1 of 8. The D in DOWNTIME


Some waste exists in every system. From manufacturing and assembly, to hospitality, healthcare, transportation, and social services, some waste is hidden within all processes. Identifying and eliminating these hidden wastes saves millions of dollars every year for those organizations that have embraced and continuously use Lean assessments. These wastes fall into eight basic categories: Defects and rework, Over-production, Waiting, Non-utilized resources, Transportation, Inventory, Motion, and Excess processing. As listed here, the 8 wastes are most easily remembered using the acronym “DOWNTIME“.

Defect and rework waste happens when we do not have robust preventive systems that include Mistake Proofing, or Poka-Yoke, techniques. When we cause a defect or an error and pass it on to the next operation, or worse, pass it on to the customer, we are accepting rework as part of the process. We lose money when something is manufactured, assembled or serviced twice, while our customer will only pay us once for the goods or service.

LOOK FOR defective, partial or un-completed products or services and completed units that are re-worked or thrown away. Stacks and piles of items anywhere in the process are good indicators of waste.

REDUCE BY improving Visual Controls and initiating more complete Standard Operation Procedures. Implement Mistake Proofing or Poka-Yokes at the source or the place in the process where errors occur.

Visual Controls can help employees monitor the status of production or services at a glance and help to identify developing bottlenecks that will need to be cleared to keep operations running smoothly. Managers can keep employees at all levels informed of current production schedules, performance levels and accomplishments with large colorful Visual Controls. Worker assignments, qualifications, training levels and suggestions can be displayed to improve morale and give recognition using Visual Controls.

Standard Operation Procedures (SOPs) must be simple, user friendly and helpful tools, not unnecessary burdens. Inputs from all areas of the organization need to be formed together to supply all of the information required for doing the job correctly the first time. The ultimate goal of an SOP is to document the best way to perform a job for your situation of materials, equipment, location and people. The SOP should be written specifically for your situation. This will assure that you really are doing the work in the best way – at least until the next improvement come along.

Mistake Proofing, or Poka-Yoke, is the method of applying techniques to eliminate the possibility of errors occurring. Poka-yoke (poh-kah yoh-keh) or more literally avoiding (yokeru) inadvertent errors (poka) was coined in Japan during the 1960s by Shigeo Shingo, a pioneer of the Toyota Production System. Ideally, poka-yokes ensure that proper conditions exist before actually executing a process step, preventing defects from occurring in the first place. Where this is not possible, poka-yokes perform a detective function, eliminating defects in the process as early as possible. Workers, engineers and managers work together to establish procedures and design devices to prevent errors from occurring at their source of origin. The most economical and least costly time and place to detect and prevent errors is at the start of the process.

Can a substandard product or service be produced or performed and passed on to the next step in your processes?

Watch for upcoming articles on Lean Manufacturing and the remaining Hidden Wastes of DOWNTIME…

July 5, 2012 at 7:04 am Leave a comment

How to Achieve Operational Excellence: Part 2 of 2 – Achieving Operational Excellence


In order to achieve operational excellence in this global economy, organizations need to change their perspectives on how to manage their core competencies; they must change from a focus on maintaining the status quo, to one that is continuously searching for better and rational ways for managing those core competencies. Organizations must continuously look for new and rational ways (strategies, capabilities, methodologies, and solutions) to enable the continuous effective and efficient management (optimization, transformation, and sustainment) and leverage their business’ core competencies to meet the needs of customers and /or stakeholders.

They will need to: (a) develop a mature capability for accurately identifying customer’s/stakeholder’s needs, (b) define those processes and metrics that employees will have to follow and measure to meet those needs, (c) develop employees capabilities to carry out those well defined processes that meets the needs of its customers/stakeholders, (d) fuel those business processes with timely, accurate, measurable and relevant information/data/metrics, and (e) support them with the right information technology for their effective and efficient performance.

Question: Are your Operational Excellence initiatives aligned with your organization’s core competencies?

June 13, 2012 at 2:45 pm Leave a comment

How to Achieve Operational Excellence: Part 1 of 2 – Understanding Operational Excellence


Operational Excellence is the foundation of business growth, profitability and competitive advantage. An organization can only begin to forge new growth strategies and business models after it has developed a mature capacity for managing its current business operations effectively and efficiently in the course of meeting the needs of its customers/stakeholders as no one can grow a profitable business on an unsecured foundation.

Based on the criteria of the Malcolm Baldrige National Quality Award, Operational Excellence must be demonstrated by results, not just by words. About half of the 1,000 points associated with the Baldrige award are results focused. In order to maximize the degree to which these 450 points are attained, an organization must show sustained improvement over time, in all areas of importance, against ‘best in class’ organizations.

Operational excellence is therefore demonstrated by results that reflect sustained improvement over time, improvement in all areas of importance (both performance areas and segments within each area), and performance at a level that is at, or superior to, ‘best in class’ organizations. Common areas of importance for a cost center are safety, quality, people, and cost. Profit centers add the revenue generation performance, processes, and information and technology areas to this mix. Common segments within each performance area include employee groups, facilities, departments, and external customer types. Organizations today are seeking to be operationally excellent for three key reasons: costs, customers, and competitors. They are continuously seeking the best ways to achieve operational excellence (lower costs, improve flexibility and speed to market, quality and reliability, and customer/stakeholder satisfaction and value. By effectively analyzing and managing operations, organizations can produce the right products with the right features at the right cost.

Part 2 of 2: Achieving Operational Excellence, to be continued…

Question: Does your organization have Operational Excellence initiatives in place?


May 22, 2012 at 2:55 pm 8 comments

How to Improve Employee Satisfaction and Retention AND Reduce Labor Costs


Human capital in particular is a critical part of a plant’s success, and needs to be nurtured through leadership, training and other education programs. Ineffective monitoring and mentoring of employees through the lean process negatively impacts the entire process and product quality in particular. The employer has to constantly create enthusiasm with all employees and always pat them on the back for their contribution, no matter how small or how large. Lean always works when the proper leadership strategy is used to implement it. As manufacturers use their new cost efficiencies to wring more output from fewer employees, care must be taken to select the correct labor reduction.

This became a severe issue at one company where the increasing rate of returns due to production quality issues was negatively impacting sales growth. The return rate of product measured in credit dollars was 6% of net sales. The Best-in-Class industry average was 3%. Due to the recent sales revenue decreases, management decided to offset the decreasing sales by reducing the labor force. Unfortunately, the first trims included most of the QA/QC personnel because they were considered to be not directly involved in the daily production throughput of product and thought of as a cost center. Upon joining the company, one of my first assignments was to address the quality issues. By building and leading a cross-functional team which developed, implemented and maintained a successful quality control program based on newly established employee and supplier performance metrics, the team resolved the poor product quality issues. Sales increased 12% in less than 1 year without any increase in labor headcount. Our efforts also resulted in the unanticipated recognition of the flagship facility, by the corporate executive committee, as Quality Factory of the Year for two consecutive years. The program was recognized by the corporate office as a Best Practice and rolled out to the licensee facilities; and I was awarded the Manufacturing Manager of the Year.

April 2, 2012 at 5:47 pm 3 comments

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