Sunday, June 29, 2008

Can You Spot Improvement Opportunities Just by Looking?

I recently posted an article, "You Can Observe a Lot Just by Watching", asserting that you could just look around your company (or a supplier's or customer's company) and observe signs of operational excellence (or lack thereof).

This can be taken one more level -- into some simple analytical tools that will put you on the trail of other operational issues.

Bob Gariepy, a GE-trained guy who taught me a lot about manufacturing, used to get a floor plan of the factory, then trace and scale the physical routing of all the parts that went into a finished product from origin to completion. And then Bob set about reducing the distance traveled by a part. Bob showed me examples of parts that traveled over a mile by the time they got to the finished goods shelf.

By definition, a lot of travel distance is a lot of wait time. And a good opportunity for things to get lost, misdirected or damaged. And a lot of extra labor, moving things great distances through the factory. Not to mention the equipment required to handle all that.

So, Bob taught me that physical distance traveled by a product in manufacturing actually has an inverse correlation to efficiency, quality and productivity. What we did about that was quite remarkable. In several cases, we changed the floor layout to manufacturing cells, where every step in the assembly process was within eyesight. That resulted in work-in-process of maybe 6 or 8 units, max. And it meant that if one unit failed final inspection we could stop right then and figure out the problem, before we made 100 or 1,000 defective units.

A couple of these cells were designed for "make-to-order", where the manufacturing lot size was one (1). Generally the same type of item, but perhaps in different sizes, capacities or configurations. That meant we could charge a "rush order" fee when a customer needed something tomorrow, and pocket the entire margin -- all we had to do to put out a rush order was put it into the front of the day's production schedule. No muss, no fuss. But more margin.

Something else we learned was to compress manufacturing processes into the least possible floor space (This also reduces distance traveled). You need aisles wide enough for safety and maintenance access. Beyond that, wider aisles tend to attract WIP -- wire baskets, pallets and other places non-productive assets can sit. You're far better off with a large, unused open space than spreading out the equipment to cover the floor. Same idea applies to office layouts -- compress the furniture into the least possible area, and leave the rest wide open. You won't have people complaining later when you need to space for expansion.

I later observed a company where the normal product flow crisscrossed the floor (actually, 2 buildings) at least 4 times before it went out the door. The equipment was scattered throughout a building that was 50% bigger than it needed to be. They're now in bankruptcy. Wasn't hard to predict.

There are lots of places outside a factory where Bob's idea applies. White collar workflow, for example. Do things have to physically move long distances between people, or perhaps buildings or cities? What would you have to do to relocate some of that activity to be in closer proximity? Or perhaps put systems in place where a physical document didn't have to move at all -- maybe an online solution.

Give this a try -- observe the way things move through your own production or administrative process -- distance traveled, times touched, etc. Just watching will work. And if you find some, click on "comments" below and tell us about what you saw and how you improved it.

To forward this to a friend,
Click Here

Terry Weaver

Chief Executive Boards International
864 527-5917

Chief Executive Boards International: Freedom for business owners & CEOs -- Less Work, More Money, More Freedom to enjoy it

No comments:

Post a Comment

Comments to CEBI Blog articles are moderated to ensure member privacy and control spam. All comments except those deemed inappropriate should post within 24 hours.