Lean Manufacturing: Productivity

Manufacturing operations must always be alert to the methods that are being used to accomplish the task. All too often, methods are established once and are never updated, revised, or reevaluated. Yet in this same environment, materials, techniques, and machines are changing. As leaders and operators of the business, we must swallow hard and ask employees what the problems are on the floor, the solutions employees see for those problems, and then provide recognition that acknowledges those correct inputs. There is a problem with this though, and that is that management all too often feels that they are above asking the employee how to perform a task. Therefore, management never learns the correct way to do the job. The second issue that directly involves the employee in regards to methods, is how the work area is operated and controlled. All too often, we take those controls out of the hand of the employee, and put them into the hands of material handlers or expediters who are focusing on something other than producing the parts in the most productive manner.

Industrial or manufacturing engineering must also make sure that we are fully utilizing the employee's time. If long machine cycles are involved in the work process, then we must assure ourselves that there are additional duties being performed by employees instead of simply observing the process. In this same light, it is absolutely essential that we provide good work planning to the floor. Historically, most of us have had to focus on routers and planners as a part of the development of an MRP system. I am afraid that all too often, we have focused on merely satisfying the requirements of the system instead of actually evaluating the quality of the planning. There are many examples of good planning as well as bad planning floating around, but it is essential that good routings convey to the worker, in an understandable format, exactly what must happen at each step of the manufactur­ing process. Additional information that should be contained on a router includes part number, description, bill of material, standards, inspection operations and buyoffs, and how to deal with scrap. If the planning does not meet these qualifications, then we are shortchanging the effectiveness of the people on the floor by not giving them adequate information to perform the task.

Increasing productivity must consider minimizing the manual, monotonous, or unsafe tasks. In the future there will be less workers available to staff our factories. Therefore, now is the time to begin focusing on eliminating the manual jobs that can easily be replaced by a machine. The focus should be to utilize machinery that provides flexability and efficiency. These require­ments cause us to generally look at multipurpose machinery rather than very expensive, specific purpose machinery. It will aid you in the examination of these situations if you utilize a Worker Machine Chart in order to evaluate the work and idle time of the worker and the machine. This technique identifies whether or not the more expensive asset is being correctly utilized. In more complex situations, such as multiple employees working around one large machine, it may be necessary to utilize a Multi Activity Chart or what is commonly referred to as a Gang Process Chart. This type of chart, while reviewing the efficiencies of the employ­ees, would also be very effective in helping create planning and training instructions. It is also essential that someone in the organization evaluate the standards against the actual times to determine if the people are working effectively. Nothing can be allowed to remain static. Part of your job is to be always looking at how the work can be done better and more efficiently.

It has often been said that material is our most expensive asset, and generally one that we keep the most of. As a result, companies have more dollars tied up in material than any other cash asset and we must receive a return for that material investment to accomplish this, we must do a good job of inventory planning. This requires us to review very basic information; understanding the difference between independent and dependent demand and how they occur. This knowledge is the only guide that we have to accurately choose the inventory planning techniques that we should utilize. If people do not understand the difference between these two types of demand and apply the incorrect ordering technique, inventory disasters are likely to occur.

Control of materials in the physical sense has always been a bit of a problem for manufacturing firms. We have historically focused on inventory accuracy as a prerequisite to utilizing any type of integrated manufacturing control system. This has been accomplished by using locked stockroom concepts, cycle count­ing, and perhaps even continuing with the annual physical inven­tory. The real issue however, is adequate training of our people to focus on the basics; the issue, maintenance, and receipts of goods that become part of the stockroom operation. I think it is still recognizable that management has a long way to go in terms of supporting these control efforts. As long as material is a major part of our products, we must continue to focus on control of this very expense asset.

The other area where we can improve the productivity of materials is to focus on reducing the material cost. In many instances, this can be accomplished by simply buying smarter and, therefore, reducing purchase cost. In most of our business, the ratio of

material to labor is now 3:1. It pays us to focus more on reducing the annual physical inventory. The real issue, however, is ade­quate training of our people to focus on the basics, to focus more on reducing the material cost than the labor cost. We can also reduce the cost of materials in two other ways. The first is to focus on minimizing expediting freight that results in higher costs. With better planning and ordering methods, these freight costs can be minimized. The other area that would substantially reduce pur­chase cost is material substitution. Every company today has the opportunity to reduce purchase costs by looking at alternate supplies and production materials. This could include utilizing recycled materials, alternates, lesser grade materials, or using totally different material technology. All of these issues can help increase the efficiency of the material dollar and consequently the efficiency of the company.

To be Continued

Lean Six Sigma Training   Thinking Out of the Box   
Balanced Scorecards  Strategic Tactical Planning  
Supply Chain Inventory Management  Total Quality Management Principles
Lean Manufacturing Implementation  Lean Manufacturing Principles