process improvement

We’re different it won’t work here

Posted on by Adam Payne

It’s been an interesting month, great meetings, new contacts and one of the most interesting presentations I‘ve given regarding Operational Excellence and Problem Solving.

The presentation was given to the Manufacturing and Construction sectors as part of a Seminar/Workshop.

The comments at the end we’re ones I have heard over and over again, “We’re Different, it won’t work here!”

Is “we’re different” an excuse not try to improve?

This got me thinking in one of my reflective moments, what is it that naturally creates this push back? Do we think that Business Excellence, Operational Excellence, Lean or Six Sigma is a technical tool and technique, only applied to manufacturing, high volume processes, etc? Is it we naturally assume that it’s for the automotive industry?

There are a number of answers you can come up with that can be assigned to this emotion and push back.

So we have to ask ourselves

Do business improvement principles (as that is all they are) apply to pretty much every process? Yes, I’d say so. Does that mean its easy to put in place? Absolutely not. But that, along with being different, should be no reason to not try.

Which leads me on from last month’s article REFLECTION! and into OPERATIONAL EXCELLENCE TRANSFORMATION

We must first seek to understand what is it we are trying to solve, what problem? This could be as an organisation, function, sub-process.

Then we must ask,

What process improvement needs to be done? What do I need to design, re-design, improve to solve our problem and achieve our objective?

Next,

Do I have the capability in house? Do I have the skillset within my team?

We then come to,

What mindset do I need to have? Growth? (One of learning as we do not have the capability in house), Implementation (I have the capability so execute, or get support if you don’t), Experimental (try and test)

Remembering that Leadership behaviour and Programme Management are the key. The governance process you apply.

Final thought – it’s often said that “Operational Excellence doesn’t succeed or fail… it’s just a set of principles. What succeeds or fails is the organisation or the leaders who try.” Success isn’t guaranteed — it requires hard work and creativity to figure out how will work in your setting, because you are different!

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How Good is Your Factory? Are there Opportunities?

Posted on by Adam Payne

It’s easy to feel like a factory tour is something that happens once every couple years, but in reality it’s something that should happen every day.

When you walk your factory floors there are nine items to get an accurate first impression of how lean you are.

1. Work Stations?
Are they clean, organised, free from unnecessary material and equipment?
Are tools organized, identified and easy to find?
(Are 5S’s in place? Visual labeling? Is the factory well lit? Is equipment clean? Supervision and support personnel on shop floor? Metal on metal contact? Safety hazards? Debris on the floors? Check out the bathroom cleanliness.)

2. How many Monuments do you see?
Monuments are massive machines anchored to the deck, not easily moved to which material has to be delivered to, can cause issues with the flow of product (lack of flexibility)
Are they still in use? Not to be confused with age, often older machines are purpose built and give us flexibility in cellular manufacturing. Can machinery, material locations, drop offs be easily rearranged?

3.Work in Process?
Are there piles and piles of Work in Process (WIP)? Has some of it grown roots, celebrated its 1st, 2nd even 3rd birthdays? Does it have any paperwork? Do you have HOT items?
In the ideal factory you should only have the WIP you are working on and its classed as Standard in Process Stock (SIPS) in my eyes as it is controlled.

4. Can everyone see if they are on Target or Behind Schedule?
Hour by hour monitoring, or close to real time as you can get. Can you see the Abnormal from Normal? Use Red and Green to distinguish. Is abnormal recorded for root cause corrective action?

5. What other Metrics do your teams have?
What charts, graphs, objectives, are posted in the area? Are they a Standard Document? (revision controlled, time and date stamped)
Are the Metrics up to date, reviewed, actioned? Again are they on Target? Can you see the Abnormal from Normal easily?

6. Are Materials delivered to or stacked at the Point of Use?
If a worker loses a component (screw, nut, rivet) do they have to go to the stockroom? Ask yourself how are items replenished? Does the replenishment depend on a crane or forklift?

7. Does the Product Flow?
Through a cell, moving line or in large batches or lots? Are associates close together, can they talk to one another, see one another’s WIP, do they help each other out if something goes wrong?

8. Look at the Testing and Inspection?
Where is the Product inspected and tested? Do the associates do most of the inspections or does the product move to another area? Do you have large numbers of inspectors? What is your inspection backlog? Are your defects recorded, reviewed actioned? Are they reducing?

9. Ask! Talk! Communicate! Question!
The biggest and most important. Show dignity and respect at all times, question and challenge, talk to the people on the front line and ask why? Understand? Use your senses.
This list is not definitive and its definitely not just for manufacturing, you apply to all functions, businesses, sectors, industries. Now Go Look See!

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Overall Equipment Effectiveness

Posted on by Adam Payne

A Good Place to Start for Productivity Improvements

OEE (Overall Equipment Effectiveness) is one of the main measures I use within a Manufacturing Business, but it can be adapted to service as well.

  • Does your production have bottlenecks you’re not aware of?
  • Could one machine be dragging down the entire facility?
  • Do you know if your equipment has excess capacity that could be easily and inexpensively tapped?

Overall Equipment Effectiveness Losses

OEE is simple and practical. It takes the most common sources of productivity loss and places them into three primary categories, it distils them into metrics that are an excellent gauge for where you are now and more importantly where you need to improve. There are other forms of effectiveness calculations for the supply chain, these are explained at the bottom of this article, but for now it’s back to OEE.

How we make O.E.E work?

