New Book Part 10

In my last post I discussed the importance of selecting the right performance metrics and laid out the benefits of using these metrics.  In today's post I will be discussing Steps 1b and 1c of the Ultimate Improvement Cycle. Just to refresh your memory, I will start with a graphic of the individual steps of the UIC:

Steps 1b and 1c

In Step 1b, we are attempting to Define, Measure and Analyze (D-M-A) non-value-added (NVA) waste in the constraint operation, while in Step 1b, we are completing the same D-M-A steps, focusing on sources of variation. It is important to remember that in these two steps, we are not taking action to reduce or eliminate waste and variation yet. What I am recommending at this point is to only recognize the existence of waste and variation. It is my belief that one of the primary reasons that many improvement initiatives fail is because of this compulsion to find and react immediately to sources of waste and variation, but I disagree with this approach. In my opinion, it is this compulsion to do everything “right now” that creates a disjointed improvement effort.

Waste and variation reduction efforts are not effective if they aren’t done with a systematic plan that ties both of these steps together. You want waste and variation to be attacked simultaneously to ensure that any changes made in the name of waste reduction aren’t negatively impacting variation, and vice versa. Remember that for now, because the constraint dictates throughput, and increasing throughput yields the highest potential for significant profitability improvement, you are focusing your waste and variation reduction efforts only on the constraint. The exceptions to this would be upstream process steps causing the constraint to be starved, or downstream process steps scrapping product or causing excessive rework. You cannot ignore these two exceptions. But primarily, you will be focusing your improvement efforts on the constraint.

The figure below is a tool that I have successfully used many times to search for waste in processes. You will notice that I have listed ten different sources of waste, and symptoms of their existence, instead of the traditional eight. I do this to be as specific as we can in our search. For example, we list overproduction and inventory separately, because the negative impact of overproduction exhibits completely different symptoms from waste of inventory and will require different actions to correct. It helps us focus better.

Waste Description	Symptoms to Look For
Waste of Transportation	1.      Too many forklifts 2.      Product has to be moved, stacked and moved again 3.      Process steps are far apart
Waste of Waiting	1.      Frequent/chronic equipment breakdowns 2.      Equipment changeovers taking hours rather than minutes 3.      Operators waiting for inspectors to inspect product
Waste of Organization and Space	1.      Operators looking for tools, materials, supplies, parts, etc. 2.      Large distances between process steps 3.      Not able to determine process status in 15 seconds 4.      Many different work methods for same process 5.      Poor lighting or dirty environment
Waste of Over-processing	1.      Rework levels are high 2.      Trying to produce perfect quality that isn’t required by customer 3.      No documented quality standards
Waste of Motion	1.      Process steps located as functional islands with no uniform flow 2.      Excessive turning, walking, bending, stooping, etc. within the process
Waste of inventory	1.      Product being made without orders 2.      Obsolete inventory 3.      Racks full of product.
Waste of Defective Product	1.      Problems never seem to get solved and just keep coming back 2.      Independent rework areas have become just another step in the process 3.      Excessive repairs
Waste of Overproduction	1.      Long production runs of the same part to avoid changeovers and set-up time 2.      Pockets of excess inventory around the plant 3.      Making excess or products earlier or in greater quantities than the customer wants or needs.
Waste of Underutilization	1.      No operator involvement on problem-solving teams 2.      No regular stand-up meetings with operators to get new ideas 3.      No suggestion system in place to collect improvement ideas 4.      Not recording delays and reasons for the delays
Waste of Storage and Handling	1.      Many storage racks full of product 2.      Damaged parts in inventory 3.      Storing product away from the point of use

We now want to turn our attention to variation. There are two types of variability, that you are interested in. No, we’re not talking about special cause and common cause. We’re talking about processing time variability (PTV) and process and product variability (PPV) which are very different from each other.

Sources of PTV are those things that prolong the time required for parts to progress through each of the individual process steps, while PPV are those variables that cause parts’ quality characteristics to vary. PPV has a profound impact on PTV, simply because PPV negatively interrupts the process flow. There are many examples of situations that disrupt processes and therefore create variation. Some of the more common examples include unreliable equipment (PTV and PPV), lack of standardized work procedures (PTV and PPV), defective product (PPV and PTV), late deliveries from external and internal suppliers (PTV) and many others.

Variability burdens a factory because it simply leads to congestion, excessive inventory, extended lead times, quality problems and a host of other operational problems. There are two prominent theories on variation and how to treat it. Walter Shewhart’s idea was to “minimize variation so that it will be so insignificant, that it does not in any way, affect the performance of your product.” Taguchi, on the other hand, tells us to “construct (design) the product in such a way, that it will be robust to any type of variation.”

They’re both right, of course. So, what are your options when dealing with the negative effects of variation? There are three ways to handle variation, namely, eliminate it, reduce it or adapt to it. Because it’s impossible to totally eliminate variability, you must reduce it as much as possible, and then adapt to the remaining variation. In a later post, I will discuss the subject of variation in depth and why it is so important to attack it with a vengeance.

In my next post I will continue our way around the Ultimate Improvement Cycle by looking at Step 2a. As a reminder, this material is taken from my newest book, The Focus and Leverage Improvement Book - Locating and Eliminating the Constraining Factor of Your Lean Six Sigma Initiative, published by Routledge/Productivity Press.

Bob Sproull