  • Must be easy to use
  • All data must be accurate
  • Data must be easy to collect
  • Must involve all cell members
  • You need to react to the results

The three categories being:

  • Availability (%) – The percentage of the planned production time during which the cell could be productive.
  • Effectiveness (%) – The percentage of planned production time during which the cell was actually productive.
  • Quality (%) – The percentage of the total shift time that a cell is producing quality components.

For the Ultimate Productivity Swipe File – ‘click here‘

So how do we calculate OEE,

Availability

Total Shift Time – Planned Non Productive – Breakdowns – Changeovers – waiting / Total shift time – Planned Non Productive

Effectiveness

Total Parts Produced x Cycle Time / Total Shift Time – Planned Non Productive – Breakdowns – Changeovers – waiting

Quality

Total Parts Produced –Scrap/Rework / Total Parts Produced

Overall Equipment Effectiveness Template

These three primary categories (as a percentage) multiplied together = OEE.

Example,
Total Shift Time 600mins
Planned Non Productive 60mins
Total Downtime 0mins
Waiting 20mins
Total Pats Produced 395
Cycle Time 1min
Scrap 89

Availability = 600-60-20 / 600-60 = 520 / 540 x 100 = 96%
Effectiveness = 395 / 520 x 100 = 76%
Quality = 395-89 / 395 = 306 / 395 x 100 = 77%

OEE = 96 x 76 x 77 = 56%

There are different ways to use the calculation within the supply chain, the following are examples

Goods Inwards

Components Available for use X On time Delivery Performance X Quality of Incoming Goods

Outgoing Performance

Customer Availability of Supplied Goods X Delivery Performance X Quality of Shipped Goods

Overall Supply Chain Effectiveness

You can also measure the supply chain from a Quality, Cost, Delivery point of view as well using OEE, OLE (Overall Logistics Effectiveness) and OPE (Overall Purchase Effectiveness) these three multiplied together forms the Overall Supply Chain Management Effectiveness.

World Class OEE

Rule of thumb states that World Class OEE levels are 85%. But industry average is spoken about at 60%, so room for improvement. How’s yours?

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The Process of Improvement for any Business

Posted on by Adam Payne

Standardise

In standardising a process you want to be able to see the Abnormal from Normal conditions. When the process is disrupted by an obstacle or issue, you can see it. The Standardise, Do, Check, Act cycle.

Stabilise

Now you can begin to systematically simplify, Combine, Eliminate the issues to Stabilise the process. Whether it’s achieving TAKT, a cycle time, changeover, order entry, bid-no bid process, etc. The Plan, Do, Check, Act cycle.

Standardise and Stabilise play off of one another. (and you must be applying the rigorous PDCA management process as a business, if you can’t do that or sustain it ultimately you will fail)

Optimise

The drive towards perfection should always be sort within our processes across all functions, departments, businesses. This is optimisation, in driving for continuous improvement. Once we have standardised and stabilised our processes internally we can also start to look externally within our supply chain and support the SDCA and PDCA within those businesses that are struggling, remember we want a way of understanding the Abnormal from Normal conditions, no reason we can’t apply that in measuring our supply chain and why not pass on the learning, we all benefit. (and I don’t mean how some OEM’s have applied this before, internally a mess but let’s concentrate and beat up the supplier, short termism!)

Optimise also goes hand in hand with Grow in my eyes, all of the improvements align to our Strategy, and our Strategy will have new business, innovation in our products, so optimise and utilise all of those resources to ensure future growth.

Grow

Apply the SDCA, PDCA into Sales and Marketing processes. Integrate the tools and techniques of Lean Manufacturing, Operational Excellence with the proven sales methods and drive sustainable increases in sales performance and profitability.

In improving the efficiency of our company’s sales processes, we enable the sales and Customer facing teams to reduce waste and duplication and free up much needed Customer contact time in the sales cycle creating greater customer value.

As the orders come in, we come back to our Standardise and Stabilise cycle and the cycle repeats.

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Applying Lean Principles to the Back Office (Manufacturing or Service)

Posted on by Adam Payne

In today’s uncertain financial times it is becoming more and more imperative that businesses look at their activities and focus in on minimising unnecessary costs, reducing waste and improving inefficient procedures.

A large part of any business are the administration costs which represent a significant element of the total business overhead. These office processes are as targetable for process improvement as any traditional manufacturing or production operation.

Lean Office

If fact some sources state that over 60% of the costs of a product or service come from administrative processes. In general, the higher the number of human touches or decision points in a process, the greater the ROI in optimising that process and with an average employee spending 30 to 40 percent of his or her time looking for information they can’t find, these processes are swamped with waste. Most of the users to these processes will have developed workarounds over time, with this comes process slip and inefficiencies.

How do we then start to optimise these processes?

The answer is simply “Apply Lean Principles”.

By defining Value in the eyes of the customer (not the provider) we create a robust specification. We must then build repeatable processes (without waste) to deliver that specification.

My approach has always been Analyse, Design, Implement and Sustain.

Analyse the current situation: process mapping, data gathering, and business assessments.

Design the future state process/structure, design roles and responsibilities, design the implementation plan and communication plan.

Implement: Execute the plan with good leadership commitment and governance (Obeya Room Process, Operations Room, War Room)

Sustain: Conduct follow up reviews, post change assessments to ensure adherence, management reviews of KPI’s (key performance indicators)and implement a framework for continuous improvement.

Tangible Customer Benefits:

  • Sales Customer Facing Time Increased by 245%.
  • Process Efficiency Increased by 95%.
  • 38% of lost Sales back into the business.

Remember:

Reality is invariably different from perception,
Few things work the way we think they do!

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